Doing Business 2017 Dominican Republic Economy Profile 2017 Dominican Republic Doing Business 2017 Dominican Republic 2 © 2017 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 19 18 17 16 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Doing Business 2017 Dominican Republic 3 CONTENTS Introduction .................................................................................................................................. 4 Starting a business ..................................................................................................................... 17 Dealing with conustruction permits ........................................................................................ 25 Getting electricity ....................................................................................................................... 38 Registering property .................................................................................................................. 48 Getting credit .............................................................................................................................. 61 Protecting minority investors ................................................................................................... 67 Paying taxes ................................................................................................................................ 75 Trading across borders .............................................................................................................. 81 Enforcing contracts .................................................................................................................... 88 Resolving insolvency .................................................................................................................. 95 Labor market regulation ........................................................................................................... 99 Distance to frontier and ease of doing business ranking .................................................... 105 Resources on the Doing Business website ............................................................................ 108 Doing Business 2017 Dominican Republic 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is comparison, it also provides data for other selected for a local entrepreneur to open and run a small to economies (comparator economies) for each indicator. medium-size business when complying with relevant The data in this report are current as of June 1, 2016 regulations. It measures and tracks changes in (except for the paying taxes indicators, which cover the regulations affecting 11 areas in the life cycle of a period January–December 2015). business: starting a business, dealing with construction The Doing Business methodology has limitations. Other permits, getting electricity, registering property, getting areas important to business—such as an economy’s credit, protecting minority investors, paying taxes, proximity to large markets, the quality of its trading across borders, enforcing contracts, resolving infrastructure services (other than those related to insolvency and labor market regulation. Doing Business trading across borders and getting electricity), the 2017 presents the data for the labor market regulation security of property from theft and looting, the indicators in an annex. The report does not present transparency of government procurement, rankings of economies on labor market regulation macroeconomic conditions or the underlying strength of indicators or include the topic in the aggregate distance institutions—are not directly studied by Doing Business. to frontier score or ranking on the ease of doing The indicators refer to a specific type of business, business. generally a local limited liability company operating in In a series of annual reports Doing Business presents the largest business city. Because standard assumptions quantitative indicators on business regulations and the are used in the data collection, comparisons and protection of property rights that can be compared benchmarks are valid across economies. The data not across 190 economies, from Afghanistan to Zimbabwe, only highlight the extent of obstacles to doing business; over time. The data set covers 48 economies in Sub- they also help identify the source of those obstacles, Saharan Africa, 32 in Latin America and the Caribbean, 25 supporting policy makers in designing regulatory reform. in East Asia and the Pacific, 25 in Eastern Europe and More information is available in the full report. Doing Central Asia, 20 in the Middle East and North Africa and Business 2017 presents the indicators, analyzes their 8 in South Asia, as well as 32 OECD high-income relationship with economic outcomes and presents economies. The indicators are used to analyze economic business regulatory reforms. The data, along with outcomes and identify what reforms have worked, where information on ordering Doing Business 2017, are and why. available on the Doing Business website at This economy profile presents the Doing Business http://www.doingbusiness.org. indicators for Dominican Republic. To allow useful Doing Business 2017 Dominican Republic 5 CHANGES IN DOING BUSINESS 2017 As part of a three-year update in methodology, Doing having equal evidentiary weight of women’s testimony in Business 2017 expands further by adding postfiling court. processes to the paying taxes indicator, including a Also for the first time this year Doing Business collects gender component in three of the indicators and data on Somalia, bringing the total number of developing a new pilot indicator on selling to the economies covered to 190. government. Also, for the first time this year Doing Business collects data on Somalia, bringing the total For more details on the changes, see the “”Old and new number of economies covered to 190. factors covered in Doing Business” section in the The paying taxes indicator is expanded this year to Overview chapter starting on page 1 of the Doing include postfiling processes – those processes that occur Business 2017 report. For more details on the data and after a firm complies with its regular tax obligations. methodology, please see the “Data Notes” chapter These include tax refunds, tax audits and tax appeals. In starting on page 114 of the Doing Business 2017 report. particular, Doing Business measures the time it takes to For more details on the distance to frontier metric, get a value added tax (VAT) refund, deal with a simple please see the “Distance to frontier and ease of doing mistake on a corporate tax return that can potentially business ranking” chapter in this profile. trigger an audit and good practices with administrative appeals process. This year’s Doing Business report presents a gender dimension in four of the indicator sets: starting a business, registering property, enforcing contracts and labor market regulation. Three of these areas are included in the distance to frontier score and in the ease of doing business ranking, while the fourth —labor market regulation—is not. Doing Business has traditionally assumed that the entrepreneurs or workers discussed in the case studies were men. This was incomplete by not reflecting correctly the Doing Business processes as applied to women—which in some economies may be different from the processes applied to men. Starting this year, Doing Business measures the starting a business process for two case scenarios: one where all entrepreneurs are men and one where all entrepreneurs are women. In economies where the processes are more onerous if the entrepreneur is a woman, Doing Business now counts the extra procedures applied to roughly half of the population that is female (for example, obtaining a husband’s consent or gender-specific requirements for opening a personal bank account when starting a business). Within the registering property indicators, a gender component has been added to the quality of land administration index. This component measures women’s ability to use, own, and transfer property according to the law. Finally, within the enforcing contracts indicator set, economies will be scored on Doing Business 2017 Dominican Republic 6 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s regulatory environment for business, a good place to start ECONOMY OVERVIEW is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business Region: Latin America & Caribbean based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size Income category: Upper middle income businesses through their life cycle. Economies are ranked from 1 to 190 by the ease of doing business ranking. Population: 10,528,391 Doing Business presents results for 2 aggregate measures: the distance to frontier score and the ease of doing GNI per capita (US$): 6,130 business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier scores, DB2017 rank: 103 rounded to two decimals. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where DB2016 rank: 103* 0 represents the worst performance and 100 the frontier. Change in rank: 0 (See the chapter on the distance to frontier and ease of doing business). DB 2017 DTF: 59.35 The ease of doing business ranking compares economies with one another; the distance to frontier score DB 2016 DTF: 59.08 benchmarks economies with respect to regulatory best practice, showing the absolute distance to the best Change in DTF: 0.27 performance on each Doing Business indicator. When compared across years, the distance to frontier score * DB2016 ranking shown is not last year’s published shows how much the regulatory environment for local ranking but a comparable ranking for DB2016 that entrepreneurs in an economy has changed over time in captures the effects of such factors as data revisions absolute terms, while the ease of doing business ranking and the changes in methodology. See the data notes can show only how much the regulatory environment has starting on page 114 of the Doing Business 2017 changed relative to that in other economies. report for sources and definitions. The 10 topics included in the ranking in Doing Business 2017: 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. The labor market regulation indicators are not included in this year’s aggregate ease of doing business ranking, but the data are presented in the economy profile. Doing Business 2017 Dominican Republic THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2017 Dominican Republic THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy regional average (figure 1.2). The economy’s rankings stands in the aggregate ranking on the ease of doing (figure 1.3) and distance to frontier scores (figure 1.4) business is useful. Also useful is to know how it ranks on the topics included in the ease of doing business relative to comparator economies and relative to the ranking provide another perspective. Figure 1.2 How Dominican Republic and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2016 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2017 Dominican Republic 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Dominican Republic (Scale: Rank 190 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Dominican Republic (Scale: Score 0 center, Score 100 outer edge) Source: Doing Business database. Note: The rankings are benchmarked to June 2016 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Doing Business 2017 Dominican Republic 10 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business Doing Business introduced the distance to frontier score. tells only part of the story, so do changes in that ranking. This measure shows how far on average an economy is Yearly movements in rankings can provide some indication from the best performance achieved by any economy on of changes in an economy’s regulatory environment for each Doing Business indicator. firms, but they are always relative. Comparing the measure for an economy at 2 points in time Moreover, year-to-year changes in the overall rankings do allows users to assess how much the economy’s regulatory not reflect how the business regulatory environment in an environment as measured by Doing Business has changed economy has changed over time—or how it has changed over time—how far it has moved toward (or away from) in different areas. To aid in assessing such changes, the most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.5). Figure 1.5 How far has Dominican Republic come in the areas measured by Doing Business? Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator. Starting a business is comparable to 2010. Getting credit, protecting minority investors, paying taxes and resolving insolvency had methodology changes in 2014 and thus are only comparable to 2013. Dealing with construction permits, registering property, trading across borders, enforcing contracts and getting electricity had methodology changes in 2015 and thus are only comparable to 2014. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2017 report for more details on the distance to frontier score. Source: Doing Business database. Doing Business 2017 Dominican Republic 11 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of regulation—such as a regulatory process that can be the story (table 1.1). The indicators, on their own or in completed with a small number of procedures in a few comparison with the indicators of a good practice days and at a low cost. Comparison of the economy’s economy or those of comparator economies in the indicators today with those in the previous year may region, may reveal bottlenecks reflected in large numbers show where substantial bottlenecks persist—and where of procedures, long delays or high costs. Or they may they are diminishing. reveal unexpected strengths in an area of business Table 1.1 Summary of Doing Business indicators for Dominican Republic Puerto Rico (U.S.) DB2017 Best performer globally Dominican Republic Dominican Republic Colombia DB2017 Panama DB2017 Jamaica DB2017 Mexico DB2017 Indicator Haiti DB2017 DB2017 DB2016 DB2017 Starting a Business 115 108 61 188 12 93 43 51 1 (New Zealand) (Rank) Starting a Business (DTF 83.34 83.12 89.57 33.61 95.61 85.74 92.01 91.23 99.96 (New Zealand) Score) Procedure – Men 7.0 7.0 6.0 12.0 2.0 7.8 5.0 6.0 1.0 (New Zealand) (number) Time – Men (days) 14.5 14.5 9.0 97.0 10.0 8.4 6.0 5.5 0.5 (New Zealand) Cost – Men (% of 16.3 16.4 7.5 219.3 4.3 17.8 5.8 1.3 0.0 (Slovenia) income per capita) Procedure – Women 7.0 7.0 6.0 12.0 2.0 7.8 5.0 6.0 1.0 (New Zealand) (number) Time – Women (days) 14.5 14.5 9.0 97.0 10.0 8.4 6.0 5.5 0.5 (New Zealand) Cost – Women (% of 16.3 16.4 7.5 219.3 4.3 17.8 5.8 1.3 0.0 (Slovenia) income per capita) Paid-in min. capital (% 36.5 39.8 0.0 15.5 0.0 0.0 0.0 0.0 0.0 (127 Economies*) of income per capita) Dealing with 45 44 34 166 75 83 73 131 1 (New Zealand) Construction Permits Doing Business 2017 Dominican Republic 12 Puerto Rico (U.S.) DB2017 Best performer globally Dominican Republic Dominican Republic Colombia DB2017 Panama DB2017 Jamaica DB2017 Mexico DB2017 Indicator Haiti DB2017 DB2017 DB2016 DB2017 (Rank) Dealing with Construction Permits 75.20 75.01 76.54 53.76 71.15 69.79 71.31 62.17 87.40 (New Zealand) (DTF Score) Procedures (number) 13.0 13.0 10.0 12.0 17.0 13.0 16.0 20.0 7.0 (4 Economies*) Time (days) 184.0 184.0 73.0 80.0 129.5 86.4 98.0 165.0 28.0 (Korea, Rep.) Cost (% of warehouse 0.1 (Trinidad and 1.7 1.8 6.7 14.9 0.8 9.8 2.0 6.2 value) Tobago) Building quality control 13.0 13.0 11.0 5.0 10.0 11.7 9.0 12.0 15.0 (Luxembourg*) index (0-15) Getting Electricity 148 151 74 139 101 98 23 65 1 (Korea, Rep.) (Rank) Getting Electricity (DTF 52.18 50.58 73.73 54.82 68.00 68.32 86.67 76.55 99.88 (Korea, Rep.) Score) Procedures (number) 7.0 7.0 5.0 4.0 7.0 6.8 5.0 5.0 3.0 (15 Economies*) Time (days) 67.0 82.0 109.0 60.0 95.0 100.4 35.0 32.0 18.0 (Korea, Rep.*) Cost (% of income per 267.1 257.0 581.4 3708.5 231.6 336.7 8.9 354.1 0.0 (Japan) capita) Reliability of supply and transparency of tariff 0.0 0.0 6.0 0.0 6.0 6.2 7.0 4.0 8.0 (26 Economies*) index (0-8) Registering Property 82 83 53 180 123 101 84 153 1 (New Zealand) (Rank) Registering Property 65.61 65.17 73.29 32.10 53.70 61.05 65.17 47.29 94.46 (New Zealand) (DTF Score) Procedures (number) 6.0 6.0 6.0 5.0 8.0 7.7 7.0 8.0 1.0 (4 Economies*) Doing Business 2017 Dominican Republic 13 Puerto Rico (U.S.) DB2017 Best performer globally Dominican Republic Dominican Republic Colombia DB2017 Panama DB2017 Jamaica DB2017 Mexico DB2017 Indicator Haiti DB2017 DB2017 DB2016 DB2017 Time (days) 45.0 45.0 16.0 312.0 18.0 42.1 22.5 191.0 1.0 (3 Economies*) Cost (% of property 3.5 3.7 2.0 7.0 9.8 5.2 2.4 1.2 0.0 (Saudi Arabia) value) Quality of the land administration index (0- 14.5 14.5 16.5 2.5 14.0 16.3 11.0 14.0 29.0 (Singapore) 30) Getting Credit (Rank) 101 97 2 175 16 5 20 7 1 (New Zealand) Getting Credit (DTF 45.00 45.00 95.00 10.00 80.00 90.00 75.00 85.00 100.00 (New Zealand) Score) Strength of legal rights 1.0 1.0 12.0 2.0 9.0 10.0 7.0 10.0 12.0 (3 Economies*) index (0-12) Depth of credit 8.0 8.0 7.0 0.0 7.0 8.0 8.0 7.0 8.0 (30 Economies*) information index (0-8) Credit registry coverage 25.2 23.2 0.0 1.6 0.0 0.0 0.0 0.0 100.0 (3 Economies*) (% of adults) Credit bureau coverage 74.9 74.6 92.1 0.0 23.3 100.0 58.1 100.0 100.0 (23 Economies*) (% of adults) Protecting Minority 87 85 13 188 63 53 70 87 1 (New Zealand*) Investors (Rank) Protecting Minority 53.33 53.33 73.33 20.00 58.33 60.00 56.67 53.33 83.33 (New Zealand*) Investors (DTF Score) Strength of minority investor protection 5.3 5.3 7.3 2.0 5.8 6.0 5.7 5.3 8.3 (New Zealand) index (0-10) Extent of conflict of interest regulation 5.3 5.3 8.0 3.0 5.7 6.0 5.3 7.0 9.3 (New Zealand) index (0-10) Extent of shareholder 5.3 5.3 6.7 1.0 6.0 6.0 6.0 3.7 8.3 (Norway) governance index (0- Doing Business 2017 Dominican Republic 14 Puerto Rico (U.S.) DB2017 Best performer globally Dominican Republic Dominican Republic Colombia DB2017 Panama DB2017 Jamaica DB2017 Mexico DB2017 Indicator Haiti DB2017 DB2017 DB2016 DB2017 10) 1 (United Arab Paying Taxes (Rank) 129 131 139 159 116 114 170 135 Emirates) Paying Taxes (DTF 99.44 (United Arab 60.7 60.33 58.91 53.1 65.18 65.81 48.09 59.82 Score) Emirates) Payments (number per 3.0 (Hong Kong SAR, 7.0 7.0 12.0 47.0 11.0 6.0 52.0 16.0 year) China*) Time (hours per year) 317.0 316.0 239.0 184.0 268.0 286.0 417.0 218.0 55.0 (Luxembourg) Total tax rate (% of 42.4 43.5 69.8 40.3 34.3 52.0 37.2 62.3 26.1 (32 Economies*) profit) Postfiling index (0-100) 14.1 47.5 26.8 19.5 46.6 41.4 98.5 (Estonia) Trading across Borders 58 56 121 76 131 61 53 62 1 (10 Economies*) (Rank) Trading across Borders 100.00 (10 83.51 83.51 62.83 76.69 60.70 82.09 85.47 81.86 (DTF Score) Economies*) Time to export: Border 16 16 112 28 58 20 24 48 0 (18 Economies*) compliance (hours) Cost to export: Border 488 488 545 368 876 400 270 386 0 (18 Economies*) compliance (USD) Time to export: Documentary 10 10 60 22 47 8 6 2 1 (25 Economies*) compliance (hours) Cost to export: Documentary 15 15 90 48 90 60 60 75 0 (19 Economies*) compliance (USD) Time to import: Border 24 24 112 83 80 44 24 48 0 (25 Economies*) compliance (hours) Doing Business 2017 Dominican Republic 15 Puerto Rico (U.S.) DB2017 Best performer globally Dominican Republic Dominican Republic Colombia DB2017 Panama DB2017 Jamaica DB2017 Mexico DB2017 Indicator Haiti DB2017 DB2017 DB2016 DB2017 Cost to import: Border 579 579 545 583 906 450 490 386 0 (28 Economies*) compliance (USD) Time to import: Documentary 14 14 64 28 72 18 6 2 1 (29 Economies*) compliance (hours) Cost to import: Documentary 40 40 50 150 90 100 50 75 0 (30 Economies*) compliance (USD) Enforcing Contracts 131 129 174 123 117 40 145 97 1 (Korea, Rep.) (Rank) Enforcing Contracts 51.03 51.03 34.29 52.49 53.60 67.01 48.10 56.13 84.15 (Korea, Rep.) (DTF Score) Time (days) 505.0 505.0 1288.0 530.0 550.0 340.7 686.0 630.0 164.0 (Singapore) Cost (% of claim) 40.9 40.9 45.8 42.6 45.6 33.0 38.0 25.6 9.0 (Iceland) Quality of judicial 5.5 5.5 9.0 7.0 8.5 10.1 6.0 7.0 15.5 (Australia) processes index (0-18) Resolving Insolvency 160 160 33 169 38 30 133 9 1 (Finland) (Rank) Resolving Insolvency 23.55 23.70 71.74 0.00 69.15 73.11 33.36 84.84 93.89 (Finland) (DTF Score) Recovery rate (cents on 8.9 9.2 69.4 0.0 64.6 69.1 27.2 70.5 92.9 (Norway) the dollar) no Time (years) 3.5 3.5 1.7 1.1 1.8 2.5 2.5 0.4 (22 Economies*) practice no Cost (% of estate) 38.0 38.0 8.5 18.0 18.0 25.0 11.0 1.0 (22 Economies*) practice Strength of insolvency 6.0 6.0 11.0 0.0 11.0 11.5 6.0 15.0 15.0 (6 Economies*) framework index (0-16) Source: Doing Business database. Doing Business 2017 Dominican Republic 16 Note: DB2016 rankings shown are not last year’s published rankings but comparable rankings for DB2016 that capture the effects of such factors as data revisions and changes to the methodology. The global best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2017 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Doing Business 2017 Dominican Republic 17 STARTING A BUSINESS Formal registration of companies has many WHAT THE STARTING A BUSINESS immediate benefits for the companies and for business owners and employees. Legal entities can INDICATORS MEASURE outlive their founders. Resources are pooled as several shareholders join forces to start a company. Procedures to legally start and operate a Formally registered companies have access to company (number) services and institutions from courts to banks as well Preregistration (for example, name as to new markets. And their employees can benefit verification or reservation, notarization) from protections provided by the law. An additional benefit comes with limited liability companies. These Registration in the economy’s largest limit the financial liability of company owners to their business city1 investments, so personal assets of the owners are not Postregistration (for example, social security put at risk. Where governments make registration registration, company seal) easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and Obtaining approval from spouse to start a generating more revenue for the government. business, to leave the home to register the company or open a bank account. What do the indicators cover? Obtaining any gender specific document for Doing Business records all procedures officially company registration and operation, national required, or commonly done in practice, for an identification card or opening a bank entrepreneur to start up and formally operate an account. industrial or commercial business, as well as the time and cost to complete these procedures and the paid- Time required to complete each procedure in minimum capital requirement. These procedures (calendar days) include obtaining all necessary licenses and permits Does not include time spent gathering and completing any required notifications, information verifications or inscriptions for the company and employees with relevant authorities. The ranking of Each procedure starts on a separate day (2 economies on the ease of starting a business is procedures cannot start on the same day). determined by sorting their distance to frontier Procedures that can be fully completed scores for starting a business. These scores are the online are recorded as ½ day. simple average of the distance to frontier scores for Procedure completed once final document is each of the component indicators. received To make the data comparable across economies, No prior contact with officials several assumptions about the business and the procedures are used. It is assumed that any required Cost required to complete each procedure information is readily available and that the (% of income per capita) entrepreneur will pay no bribes. Assumptions about Official costs only, no bribes the business: No professional fees unless services required  Is a limited liability company (or its legal by law or commonly used in practice equivalent). If there is more than one type of limited liability company in the economy, the Paid-in minimum capital (% of income limited liability form most common among per capita) domestic firms is chosen. Information on the Deposited in a bank or with a notary before most common form is obtained from registration (or within 3 months) incorporation lawyers or the statistical office.  Operates in the economy’s largest business city.  The size of the entire office space is For 11 economies the data are also collected for the second largest business city. approximately 929 square meters (10,000 square feet). Doing Business 2017 Dominican Republic 18  Is 100% domestically owned and has five owners,  Does not qualify for investment incentives or none of whom is a legal entity. any special benefits.  Has start-up capital of 10 times income per  Has at least 10 and up to 50 employees one capita month after the commencement of operations, all of them domestic nationals.  Performs general industrial or commercial activities, such as the production or sale to the  Has a turnover of at least 100 times income per public of products or services. The business does capita. not perform foreign trade activities and does not  Has a company deed 10 pages long handle products subject to a special tax regime, for example, liquor or tobacco. It is not using The owners: heavily polluting production processes.  Have reached the legal age of majority and are  Leases the commercial plant or offices and is not capable of making decisions as an adult. If a proprietor of real estate. there is no legal age of majority, they are assumed to be 30 years old.  The amount of the annual lease for the office space is equivalent to 1 times income per capita.  Are sane, competent, in good health and have no criminal record.  Are married, the marriage is monogamous and registered with the authorities.  Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Doing Business 2017 Dominican Republic 19 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Dominican 2.1) is legally mandatory for both men and women. Most Republic? According to data collected by Doing Business, indicator sets refer to a case scenario in the largest starting a business there requires 7.0 procedures , takes business city of an economy, except for 11 economies for 14.5 days, costs 16.3% of income per capita for men, and which the data are a population-weighted average of the requires 7.0 procedures , takes 14.5 days, costs 16.3% of 2 largest business cities. See the chapter on distance to income per capita for women. A requirement of paid-in frontier and ease of doing business ranking at the end of minimum capital of 36.5% of income per capita (figure this profile for more details. Figure 2.1 What it takes to start a business in Dominican Republic Paid-in minimum capital (% of income per capita): 36.5 Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Procedures in light blue for married women only. Doing Business 2017 Dominican Republic 20 STARTING A BUSINESS Globally, Dominican Republic stands at 115 in the other useful information for assessing how easy it is for ranking of 190 economies on the ease of starting a an entrepreneur in Dominican Republic to start a business (figure 2.2). The rankings for comparator business. economies and the regional average ranking provide Figure 2.2 How Dominican Republic and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2017 Dominican Republic 21 STARTING A BUSINESS Economies around the world have taken steps making it they often are part of a larger regulatory reform easier to start a business—streamlining procedures by program. Among the benefits have been greater firm setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses, or faster by introducing technology and reducing or financial resources and job opportunities. eliminating minimum capital requirements. Many have What business registration reforms has Doing Business undertaken business registration reforms in stages—and recorded in Dominican Republic (table 2.1)? Table 2.1 How has Dominican Republic made starting a business easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic made it more difficult to start a business by setting a minimum capital requirement of 100,000 DB2011 Dominican pesos ($2,855) for its new type of company, sociedad de responsabilidad limitada (limited liability company). The Dominican Republic made starting a business easier by DB2012 eliminating the requirement for a proof of deposit of capital when establishing a new company. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 22 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Dominican Republic is a set of specific procedures— the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new Legal form: Sociedad de Responsabilidad firm. These are identified by Doing Business through Limitada (SRL) collaboration with relevant local professionals and the study of laws, regulations and publicly available Paid-in minimum capital requirement: DOP information on business entry in that economy. 100,000 Following is a detailed summary of those procedures, City: Santo Domingo along with the associated time and cost. These procedures are those that apply to a company Start-up Capital: 10 times GNI per capita matching the standard assumptions (the “standardized company”) used by Doing Business in collecting the data (see the section in this chapter on what the indicators measure). Table 2.2 Summary of time, cost and procedures for starting a business in Dominican Republic Time to No. Procedure Cost to complete complete Check company online With the introduction of the virtual portal the applicant can search and pay for a fee of DOP 4,755 for its company’s name. Currently, the interested party may enter www.onapi.gov.do to check and purchase the name online. Less than one day included in 1 Since December 31, 2012, the cost for publication was unified with the (online procedure) procedure 2 cost to check and purchase the company’s name. This unification was due to article 114 of the Law no. 20 00 and article 74 of the Decree Law no. 326 06. Agency: ONAPI (Oficina Nacional de la Propiedad Industrial) Purchase of the company name After the petition or request of the registration of a commercial or trade name is made the National Office of Industrial Property (ONAPI) has a time limit of five (5) business days to issue the Formal Certificate. Then, the company name announcement is published in a national circulation newspaper in about 10 days. The National Office of Industrial DOP 4755 2 Property publishes the list of requested corporate names and their 5 days petitioners twice a month. After that publication, third parties may lodge protests within 45 days. The publication receipt suffices for the company to continue with subsequent simultaneous formalities. The publication can also be in the virtual portal of www.onapi.gov.do (oficina nacional de propriedad industrial-national- Intellectual Property). However, most companies do not use this online service. Doing Business 2017 Dominican Republic 23 Time to No. Procedure Cost to complete complete Since December 31, 2012, the cost for publication was unified with the cost to check and purchase the company’s name. This unification was due to article 114 of the Law no. 20 00 and article 74 of the Decree Law no. 326 06. Agency: ONAPI (Oficina Nacional de la Propiedad Industrial) Payment of the incorporation tax The relevant incorporation taxes are paid by certified check issued to the Collector of the Internal Revenue Department (Colector de Impuestos Internos), through online banking (BHD and Leon banks) or at the counter at Banco del Progreso. According to new Law of Eficiencia Recaudatoria (from April 1st 2007) the incorporation taxes 1 day have been unified and only one tax should be paid that accounts as 1% (simultaneous with *3 1% of the capital of the amount of the authorized capital. The incorporation tax can also previous be paid directly at the Internal Revenue Service office (Dirección procedure) General de Impuestos Internos) and Banco de Reservas. If the amount does not exceed DOP 10,000, it can be paid in cash. Agency: National Agency of Internal Revenues (DGII) Register the company in the Chamber of Commerce and obtain the identification number (RNC) online The company is registered at the Chamber of Commerce of the domicile of the company. In Dominican Republic the domicile of the company is where the effective center of administration and management of the company is located. The following documents have to be filed at the Mercantile Registry at the Chamber of Commerce: - Bylaws properly signed; - General Constitutive Assembly with its corresponding list of presence of Associates; - List of the distribution of each of the associate’s investment to the 4 company and their corresponding amounts of corporate quotas; 5 days DOP 12,000 - Application Form for registration of Limited Liability Company, duly completed and signed by the authorized manager or agent (must attach original power of attorney, if applicable). - Association Partnership Agreement; - Receipt of payment of incorporation taxes; - Photocopies of identity card; - Copy of Business Name Registration issued by the National Office of Industrial Property (ONAPI). In December 2013, the Chamber of Commerce made company registration available online at http://www.formalizate.gob.do/. This electronic method of registration is not yet widely used in practice, but it is available to business entrepreneurs in Santo Domingo. Doing Business 2017 Dominican Republic 24 Time to No. Procedure Cost to complete complete Agency: Chamber of Commerce File for the National Taxpayers Registry at the Internal Revenue Service (DGII) and apply for fiscal receipts According to Decree 254–06, companies that render services or whose operations require the transfer of goods must issue receipts with a fiscal number (numero de comprobante fiscal). The application can be made online. Within 5 working days, the Internal Tax Directorate must analyze the information and notify the taxpayer (either physically or electronically) of the administrative resolution of the authorization to issue the fiscal receipts. 5 Even in the case that the application for the National Taxpayers Registry 2 days no charge is made online, through the Internal Revenue Service’s webpage, physical documents still need to be filed at the Internal Revenue Service. Additionally, even if the incorporation is undertaken via the virtual portal www.creatuempresa.gob.do, physical documents still need to be filed both at the Mercantile Registry and the Internal Revenue Service. Agency: General Agency of Internal Revenue (Dirección General de Impuestos Internos) Register local employees with the Department of Labor Forms DGT-3 must be completed within the first week of employment. The following forms, found at the local Department of Labor office, must be filed: a list of permanent personnel and employee work schedules and vacation periods. 2 days DOP 500 6 This procedure can be completed only once the taxpayer's identification number has been obtained. Agency: Department of Labor Register employees at the Social Security Office (Tesorería de la Seguridad Social) The company shall registered and file the list of its employees at the Social Security National Treasury (Tesorería Nacional de la Seguridad 1 day Social, TNSS), a dependency of the main social security office (Consejo (simultaneous with *7 no charge Nacional de Seguridad Social, CNSS). previous procedure) According to the Law 188-07 dated August 2007 the TNSS is under the obligation of updating the above mentioned percentages. Under Law 87-01, employers must register employees at the CNSS within 3 days of hiring them or upon the start of business. This procedure can be done Doing Business 2017 Dominican Republic 25 Time to No. Procedure Cost to complete complete online: http://www.tss.gov.do/ or at the Tesorería Nacional de la Seguridad Social. Agency: Social security office (Tesorería de la Seguridad Social) * Takes place simultaneously with another procedure. Source: Doing Business database. Note: Online procedures account for 0.5 days in the total time calculation. Procedures in light blue for married women only. Doing Business 2017 Dominican Republic 26 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid excessive PERMITS INDICATORS MEASURE constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in time and money, Procedures to legally build a warehouse many builders opt out. They may pay bribes to pass (number) inspections or simply build illegally, leading to Submitting all relevant documents and hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses, Where compliance is simple, straightforward and permits and certificates inexpensive, everyone is better off. Submitting all required notifications and What do the indicators cover? receiving all necessary inspections Doing Business records all procedures required for a Obtaining utility connections for water and business in the construction industry to build a sewerage warehouse along with the time and cost to complete Registering and selling the warehouse after its each procedure. In addition, the building quality completion control index evaluates the quality of building Time required to complete each procedure regulations, the strength of quality control and safety (calendar days) mechanisms, liability and insurance regimes, and professional certification requirements. Does not include time spent gathering information The ranking of economies on the ease of dealing with construction permits is determined by sorting their Each procedure starts on a separate day— though procedures that can be fully distance to frontier scores for dealing with completed online are an exception to this rule construction permits. These scores are the simple average of the distance to frontier scores for each of Procedure considered completed once final the component indicators. document is received To make the data comparable across economies, No prior contact with officials several assumptions about the construction Cost required to complete each procedure (% company, the warehouse project and the utility of warehouse value) connections are used. Official costs only, no bribes Assumptions about the construction company Building quality control index (0-15) The construction company (BuildCo): Sum of the scores of six component indices:  Is a limited liability company (or its legal Quality of building regulations (0-2) equivalent). Quality control before construction (0-1)  Operates in the economy’s largest business city. For 11 economies the data are also collected for Quality control during construction (0-3) the second largest business city. Quality control after construction (0-3)  Is 100% domestically and privately owned. Liability and insurance regimes (0-2)  Has five owners, none of whom is a legal entity. Professional certifications (0-4)  Is fully licensed and insured to carry out construction projects, such as building warehouses.  Has 60 builders and other employees, all of them nationals with the technical expertise and Doing Business 2017 Dominican Republic 27 professional experience necessary to obtain  Is valued at 50 times income per capita. construction permits and approvals.  Will be a new construction (there was no previous  Has a licensed architect and a licensed engineer, construction on the land), with no trees, natural both registered with the local association of water sources, natural reserves or historical architects or engineers. BuildCo is not assumed monuments of any kind on the plot. to have any other employees who are technical  Will have complete architectural and technical plans or licensed experts, such as geological or prepared by a licensed architect. If preparation of topographical experts. the plans requires such steps as obtaining further  Has paid all taxes and taken out all necessary documentation or getting prior approvals from insurance applicable to its general business external agencies, these are counted as procedures. activity (for example, accidental insurance for  Will include all technical equipment required to be construction workers and third-person liability). fully operational.  Owns the land on which the warehouse will be  Will take 30 weeks to construct (excluding all delays built and will sell the warehouse upon its due to administrative and regulatory requirements). completion. Assumptions about the warehouse Assumptions about the utility connections The warehouse: The water and sewerage connections:  Will be used for general storage activities, such as storage of books or stationery. The warehouse  Will be 150 meters (492 feet) from the existing will not be used for any goods requiring special water source and sewer tap. If there is no water conditions, such as food, chemicals or delivery infrastructure in the economy, a borehole pharmaceuticals. will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be  Will have two stories, both above ground, with a installed or built. total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor  Will not require water for fire protection reasons; a will be 3 meters (9 feet, 10 inches) high. fire extinguishing system (dry system) will be used instead. If a wet fire protection system is required  Will have road access and be located in the by law, it is assumed that the water demand periurban area of the economy’s largest business specified below also covers the water needed for city (that is, on the fringes of the city but still fire protection. within its official limits). For 11 economies the data are also collected for the second largest  Will have an average water use of 662 liters (175 business city. gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak  Will not be located in a special economic or water use of 1,325 liters (350 gallons) a day and a industrial zone. peak wastewater flow of 1,136 liters (300 gallons) a  Will be located on a land plot of approximately day. 929 square meters (10,000 square feet) that is  Will have a constant level of water demand and 100% owned by BuildCo and is accurately wastewater flow throughout the year. registered in the cadastre and land registry.  Will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Doing Business 2017 Dominican Republic 28 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build business city of an economy, except for 11 economies for a warehouse in Dominican Republic? According to data which the data are a population-weighted average of the collected by Doing Business, dealing with construction 2 largest business cities. See the chapter on distance to permits there requires 13.0 procedures, takes 184.0 days frontier and ease of doing business ranking at the end of and costs 1.7% of the warehouse value (figure 3.1). this profile for more details. Most indicator sets refer to a case scenario in the largest Figure 3.1 What it takes to comply with formalities to build a warehouse in Dominican Republic Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. . Doing Business 2017 Dominican Republic 29 DEALING WITH CONSTRUCTION PERMITS Globally, Dominican Republic stands at 45 in the ranking provide other useful information for assessing how easy of 190 economies on the ease of dealing with it is for an entrepreneur in Dominican Republic to legally construction permits (figure 3.2). The rankings for build a warehouse. comparator economies and the regional average ranking Figure 3.2 How Dominican Republic and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2017 Dominican Republic 30 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while compliance costs reasonable, governments around the making compliance easy and accessible to all. Coherent world have worked on consolidating permitting and transparent rules, efficient processes and adequate requirements. What construction permitting reforms has allocation of resources are especially important in sectors Doing Business recorded in Dominican Republic (table where safety is at stake. Construction is one of them. In 3.1)? an effort to ensure building safety while keeping Table 3.1 How has Dominican Republic made dealing with construction permits easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic made dealing with construction DB2015 permits more costly by increasing the building permit fees. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 31 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Dominican Republic BUILDING A WAREHOUSE are based on a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified by Doing Business through Estimated value of information collected from experts in construction DOP 13,705,646 warehouse : licensing, including architects, civil engineers, construction lawyers, construction firms, utility City : Santo Domingo service providers and public officials who deal with building regulations. These procedures are those that apply to a company and structure matching the The procedures, along with the associated time and cost, standard assumptions used by Doing Business in are summarized below. collecting the data (see the section in this chapter on what the indicators cover). Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Dominican Republic Time to No. Procedure Cost to complete complete Request a certificate to use the land and a certificate of no objection ("Certificado de uso de suelo", "certificado de no objecion") and receive inspection by the Municipal Council (Departamento de Planeamiento Urbano) Following the Doing Business case study assumptions and based on Resolution 5/2004 one needs to request a certificate to use the land and also obtain a certificate of no objection prior to obtaining the construction permit. Moreover, in order to obtain the certificate to use the land an inspection by the Municipal Council is required (the official cost for this inspection is DOP 500.00.). The land-use certificate confers the right to build on the plot, but it does not authorize construction. The certificate ensures that the project conforms to zoning regulations. The certificate of no objection is a certificate which according to your project plans, elevations and sections approves and 1 day DOP 500 1 appoints the urban design parameters. The request must be accompanied by several documents related to the land, including: • A copy (simple, unnotarized) of the real property deed for the plot (does not have to be recently obtained) • A cadastral plan • A map of the project’s location and a first draft of the project design drawings Agency: Municipal Council (Departamento de Planeamiento Urbano) Doing Business 2017 Dominican Republic 32 Time to No. Procedure Cost to complete complete Obtain a certificate to use the land and a certificate of no objection ("certificación de uso de suelo" y "certificación de no objeción" ) According to Resolution 5/2004, the cost to obtain a certificate to use the land is DOP 1,000 and the cost to obtain the 2 certificate of no objection is DOP 5,000. 15 days DOP 6,000 Agency: Municipal Council (Departamento de Planeamiento Urbano) Request and obtain approval of project design drawings by the Municipal Council The request for approval of the project design drawings must be accompanied by several documents, including the property deed, the cadastral plan, and project design drawings, certified by an architect or engineer registered at the Dominican College of Engineers and Architects (CODIA) by the corresponding Municipal Council. BuildCo must request an inspection upon filing the project drawings. This is a prerequisite for other procedures. Once the request is approved by the Municipal Council, the Municipality forwards the request to the Ministry of Public Works and Communications. The Ministry then grants a construction license for the project. The license is granted to the project itself 21 days DOP 97,545 3 and not to BuildCo. During this process, BuildCo must follow up with both agencies to ensure license processing. Construction must commence within 1 year from the date of issuance of the license. According to Resolution #5 2004 of the National District Office (Ayuntamiento del Distrito Nacional de Santo Domingo) the official cost for the construction of a warehouse is DOP 75.00 per sq. m. For a warehouse of 1300.6 sq. m. the total cost will be DOP 97,545.00. Agency: Municipal Council (Departamento de Planeamiento Urbano del Ayuntamiento de la jurisdicción correspondiente) Receive pre-registration inspection (preinspeccion) by the Ministry of Public Works and Communications (Departamento de Inspeccion de Edificaciones Privadas) According to article 86 of the Regulations for the Supervision 4 and General Inspection of Work (R-0004 Reglamento para la 1 day no charge Supervision e Inspeccion General de Obras), all projects which have been subject to the review and approval of project design drawing by the Ministry of Public Works and Communications (Oficina de Tramitacion de Planos) must be previously inspected (pre-registration) to verify that the construction has not started. Doing Business 2017 Dominican Republic 33 Time to No. Procedure Cost to complete complete Agency: Ministry of Public Works and Communications (Departamento de Inspeccion de Edificaciones Privadas) Request and obtain construction permit from the Ministry of Public Works and Communications Fees are paid once the license has been approved and the project has been valued by the Ministry of Public Works and Communications (Oficina de Tramitacion de Planos). The formula used by the Ministry of Public Works and Communications to determine the project value (is DOP 16,510.20 per sq. m (1,300.6 sq. m. x DOP 16,510 = DOP 21,473,166.12). Thus, the applicable administrative fees (based on a project value of 21,473,166.12 DOP ) to obtain the construction permit are as follows: • Fee for the Municipality, equivalent to 2.5 X 1,000 of the 5 construction cost: DOP 53,682.9 90 days DOP 96,629 • Fee for the Dominican College of Engineers and Architects (CODIA), equivalent to 2 X 1,000 of the construction cost: DOP 42,946.3 TOTAL: DOP 96,629.2 BuildCo must present a copy of receipts for both payments made to the Ministry of Public Works and Communications in order to obtain the construction permit. Agency: Ministry of Public Works and Communications (Ministerio de Obras Publicas y Comunicaciones) Receive an inspection before the lintel (zapata) of the project is made The inspection is carried out by an inspector from the Private Buildings Inspection Department (Departamento de Inspeccion de Edificaciones Privadas) of the Ministry of Public Works and Communications. All required inspections are set out in the Regulations for the Supervision and General Inspection of Work 6 (R-0004 Reglamento para la Supervision e Inspeccion General de 1 day DOP 232 Obras). BuildCo must complete an online application form and bring it to the Ministry of Public Works and Communications to schedule the inspection. Agency: Ministry of Public Works and Communications (Departamento de Inspeccion de Edificaciones Privadas) Receive an inspection before the space between galleries (entrepiso) is completed 7 BuildCo. receives an inspection before the space between 1 day DOP 232 galleries (entrepiso) is completed Agency: Ministry of Public Works and Communications Doing Business 2017 Dominican Republic 34 Time to No. Procedure Cost to complete complete (Departamento de Inspeccion de Edificaciones Privadas) Receive an inspection before the roof of the project is completed Once the contruction is in the last stages, BuildCo. receives an inspection before the roof of the project is completed. 1 day DOP 232 8 Agency: Ministry of Public Works and Communications (Departamento de Inspeccion de Edificaciones Privadas) Request water and sewage connection After the finalization of the work, BuildCo. requests water and sewage connection. 9 1 day no charge Agency: Corporation of Aqueduct and Sewage System of Santo Domingo (CAASD) Receive on-site inspection for water and sewage connection Due to the prior request, buildCo. receives an inspection in order to receive the utilities connections. 10 1 day no charge Agency: Corporation of Aqueduct and Sewage System of Santo Domingo (CAASD) Receive water and sewage connection A contract must be executed with the Corporation of Aqueducts and Sewage System of Santo Domingo. 11 45 days DOP 25,632 Agency: Corporation of Aqueduct and Sewage System of Santo Domingo (CAASD) Notify the Ministry of Public Works and Communications of building completion After utilities are connected, BuildCo. notifies to the Ministry of Public Works and Communications (Dirección de Edificación de la Secretaría de Estado de Obras Públicas) the completion of the 1 day no charge 12 work. Agency: Ministry of Public Works and Communications (Dirección de Edificación de la Secretaría de Estado de Obras Públicas) Doing Business 2017 Dominican Republic 35 Time to No. Procedure Cost to complete complete Receive final inspection Once notified of construction completion, the Ministry of Public Works undertakes a final on-site inspection. Usually, the inspectors visit the site in about a week or so. To obtain the final inspection, BuildCo must pay internal taxes of DOP 1,160.00 (five times the tax of DOP 232.00). This inspection verifies if the transit regulations have been fulfilled and examines the roof’s 5 days DOP 1,160 13 impermeability, the sanitary installations, the electrical installations,the door, floor, and window installations, and security safety (fire). Agency: Ministry of Public Works and Communications (Departamento de Inspeccion de Edificaciones Privadas) * Takes place simultaneously with another procedure. Source: Doing Business database. Note: Online procedures account for 0.5 days in the total time calculation. Doing Business 2017 Dominican Republic 36 DEALING WITH CONSTRUCTION PERMITS Building Quality Control Index The building quality control index is the sum of the The index ranges from 0 to 15, with higher values scores on the quality of building regulations, quality indicating better quality control and safety mechanisms in control before construction, quality control during the construction permitting system. construction, quality control after construction, The indicator is based on the same case study liability and insurance regimes, and professional assumptions as the measures of efficiency. certifications indices. Table 3.3 Summary of quality control and safety mechanisms in Dominican Republic Answer Score Building quality control index (0-15) 13.0 Which third-party entities are required by law to verify that the Licensed architect; building plans are in compliance with existing building Licensed engineer. regulations? (0-1) Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your Available online; Free of 1.0 economy? (0-1) charge. List of required Which requirements for obtaining a building permit are clearly documents; Fees to be specified in the building regulations or on any accessible website, 1.0 paid; Required brochure or pamphlet? (0-1) preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the Licensed architect; building plans are in compliance with existing building 1.0 Licensed engineer. regulations? (0-1) Quality control during construction index (0-3) 2.0 Inspections by in-house engineer; Inspections at What types of inspections (if any) are required by law to be various phases; No 1.0 carried out during construction? (0-2) inspections are legally required during construction. Mandatory inspections Do legally mandated inspections occur in practice during are always done in 1.0 construction? (0-1) practice. Quality control after construction index (0-3) 3.0 Yes, final inspection is done by government agency; Yes, in-house Is there a final inspection required by law to verify that the engineer submits building was built in accordance with the approved plans and 2.0 report for final regulations? (0-2) inspection; Final inspection is not required by law. Doing Business 2017 Dominican Republic 37 Answer Score Final inspection always Do legally mandated final inspections occur in practice? (0-1) 1.0 occurs in practice. Liability and insurance regimes index (0-2) 1.0 Architect or engineer; Which parties (if any) are held liable by law for structural flaws or Professional in charge problems in the building once it is in use (Latent Defect Liability 1.0 of the supervision; or Decennial Liability)? (0-1) Construction company. No party is required by Which parties (if any) are required by law to obtain an insurance law to obtain insurance policy to cover possible structural flaws or problems in the ; Insurance is 0.0 building once it is in use (Latent Defect Liability Insurance or commonly taken in Decennial Insurance)? (0-1) practice. Professional certifications index (0-4) 4.0 Minimum number of years of experience; What are the qualification requirements for the professional University degree in responsible for verifying that the architectural plans or drawings architecture or 2.0 are in compliance with existing building regulations? (0-2) engineering; Being a registered architect or engineer. Minimum number of years of experience; University degree in engineering, What are the qualification requirements for the professional who construction or 2.0 supervises the construction on the ground? (0-2) construction management; Being a registered architect or engineer. Source: Doing Business database. Doing Business 2017 Dominican Republic 38 GETTING ELECTRICITY Access to reliable and affordable electricity is vital for WHAT THE GETTING ELECTRICITY businesses. To counter weak electricity supply, many firms in developing economies have to rely on self- INDICATORS MEASURE supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the first step for Procedures to obtain an electricity connection a customer is always to gain access by obtaining a (number) connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for a Completing all required notifications and local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized warehouse, Obtaining external installation works and as well as the time and cost to complete them. These possibly purchasing material for these works procedures include applications and contracts with Concluding any necessary supply contract and electricity utilities, clearances from other agencies obtaining final supply and the external and final connection works. In addition, Doing Business also measures the reliability Time required to complete each procedure of supply and transparency of tariffs index (included (calendar days) in the aggregate distance to frontier score and Is at least 1 calendar day ranking on the ease of doing business) and the price Each procedure starts on a separate day of electricity (omitted from these aggregate measures). The ranking of economies on the ease of Does not include time spent gathering getting electricity is determined by sorting their information distance to frontier scores for getting electricity. Reflects the time spent in practice, with little These scores are the simple average of the distance follow-up and no prior contact with officials to frontier scores for each of the component Cost required to complete each procedure (% indicators. To make the data comparable across of income per capita) economies, several assumptions are used. Official costs only, no bribes Assumptions about the warehouse Excludes value added tax The warehouse: The reliability of supply and transparency of  Is owned by a local entrepreneur. tariffs index  Is located in the economy’s largest business city. Sum of the scores of six component indices: For 11 economies the data are also collected for Duration and frequency of outages the second largest business city. Tools to monitor power outages  Is located in an area where similar warehouses Tools to restore power supply are typically located. In this area a new electricity connection is not eligible for a special investment Regulatory monitoring of utilities’ performance promotion regime (offering special subsidization Financial deterrents aimed at limiting outages or faster service, for example). Transparency and accessibility of tariffs  Is located in an area with no physical constraints. Price of electricity (cents per kilowatt-hour)* For example, the property is not near a railway. Price based on monthly bill for commercial  Is a new construction and is being connected to warehouse in case study electricity for the first time. *Price of electricity is not included in the calculation of distance to frontier nor ease of doing business ranking Doing Business 2017 Dominican Republic 39 The warehouse (continued): Assumptions about the monthly consumption  Has two stories, both above ground, with a total  It is assumed that the warehouse operates 30 days surface area of approximately 1,300.6 square a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), meters (14,000 square feet). The plot of land on with equipment utilized at 80% of capacity on which it is built is 929 square meters (10,000 average and that there are no electricity cuts square feet). (assumed for simplicity reasons).  Is used for storage of goods.  The monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 Assumptions about the electricity connection kWh. The electricity connection:  If multiple electricity suppliers exist, the warehouse  Is a permanent one. is served by the cheapest supplier.  Is a three-phase, four-wire Y connection with a  Tariffs effective in March of the current year are subscribed capacity of 140-kilo-volt-ampere used for calculation of the price of electricity for the (kVA) with a power factor of 1, when 1 kVA = 1 warehouse. Although March has 31 days, for kilowatt (kW). calculation purposes only 30 days are used.  Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located  Requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.  Includes only a negligible length in the customer’s private domain.  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 panel or switchboard and the meter base. Doing Business 2017 Dominican Republic 40 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity connection Most indicator sets refer to a case scenario in the largest in Dominican Republic? According to data collected by business city of an economy, except for 11 economies for Doing Business, getting electricity there requires 7.0 which the data are a population-weighted average of the procedures, takes 67.0 days and costs 267.1% of income 2 largest business cities. See the chapter on distance to per capita (figure 4.1). frontier and ease of doing business ranking at the end of this profile for more details. Figure 4.1 What it takes to obtain an electricity connection in Dominican Republic Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Doing Business 2017 Dominican Republic 41 GETTING ELECTRICITY Globally, Dominican Republic stands at 148 in the another perspective in assessing how easy it is for an ranking of 190 economies on the ease of getting entrepreneur in Dominican Republic to connect a electricity (figure 4.2). The rankings for comparator warehouse to electricity. economies and the regional average ranking provide Figure 4.2 How Dominican Republic and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2017 Dominican Republic 42 GETTING ELECTRICITY Obtaining an electricity connection is essential to enable ensure safety in the connection process while keeping a business to conduct its most basic operations. In many connection costs reasonable, governments around the economies the connection process is complicated by the world have worked to consolidate requirements for multiple laws and regulations involved—covering service obtaining an electricity connection. What reforms in quality, general safety, technical standards, procurement getting electricity has Doing Business recorded in practices and internal wiring installations. In an effort to Dominican Republic (table 4.1)? Table 4.1 How has Dominican Republic made getting electricity easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic made getting an electricity DB2017 connection faster by reducing the time required to approve electrical connection plans. Source: Doing Business database. Doing Business 2017 Dominican Republic 43 GETTING ELECTRICITY What are the details? The indicators reported here for Dominican Republic are OBTAINING AN ELECTRICITY CONNECTION* based on a set of specific procedures—the steps that an entrepreneur must complete to get a warehouse connected to electricity by the local distribution utility— Name of utility: EdeSur identified by Doing Business. Data are collected from the distribution utility, then completed and verified by Price of electricity electricity regulatory agencies and independent (US cents per kWh): 22.0 professionals such as electrical engineers, electrical contractors and construction companies. The electricity City: Santo Domingo distribution utility surveyed is the one serving the area (or areas) in which warehouses are located. If there is a *Price is calculated as a monthly consumption of 26,880 kWh choice of distribution utilities, the one serving the largest for business customers, based on a standardized case study number of customers is selected. adopted by the getting electricity methodology. Doing Business measures the price of electricity but does not include these The procedures are those that apply to a warehouse and data when calculating the distance to frontier score for getting electricity connection matching the standard electricity or the ranking on the ease of getting electricity. assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). The procedures, along with the associated time and cost, are summarized below. Table 4.2 Summary of time, cost and procedures for getting electricity in Dominican Republic Time to No. Procedure Cost to complete complete Obtain approval of electrical plans from EDESUR A certified electrician of the client designs the interconnection plans and sends them to EDESUR for approval. In those plans the electrician specifies the nature of the transformer to be installed. Two copies of the plans need to be submitted to the nearest commercial office of EDESUR to the neighborhood of the warehouse. EDESUR analyses the interconnection plans and suggest corrections. It would require on average two to three visits to EDESUR to correct plans. A tax of RD$ 1 2,500 must be paid at the time of submission of the application by the 30 calendar days DOP 5,000 client and RD$ 1,500 for any further visit for submission of corrected plans. An additional RD$ 1,000 for project review is also charged. When the final connections have been approved, the client will have to submit 6 copies of the plans and EDESUR will give only 5 stamped copies back to the client. Agency: EDESUR Doing Business 2017 Dominican Republic 44 Time to No. Procedure Cost to complete complete Hire electrician to carry out external works Once the interconnection plans have been approved by EDESUR, the client hires an electrician to build the electric system (medium voltage 2 net, substation, meter, etc.) 7 calendar days DOP 578,500 Agency: Electrician Receive external inspection by EDESUR EDESUR comes to check that the works follow the approved plan and raises observations to correct those works which do not follow the approved plans. The client must request the inspection when he considers everything is ready for interconnection. The first inspection do 3 not bear any cost, but EDESUR charges RD$ 500 for each inspection after 7 calendar days DOP 0 the third one. EDESUR delivers a letter of approval (carta de Aceptación de la Obra). Agency: Edesur Receive interconnection estimate from EDESUR The interconnection estimate contains the cost that the client must pay to EDESUR to carry out the interconnection works to the electricity distribution network. The client must submit the final letter of approval of EDESUR, two copies of the approved plans, a CD with the approved 7 calendar days DOP 1,000 4 plan in DWG, a letter of request of estimate and he has to pay a stamp duty of RD$ 500. Agency: Edesur Pay taxes to the professional association CODIA After receiving the interconnection estimate from EDESUR, the client must pay the stamp duty at CODIA. The client must pay within 3 months. After payment has been done, EDESUR will carry out the interconnection 1 calendar day DOP 5,000 5 works. Agency: CODIA Receive external works from EDESUR Interconnection works are carried out by EDESUR with a TCT team 15 calendar days DOP 25,000 6 (Brigada de Trabajo Con Tensión). If the works cannot be carried out with full voltage, EDESUR will stop the energy in the circuit and will charge that cost to the client. Doing Business 2017 Dominican Republic 45 Time to No. Procedure Cost to complete complete Agency: Edesur Sign supply contract with EDESUR and receive meter installation The client has to open a user account with EDESUR. The client has to deposit an amount which is reimbursed at the cancelation of the contract. The deposit equals twice the client's bill in RD$ and it is calculated on the basis of the capacity declared by the client or as a *7 percentage of the substation capacity which would go between 60 to 7 calendar days DOP 117,534.93 80%. Law 125-01 establishes a payment of monthly interest for the deposit but this dispositions have not been implemented yet. Agency: Edesur * Takes place simultaneously with previous procedure. Source: Doing Business database. Doing Business 2017 Dominican Republic 46 GETTING ELECTRICITY Reliability of supply and transparency of tariffs index The reliability of supply and transparency of tariffs Doing Business uses the system average interruption index encompasses quantitative data on the duration duration index (SAIDI) and the system average and frequency of power outages as well as interruption frequency index (SAIFI) to measure the qualitative information on the mechanisms put in duration and frequency of power outages in the largest place by the utility for monitoring power outages business city of each economy (for 11 economies the data and restoring power supply, the reporting are also collected for the second largest business city). relationship between the utility and the regulator for SAIDI is the average total duration of outages over the power outages, the transparency and accessibility of course of a year for each customer served, while SAIFI is tariffs and whether the utility faces a financial the average number of service interruptions experienced deterrent aimed at limiting outages (such as a by a customer in a year. Annual data (covering the requirement to compensate customers or pay fines calendar year) are collected from distribution utility when outages exceed a certain cap). companies and national regulators on SAIDI and SAIFI. Both SAIDI and SAIFI estimates include load shedding. The index ranges from 0 to 8, with higher values indicating greater reliability of electricity supply and greater transparency of tariffs. Table 4.3 Reliability of Supply and Transparency of Tariff Index in Dominican Republic Answer Score Reliability of supply and transparency of tariff index (0-8) 0.0 Total duration and frequency of outages per customer a year (0-3) 0.0 System average interruption duration index (SAIDI) 116.4 System average interruption frequency index (SAIFI) 35.7 Mechanisms for monitoring outages (0-1) 1.0 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1.0 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1.0 Does a regulator—that is, an entity separate from the utility—monitor Yes the utility’s performance on reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0.0 Does the utility either pay compensation to customers or face fines by No the regulator (or both) if outages exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1.0 Are effective tariffs available online? Yes Link to the website, if available online http://www.sie.go Doing Business 2017 Dominican Republic 47 Answer Score b.do/index.php?o ption=com_conte nt&view=article& id=100 ; http://www.edesu r.com.do/ Are customers notified of a change in tariff ahead of the billing cycle? Yes Price of electricity (US cents per kWh) 22.0 Source: Doing Business database. Note: If data on power outages is not collected or if the SAIFI index or SAIDI index are above the threshold of 100, the economy is not eligible to obtain a score in the Reliability of Supply and Transparency of Tariff Index. If SAIDI and SAIFI are 12 (equivalent to an outage of one hour each month) or below, a score of 1 is assigned. If SAIDI and SAIFI are 4 (equivalent to an outage of one hour each quarter) or below, 1 additional point is assigned. Finally, if SAIDI and SAIFI are 1 (equivalent to an outage of one hour per year) or below, 1 more point is assigned. Doing Business measures the price of electricity but does not include these data when calculating the distance to frontier score for getting electricity or the ranking on the ease of getting electricity. The price of electricity is measured in cents per kilowatt-hour. On the basis of the assumptions about monthly consumption, a monthly bill for a commercial warehouse in the largest business city of the economy is computed for the month of March. As noted, the warehouse uses electricity 30 days a month, from 9:00 a.m. to 5:00 p.m., so different tariff schedules may apply if a time-of-use tariff is available. Doing Business 2017 Dominican Republic 48 REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being accepted immovable property (number) as collateral for loans—limiting access to finance. Preregistration (for example, checking for liens, notarizing sales agreement, paying property What do the indicators cover? transfer taxes) Doing Business records the full sequence of Registration in the economy’s largest business procedures necessary for a business to purchase city property from another business and transfer the property title to the buyer’s name. The transaction is Postregistration (for example, filing title with the municipality) considered complete when it is opposable to third parties and when the buyer can use the property, Time required to complete each procedure use it as collateral for a bank loan or resell it. In (calendar days) addition, Doing Business also measures quality of Does not include time spent gathering the land administration system in each economy. information The ranking of economies on the ease of registering property is determined by sorting their distance to Each procedure starts on a separate day— frontier scores for registering property. These scores though procedures that can be fully completed online are an exception to this rule are the simple average of the distance to frontier scores for each of the component indicators. To Procedure considered completed once final make the data comparable across economies, document is received several assumptions about the parties to the No prior contact with officials transaction, the property and the procedures are used. Cost required to complete each procedure (% of property value) The parties (buyer and seller): Official costs only, no bribes  Are limited liability companies, 100% domestically and privately owned and perform No value added or capital gains taxes included general commercial activities in the economy’s Quality of land administration index (0-30) largest business city.  Have 50 employees each, all of whom are  Has no mortgages attached, has been under the nationals. same ownership for the past 10 years. The property (fully owned by the seller):  Consists of 557.4 square meters (6,000 square feet)  Has a value of 50 times income per capita. The of land and a 10-year-old, 2-story warehouse of 929 sale price equals the value and entire property square meters (10,000 square feet). The warehouse is will be transferred. in good condition and complies with all safety  Is registered in the land registry or cadastre, or standards, building codes and legal requirements. both, and is free of title disputes. There is no heating system.  Is located in a periurban commercial zone, and no rezoning is required. Doing Business 2017 Dominican Republic 49 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in Most indicator sets refer to a case scenario in the largest Dominican Republic? According to data collected by business city of an economy, except for 11 economies for Doing Business, registering property there requires 6.0 which the data are a population-weighted average of the procedures, takes 45.0 days and costs 3.5% of the 2 largest business cities. See the chapter on distance to property value (figure 5.1). The score on the quality of frontier and ease of doing business ranking at the end of land administration index is 14.5 this profile for more details. Figure 5.1 What it takes to register property in Dominican Republic Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Doing Business 2017 Dominican Republic 50 REGISTERING PROPERTY Globally, Dominican Republic stands at 82 in the ranking the regional average ranking provide other useful of 190 economies on the ease of registering property information for assessing how easy it is for an (figure 5.2). The rankings for comparator economies and entrepreneur in Dominican Republic to transfer property. Figure 5.2 How Dominican Republic and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2017 Dominican Republic 51 REGISTERING PROPERTY What are the details? The indicators reported here are based on a set of STANDARD PROPERTY TRANSFER specific procedures—the steps that a buyer and seller must complete to transfer the property to the buyer’s name—identified by Doing Business through information collected from local property lawyers, Property value: DOP 13,705,646 notaries and property registries. These procedures are those that apply to a transaction matching the City: Santo Domingo standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). The procedures, along with the associated time and cost, are summarized below. Table 5.2 Summary of time, cost and procedures for registering property in Dominican Republic Time to No. Procedure Cost to complete complete Obtain a judicial status certificate from the title Registry Office. A non-encumbrance certificate ("Certificado del Estado Jurídico del Inmueble") must be obtained from the Title Registry Office in order to ensure that the property has no liens and there are no other conflicts DOP 1,040 (DOP related to it. The time varies in each district. In Santo Domingo it takes 15 - 20 days 1,000, plus stamp about 15-20 days, while in the interior of the country it is faster. The fees (simultaneous duties for DOP 30 1 to obtain this certificate were increased in September 2015 by decision with Procedure 2 (Law 91/83) and of the Council of the Judiciary laid down in the minutes No. 25/2015 of and 3) DOP 10 (Law June 15th 2015. 33/91) Agency: Title Registry Office Site inspection to establish the exact location of the property A surveyor ("agrimensor") inspects the site in order to establish the exact 2 days location of the property. This is not mandatory, but a way the buyer has (simultaneous DOP 5,000 – *2 to protect against potential problems. with Procedure 1 12,000 and 3) Agency: Surveyor (agrimensor) Obtain the appraisal of the property and the tax certificate at the Dirección General de Impuestos Internos (Tax Authority) The parties must request the valuation of the property for the payment 5 to 7 days DOP 300 to obtain *3 of the transfer tax. A certificate is also obtained at the DGI stating that (simultaneous the tax certificate the real estate taxes are up to date. with 1 and 2) Agency: Tax Authority (Dirección General de Impuestos Internos) Doing Business 2017 Dominican Republic 52 Time to No. Procedure Cost to complete complete Notarization of the sale purchase agreement Notarization fee of DOP 50,000. After the agreement is reached and the documentation has been exchanged by the parties, the sale purchase agreement must be Fee schedule to notarized by the public notary. The Notary can no longer freely establish Notarize the sale his fees after the enactment of the Notarial Law No. 140-15 (which agreement is the institutes the Dominican Bar of Notaries (Colegio Dominicano de following: Notarios) in August 2015. The Notaries have the obligation to observe the schedule of fees set forth in this law which are: From DOP 1,000.01 to DOP Art. 66: For every hour of service: DOP 1,000. After three hours, DOP 100,000.00: DOP 2,000 per hour. 3,000.00; From DOP 100,000.01 to DOP Art. 66 A) Sale and purchase agreement fee schedule: 200,000.00: DOP 5,000.00; From DOP Between DOP 1000.01 to DOP 100,000: 200,000.01 to DOP DOP 3,000 500,000.00: DOP 10,000.00; Between DOP 100,000.01 to DOP 200,000: DOP 1 day From DOP 4 5,000 500,000.01 to DOP Between DOP 200,000.01 to DOP 500,000: DOP 1,500,000.00: DOP 10,000 20,000.00; From DOP Between DOP 500,000.01 to DOP 1,500,000: DOP 1,500,000.01 to 20,000 DOP 3,000,000.00: DOP 25,000.00; Between DOP 1,500,000.01 to DOP 3,000,000: From DOP DOP 25,000 3,000,000.01 to DOP 5,000,000.00: Between DOP 3,000,000.01 to DOP 5,000,000: DOP 30,000.00; DOP 30,000 From DOP Between DOP 5,000,000.01 to DOP 10,000,000: 5,000,000.01 to DOP 40,000 DOP 10,000,000.00: Between DOP 10,000,000.01 to DOP 20,000,000: DOP DOP 40.000.00; 50,000 From DOP 10,000,000.01 to Between DOP 20,000,000.01 to DOP 30,000,000: DOP DOP 60,000 20,000,000.00: DOP 50,000.00; Doing Business 2017 Dominican Republic 53 Time to No. Procedure Cost to complete complete Between DOP 30,000,000.01 to DOP 40,000,000: DOP From DOP 70,000 20,000,000.01 to DOP Between DOP 40,000,000.01 to DOP 50,000,000: DOP 30,000,000.00: 80,000 DOP 60,000.00; From DOP Between DOP 50,000,000.01 to DOP 100,000,000: DOP 100,000 30,000,000.01 to DOP Between DOP 100,000,000.01 to DOP 150,000,000: DOP 40,000,000.00: 200,000 DOP 70.000.00; From DOP 40,000,000.01 to DOP 50,000,000.00: DOP 80,000.00; From DOP 50,000,000.01 to Agency: Notary DOP 100,000,000.00: DOP 100,000.00; From DOP 100,000,000.01 to DOP 150,000,000.00: DOP 200,000.00; Payment of taxes at the Dirección General de Impuestos (Tax Authority) After the inspection is over and the value of the property is calculated, a tax of 3% of the property value must be paid before the "Dirección General de Impuestos Internos" (Tax Authority) before registering the property transfer, by virtue of de “Eficiencia Recaudatoria” Law No. 173- 07 dated July 17th, 2007. If there is a difference between the property value indicated in the 3% of property 5 purchase agreement and the one estimated by the Internal Revenue 1 day value (transfer tax) Department upon valuation, the higher value will be the one considered as valid for calculation of this transfer tax. However, said law provides an exemption of this tax in cases of transfer of real estate properties acquired by means of loans with financial institutions and cooperatives, if such real estate property has a value under DOP$1,000,000.00 adjustable upon inflation. The property tax must be paid within the six (6) months following to the Doing Business 2017 Dominican Republic 54 Time to No. Procedure Cost to complete complete Sale and Purchase Agreement entered by the parties. Otherwise, surcharges will be applied. Surcharges amount to 10% of the sum not paid (the corresponding transfer taxes) for the first month or fraction of the month. To any additional delays the Tax authorities will charge a 4% (per month or fraction) over the 10% plus a 1.73% indemnity (per month or fraction). Moreover, on July 10, 2009, Law 182-09 was enacted granting a tax exemption on the 2% that must be paid to record a mortgage. This exemption only applies when it is proved that a new loan/mortgage has been obtained to pay off an existing loan secured with the same land. Consequently, the former mortgage would be cancelled to record the new one, with no additional cost. Stamp duties are required to be paid by Law 33-91 and Law 91-83 as well before registering the deed. Agency: Tax Authority (Dirección General de Impuestos Internos) Buyer files the property transfer request before the Title Registrar´s Office When filing request for property registration before the Title Registrar´s Office, stamp duties are paid (Art. 13 of Law 140-2015: DOP 100 for the Notarial receipt; 30 DOP according to Law 91; and 20 DOP according to Law 33/91). Additionally, Article 42 (2) of Law 108/05 establishes a special contribution to the "Fondo de Garantía de Inmuebles Registrados" of DOP 5,000 to be paid every time a new Certificate of Title is issued after a property transaction (in practice, this Fund has not been created yet and Registrars are not requiring them). After all payments DOP 150 (DOP 100 have been made and all documents are ready, the buyer will apply for Notarial receipt registration of the property under his name at the Property Registry. (Law 140/15), plus 6 20 - 30 days stamp duties of 30 140-201 DOP (Law 91/83), and DOP 20 (Law The registrar will analyze the documentation and, if everything is correct, 33/91)) will register the property under the name of the buyer, issue a new Certificate of Title in the name of the buyer, cancel the old Certificate and will set the date for giving the new title to the buyer. Because of the higher workload, this procedure takes longer in Santo Domingo and Santiago than in other provinces, taking between 20 and 30 days to complete this procedure. However, the “Ley de Registro de la Propiedad Inmobiliaria”, passed on Doing Business 2017 Dominican Republic 55 Time to No. Procedure Cost to complete complete March 2005 to replace the previous law from 1947, together with the "Reglamento General del Registro de Títulos" of September 2009, introduced changes into the system seen up to now. The registrar should take no more than 45 days to qualify the transfer. The filed documentation shall include: (i) Notarized purchase agreement (obtained in Procedure 4). (ii) Real estate property taxes declaration; receipt of payment; and Certification issued by the Tax Authority stating the Seller is up to date on the payment of taxes on the real estate property (obtained in Procedure 5). (iii) Payment of stamp duties (completed in this procedure). (iv) Copy of identity documents for seller and buyer (such documents may vary whether seller and buyer are natural persons or companies). (v) Copies of their Mercantile Registration Certificate ("Certificado de Registro Mercantil") issued by the corresponding Chamber of Commerce, and (vi) Certificate of registration at the National Taxpayers Registry ("RNC") issued by the Dirección General de Impuestos Internos (the Tax Authority) It should also be noted that the Buyer is also required to file the original copy of the Title Certificate. Furthermore, if either Buyer and/or Seller are companies or legal entities, the authorities will require evidence of the corporate approval of the transaction (i.e. minutes of the meeting of the corporate body that has authorized the purchase/sale). Another relevant point is that if the Buyer and/or Seller are foreigners, they must present two different copy of their identity documents: their passport and any official identification from their country of origin. The land registry operates with the Torrens title system and is being digitized since 2005. All new transactions are completed digitally, but all titles created before 2005 are not digitized yet. The registry has consultation room units (“Departamento de sala de consultas”) where the registry’s electronic database is available. Agency: Property Registry ("Oficina de Registro de Títulos") Doing Business 2017 Dominican Republic 56 Time to No. Procedure Cost to complete complete * Takes place simultaneously with another procedure. Source: Doing Business database. Note: Online procedures account for 0.5 days in the total time calculation. Doing Business 2017 Dominican Republic 57 REGISTERING PROPERTY Quality of land administration The quality of land administration index is the sum of If private sector entities were unable to register property the scores on the reliability of infrastructure, transfers in an economy between June 2015 and June transparency of information, geographic coverage, 2016, the economy receives a “no practice” mark on the land dispute resolution and equal access to property procedures, time and cost indicators. A “no practice” rights indices. economy receives a score of 0 on the quality of land administration index even if its legal framework includes The index ranges from 0 to 30, with higher values provisions related to land administration. indicating better quality of the land administration system. Table 5.3 Summary of quality of land administration in Dominican Republic Answer Score Quality of the land administration index (0-30) 14.5 Reliability of infrastructure index (0-8) 6.0 Oficina de What is the institution in charge of immovable property registration? Registro de Títulos In what format are the majority of title or deed records kept in the Computer/Scann largest business city—in a paper format or in a computerized format 1.0 ed (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, Yes 1.0 mortgages, restrictions and the like)? In what format are the majority of maps of land plots kept in the Computer/Scann largest business city—in a paper format or in a computerized format 1.0 ed (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information Yes 1.0 system)? Is the information recorded by the immovable property registration Different agency and the cadastral or mapping agency kept in a single database, databases but 1.0 in different but linked databases or in separate databases? linked Do the immovable property registration agency and cadastral or Yes 1.0 mapping agency use the same identification number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in Anyone who pays 1.0 charge of immovable property registration in the largest business city? the official fee Is the list of documents that are required to complete any type of Yes, online 0.5 property transaction made publicly available–and if so, how? Doing Business 2017 Dominican Republic 58 Answer Score http://www.ji.gov. do/images/Resol uciones/Resoluci on21-0313.pdf (page 3) http://ji.gov.do/in Link for online access: dex.php/atencion -al- usuario/actuacion es-y- requisitos/requisit os-registro-de- titulos/42- transferencia Is the applicable fee schedule for any property transaction at the agency in charge of immovable property registration in the largest Yes, online 0.5 business city made publicly available–and if so, how? http://www.ji.gov. do/images/Resol uciones/Resoluci on21-0313.pdf (page 5) Link for online access: http://ji.gov.do/in dex.php/atencion -al- usuario/pagos- de-tasas-por- servicios Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property Yes, in person 0.0 ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property No 0.0 registration? Contact information: Are there publicly available official statistics tracking the number of No 0.0 transactions at the immovable property registration agency? Number of property transfers in the largest business city in 2015: Doing Business 2017 Dominican Republic 59 Answer Score Freely accessible Who is able to consult maps of land plots in the largest business city? 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made Yes, online 0.5 publicly available—and if so, how? http://ji.gov.do/in dex.php/atencion -al- Link for online access: usuario/pagos- de-tasas-por- servicios Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it Yes, in person 0.0 communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about No 0.0 a problem that occurred at the cadastral or mapping agency? Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at No 0.0 the immovable property registry? Are all privately held land plots in the largest business city formally No 0.0 registered at the immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 5.5 Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third Yes 1.5 parties? Is the system of immovable property registration subject to a state or Yes 0.5 private guarantee? Is there a specific compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction Yes 0.5 based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of Yes 0.5 contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Doing Business 2017 Dominican Republic 60 Answer Score Does the legal system require verification of the identity of the parties Yes 0.5 to a property 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 Yes 1.0 documents? For a standard land dispute between two local businesses over tenure Tribunal de rights of a property worth 50 times gross national income (GNI) per Jurisdicción capita and located in the largest business city, what court would be in Original charge of the case in the first instance? How long does it take on average to obtain a decision from the first- Between 2 and 3 1.0 instance court for such a case (without appeal)? years Are there any statistics on the number of land disputes in the first No 0.0 instance? The "Tribunal de Jurisdicción Original" specializes in land dispute matters. Number of land disputes in the largest business city in 2015: There are no statistics available for 2015. For 2014, 2,680 disputes were lodged in Santo Domingo. Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights Yes 0.0 to property? Do married men and married women have equal ownership rights to Yes 0.0 property? Source: Doing Business database. Doing Business 2017 Dominican Republic 61 GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable lenders to view and consider a potential borrower’s Strength of legal rights index (0–12) financial history (positive or negative) when assessing Rights of borrowers and lenders through risk and they allow borrowers to establish a good collateral laws credit history that will facilitate their access to credit. Protection of secured creditors’ rights through Sound collateral laws enable businesses to use their bankruptcy laws assets, especially movable property, as security to generate capital—while strong creditors’ rights have Depth of credit information index (0–8) been associated with higher ratios of private sector Scope and accessibility of credit information credit to GDP. distributed by credit bureaus and credit registries What do the indicators cover? Credit bureau coverage (% of adults) Doing Business assesses the sharing of credit information and the legal rights of borrowers and Number of individuals and firms listed in largest lenders with respect to secured transactions through credit bureau as percentage of adult population 2 sets of indicators. The depth of credit information Credit registry coverage (% of adults) index measures rules and practices affecting the coverage, scope and accessibility of credit Number of individuals and firms listed in credit registry as percentage of adult population information available through a credit registry or a credit bureau. The strength of legal rights index measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses two case scenarios, Case A and Case B, to determine the scope Has up to 50 employees. of the secured transactions system, involving a secured borrower and a secured lender and Is 100% domestically owned, as is the lender. examining legal restrictions on the use of movable The ranking of economies on the ease of getting credit collateral (for more details on each case, see the Data is determined by sorting their distance to frontier scores Notes section of the Doing Business 2017 report). for getting credit. These scores are the distance to These scenarios assume that the borrower: frontier score for the strength of legal rights index and Is a domestic limited liability company. the depth of credit information index. Has its headquarters and only base of operations in the largest business city. For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2017 Dominican Republic 62 GETTING CREDIT Where does the economy stand today? How well do the credit information system and collateral Globally, Dominican Republic stands at 101 in the and bankruptcy laws in Dominican Republic facilitate ranking of 190 economies on the ease of getting credit access to credit? The economy has a score of 8.0 on the (figure 6.1). The rankings for comparator economies depth of credit information index and a score of 1.0 on provide other useful information for assessing how well the strength of legal rights index (see the summary of regulations and institutions in Dominican Republic scoring at the end of this chapter for details). Higher support lending and borrowing. scores indicate more credit information and stronger legal rights for borrowers and lenders. Figure 6.1 How Dominican Republic and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2017 Dominican Republic 63 GETTING CREDIT One way to put an economy’s score on the getting credit rights index for Dominican Republic and shows the indicators into context is to see where the economy scores for comparator economies as well as the regional stands in the distribution of scores across economies. average score. Figure 6.3 shows the same for the depth Figure 6.2 highlights the score on the strength of legal of credit information index. Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared — and lenders? and how widely? Economy scores on strength of legal rights index Economy scores on depth of credit information index Source: Doing Business database. Source: Doing Business database. Note: Higher scores indicate that collateral and bankruptcy Note: Higher scores indicate the availability of more credit laws are better designed to facilitate access to credit. information, from either a credit registry or a credit bureau, Source: Doing Business database. to facilitate lending decisions. 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. Doing Business 2017 Dominican Republic 64 GETTING CREDIT When economies strengthen the legal rights of lenders information, they can increase entrepreneurs’ access to and borrowers under collateral and bankruptcy laws, and credit. What credit reforms has Doing Business recorded increase the scope, coverage and accessibility of credit in Dominican Republic (table 6.1)? Table 6.1 How has Dominican Republic made getting credit easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic improved its credit information system DB2015 by enacting a new law regulating the protection of personal data and the operation of credit reporting institutions. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 65 GETTING CREDIT What are the details? The getting credit indicators reported here for The data on the legal rights of borrowers and lenders are Dominican Republic are based on detailed information gathered through a survey of financial lawyers and collected in that economy. The data on credit verified through analysis of laws and regulations as well information sharing are collected through a survey of a as public sources of information on collateral and credit registry and/or credit bureau (if one exists). To bankruptcy laws. For the strength of legal rights index, a construct the depth of credit information index, a score score of 1 is assigned for each of 10 aspects related to of 1 is assigned for each of 8 features of the credit legal rights in collateral law and 2 aspects in bankruptcy registry or credit bureau (see summary of scoring below). law. Strength of legal rights index (0–12) Index score: 1.0 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable 0 assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of 0 movable assets, without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its 0 assets, without requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to 0 the products, proceeds or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a 1 maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is 0 unified geographically and by asset type, with an electronic database indexed by debtor's name? Can banks and financial institutions access borrowers’ credit information online (for example, 0 through a web interface, a system-to-system connection or both)? Does a modern collateral registry exist in which registrations, amendments, cancellations and 0 searches can be performed online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor 0 defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is 0 liquidated? Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by 0 providing clear grounds for relief from the stay and/or sets a time limit for it? Doing Business 2017 Dominican Republic 66 Strength of legal rights index (0–12) Index score: 1.0 Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through public auction and 0 private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Depth of credit information index (0–8) Credit bureau Credit registry Index score: 8.0 Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years Yes Yes 1 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 Yes Yes 1 capita distributed? By law, do borrowers have the right to access their data Yes Yes 1 in the credit bureau or credit registry? Can banks and financial institutions access borrowers’ credit information online (for example, through an online Yes Yes 1 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 institutions Yes No 1 assess the creditworthiness of borrowers? 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 4,932,436 1,657,823 Number of firms 66,937 21,995 Total 4,999,373 1,679,818 Total percentage of adult population 74.9 25.2 Source: Doing Business database. Doing Business 2017 Dominican Republic 67 PROTECTING MINORITY INVESTORS Protecting minority investors matters for the ability of WHAT THE PROTECTING MINORITY companies to raise the capital they need to grow, innovate, diversify and compete. Effective regulations INVESTORS INDICATORS MEASURE define related-party transactions precisely, promote clear and efficient disclosure requirements, require Extent of disclosure index (0–10) shareholder participation in major decisions of the Review and approval requirements for related-party company and set detailed standards of accountability transactions; Disclosure requirements for related-party for company insiders. transactions What do the indicators cover? Extent of director liability index (0–10) Ability of minority shareholders to sue and hold Doing Business measures the protection of minority interested directors liable for prejudicial related-party investors from conflicts of interest through one set of transactions; Available legal remedies (damages, indicators and shareholders’ rights in corporate disgorgement of profits, fines, imprisonment, rescission governance through another. The ranking of economies of the transaction) on the strength of minority investor protections is Ease of shareholder suits index (0–10) determined by sorting their distance to frontier scores Access to internal corporate documents; Evidence for protecting minority investors. These scores are the obtainable during trial and allocation of legal expenses simple average of the distance to frontier scores for the extent of conflict of interest regulation index and the Extent of conflict of interest regulation index (0– extent of shareholder governance index. To make the 10) data comparable across economies, a case study uses Simple average of the extent of disclosure, extent of several assumptions about the business and the director liability and ease of shareholder indices transaction. Extent of shareholder rights index (0-10) The business (Buyer): Shareholders’ rights and role in major corporate decisions  Is a publicly traded corporation listed on the Extent of ownership and control index (0-10) economy’s most important stock exchange. If the Governance safeguards protecting shareholders from number of publicly traded companies listed on that undue board control and entrenchment exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer Extent of corporate transparency index (0-10) is a large private company with multiple Corporate transparency on ownership stakes, shareholders. compensation, audits and financial prospects Extent of shareholder governance index (0–10)  Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer Simple average of the extent of shareholders rights, extent of ownership and control and extent of corporate where permitted, even if this is not specifically transparency indices required by law. Strength of minority investor protection index (0–  Has a supervisory board (applicable to economies 10) with a two-tier board system) on which 60% of the Simple average of the extent of conflict of interest shareholder-elected members have been appointed regulation and extent of shareholder governance indices by Mr. James, who is Buyer’s controlling shareholder and a member of Buyer’s board of directors.  Has not adopted any bylaws or articles of association that differ from default minimum standards and does not follow any nonmandatory codes, principles, recommendations or guidelines Doing Business 2017 Dominican Republic 68 relating to corporate governance.  Is a manufacturing company with its own distribution network. The transaction involves the following details:  Mr. James owns 60% of Buyer and elected two directors to Buyer’s five-member board.  Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.  Mr. James proposes that Buyer pur chase Seller’s unused fleet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.  The proposed transaction is part of the company’s ordinary course of business and is not outside the authority of the company.  Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made (that is, the transaction is not fraudulent).  The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Doing Business 2017 Dominican Republic 69 PROTECTING MINORITY INVESTORS Where does the economy stand today? How strong are minority investor protections against protection index (figure 7.1). While the indicator does self-dealing in Dominican Republic? The economy has a not measure all aspects related to the protection of score of 5.3 on the strength of minority investor minority investors, a higher ranking does indicate that an protection index, with a higher score indicating stronger economy’s regulations offer stronger minority investor protections. protections against self-dealing in the areas measured. Globally, Dominican Republic stands at 87 in the ranking of 190 economies on the strength of minority investor Figure 7.1 How Dominican Republic and comparator economies perform on the strength of minority investor protection index Source: Doing Business database. Doing Business 2017 Dominican Republic 70 PROTECTING MINORITY INVESTORS One way to put an economy’s scores on the A summary of scoring for the protecting minority investors protecting minority investors indicators into context indicators at the end of this chapter provides details on is to see where the economy stands in the how the indices were calculated. distribution of scores across comparator economies. Figure 7.2 highlights the scores on the various minority investor protection indices for Dominican Republic. Figure 7.2 Summary of the various minority investor protection indices for Dominican Republic and comparator economies. Source: Doing Business database. Doing Business 2017 Dominican Republic 71 PROTECTING MINORITY INVESTORS Economies with the strongest protections of minority result, reforms to strengthen minority investor investors from self-dealing require detailed disclosure protections may move ahead on different fronts—such and define clear duties for directors. They also have well- as through new or amended company laws, securities functioning courts and up-to-date procedural rules that regulations or civil procedure rules. What minority give minority shareholders the means to prove their case investor protection reforms has Doing Business recorded and obtain a judgment within a reasonable time. As a in Dominican Republic (table 7.1)? Table 7.1 How has Dominican Republic strengthened minority investor protections—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic strengthened minority investor DB2015 protections by introducing greater shareholder rights and requirements for greater corporate transparency. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 72 PROTECTING MINORITY INVESTORS What are the details? The protecting minority investors indicators reported of conditions relating to disclosure, director liability, here for Dominican Republic are based on detailed shareholder suits, shareholder rights, ownership and information collected through a survey of corporate and control and corporate transparency in a standard case securities lawyers about securities regulations, company study (for more details, see the Data Notes section of the laws and court rules of evidence and procedure. To Doing Business 2017 report). The summary below shows construct the six indicators on minority investor the details underlying the scores for Dominican Republic. protection, scores are assigned to each based on a range Table 7.2 Summary of scoring for the protecting minority investors indicators in Dominican Republic Answer Score Strength of minority investor protection index (0-10) 5.3 Extent of conflict of interest regulation index (0-10) 5.3 Extent of disclosure index (0-10) 5.0 Which corporate body is legally sufficient to approve the Board of directors excluding 2.0 Buyer-Seller transaction? (0-3) interested members Must Mr. James disclose his conflict of interest to the board Existence of a conflict without any 1.0 of directors? (0-2) specifics Must Buyer disclose the transaction in published periodic Disclosure on the transaction and 2.0 filings (annual reports)? (0-2) on the conflict of interest Must Buyer immediately disclose the transaction to the No disclosure obligation 0.0 public and/or shareholders? (0-2) Must an external body review the terms of the transaction No 0.0 before it takes place? (0-1) Extent of director liability index (0-10) 4.0 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively for the damage the transaction Yes 1.0 caused to Buyer? (0-1) Can shareholders hold the interested director liable for the Liable if negligent 1.0 damage the transaction caused to Buyer? (0-2) Can shareholders hold the other directors liable for the Liable if negligent 1.0 damage the transaction caused to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer Yes 1.0 upon a successful claim by shareholders? (0-1) Must Mr. James repay profits made from the transaction No 0.0 upon a successful claim by shareholders? (0-1) Is Mr. James disqualifed or fined and imprisoned upon a No 0.0 successful claim by shareholders? (0-1) Can a court void the transaction upon a successful claim by Only in case of fraud or bad faith 0.0 shareholders? (0-2) Ease of shareholder suits index (0-10) 7.0 Before suing can shareholders representing 10% of Buyer's No 0.0 share capital inspect the transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant Any relevant document 3.0 and witnesses at trial? (0-3) Can the plaintiff request categories of documents from the No 0.0 Doing Business 2017 Dominican Republic 73 defendant without identifying specific ones? (0-1) Can the plaintiff directly question the defendant and Yes 2.0 witnesses at trial? (0-2) Is the level of proof required for civil suits lower than that of Yes 1.0 criminal cases? (0-1) Can shareholder plaintiffs recover their legal expenses from Yes if successful 1.0 the company? (0-2) Extent of shareholder governance index (0-10) 5.3 Extent of shareholder rights index (0-10) 9.0 Does the sale of 51% of Buyer's assets require shareholder Yes 1.0 approval? Can shareholders representing 10% of Buyer's share capital Yes 1.0 call for an extraordinary meeting of shareholders? Must Buyer obtain its shareholders’ approval every time it Yes 1.0 issues new shares? Do shareholders automatically receive preemption rights Yes 1.0 every time Buyer issues new shares? Must shareholders approve the election and dismissal of the Yes 1.0 external auditor? Are changes to the rights of a class of shares only possible if Yes 1.0 the holders of the affected shares approve? Assuming that Buyer is a limited company, does the sale of Yes 1.0 51% of its assets require member approval? Assuming that Buyer is a limited company, can members representing 10% call for an extraordinary meeting of No 0.0 members? Assuming that Buyer is a limited company, must all Yes 1.0 members consent to add a new member? Assuming that Buyer is a limited company, must a member first offer to sell his interest to the existing members before Yes 1.0 selling to a non-member? Extent of ownership and control index (0-10) 2.0 Is it forbidden to appoint the same individual as CEO and No 0.0 chair of the board of directors? Must the board of directors include independent and No 0.0 nonexecutive board members? Can shareholders remove members of the board of Yes 1.0 directors without cause before the end of their term? Must the board of directors include a separate audit No 0.0 committee exclusively comprising board members? Must a potential acquirer make a tender offer to all No 0.0 shareholders upon acquiring 50% of Buyer? Must Buyer pay dividends within a maximum period set by No 0.0 law after the declaration date? Is a subsidiary prohibited from acquiring shares issued by its No 0.0 parent company? Assuming that Buyer is a limited company, is there a Yes 1.0 management deadlock breaking mechanism? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to all shareholders upon No 0.0 acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer No 0.0 Doing Business 2017 Dominican Republic 74 distribute profits within a maximum period set by law after the declaration date? Extent of corporate transparency index (0-10) 5.0 Must Buyer disclose direct and indirect beneficial ownership Yes 1.0 stakes representing 5%? Must Buyer disclose information about board members’ other directorships as well as basic information on their No 0.0 primary employment? Must Buyer disclose the compensation of individual No 0.0 managers? Must a detailed notice of general meeting be sent 21 days No 0.0 before the meeting? Can shareholders representing 5% of Buyer’s share capital Yes 1.0 put items on the agenda for the general meeting? Must Buyer's annual financial statements be audited by an Yes 1.0 external auditor? Must Buyer disclose its audit reports to the public? No 0.0 Assuming that Buyer is a limited company, must members Yes 1.0 meet at least once a year? Assuming that Buyer is a limited company, can members No 0.0 representing 5% put items on the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be audited by an external Yes 1.0 auditor? Source: Doing Business database. Doing Business 2017 Dominican Republic 75 PAYING TAXES Taxes are essential. The level of tax rates needs to be WHAT THE PAYING TAXES INDICATORS carefully chosen—and needless complexity in tax rules avoided. Firms in economies that rank better MEASURE on the ease of paying taxes in the Doing Business study tend to perceive both tax rates and tax Tax payments for a manufacturing company administration as less of an obstacle to business in 2014 (number per year adjusted for according to the World Bank Enterprise Survey electronic and joint filing and payment) research. Total number of taxes and contributions paid, What do the indicators cover? including consumption taxes (value added tax, sales tax or goods and service tax) Using a case scenario, Doing Business records the taxes and mandatory contributions that a medium- Method and frequency of filing and payment size company must pay in a given year as well as Time required to comply with 3 major taxes measures of the administrative burden of paying (hours per year) taxes and contributions and dealing with postfiling processes. This case scenario uses a set of financial Collecting information and computing the tax payable statements and assumptions about transactions made over the year. Information is also compiled on Completing tax return forms, filing with the frequency of filing and payments, time taken to proper agencies comply with tax laws, time taken to comply with the Arranging payment or withholding requirements of postfiling processes and time waiting for these processes to be completed. The Preparing separate tax accounting books, if required ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier Total tax rate (% of profit before all taxes) scores on the ease of paying taxes. These scores are Profit or corporate income tax the simple average of the distance to frontier scores for each of the four component indicators – number Social contributions and labor taxes paid by of tax payments. time, total tax rate and postfiling the employer index – with a threshold and a nonlinear Property and property transfer taxes transformation applied to one of the component Dividend, capital gains and financial indicators, the total tax rate1. If both VAT (or GST) transactions taxes and corporate income tax apply, the postfiling index is the simple average of the distance to frontier Waste collection, vehicle, road and other taxes scores for each of the four components: the time to Postfiling Index comply with a VAT or GST refund, the time to obtain The time to comply with a VAT or GST refund a VAT or GST refund, the time to comply with a corporate income tax audit and the time to complete The time to receive a VAT or GST refund a corporate income tax audit. If only VAT (or GST) or The time to comply with a corporate income corporate income tax If onapplies, the postfiling tax audit index is the simple average of the scores for only the The time to complete a corporate income tax two components pertaining to the applicable tax. If audit neither VAT (or GST) nor corporate income tax 1 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 defined 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. Doing Business 2017 Dominican Republic 76 applies, the postfiling index is not included in the ranking of the ease of paying taxes. Assumptions about the corporate income tax audit process: Taxes and mandatory contributions include corporate income tax, turnover tax and all labor  An error in the calculation of the income tax taxes and contributions paid by the company. A liability (for example, use of incorrect tax range of standard deductions and exemptions are depreciation rates, or incorrectly treating an also recorded. expense as tax deductible) leads to an incorrect All financial statement variables are proportional to income tax return and consequently an 2012 income per capita. To make the data underpayment of corporate income tax. comparable across economies, several assumptions  TaxpayerCo. discovered the error and are used. voluntarily notified the tax authority of the error TaxpayerCo is a medium-size business that started in the corporate income tax return. operations on January 1, 2014. The business starts from the same financial position in each economy. All the taxes and mandatory contributions paid during the second year of operation are recorded. Taxes and mandatory contributions are measured at all levels of government. Assumptions about the VAT refund process:  In June 2015, TaxpayerCo. makes a large capital purchase: one additional machine for manufacturing pots.  The value of the machine is 65 times income per capita of the economy.  Sales are equally spread per month (that is, 1,050 times income per capita divided by 12).  Cost of goods sold are equally expensed per month (that is, 875 times income per capita divided by 12).  The seller of the machinery is registered for VAT or general sales tax (GST).  Excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT or GST rate is the same for inputs, sales and the machine and the tax reporting period is every month. Doing Business 2017 Dominican Republic 77 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with tax of this chapter for details). Most indicator sets refer to a obligations and postfiling processes in Dominican case scenario in the largest business city of an economy, Republic—and how much do firms pay in taxes? Globally, except for 11 economies for which the data are a Dominican Republic stands at 129 in the ranking of 190 population-weighted average of the 2 largest business economies on the ease of paying taxes (figure 8.1). The cities. See the chapter on distance to frontier and ease of rankings for comparator economies and the regional doing business ranking at the end of this profile for more average ranking provide other useful information for details. assessing the tax compliance burden for businesses in . Dominican Republic (see table 8.2 and table 8.3 the end Figure 8.1 How Dominican Republic and comparator economies rank on the ease of paying taxes Source: Doing Business database. Doing Business 2017 Dominican Republic 78 PAYING TAXES Economies around the world have made paying taxes and exemptions. Many have lowered tax rates. Changes faster, easier and less costly for businesses —such as by have brought concrete results. Some economies consolidating payments and filings of taxes, offering simplifying tax payment and reducing rates have seen electronic systems for filing and payment, establishing tax revenue rise. What tax reforms has Doing Business taxpayer service centers or allowing for more deductions recorded in Dominican Republic (table 8.1)? Table 8.1 How has Dominican Republic made paying taxes easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic increased the corporate income tax DB2013 rate. The Dominican Republic made paying taxes less costly by DB2017 decreasing the corporate income tax rate. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 79 PAYING TAXES What are the details? The indicators reported here for Dominican Republic LOCATION OF STANDARDIZED COMPANY are based on the taxes and contributions that would be paid by a standardized case study company used by Doing Business in collecting the data (see the City: Santo Domingo section in this chapter on what the indicators cover). Tax practitioners are asked to review a set of financial statements as well as a standardized list of assumptions and transactions that the company The taxes and contributions paid are listed in table 8.2, completed during its 2nd year of operation. along with the associated number of payments, time Respondents are asked how much taxes and and tax rate. mandatory contributions the business must pay, how these taxes are filed and paid, how much time The postfiling index is based on four components—the taxpayers spend preparing, filing and paying three time to comply with a VAT or GST refund, the time to major taxes (profit taxes, labor taxes including obtain a VAT or GST refund, the time to comply with a mandatory contributions and consumption taxes) and corporate income tax audit and the time to complete a how much time taxpayers spend complying with corporate income tax audit. These components are postfiling processes and waiting for these processes based on expanded case study assumptions. If only VAT to be completed. (or GST) or corporate income tax applies for an economy, the postfiling index is the simple average of the scores for only the two components pertaining to the applicable tax. If neither VAT (or GST) nor corporate income tax applies, the postfiling index is not included in the ranking of the ease of paying taxes. Table 8.2 Summary of tax rates and administration Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate taxable Corporate income tax 1 online 74 27% 22.63 profit Employer paid - Pension online and gross 0 80 7.1% 15.56 contributions jointly salaries Employer paid - Labor risk online and gross 0 1.3% 1.47 insurance contributions jointly salaries Employer paid - Training tax gross 1 online 1% 1.13 (INFOTEP) salaries per Tax on electronic transfers 1 online 0.15% 1.10 cheque Employer paid - Health gross 1 online 7.09% 0.44 insurance contributions salaries Doing Business 2017 Dominican Republic 80 Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate Vehicle tax 1 online RD$ 2,500 fixed fee 0.02 fuel RD$ 6.3 per Fuel tax 1 consumpti 0.00 gallon on Employee paid - Health online and gross 0 3.04% 0.00 withheld insurance contributions jointly salaries Employee paid - Pension online and gross 0 2.87% 0.00 withheld contributions jointly salaries value not Value added tax (VAT) 1 online 163 18% 0.00 added included Totals 7.0 317.0 42.4 Source: Doing Business database. Doing Business 2017 Dominican Republic 81 TRADING ACROSS BORDERS In today’s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE FOR IMPORT & EXPORT business. Excessive use of paper documents, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead Documentary compliance to extra costs and delays for exporters and Obtaining, preparing and submitting documents importers, stifling trade potential. during transport, clearance, inspections and port or border handling in origin economy What do the indicators cover? Obtaining, preparing and submitting documents Doing Business records the time and cost required by destination economy and any transit associated with the logistical process of exporting economies and importing goods. Doing Business measures the Covers all documents required by law and in time and cost (excluding tariffs) associated with practice, including electronic submissions of three sets of procedures—documentary information as well as non-shipment-specific compliance, border compliance and domestic documents necessary to complete the trade transport—within the overall process of exporting Border compliance or importing a shipment of goods. The ranking of economies on the ease of trading across borders is Customs clearance and inspections determined by sorting their distance to frontier Inspections by other agencies (if applied to more scores for trading across borders. These scores are than 10% of shipments) the simple average of the distance to frontier Port or border handling scores for the time and cost for documentary compliance and border compliance to export and Processing of documents during clearance, import (domestic transport is not used for inspections and port or border handling. calculating the ranking). Domestic transport Loading and unloading of shipment at warehouse, To make the data comparable across economies, a dry port or border few assumptions are made about the traded goods and the transactions: Transport by most widely used mode between warehouse and terminal or dry port Time Traffic delays and road police checks while Time is measured in hours, and 1 day is 24 hours shipment is en route (for example, 22 days are recorded as 22 × 24 = 528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose Cost that documents are submitted to a customs Insurance cost and informal payments for which no receipt agency at 8:00 a.m., are processed overnight and is issued are excluded from the costs recorded. Costs are can be picked up at 8:00 a.m. the next day. In this reported in U.S. dollars. Contributors are asked to convert case the time for customs clearance would be local currency into U.S. dollars based on the exchange rate recorded as 24 hours because the actual procedure prevailing on the day they answer the questionnaire. took 24 hours. Doing Business 2017 Dominican Republic 82 Assumptions of the case study  If government fees are determined by the value of the shipment, the value is assumed to be $50,000.  For each of the 190 economies covered by Doing Business, it is assumed that a shipment  The product is new, not secondhand or used travels from a warehouse in the largest merchandise. business city of the exporting economy to a  The exporting firm is responsible for hiring and paying warehouse in the largest business city of the for a freight forwarder or customs broker (or both) importing economy. For 11 economies the and pays for all costs related to international shipping, data are also collected, under the same case domestic transport, clearance and mandatory study assumptions, for the second largest inspections by customs and other government business city. agencies, port or border handling, documentary  The import and export case studies assume compliance fees and the like for exports. The different traded products. It is assumed that importing firm is responsible for the above costs for each economy imports a standardized imports. shipment of 15 metric tons of containerized  The mode of transport is the one most widely used for auto parts (HS 8708) from its natural import the chosen export or import product and the trading partner—the economy from which it imports partner, as is the seaport, airport or land border the largest value (price times quantity) of auto crossing. parts. It is assumed that each economy exports the product of its comparative advantage  All electronic submissions of information requested by (defined by the largest export value) to its any government agency in connection with the natural export partner—the economy that is shipment are considered to be documents obtained, the largest purchaser of this product. Special prepared and submitted during the export or import products, such as precious metal and gems, process. live animals and pharmaceuticals are excluded  A port or border is defined as a place (seaport, airport from the list of possible export products, or land border crossing) where merchandise can enter however, and the second largest product or leave an economy. category is considered as needed.  Government agencies considered relevant are  A shipment is a unit of trade. Export shipments agencies such as customs, port authorities, road do not necessarily need to be containerized, police, border guards, standardization agencies, while import shipments of auto parts are ministries or departments of agriculture or industry, assumed to be containerized. national security agencies and any other government authorities. Doing Business 2017 Dominican Republic 83 TRADING ACROSS BORDERS Where does the economy stand today? The Trading across Borders indicator refers to a case Globally, Dominican Republic stands at 58 in the ranking study scenario of a warehouse in the largest business city of 190 economies on the ease of trading across borders of an economy (except for 11 economies for which the (figure 9.1). data are a population-weighted average of the 2 largest While not included in the distance to frontier or ease of business cities) trading with the main import and export doing business ranking, data on domestic transportation partner through the economy’s main border crossing. is also recorded for all economies and provided in Table 9.3. Figure 9.1 How Dominican Republic and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2017 Dominican Republic 84 TRADING ACROSS BORDERS In economies around the world, trading across borders systems. These changes help improve the trading as measured by Doing Business has become faster and environment and boost firms’ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing Business tools to facilitate trade—including single windows, risk- recorded in Dominican Republic (table 9.1)? based inspections and electronic data interchange Table 9.1 How has Dominican Republic made trading across borders easier—or not? By Doing Business report year from DB2011 to DB2017 DB year Reform The Dominican Republic made trading across borders easier DB2015 by reducing the number of documents required for exports and imports. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Doing Business 2017 Dominican Republic 85 TRADING ACROSS BORDERS What are the details? The indicators reported here for Dominican Republic LOCATION OF STANDARDIZED COMPANY are based on a set of specific predefined procedures for trading a shipment of goods by the most widely used mode of transport (whether sea or land or some City: Santo Domingo combination of these). The information on the time and cost to complete export and import is collected The details on the predefined set of procedures, and the from local freight forwarders, customs brokers and associated time and cost, for exporting and importing a traders. shipment of goods are listed in the summary bellow, along with the required documents. Table 9.2 Summary of export and import time and cost for trading across borders in Dominican Republic Dominican Republic Latin America & Caribbean Time to export: Border compliance (hours) 16 63 Cost to export: Border compliance (USD) 488 527 Time to export: Documentary compliance (hours) 10 56 Cost to export: Documentary compliance (USD) 15 111 Time to import: Border compliance (hours) 24 65 Cost to import: Border compliance (USD) 579 685 Time to import: Documentary compliance (hours) 14 83 Cost to import: Documentary compliance (USD) 40 120 Source: Doing Business database. Table 9.3 Summary of trading details, transport time and documents for trading across borders in Dominican Republic Export Import HS 90 : Optical, photographic, cinematographic, measuring, checking, precision, medical HS 8708: Parts and accessories Product or surgical instruments and of motor vehicles apparatus; parts and accessories thereof Trade partner United States United States Border Caucedo port Caucedo port Distance (km) 46 46 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 296 296 Doing Business 2017 Dominican Republic 86 Source: Doing Business database. Note: Although Doing Business collects and publishes data on the time and cost for domestic transport, it does not use these data in calculating the distance to frontier score for trading across borders or the ranking on the ease of trading across borders. Documents to export Bill of lading Certificate of origin Commercial invoice Customs Export Declaration Documents to import Bill of lading Certificate of Origin Commercial invoice Customs import declaration Source: Doing Business database. Note: Doing Business continues to collect data on the number of documents needed to trade internationally. Unlike in previous years, however, these data are excluded from the calculation of the distance to frontier score and ranking. The time and cost for documentary compliance serve as better measures of the overall cost and complexity of compliance with documentary requirements than does the number of documents required. Doing Business 2017 Dominican Republic 87 Figure 9.2 Summary of Dominican Republic on the ease of trading across borders Export Import Source: Doing Business database. Doing Business 2017 Dominican Republic 88 ENFORCING CONTRACTS WHAT THE ENFORCING CONTRACTS Effective commercial dispute resolution has many benefits. Courts are essential for entrepreneurs INDICATORS MEASURE because they interpret the rules of the market and protect economic rights. Efficient and transparent Time required to enforce a contract through courts encourage new business relationships because the courts (calendar days) businesses know they can rely on the courts if a new customer fails to pay. Speedy trials are essential for Time to file and serve the case small enterprises, which may lack the resources to Time for trial and to obtain the judgment stay in business while awaiting the outcome of a long Time to enforce the judgment court dispute. Cost required to enforce a contract through What do the indicators cover? the courts (% of claim) Doing Business measures the time and cost for Attorney fees resolving a standardized commercial dispute through a local first-instance court. In addition, Doing Court fees Business measures the quality of judicial processes Enforcement fees index, evaluating whether each economy has Quality of judicial processes index (0-18) adopted a series of good practices that promote quality and efficiency in the court system. The Court structure and proceedings (0-5) ranking of economies on the ease of enforcing Case management (0-6) contracts is determined by sorting their distance to frontier scores. These scores are the simple average Court automation (0-4) of the distance to frontier scores for each of the Alternative dispute resolution (0-3) component indicators. The dispute in the case study involves the breach of a sales contract between 2 domestic businesses. The  The seller sues the buyer before the court with case study assumes that the court hears an expert on jurisdiction over commercial cases worth 200% of the quality of the goods in dispute. This distinguishes income per capita or $5,000. the case from simple debt enforcement. To make the  The seller requests a pretrial attachment to secure data comparable across economies, Doing Business the claim. uses several assumptions about the case:  The dispute on the quality of the goods requires an expert opinion.  The dispute concerns a lawful transaction  The judge decides in favor of the seller; there is no between two businesses (Seller and Buyer), both appeal. located in the economy’s largest business city. For 11 economies the data are also collected for  The seller enforces the judgment through a public the second largest business city. sale of the buyer’s movable assets.  The buyer orders custom-made goods, then fails to pay.  The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater. Doing Business 2017 Dominican Republic 89 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial on distance to frontier and ease of doing business dispute through the courts in Dominican Republic? ranking at the end of this profile for more details. According to data collected by Doing Business, contract Globally, Dominican Republic stands at 131 in the enforcement takes 505.0 days and costs 40.9% of the ranking of 190 economies on the ease of enforcing value of the claim. Most indicator sets refer to the contracts (figure 10.1). The rankings for comparator largest business city of an economy, except for 11 economies and the regional average provide other useful economies for which the data are a population-weighted benchmarks for assessing the efficiency of contract average of the 2 largest business cities. See the chapter enforcement in Dominican Republic. Figure 10.1 How Dominican Republic and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2017 Dominican Republic 90 ENFORCING CONTRACTS What are the details? The data on time and cost reported here for ECONOMY DETAILS Dominican Republic are built by following the step- by-step evolution of a commercial sale dispute within the court, under the assumptions about the Claim value: DOP 502,306 case described above (figure 10.2). The time and cost of resolving the standardized dispute are identified Civil and Commercial through study of the codes of civil procedure and Court name: Court of First Instance of other court regulations, as well as through the National District questionnaires completed by local litigation lawyers (and, in a quarter of the economies covered by City: Santo Domingo Doing Business, by judges as well). Figure 10.2 Time and cost of contract enforcement in Dominican Republic and comparator economies Source: Doing Business database. Doing Business 2017 Dominican Republic 91 Table 10.2 Details on time and cost for enforcing contracts in Dominican Republic Dominican Latin America & Indicator Republic Caribbean average Time (days) 505 749 Filing and service 20 Trial and judgment 365 Enforcement of judgment 120 Cost (% of claim) 40.9 31.3 Attorney fees 25.0 Court fees 7.5 Enforcement fees 8.4 Source: Doing Business database. Doing Business 2017 Dominican Republic 92 ENFORCING CONTRACTS Quality of judicial processes index The quality of judicial processes index measures The scores reported here show which of these good whether each economy has adopted a series of good practices are available in Dominican Republic (figure 10.3). practices in its court system in four areas: court This methodology was initially developed by Djankov and structure and proceedings, case management, court others (2003) and is adopted here with several changes. automation and alternative dispute resolution. The The quality of judicial processes index was introduced in score on the quality of judicial processes index is the Doing Business 2016. The good practices tested in this sum of the scores on these 4 sub-components. The index were developed on the basis of internationally index ranges from 0 to 18, with higher values recognized good practices promoting judicial efficiency. indicating more efficient judicial processes. Figure 10.3 Quality of judicial processes index in Dominican Republic and comparator economies Doing Business 2017 Dominican Republic 93 Source: Doing Business database. Table 10.3 Details of the quality of judicial processes index in Dominican Republic Answer Score Quality of judicial processes index (0-18) 5.5 Court structure and proceedings (0-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing No 0.0 commercial cases? 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small Yes claims? 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in Yes 0.0 court as a man's? Case management (0-6) 0.5 1. Time standards 0.5 1.a. Are there laws setting overall time standards for key court events in Yes a civil case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that No can be granted? 2.b. Are adjournments limited to unforeseen and exceptional No circumstances? 2.c. If rules on adjournments exist, are they respected in more than 50% n.a. of cases? 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; No 0.0 (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques No 0.0 used before the competent court? 5. Are there any electronic case management tools in place within the No 0.0 competent court for use by judges? Doing Business 2017 Dominican Republic 94 Answer Score 6. Are there any electronic case management tools in place within the No 0.0 competent court for use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be filed electronically through a dedicated No 0.0 platform within the competent court? 2. Is it possible to carry out service of process electronically for claims No 0.0 filed before the competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, No in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through No publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil Yes procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public order or public policy—that cannot be submitted to No arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the Yes courts? 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or section of the applicable code of civil No procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or conciliation is successful, a refund of No court filing fees, income tax credits or the like)? Source: Doing Business database. Doing Business 2017 Dominican Republic 95 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient companies and reallocating the resources of INDICATORS MEASURE inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of businesses Time required to recover debt (years) to normal operation and increase returns to Measured in calendar years creditors. By clarifying the expectations of creditors and debtors about the outcome of insolvency Appeals and requests for extension are proceedings, well-functioning insolvency systems can included facilitate access to finance, save more viable Cost required to recover debt (% of debtor’s businesses and sustainably grow the economy. estate) What do the indicators cover? Measured as percentage of estate value Doing Business studies the time, cost and outcome of Court fees insolvency proceedings involving domestic legal Fees of insolvency administrators entities. These variables are used to calculate the Lawyers’ fees recovery rate, which is recorded as cents on the Assessors’ and auctioneers’ fees dollar recovered by secured creditors through Other related fees reorganization, liquidation or debt enforcement Outcome (foreclosure or receivership) proceedings. To determine the present value of the amount Whether business continues operating as a recovered by creditors, Doing Business uses the going concern or business assets are sold lending rates from the International Monetary Fund, piecemeal supplemented with data from central banks and the Recovery rate for creditors Economist Intelligence Unit. Measures the cents on the dollar recovered To make the data on the time, cost and outcome by secured creditors comparable across economies, several assumptions Outcome for the business (survival or not) about the business and the case are used: determines the maximum value that can be  A hotel located in the largest city (or cities) has recovered 201 employees and 50 suppliers. The hotel Official costs of the insolvency proceedings experiences financial difficulties. are deducted  The value of the hotel is 100% of the income per Depreciation of furniture is taken into capita or the equivalent in local currency of USD account 200,000, whichever is greater. Present value of debt recovered  The hotel has a loan from a domestic bank, Strength of insolvency framework index (0- secured by a mortgage over the hotel’s real 16) estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise. Sum of the scores of four component indices: Commencement of proceedings index (0-3) In addition, Doing Business evaluates the adequacy and integrity of the existing legal framework Management of debtor’s assets index (0-6) applicable to liquidation and reorganization Reorganization proceedings index (0-3) proceedings through the strength of insolvency Creditor participation index (0-4) framework index. The index tests whether economies adopted internationally accepted good practices in management of debtor’s assets, reorganization four areas: commencement of proceedings, proceedings and creditor participation. Doing Business 2017 Dominican Republic 96 RESOLVING INSOLVENCY Where does the economy stand today? Globally, Dominican Republic stands at 160 in the indicator does not measure insolvency proceedings of ranking of 190 economies on the ease of resolving individuals and financial institutions. The data are derived insolvency (figure 11.1). The ranking of economies on the from questionnaire responses by local insolvency ease of resolving insolvency is determined by sorting practitioners and verified through a study of laws and their distance to frontier scores for resolving insolvency. regulations as well as public information on bankruptcy These scores are the simple average of the distance to systems. frontier scores for the recovery rate and the strength of insolvency framework index. The resolving insolvency Figure 11.1 How Dominican Republic and comparator economies rank on the ease of resolving insolvency Source: Doing Business database. Doing Business 2017 Dominican Republic 97 RESOLVING INSOLVENCY Recovery of debt in insolvency Data on the time, cost and outcome refer to the most average recovery rate is 8.9 cents on the dollar. Most likely in-court insolvency procedure applicable under indicator sets refer to a case scenario in the largest specific case study assumptions. business city of an economy, except for 11 economies for which the data are a population-weighted average of the According to data collected by Doing Business, resolving 2 largest business cities. insolvency takes 3.5 years on average and costs 38.0% of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale. The Figure 11.2 Efficiency of proceedings - time, cost and recovery rate in Dominican Republic and comparator economies. Source: Doing Business database. Note: The recovery rate is calculated based on the time, cost and outcome of insolvency proceedings involving domestic legal entities and is recorded as cents on the dollar recovered by secured creditors. The calculation takes into account the outcome: whether the business emerges from the proceedings as a going concern or the assets are sold piecemeal. Then the costs of the proceedings are deducted. Finally, the value lost as a result of the time the money remains tied up in insolvency proceedings is taken into account. The recovery rate is the present value of the remaining proceeds, based on end-2015 lending rates. Doing Business 2017 Dominican Republic 98 Table 11.1 Details of data on efficiency of insolvency proceedings in Dominican Republic Indicator Answer Explanation BizBank would initiate a foreclosing proceeding to avail itself of its security right. However, Mirage will file a petition to initiate a collective insolvency proceeding of liquidation. A judgment opening insolvency proceedings will be liquidation handed down by the Court, along with the appointment of a liquidator. The (after an liquidator would finalize the creditors' claims and prepare Mirage' assets for Proceeding attempt at sale. Some or all of the proceeds of the sale are paid to BizBank. foreclosure) The hotel won’t be able to continue operating and the assets of Mirage will be sold piecemeal. Insolvency proceedings in the Dominican Republic tend to Outcome piecemeal sale conclude with the dissolution of the insolvent debtor. There is no legislation related to reorganization in the Dominican Republic. The liquidation proceeding after an attempt at foreclosure would take about 3.5 years. The procedure would start by the Bank filing for foreclosure which will take around 6 months. The Court will adjudicate the status of bankruptcy Time (in of the debtor converting the foreclosure procedure into a liquidation 3.5 years) proceeding. This stage would take approximately 6 months. Afterwards, a liquidator will be appointed and the list of creditors’ claims will be issued. This stage will take from 1 to 1.5 years. The sale of the debtor’s assets may take up to 2 years. The estimated cost would amount to approximately 38% of the value of Cost (% of Mirage’s estate. The main component of this expense would be the attorney’s 38.0 estate) fees (17%), court expenses, notification costs and administrative fees (10 %), auctioneer fees (10 %), and other professionals, including accountants (1%) Recovery rate: 8.9 Source: Doing Business database. Doing Business 2017 Dominican Republic 99 LABOR MARKET REGULATION Doing Business studies the flexibility of regulation of food retail sector and they apply even to firms employment, specifically as it relates to the areas of that are not party to them. hiring, working hours and redundancy. Doing Business  Abides by every law and regulation but does not also measures several aspects of job quality such as the grant workers more benefits than those availability of maternity leave, paid sick leave and the mandated by law, regulation or (if applicable) equal treatment of men and women at the workplace. collective bargaining agreements. Doing Business 2017 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). The data on labor market regulation are based on a detailed questionnaire on employment regulations that is completed by local lawyers and public officials. Employment laws and regulations as well as secondary sources are reviewed to ensure accuracy. To make the data comparable across economies, several assumptions about the worker and the business are used. The worker:  Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.  Is a full-time employee.  Is not a member of the labor union, unless membership is mandatory. The business:  Is a limited liability company (or the equivalent in the economy).  Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.  Has 60 employees.  Is subject to collective bargaining agreements if such agreements cover more than 50% of the Doing Business 2017 Dominican Republic 100 LABOR MARKET REGULATION What are the details? The data reported here for Dominican Republic are Employment laws and regulations as well as secondary based on a detailed survey of labor market regulation sources are reviewed to ensure accuracy. that is completed by local lawyers and public officials. Hiring Data on hiring cover five areas: (i) whether fixed-term minimum wage to the average value added per worker contracts are prohibited for permanent tasks; (ii) the (the ratio of an economy’s GNI per capita to the maximum cumulative duration of fixed-term contracts; working-age population as a percentage of the total (iii) the minimum wage for a cashier, age 19, with one population). year of work experience; and (iv) the ratio of the Hiring Data Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study 311.9 (US$/month) Ratio of minimum wage to value added per worker 0.4 Source: Doing Business database. Doing Business 2017 Dominican Republic 101 LABOR MARKET REGULATION Working hours Data on working hours cover nine areas: i) the maximum and nonnursing women can work the same night hours number of working days allowed per week; (ii) the as men*; (vii) whether there are restrictions on weekly premium for night work (as a percentage of hourly pay); holiday work; (viii) whether there are restrictions on (iii) the premium for work on a weekly rest day (as a overtime work; and (ix) the average paid annual leave for percentage of hourly pay); (iv) the premium for overtime workers with 1 year of tenure, 5 years of tenure, and 10 work (as a percentage of hourly pay); (v) whether there years of tenure. are restrictions on night work; (vi) whether nonpregnant Working Hours Data Maximum number of working days per week 5.5 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 35.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night Yes hours as men Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 14.0 Paid annual leave for a worker with 5 years of tenure (working days) 18.0 Paid annual leave for a worker with 10 years of tenure (working days) 18.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in 16.7 working days) Source: Doing Business database. Doing Business 2017 Dominican Republic 102 LABOR MARKET REGULATION Redundancy rules Data on redundancy cover nine areas: (i) the length of whether the employer needs approval from a third party the maximum probationary period (in months) for to terminate one redundant worker; (vi) whether the permanent employees; (ii) whether redundancy is employer needs approval from a third party to terminate allowed as a basis for terminating workers; (iii) whether a group of nine redundant workers; (vii) whether the law the employer needs to notify a third party (such as a requires the employer to reassign or retrain a worker government agency) to terminate one redundant worker; before making the worker redundant; (viii) whether (iv) whether the employer needs to notify a third party to priority rules apply for redundancies; and (ix) whether terminate a group of nine redundant workers; (v) priority rules apply for reemployment. Redundancy rules Data Maximum length of probationary period (months) 3.0 Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Source: Doing Business database. Doing Business 2017 Dominican Republic 103 LABOR MARKET REGULATION Redundancy cost Redundancy cost measures the cost of advance notice severance payments applicable to a worker with 1 year of requirements and severance payments due when tenure, a worker with 5 years and a worker with 10 years terminating a redundant worker, expressed in weeks of is considered. One month is recorded as 4 and 1/3 salary. The average value of notice requirements and weeks. Redundancy cost indicator (in salary weeks) Data Notice period for redundancy dismissal for a worker with 1 year of tenure 4.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years 4.0 of tenure) Severance pay for redundancy dismissal for a worker with 1 year of tenure 3.8 Severance pay for redundancy dismissal for a worker with 5 years of tenure 20.9 Severance pay for redundancy dismissal for a worker with 10 years of tenure 41.8 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years 22.2 of tenure) Source: Doing Business database. Doing Business 2017 Dominican Republic 104 LABOR MARKET REGULATION Job quality Doing Business introduced new data on job quality in leave receive 100% of wages; (vi) the availability of five 2015. Doing Business 2017 covers eight questions on job fully paid days of sick leave a year; (vii) whether a worker quality (i) whether the law mandates equal remuneration is eligible for an unemployment protection scheme after for work of equal value; (ii) whether the law mandates one year of service; and (viii) the minimum duration of nondiscrimination based on gender in hiring; (iii) the contribution period (in months) required for whether the law mandates paid or unpaid maternity unemployment protection. leave; (iv) the minimum length of paid maternity leave (in . calendar days); (v) whether employees on maternity Job Quality Data 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)? 84.0 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? No Minimum contribution period for unemployment protection (months)? n.a. Source: Doing Business database. Doing Business 2017 Dominican Republic 105 DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING Doing Business presents results for two aggregate even though it is no longer at the frontier in a measures: the distance to frontier score and the ease of subsequent year. doing business ranking, which is based on the distance For scores such as those on the strength of legal rights to frontier score. The ease of doing business ranking index or the quality of land administration index, the compares economies with one another; the distance to frontier is set at the highest possible value. For the total frontier score benchmarks economies with respect to tax rate, consistent with the use of a threshold in regulatory best practice, showing the absolute distance calculating the rankings on this indicator, the frontier is to the best performance on each Doing Business defined as the total tax rate at the 15th percentile of the indicator. When compared across years, the distance to overall distribution for all years included in the analysis frontier score shows how much the regulatory up to and including Doing Business 2015. For the time to environment for local entrepreneurs in an economy has pay taxes the frontier is defined as the lowest time changed over time in absolute terms, while the ease of recorded among all economies that levy the three major doing business ranking can show only how much the taxes: profit tax, labor taxes and mandatory regulatory environment has changed relative to that in contributions, and value added tax (VAT) or sales tax. For other economies. the different times to trade across borders, the frontier is Distance to Frontier defined as 1 hour even though in many economies the time is less than that. The distance to frontier score captures the gap between an economy’s performance and a measure of best In the same formulation, to mitigate the effects of practice across the entire sample of 41 indicators for 10 extreme outliers in the distributions of the rescaled data Doing Business topics (the labor market regulation for most component indicators (very few economies indicators are excluded). For starting a business, for need 700 days to complete the procedures to start a example, New Zealand has the smallest number of business, but many need 9 days), the worst performance procedures required (1), and New Zealand the shortest is calculated after the removal of outliers. The definition time to fulfill them (0.5 days). Slovenia has the lowest of outliers is based on the distribution for each cost (0.0), and Australia, Colombia and 111 other component indicator. To simplify the process two rules economies have no paid-in minimum capital were defined: the 95th percentile is used for the requirement (table 14.1 in the Doing Business 2017 indicators with the most dispersed distributions report). (including minimum capital, number of payments to pay taxes, and the time and cost indicators), and the 99th Calculation of the distance to frontier score percentile is used for number of procedures. No outlier is Calculating the distance to frontier score for each removed for component indicators bound by definition economy involves two main steps. In the first step or construction, including legal index scores (such as the individual component indicators are normalized to a depth of credit information index, extent of conflict of common unit where each of the 41 component interest regulation index and strength of insolvency indicators y (except for the total tax rate) is rescaled framework index) and the recovery rate (figure 14.1 in using the linear transformation (worst − y)/(worst − the Doing Business 2017 report). frontier). In this formulation the frontier represents the In the second step for calculating the distance to frontier best performance on the indicator across all economies score, the scores obtained for individual indicators for since 2005 or the third year in which data for the each economy are aggregated through simple averaging indicator were collected. Both the best performance and into one distance to frontier score, first for each topic the worst performance are established every five years and then across all 10 topics: starting a business, dealing based on the Doing Business data for the year in which with construction permits, getting electricity, registering they are established, and remain at that level for the five property, getting credit, protecting minority investors, years regardless of any changes in data in interim years. paying taxes, trading across borders, enforcing contracts Thus an economy may set the frontier for an indicator and resolving insolvency. More complex aggregation methods—such as principal components and unobserved components—yield a ranking nearly Doing Business 2017 Dominican Republic 106 identical to the simple average used by Doing Business2. The nonlinear transformation is not based on any Thus Doing Business uses the simplest method: economic theory of an “optimal tax rate” that minimizes weighting all topics equally and, within each topic, giving distortions or maximizes efficiency in an economy’s equal weight to each of the topic components 3. overall tax system. Instead, it is mainly empirical in nature. The nonlinear transformation along with the An economy’s distance to frontier score is indicated on a threshold reduces the bias in the indicator toward scale from 0 to 100, where 0 represents the worst economies that do not need to levy significant taxes on performance and 100 the frontier. All distance to frontier companies like the Doing Business standardized case calculations are based on a maximum of five decimals. study company because they raise public revenue in However, indicator ranking calculations and the ease of other ways—for example, through taxes on foreign doing business ranking calculations are based on two companies, through taxes on sectors other than decimals. manufacturing or from natural resources (all of which are The difference between an economy’s distance to outside the scope of the methodology). In addition, it frontier score in any previous year and its score in 2017 acknowledges the need of economies to collect taxes illustrates the extent to which the economy has closed from firms. the gap to the regulatory frontier over time. And in any Calculation of scores for economies with 2 cities given year the score measures how far an economy is covered from the best performance at that time. For each of the 11 economies in which Doing Business Treatment of the total tax rate collects data for the second largest business city as well The total tax rate component of the paying taxes as the largest one, the distance to frontier score is indicator set enters the distance to frontier calculation in calculated as the population-weighted average of the a different way than any other indicator. The distance to distance to frontier scores for these two cities (table frontier score obtained for the total tax rate is 13.1). This is done for the aggregate score, the scores for transformed in a nonlinear fashion before it enters the each topic and the scores for all the component distance to frontier score for paying taxes. As a result of indicators for each topic. the nonlinear transformation, an increase in the total tax rate has a smaller impact on the distance to frontier score for the total tax rate—and therefore on the distance to frontier score for paying taxes—for economies with a below-average total tax rate than it would have had before this approach was adopted in Doing Business 2015 (line B is smaller than line A in figure 14.2 of the Doing Business 2017 report). And for economies with an extreme total tax rate (a rate that is very high relative to the average), an increase has a greater impact on both these distance to frontier scores than it would have had before (line D is bigger than line C in figure 14.2 of the Doing Business 2017 report). 2 See Djankov, Manraj and others (2005). Principal components and unobserved components methods yield a ranking nearly identical to that from the simple average method because both these methods assign roughly equal weights to the topics, since the pairwise correlations among indicators do not differ much. An alternative to the simple average method is to give different weights to the topics, depending on which are considered of more or less importance in the context of a specific economy. 3 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60% assigned to the strength of legal rights index and 40% to the depth of credit information index. Indicators for all other topics are assigned equal weights Doing Business 2017 Dominican Republic 107 Table 13.1 Weights used in calculating the distance to the most. First, it selects the economies that in 2015/16 frontier scores for economies with 2 cities covered implemented regulatory reforms making it easier to do business in 3 or more of the 10 topics included in this Economy City Weight (%) year’s aggregate distance to frontier score. Twenty-nine Dhaka 78 Bangladesh economies meet this criterion: Algeria; Azerbaijan; Chittagong 22 São Paulo 61 Bahrain; Belarus; Brazil; Brunei Darussalam; Burkina Faso; Brazil Rio de Janeiro 39 Côte d’Ivoire; Georgia; India; Indonesia; Kazakhstan; Shanghai 55 Kenya; Madagascar; Mali; Mauritania; Morocco; Niger; China Beijing 45 Pakistan; Poland; Senegal; Serbia; Singapore; Thailand; Mumbai 47 Togo; Uganda; the United Arab Emirates; Uzbekistan and India Delhi 53 Vanuatu. Second, Doing Business sorts these economies Jakarta 78 Indonesia on the increase in their distance to frontier score from Surabaya 22 Tokyo 65 the previous year using comparable data. Japan Osaka 35 Mexico City 83 Selecting the economies that implemented regulatory Mexico Monterrey 17 reforms in at least three topics and had the biggest Lagos 77 improvements in their distance to frontier scores is Nigeria Kano 23 intended to highlight economies with ongoing, broad- Karachi 65 based reform programs. The improvement in the Pakistan Lahore 35 distance to frontier score is used to identify the top Moscow 70 Russian Federation improvers because this allows a focus on the absolute St. Petersburg 30 improvement—in contrast with the relative improvement New York 60 United States Los Angeles 40 shown by a change in rankings—that economies have made in their regulatory environment for business. Source: United Nations, Department of Economic and Social Affairs, Population Division, World Urbanization Prospects, 2014 Revision. http://esa.un.org/unpd/wup/CD- ROM/Default.aspx. Ease of Doing Business ranking The ease of doing business ranking ranges from 1 to 190. Economies that improved the most across 3 or more The ranking of economies is determined by sorting the Doing Business topics in 2015/16 aggregate distance to frontier scores, rounded to 2 Doing Business 2017 uses a simple method to calculate decimals. which economies improved the ease of doing business Doing Business 2017 Dominican Republic 108 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Law library News on the Doing Business project Online collection of business laws and regulations http://www.doingbusiness.org relating to business http://www.doingbusiness.org/law-library Rankings How economies rank—from 1 to 190 Contributors http://www.doingbusiness.org/rankings More than 12,500 specialists in 190 economies who participate in Doing Business Data http://www.doingbusiness.org/contributors/doing- All the data for 190 economies—topic rankings, business indicator values, lists of regulatory procedures and details underlying indicators Entrepreneurship data http://www.doingbusiness.org/data Data on business density (number of newly registered companies per 1,000 working-age Reports people) for 136 economies Access to Doing Business reports as well as http://www.doingbusiness.org/data/exploretopics/ent subnational and regional reports, case studies and repreneurship customized economy and regional profiles http://www.doingbusiness.org/reports Distance to frontier Data benchmarking 190 economies to the frontier in Methodology regulatory practice and a distance to frontier The methodologies and research papers underlying calculator Doing Business http://www.doingbusiness.org/data/distance-to- http://www.doingbusiness.org/methodology frontier Research Information on good practices Abstracts of papers on Doing Business topics and Showing where the many good practices identified related policy issues by Doing Business have been adopted http://www.doingbusiness.org/research http://www.doingbusiness.org/data/good-practice Doing Business reforms Short summaries of DB2017 business regulation reforms and lists of reforms since DB2008 http://www.doingbusiness.org/reforms Historical data Customized data sets since DB2004 http://www.doingbusiness.org/custom-query Doing Business 2017 Dominican Republic 109