Doing Business 2020 Bahamas, The Economy Profile Bahamas, The Page 1 Doing Business 2020 Bahamas, The Economy Profile of Bahamas, The Doing Business 2020 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Bahamas, The About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Bahamas, The Ease of Doing Business in DB RANK DB SCORE Region Latin America & Caribbean Bahamas, The Income Category High income Population 385,640 119 59.9 City Covered Nassau Rankings on Doing Business topics - Bahamas, The 50 71 77 81 82 88 94 152 161 181 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Topic Scores 87.0 70.9 76.7 30.8 30.0 56.0 81.7 53.1 59.1 53.4 Starting a Business (rank) 94 Getting Credit (rank) 152 Trading across Borders (rank) 161 Score of starting a business (0-100) 87.0 Score of getting credit (0-100) 30.0 Score of trading across borders (0-100) 53.1 Procedures (number) 7 Strength of legal rights index (0-12) 6 Time to export Time (days) 11.5 Depth of credit information index (0-8) 0 Documentary compliance (hours) 12 Cost (number) 11 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 36 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 0.0 Cost to export Documentary compliance (USD) 550 Dealing with Construction Permits (rank) 77 Protecting Minority Investors (rank) 88 Border compliance (USD) 512 Score of dealing with construction permits (0-100) 70.9 Score of protecting minority investors (0-100) 56.0 Time to export Procedures (number) 17 Extent of disclosure index (0-10) 3.0 Documentary compliance (hours) 6 Time (days) 180 Extent of director liability index (0-10) 5.0 Border compliance (hours) 51 Cost (% of warehouse value) 0.8 Ease of shareholder suits index (0-10) 8.0 Cost to export Building quality control index (0-15) 12.0 Extent of shareholder rights index (0-6) 5.0 Documentary compliance (USD) 550 Extent of ownership and control index (0-7) 4.0 Border compliance (USD) 1,385 Getting Electricity (rank) 81 Extent of corporate transparency index (0-7) 3.0 Score of getting electricity (0-100) 76.7 Enforcing Contracts (rank) 82 Procedures (number) 5 Paying Taxes (rank) 50 Score of enforcing contracts (0-100) 59.1 Time (days) 67 Score of paying taxes (0-100) 81.7 Time (days) 545 Cost (% of income per capita) 87.1 Payments (number per year) 20 Cost (% of claim value) 28.9 Reliability of supply and transparency of tariff index (0-8) 5 Time (hours per year) 155 Quality of judicial processes index (0-18) 8.0 Total tax and contribution rate (% of profit) 33.8 Registering Property (rank) 181 Postfiling index (0-100) 82.3 Resolving Insolvency (rank) 71 Score of registering property (0-100) 30.8 Score of resolving insolvency (0-100) 53.4 Procedures (number) 7 Recovery rate (cents on the dollar) 64.4 Time (days) 122 Time (years) 3.0 Cost (% of property value) 11.8 Cost (% of estate) 12.0 Quality of the land administration index (0-30) 3.0 Outcome (0 as piecemeal sale and 1 as going 1 concern) Strength of insolvency framework index (0-16) 6.0 Page 4 Doing Business 2020 Bahamas, The Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are 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. Page 5 Doing Business 2020 Bahamas, The Starting a Business - Bahamas, The Standardized Company Legal form Limited Liability Company (LLC) Paid-in minimum capital requirement No minimum City Covered Nassau Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Procedure – Men (number) 7 8.1 4.9 1 (2 Economies) Time – Men (days) 11.5 28.8 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 11.0 31.4 3.0 0.0 (2 Economies) Procedure – Women (number) 7 8.1 4.9 1 (2 Economies) Time – Women (days) 11.5 28.8 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 11.0 31.4 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 0.4 7.6 0.0 (120 Economies) Figure – Starting a Business in Bahamas, The – Score 64.7 88.9 94.5 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Bahamas, The and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 87.0: Bahamas, The (Rank: 94) 86.4: Barbados (Rank: 102) 85.9: St. Kitts and Nevis (Rank: 109) 85.4: Dominican Republic (Rank: 112) 82.6: Antigua and Barbuda (Rank: 130) 79.6: Regional Average (Latin America & Caribbean) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Bahamas, The Figure – Starting a Business in Bahamas, The – Procedure, Time and Cost Time (days) Cost (% of income per capita) 6 10 Cost (% of income per capita) 5 8 4 Time (days) 6 3 4 2 2 1 0 0 1 2 3 4 5 6 *7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Bahamas, The Details – Starting a Business in Bahamas, The – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Search for a company name and reserve the proposed name online Less than one day BSD 25 Agency : Registrar General's Department (online procedure) The online name search system has been in place since 2004. The name reservation is available only for 28 days plus 2 extensions of 14 days each. 2 A lawyer prepares and notarizes the company documents (memorandum and articles of 1 day on average Usually about BSD 650 association) (BSD 100 to public Agency : Lawyer or corporate service provider treasury + BSD 550 Legally, only the memorandum has to be filed at the moment of the incorporation. Standard register of company) articles of association are available and the memorandum has to be a statutory declaration. Therefore, the most common scenario is to prepare both. Since 2001, the Bahamas has issued many provisions on anti-money laundering and since then the information requested from the client has increased. Usually, a client has to provide the law firm with a financial and a character reference. In addition to financial and character references and a notarised copy of the client's passport, a client is also required to provide evidence of his or her current address, usually a notarised copy of a utility bill and a notarised copy of the passport and evidence of a current address for each of the directors. The Affidavit, which records the oath of the subscribing witness, must be signed by said witnesses in the presence of a Notary Public. The Statutory Declaration is not mandatory under the Companies Act. However section 3(3) thereof states that if the Memorandum of Association is filed along with the Statutory Declaration, the Statutory Declaration shall be conclusive evidence of the capacity of the subscribers to the Memorandum. The Statutory declaration is not required to be executed by a Notary Public but instead by an attorney. 3 Stamp duty on the memorandum paid to the Public Treasury 1 day BSD 100 stamp duty is Agency : Public Treasury payable on the first BSD The fees includes BSD 100 stamp duty is payable on the first BSD 5,000 authorized capital of the 5,000 authorized capital of company and BSD 5 for every additional BSD 1,000 authorized capital. the company and BSD 5 for every additional BSD 1,000 authorized capital 4 File the company documents at the Companies Registry 3 days BSD 1,000 for the Agency : Companies Registry incorporation and BSD 50 The registration is usually done by a lawyer or a corporate service provider. If submitted online, for certified copy of the the fees are:BSD 1,000 for the incorporation and BSD 50 for Certified copy of the Memorandum Memorandum and Articles and Articles of Association. of Association. Entrepreneurs and certified providers have the option to submit in person, which will take roughly 10 days to receive the incorporation documents. 5 Obtain the National Insurance Number from the National Insurance Board 1 day no charge Agency : National Insurance Board The National Insurance Number is a requirement to obtain business license. According to the National Insurance Act, every employer has to have a national insurance employer’s number. This could be obtained at no cost and it can be done in a day (by mail or in person). The document required for registration is a certificate of incorporation. Employer also registers the employees if they have not been registered already. Where an employee is being registered with the National Insurance Board they must provide a copy of a document that verifies their birth, i.e. a birth certificate, passport or affidavit. Page 8 Doing Business 2020 Bahamas, The 6 Register the company for a business license and VAT at the Department of Inland Revenue 5 days no charge - Central Revenue Administration of the Ministry of Finance Agency : Department of Inland Revenue - Central Revenue Administration of the Ministry of Finance Under the Business License Act all persons carrying on business in The Bahamas must have a business license before operations commence, whether or not the business is owned by Bahamians. Since the coming into force of the Business License Act, 2010 (and it Amendment 2018) there is no longer a requirement to separately register the trading name of the company. The requested trading name is indicated on the Business Registration Form. When the Business Registration Form is submitted online it must be accompanied by: (i) proof of citizenship of the beneficial owners of the company; (ii) a copy of the Certificate of Incorporation of the company; (iii) a copy of the Certificate of Registration from the National Insurance Board; (iv) a copy of the lease for the property; (v) a copy of the Certificate of Sanitation from the Department of Environmental Health Services, depending on the nature of the business operations, a Certificate of Sanitation may or may not be required. On 1 January, 2015, the Value Added Tax Act (the "VAT Act") came into effect in The Bahamas. The VAT Act requires all persons, including companies, carrying on a business with an annual turnover of B$100,000 or more, or who have reasonable grounds to expect that the business will obtain an annual turnover of B$100,000 or more, to register with the VAT Department of the Ministry of Finance. VAT registrants are required charge and collect VAT at a standard rate of 12% on the supply of all goods and services (except goods and services which are exempt or zero- rated under the VAT Act) and remit the VAT collected to the Government of The Bahamas. In addition, persons meeting the registration threshold will be required to submit returns to the VAT Department on a monthly or quarterly basis. Business are able to register for VAT at the same time as registering for the business license. In order to register for VAT the company must register within 14 days of commencing business if it is anticipated that it will meet the annual turnover threshold of B$100,000. The application for registration must be submitted through the VAT Department's Online Tax Administration System (OTAS): vat.revenue.gov.bs, which will require the company to create a free online user account and complete and submit the VAT Registration Application. Once the VAT Department has approved the registration, which takes between 3 and 14 days, it will issue a Certificate of Registration to the company, which must be displayed in all locations where the company conducts business. 7 Obtain a company seal 2 days on average BSD 35 Agency : Registry Agency (simultaneous with A proof of seal has to be provided at the time of filing the first annual statement. Under Section 26 previous procedure) of the Companies Act of 1992, every company must have a common seal. Seals are locally manufactured and can usually be obtained within 2-3 business days at a cost of BSD 30- BSD 35. The company seal is ordered and supplied by the corporate service provider that incorporates the company. Takes place simultaneously with previous procedure. Page 9 Doing Business 2020 Bahamas, The Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures The warehouse: that can be fully completed online are an exception to this rule - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) requirements). • Quality of building regulations (0-2) The water and sewerage connections: • Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2020 Bahamas, The Dealing with Construction Permits - Bahamas, The Standardized Warehouse Estimated value of warehouse BSD 1,518,431 City Covered Nassau Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Procedures (number) 17 15.5 12.7 None in 2018/19 Time (days) 180 191.2 152.3 None in 2018/19 Cost (% of warehouse value) 0.8 3.6 1.5 None in 2018/19 Building quality control index (0-15) 12.0 9.0 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Bahamas, The – Score 52.0 55.6 96.0 80.0 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Bahamas, The and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 73.5: St. Kitts and Nevis (Rank: 58) 70.9: Bahamas, The (Rank: 77) 70.7: Dominican Republic (Rank: 80) 65.7: Antigua and Barbuda (Rank: 117) 63.2: Regional Average (Latin America & Caribbean) 56.6: Barbados (Rank: 153) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 11 Doing Business 2020 Bahamas, The Figure – Dealing with Construction Permits in Bahamas, The – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 180 0.35 160 0.3 Cost (% of warehouse value) 140 0.25 120 Time (days) 100 0.2 80 0.15 60 0.1 40 0.05 20 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 * 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 12 Doing Business 2020 Bahamas, The Figure – Dealing with Construction Permits in Bahamas, The and comparator economies – Measure of Quality 14 13.0 12.0 12 Index score 10 9.0 9.0 8 7.0 6.5 6 4 2 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Details – Dealing with Construction Permits in Bahamas, The – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain “approval in principle” (planning permission) with the Town Planning 30 days no charge Committee Agency : Town Planning Committee This approval is not a prerequisite for the building permit but most constructors would still want to obtain it in advance to make sure that their project is viable/acceptable in terms of town planning. Only the plot and location plan needs to be submitted. to be attached. No proof of ownership is needed at this point. The Committee members that examines the proposal represent the different interest groups that are interested in building process. The Committee agenda is prepared by the Department of Physical Planning. The Committee also hears complaints and addresses grievances. 2 Request and obtain building permit at the Building Control Unit of the Ministry of Works 120 days BSD 4,900 Agency : Ministry of Works BuildCo will submit the request for the building permit to the Building Control Department and pay 10% as a deposit. The file will be inserted in a cardboard jacket and submitted to various department, one after the other. The application and supporting documents are sent to the following departments for processing: b. Civil Design Section, where checks are made for drainage and road access. c. Department of Physical Planning, which grants zoning approval. d. Department of Environmental Health/BEST Commission, to assess the environmental impact and ensure compliance with Environmental Health codes. e. Control Division of the Ministry of Works & Urban Development, where they complete mechanical, electrical, structural and other checks as necessary. 4. The Building Permit is then prepared for issue. Drawings are stamped as approved and the final fee is assessed and calculated. 5. Applicants are notified via telephone that the Building Permit has been approved and can be collected upon payment of the building permit fee. The applicant must then make final payment and collect the Building Permit at the Buildings Control Division of the Ministry of Works & Urban Development. Buildings Regulation Art. 4. (1) “Subject to the provisions of this Act, no person shall commence or carry on, or cause or procure to be commenced or carried on, any building operation save under and in accordance with the conditions of a valid building permit and in accordance with the provisions of this Act and any rules and the Building Code.” The status of the application can be checked online. 3 Request and receive plumbing permit 1 day BSD 3,500 Agency : Ministry of Works A request for plumbing inspection must be requested by the licensed plumber. 4 Receive "rough-in" plumbing inspection 1 day no charge Agency : Ministry of Works 5 Receive stand pipe inspection by the Fire Branch of the Royal Bahamas Police Force 1 day no charge Agency : Fire Branch of the Royal Bahamas Police Force The Fire Department will proceed with an inspection of the stand pipes and sprinkler system during the construction phase. 6 Receive inspection of floors 1 day no charge Agency : Ministry of Works 7 Receive inspection of walls 1 day no charge Agency : Ministry of Works 8 Receive inspection of roofing 1 day no charge Agency : Ministry of Works 9 File notice of completion of the plumbing works 1 day no charge Agency : Building Control Division The certified plumber must file a notice of completion of all plumbing works so that the final inspection can take place. Page 13 Doing Business 2020 Bahamas, The 10 Receive final inspection 1 day no charge Agency : Ministry of Works 11 Obtain final plumbing inspection 1 day no charge Agency : Ministry of Works After the plumbing has been approved, the plumber can obtain a copy of the approval at the Ministry of Works. 12 Receive fire safety inspection 1 day no charge Agency : Fire Branch of the Royal Bahamas Police Force After the final inspection performed by the Ministry of Works, it is often determined that a fire inspection is also required. Some contractors even have the fire inspection conducted before the final inspection from the Ministry of Works, to ensure that the final inspection goes smoothly. 13 Obtain occupancy permit 2 days no charge Agency : Ministry of Works BuildCo must apply for the occupancy permit, which can only be obtained after the final inspection for the electrical, plumbing and fire protection final inspections are carried out. 14 Request water connection 1 day no charge Agency : Bahamas Water and Sewerage Corporation The request for water and sewage connection is done online at http://www.wsc.com.bs/NewConnectionsForm.aspx The following document has to be submitted: A copy of the property title In case of Limited Company, the application must be signed by two or more directors of the Company accompanied by a copy of the resolution authorizing these directors to sign on behalf of the company. An article of association and certificate of good standing must also be attached. 15 Receive water inspection 1 day no charge Agency : Bahamas Water and Sewerage Corporation Technician will visit the property to establish the work to be done and the cost as well. This is usually done within 5-7 working days. 16 Obtain water service 16 days BSD 2,784 Agency : Bahamas Water and Sewerage Corporation Bahamas Water and Sewerage Corporation will conduct the works to connect the meter to the main. BuildCo must hire a licensed plumber to connect from the meter to the building. Cost includes labor, connection fee and meter. It will take about 2 weeks for the work and connection to be completed. Build septic tank 2 days BSD 1,000 17 Agency : Private firm Takes place simultaneously with previous procedure. Page 14 Doing Business 2020 Bahamas, The Details – Dealing with Construction Permits in Bahamas, The – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0 building regulations? (0-1) Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections at various 1.0 phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0 plans and regulations? (0-2) is done by government agency. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use No party is held liable 0.0 (Latent Defect Liability or Decennial Liability)? (0-1) under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 2.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Page 15 Doing Business 2020 Bahamas, The Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 16 Doing Business 2020 Bahamas, The Getting Electricity - Bahamas, The Standardized Connection Name of utility Bahamas Power and Light Price of electricity (US cents per kWh) 28.5 City Covered Nassau Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Procedures (number) 5 5.5 4.4 3 (28 Economies) Time (days) 67 66.8 74.8 18 (3 Economies) Cost (% of income per capita) 87.1 407.2 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 5 4.4 7.4 8 (26 Economies) Figure – Getting Electricity in Bahamas, The – Score 66.7 78.7 98.9 62.5 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Bahamas, The and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 83.5: Antigua and Barbuda (Rank: 50) 76.7: Bahamas, The (Rank: 81) 71.7: Regional Average (Latin America & Caribbean) 70.2: St. Kitts and Nevis (Rank: 110) 68.0: Dominican Republic (Rank: 116) 66.2: Barbados (Rank: 117) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Bahamas, The – Procedure, Time and Cost Time (days) Cost (% of income per capita) 80 60 70 Cost (% of income per capita) 50 60 Time (days) 50 40 40 30 30 20 20 10 10 0 0 1 *2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 17 Doing Business 2020 Bahamas, The reflected here, see the summary below. Figure – Getting Electricity in Bahamas, The and comparator economies – Measure of Quality 7 6 6 5 5 5 Index score 5 4.4 4 3 2 1 0 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Page 18 Doing Business 2020 Bahamas, The Details – Getting Electricity in Bahamas, The – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Receive site visit and estimate from Bahamas Power and Light and pay connection costs 33 calendar days USD 23,000 Agency : Bahamas Power and Light The customer submits an application for a new electricity connection. The utility will then send out an engineer from the planning department to conduct a site visit and prepare an estimate. A letter will be sent to the customer along with an invoice stating the cost for the connection works. The payment can be made at the two offices of Bahamas Power and Light by check, cash or credit card. The connection costs includes the cost of a distribution transformer and accessories. The external works will be scheduled by the utility - Bahamas Power and Light after the payment is received. 2 Request and receive final inspection by Ministry of Works 21 calendar days BSD 0 Agency : Ministry of Public Works and Transport - Building Control Department The customer requests a final inspection for the internal wiring from the Ministry of Works. The Inspector signs off on the certificate after ascertaining that all internal wiring has been done satisfactorily. There are several rounds of internal wiring inspection conducted by the Ministry of Works during the construction of the warehouse. 3 Receive external works from Bahamas Power and Light 28 calendar days USD 0 Agency : Bahamas Power and Light Bahamas Power and Light will conduct the external works. This involves the construction of the mains extension, installation of the transformer and the installation of the service cable. 4 Open electricity account with Bahamas Power and Light 1 calendar day BSD 3,457.97 Agency : Bahamas Power and Light In order to open an account with the Bahamas Power and Light, the customer should bring the following into BPL's Business Office on Blue Hill and Tucker Roads or at the Marathon Mall Office: • The original Electrical Installation Approval, a copy of the Occupancy Certificate (or occupancy exemption). These documents are issued by the Building Control Division of the Ministry of Works & Transport and can be obtained from the electrical or building contractor. • Two forms of personal identification, the National Insurance Card, along with a valid Passport or Voters Card. In the case of non-working expatriates, a valid Passport along with a Social Security Card or Driver’s License. • Where the applicant is a Limited Company or Government Ministry, the following is required: A letter on the Company's or Ministry's letterhead with the name of two (2) signatories, positions held, along with the Company's seal or Ministry's stamp affixed; along with the requirements in point 1. • The letter should state that the company / government ministry applies for the supply of electricity to certain named premises and authorizes the persons (also to be named) to sign on the Company's or Ministry's behalf. There ought to be two signatories on the Company's or Ministry's account with the Corporation. 5 Receive meter installation and electricity flow 5 calendar days BSD 0 Agency : Bahamas Power and Light The service extension (transformer, service cable, etc) has been completed prior to the account being opened, and meter is now installed and electricity turned on. Takes place simultaneously with previous procedure. Page 19 Doing Business 2020 Bahamas, The Details – Getting Electricity in Bahamas, The – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 6.5 System average interruption frequency index (SAIFI) 6.3 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? No Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online https://www.facebook.com /mybpl242/photos/pcb.20 45961628860393/204596 0985527124/? type=3&theater Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 20 Doing Business 2020 Bahamas, The Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 21 Doing Business 2020 Bahamas, The Registering Property - Bahamas, The Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Procedures (number) 7 7.4 4.7 1 (5 Economies) Time (days) 122 63.7 23.6 1 (2 Economies) Cost (% of property value) 11.8 5.9 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 3.0 12.0 23.2 None in 2018/19 Figure – Registering Property in Bahamas, The – Score 50.0 42.1 21.2 10.0 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Bahamas, The and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 67.2: Dominican Republic (Rank: 74) 58.0: Barbados (Rank: 118) 56.7: Antigua and Barbuda (Rank: 124) 54.9: Regional Average (Latin America & Caribbean) 30.8: Bahamas, The (Rank: 181) 28.9: St. Kitts and Nevis (Rank: 185) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 22 Doing Business 2020 Bahamas, The Figure – Registering Property in Bahamas, The – Procedure, Time and Cost Time (days) Cost (% of property value) 120 12 100 10 Cost (% of property value) 80 8 Time (days) 60 6 40 4 20 2 0 0 1 2 *3 *4 *5 6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2020 Bahamas, The Figure – Registering Property in Bahamas, The and comparator economies – Measure of Quality 20 19.0 18 16 14.5 Index score 14 12.0 12 10.5 10 9.0 8 6 4 3.0 2 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Details – Registering Property in Bahamas, The – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Drafting of contracts and exchange of contracts once agreed 1 day BSD 27,684.31; (2.5% of Agency : Lawyer's office the value of the property is The contract stage, which can last between 1 and 5 days, depending on the complexity of the payable on the first transaction, would include the following steps: B$500,000 2% of the value of the (1) The Seller's lawyer prepares a draft Agreement for Sale and submits it to the Buyer's lawyer for approval. property is payable for that (2) The Seller's lawyer forwards the final Agreement for Sale (in duplicate) to the Buyer's lawyer part which is in excess of for execution. B$500,000, but does not (3) The Buyer's lawyer returns a signed Agreement for Sale (and deposits part of the payment, exceed B$1,000,000 usually 10% of the purchase price). 1% of the value that is in excess of B$1,000,000, After the contract stage, the Buyer's lawyer would conduct the due diligence included in but does not exceed procedures 2, 3, and 4. As part of the due diligence, the Buyer’s lawyer may forward requisitions. B$5,000,000.) Once the due diligence is completed, the buyer's lawyer forwards the draft Conveyance to the seller's lawyer for approval. The Bahamas Bar Association has a sliding scale of fees for property transactions, which is based on the valued of the property: 2.5% of the value of the property is payable on the first B$500,000 2% of the value of the property is payable for that part which is in excess of B$500,000, but does not exceed B$1,000,000 1% of the value that is in excess of B$1,000,000, but does not exceed B$5,000,000. 2 Lawyer or his clerk checks for encumbrances at the Registry of records (regarding any 45 days Cost included in lawyer's mortgages on the property) fees (Procedure 1) Agency : Registry of Records Searches are conducted by search clerks or lawyers. Documents recorded at the Registry of Records are available on microfilm up to 2003. From 2003 onwards documents recorded have been scanned and may be accessed online. When the parties hire a large law firm, the firm usually does this Documents search, together with the Court Cause List search of Procedure 3 and the Company Search of Procedure 4, in house. The firm does not charge an extra fee for these searches, i.e. it is included in the conveyance fee. When an independent party is hired to conduct the searches, the fee is 300-350 USD per lot searched. 3 Lawyer checks for judgments against the property at the Supreme Court 1 day Cost included in lawyer's Agency : Supreme Court fees (Procedure 1) This search is conducted to check if there are any judgments affecting the property, since charges imposed by judicial decisions could be levied on the property, regardless of who the owner is. 4 Lawyer checks for other companies using the same property at the Company Registrar 1 day Cost included in lawyer's Agency : Company Registry fees (Procedure 1) Searches are done at the Companies Registry only if a company owns or previously owned the property. Searches are done to ensure that the company was existing and duly incorporated during the property ownership period and to ensure that any prior conveyance was executed in accordance with the Articles of Association. 5 Real property tax status enquiry with the Valuation office of the Ministry of Finance. 1 day Cost included in lawyer's Agency : Department of Inland Revenue fees (Procedure 1) Starting January 2015, it is required to submit a certificate of good standing with property taxes signed by the Chief Valuation officer of the Inland Revenue Department. If the seller did not pay these taxes in the past, the new owner will be liable to satisfy this debt. In addition to this Procedure, the buyer's lawyer might also choose to make an inquiry with utility companies (water, electricity and phone/cable). Such inquiry could be conducted within two weeks. Page 24 Doing Business 2020 Bahamas, The 6 Payment of Stamp Duty 1 day BSD 151,843.1; (10% of Agency : Public Treasury the value of the property) Stamp duty is paid at the Public Treasury. According to the Stamp (Amendment) Act of 2018, effective July 1st, 2018, the rate of stamp duty is 10% of the property's value for all property transactions valued at more than $100,000. No Value Added Tax is required. 7 Lodge the conveyance for recording at registry of records 75 days BSD 4.5; (BSD 4.50/page) Agency : Registry of Records It generally takes between two and three months for the Registry of Records to record a property transfer and return the supporting documentation after it has been filed for recording. To file the transfer instrument for registration, the affidavits of the witnesses to the conveyance must be notarized. This Procedure is not necessary for the validity of the conveyance, but it is a requirement under the Registration of Records Act (Ch. 187 Statute Laws of The Bahamas, 2000 Edition) to record the transfer. Any licensed notary public can do it at a cost of BSD 30.00 to BSD 50.00, and in most cases, lawyers have a notary public license, in which case they may do it themselves. In this case, the fee is included in the lawyer's overall fees charged in Procedure 1. Takes place simultaneously with previous procedure. Page 25 Doing Business 2020 Bahamas, The Details – Registering Property in Bahamas, The – Measure of Quality Answer Score Quality of the land administration index (0-30) 3.0 Reliability of infrastructure index (0-8) 0.0 Type of land registration system in the economy: Deed Registration System What is the institution in charge of immovable property registration? Registrar General’s Department of the Bahamas Deeds & Documents Section In what format are past and newly issued land records kept at the immovable property registry of the largest Paper 0.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Department of Lands and Surveys In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Paper 0.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information No 0.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Separate databases 0.0 kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the same identification No 0.0 number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Freely accessible by 1.0 in the largest business city? anyone Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Page 26 Doing Business 2020 Bahamas, The Link for online access: http://www.bahamas. gov.bs/wps/portal/pub lic/gov/government/se rvices/!ut/p/b1/vZPJb qNAEIafJQ_g0M3Os RsYb3SzNGDDBRkv GLOYxGzm6YfR5BQ pmcvMVJ1K-qt- _Z9UXMztubg- 9Hl2aPN7fSh_zbGcC GBJEBJVspSADNaB YyFHWfEqhbMgmgX gi0Lg074fArCGAHkM usAWILfj9qtoGI0HyU zEErewN4gcx7QnpB PrTMmxqVUmfl46I- ggIYdW6F1HeFMSs HnAWLyS7Wmx7nxP Sis3lcRRp_LtaNBd6 VZF426r2L4XDHs0N - PRi8SVbbddPZ770m Q6qJNrW0Dc2uAgnI XQi0wakKf8praBRI9i NvKVcU37ndRf1WTA rliil5ePzN-E- gOzHRd_j4X_EHyDl a7u1ZmLZpny1R3VA 5zP7YGYsNuzWU_F 5N3AMLKbLTDDFW ABngzUHg0K_qFhSg 0XwCl4sqCx2EQJKQ aennznFHoBRrq4- ZEGnw1t3tdmQx3K2 0ACDEj_2nAp2eoMU _EdJPEA6MJ_NmR_ H- mGi_O0eh2O1St4FV So8RoAsiTLUBNVLr SiERvZ- mqYu37In_Iqfec3W5 JmijsVBbbupBHPYjlq obZQG- WSOGET5guULW1C fWG7fA9QnYcWlkeq x7qOL22A78PbWFkL 7e74CYqjk5UkFxWB digd_VYpU8ef1o_EfT eYzee3jbj3hNGcTpj9 WC1LrexaoY5gtZhaj 8Bh_oimCnpL9lR6- d1kfpOfn_ewNw!!/dl4 /d5/L2dBISEvZ0FBIS 9nQSEh/ Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Page 27 Doing Business 2020 Bahamas, The Link for online access: http://www.bahamas. gov.bs/wps/portal/pub lic/gov/government/se rvices/!ut/p/b1/vZPJb qNAEIafJQ_g0M3Os RsYb3SzNGDDBRkv GLOYxGzm6YfR5BQ pmcvMVJ1K-qt- _Z9UXMztubg- 9Hl2aPN7fSh_zbGcC GBJEBJVspSADNaB YyFHWfEqhbMgmgX gi0Lg074fArCGAHkM usAWILfj9qtoGI0HyU zEErewN4gcx7QnpB PrTMmxqVUmfl46I- ggIYdW6F1HeFMSs HnAWLyS7Wmx7nxP Sis3lcRRp_LtaNBd6 VZF426r2L4XDHs0N - PRi8SVbbddPZ770m Q6qJNrW0Dc2uAgnI XQi0wakKf8praBRI9i NvKVcU37ndRf1WTA rliil5ePzN-E- gOzHRd_j4X_EHyDl a7u1ZmLZpny1R3VA 5zP7YGYsNuzWU_F 5N3AMLKbLTDDFW ABngzUHg0K_qFhSg 0XwCl4sqCx2EQJKQ aennznFHoBRrq4- ZEGnw1t3tdmQx3K2 0ACDEj_2nAp2eoMU _EdJPEA6MJ_NmR_ H- mGi_O0eh2O1St4FV So8RoAsiTLUBNVLr SiERvZ- mqYu37In_Iqfec3W5 JmijsVBbbupBHPYjlq obZQG- WSOGET5guULW1C fWG7fA9QnYcWlkeq x7qOL22A78PbWFkL 7e74CYqjk5UkFxWB digd_VYpU8ef1o_EfT eYzee3jbj3hNGcTpj9 WC1LrexaoY5gtZhaj 8Bh_oimCnpL9lR6- d1kfpOfn_ewNw!!/dl4 /d5/L2dBISEvZ0FBIS 9nQSEh/ Does the agency in charge of immovable property registration agency formally commit to deliver a legally No 0.0 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Link for online access: Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property No 0.0 registration agency? Number of property transfers in the largest business city in 2018: Who is able to consult maps of land plots in the largest business city? Anyone who pays the 0.5 official fee Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, in person 0.0 Link for online access: Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and No 0.0 if so, how does it communicate the service standard? Page 28 Doing Business 2020 Bahamas, The Link for online access: Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the largest business city formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Are all privately held land plots in the economy mapped? No 0.0 Land dispute resolution index (0–8) 0.5 Does the law require that all property sale transactions be registered at the immovable property registry to make No 0.0 them opposable to third parties? Legal basis: Is the system of immovable property registration subject to a state or private guarantee? No 0.0 Type of guarantee: Legal basis: Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Legal basis: Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., No 0.0 checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? No one; Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Lawyer; Is there a national database to verify the accuracy of government issued identity documents? No 0.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local Supreme court businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without More than 3 years 0.0 appeal)? Are there publicly available statistics on the number of land disputes at the economy level in the first instance No 0.0 court? Number of land disputes in the economy in 2018: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 29 Doing Business 2020 Bahamas, The Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 30 Doing Business 2020 Bahamas, The Getting Credit - Bahamas, The Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Strength of legal rights index (0-12) 6 5.3 6.1 12 (5 Economies) Depth of credit information index (0-8) 0 5.1 6.8 8 (53 Economies) Credit registry coverage (% of adults) 0.0 14.6 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 0.0 47.6 66.7 100.0 (14 Economies) Figure – Getting Credit in Bahamas, The – Score 30.0 Score - Getting Credit Figure – Getting Credit in Bahamas, The and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 52.0: Regional Average (Latin America & Caribbean) 45.0: Dominican Republic (Rank: 119) 30.0: Bahamas, The (Rank: 152) 30.0: Barbados (Rank: 152) 25.0: Antigua and Barbuda (Rank: 165) 25.0: St. Kitts and Nevis (Rank: 165) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 31 Doing Business 2020 Bahamas, The Figure – Legal Rights in Bahamas, The and comparator economies 7 6 6 6 5.3 5 5 Index Score 5 4 3 2 1 1 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Page 32 Doing Business 2020 Bahamas, The Details – Legal Rights in Bahamas, The Strength of legal rights index (0-12) 6 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description Yes of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes 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; Yes and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an No electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Bahamas, The and comparator economies 9 8 8 7 Index Score 6 5.1 5 4 3 2 1 0 0 0 0 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Page 33 Doing Business 2020 Bahamas, The Details – Credit Information in Bahamas, The Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? No No 0 Are both positive and negative credit data distributed? No No 0 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries No No 0 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No No 0 By law, do borrowers have the right to access their data in the credit bureau or No No 0 credit registry? Can banks and financial institutions access borrowers’ credit information online No No 0 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help No No 0 banks and financial institutions 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 0 0 Number of firms 0 0 Total 0 0 Percentage of adult population 0.0 0.0 Page 34 Doing Business 2020 Bahamas, The Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal - Has not adopted bylaws or articles of association that go beyond the minimum requirements. corporate documents; Evidence obtainable during trial and allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - 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. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 35 Doing Business 2020 Bahamas, The Protecting Minority Investors - Bahamas, The Stock exchange information Stock exchange Bahamas International Securities Exchange Stock exchange URL http://www.bisxbahamas.com Listed firms with equity securities 15 City Covered Nassau Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Extent of disclosure index (0-10) 3.0 4.1 6.5 10 (13 Economies) Extent of director liability index (0-10) 5.0 5.2 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 8.0 6.7 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 5.0 3.0 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 4.0 2.3 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 3.0 2.3 5.7 7 (13 Economies) Figure – Protecting Minority in Bahamas, The – Score 56.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Bahamas, The and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 58.0: Antigua and Barbuda (Rank: 79) 56.0: Bahamas, The (Rank: 88) 52.0: St. Kitts and Nevis (Rank: 103) 47.3: Regional Average (Latin America & Caribbean) 38.0: Barbados (Rank: 136) 34.0: Dominican Republic (Rank: 143) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 36 Doing Business 2020 Bahamas, The Figure – Protecting Minority Investors in Bahamas, The and comparator economies – Measure of Quality the Bahamas 3 5 3 4 5 8 Antigua and Barbuda 2 8 4 4 3 8 Barbados 4 2 2 1 3 7 Dominican Republic 0 4 5 0 8 St. Kitts and Nevis 2 8 4 1 3 8 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 Latin America & Caribbean 2.5 5.4 4.4 2.5 3.2 6.5 0 5 10 15 20 25 30 35 40 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 37 Doing Business 2020 Bahamas, The Details – Protecting Minority Investors in Bahamas, The – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 3.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of all 2.0 material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) No disclosure 0.0 obligation Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 5.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) Yes 1.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) Yes 1.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of fraud 0.0 or bad faith Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? No 0.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) Yes 1.0 Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 5.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders? Yes 1.0 Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 4.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? No 0.0 Page 38 Doing Business 2020 Bahamas, The Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? Yes 1.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? No 0.0 Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Extent of corporate transparency index (0-7) 3.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and directorships in other No 0.0 companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? No 0.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? No 0.0 Page 39 Doing Business 2020 Bahamas, The Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 40 Doing Business 2020 Bahamas, The Paying Taxes - Bahamas, The Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Payments (number per year) 20 28.2 10.3 3 (2 Economies) Time (hours per year) 155 317.1 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 33.8 47.0 39.9 26.1 (33 Economies) Postfiling index (0-100) 82.3 47.5 86.7 None in 2018/19 Figure – Paying Taxes in Bahamas, The – Score 71.7 83.6 89.2 82.3 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Bahamas, The and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 81.7: Bahamas, The (Rank: 50) 72.3: Barbados (Rank: 96) 64.4: St. Kitts and Nevis (Rank: 125) 60.5: Regional Average (Latin America & Caribbean) 58.9: Antigua and Barbuda (Rank: 145) 57.4: Dominican Republic (Rank: 150) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution 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 and contribution rate below this threshold receive the same score as the economy at the threshold. Page 41 Doing Business 2020 Bahamas, The Figure – Paying Taxes in Bahamas, The and comparator economies – Measure of Quality 90 82.3 80 75.7 74.1 69.4 70 Index score 60 47.5 50 40 30 20 10.7 10 0 Bahamas, Antigua Dominican St. Barbados Latin The and Republic Kitts America Barbuda and & Nevis Caribbean Page 42 Doing Business 2020 Bahamas, The Details – Paying Taxes in Bahamas, The Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Business license 1.0 10.0 1.25% turnover or flat 22.02 fee fee (whichever is greater) Employer paid - 12.0 66.0 5.9% gross salaries 6.36 Social security contributions Stamp duty 1.0 10% sale price 3.03 Property tax 1.0 1% and 2% market value of 1.58 property Land Tax 1.0 $100 or 1.5% if market value of 0.76 land value is land higher than $7000 Vehicle tax 1.0 $195-$745 variable 0.03 Tax on check 1.0 $.40 /check 0.01 transactions Fuel tax 1.0 included into fuel 0.00 small amount price Employee paid - 0.0 jointly 3.9% gross salaries 0.00 withheld Social security contributions Value Added Tax 1.0 online 79.0 12% Value Added 0.00 Not included (VAT) Totals 20 155 33.8 Page 43 Doing Business 2020 Bahamas, The Details – Paying Taxes in Bahamas, The – Tax by Type Taxes by type Answer Profit tax (% of profit) 0.0 Labor tax and contributions (% of profit) 6.4 Other taxes (% of profit) 27.4 Page 44 Doing Business 2020 Bahamas, The Details – Paying Taxes in Bahamas, The – Measure of Quality Answer Score Postfiling index (0-100) 82.3 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process none Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 2.0 96.0 Time to obtain VAT refund (weeks) 20.0 68.5 Corporate income tax audits Does corporate income tax exist? No Percentage of cases exposed to a corporate income tax audit (%) Not applicable Time to comply with a corporate income tax correction (hours) No corporate income No CIT tax Time to complete a corporate income tax correction (weeks) No corporate income No CIT tax Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 45 Doing Business 2020 Bahamas, The Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 46 Doing Business 2020 Bahamas, The Trading across Borders - Bahamas, The Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Time to export: Border compliance (hours) 36 55.3 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 512 516.3 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 12 35.7 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 550 100.3 33.4 0 (20 Economies) Time to import: Border compliance (hours) 51 55.6 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 1385 628.4 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 6 43.2 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 550 107.3 23.5 0 (30 Economies) Figure – Trading across Borders in Bahamas, The – Score 78.0 51.7 93.5 0.0 82.1 0.0 97.9 21.4 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Bahamas, The and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 83.5: Dominican Republic (Rank: 66) 81.0: St. Kitts and Nevis (Rank: 71) 69.1: Regional Average (Latin America & Caribbean) 68.7: Antigua and Barbuda (Rank: 112) 62.8: Barbados (Rank: 132) 53.1: Bahamas, The (Rank: 161) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 47 Doing Business 2020 Bahamas, The Figure – Trading across Borders in Bahamas, The – Time and Cost Time (hours) Cost (USD) 60 1600 51 1385 1400 50 Time (hours) 1200 Cost (USD) 40 36 1000 30 800 512 550 550 600 20 12 400 10 6 200 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 48 Doing Business 2020 Bahamas, The Details – Trading across Borders in Bahamas, The Characteristics Export Import Product HS 39 : Plastics and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner United States United States Border Arawak Cay port Arawak Cay port Distance (km) 10 10 Domestic transport time (hours) 2 2 Domestic transport cost (USD) 320 325 Details – Trading across Borders in Bahamas, The – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 3.5 415.0 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 33.0 97.0 Import: Clearance and inspections required by 15.0 1075.0 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 51.0 310.0 Page 49 Doing Business 2020 Bahamas, The Details – Trading across Borders in Bahamas, The – Trade Documents Export Import Bill of Lading Bill of Lading Commercial Invoice Commercial Invoice Certificate of origin Manifest from the Shipping Line Importer Security Filing (ISF) Customs Import Declaration - Home Consumption entry C-13 Packing List Cargo release order Customs Export Declaration - C30 Re-Export Entry for Imported Goods SOLAS certificate SOLAS certificate Page 50 Doing Business 2020 Bahamas, The Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local currency of • Court costs USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 51 Doing Business 2020 Bahamas, The Enforcing Contracts - Bahamas, The Standardized Case Claim value BSD 60,230 Court name Nassau Supreme Court of the Commonwealth of the Bahamas City Covered Nassau Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Time (days) 545 774.2 589.6 120 (Singapore) Cost (% of claim value) 28.9 32.0 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 8.0 8.8 11.7 None in 2018/19 Figure – Enforcing Contracts in Bahamas, The – Score 65.2 67.6 44.4 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Bahamas, The and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 68.1: Antigua and Barbuda (Rank: 36) 65.5: St. Kitts and Nevis (Rank: 49) 59.1: Bahamas, The (Rank: 82) 53.5: Regional Average (Latin America & Caribbean) 50.6: Dominican Republic (Rank: 133) 38.9: Barbados (Rank: 170) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 52 Doing Business 2020 Bahamas, The Figure – Enforcing Contracts in Bahamas, The – Time and Cost Time (days) Cost (% of claim value) 1600 40.9 45 Cost (% of claim value) 1400 1340 40 1200 32.0 35 Time (days) 28.9 27.1 26.6 30 1000 774.2 21.5 25 800 19.7 590 589.6 578 20 600 545 476 15 400 10 200 5 0 0 Antigua Bahamas, Barbados Dominican Latin OECD St. and The Republic America high Kitts Barbuda & income and Caribbean Nevis Page 53 Doing Business 2020 Bahamas, The Figure – Enforcing Contracts in Bahamas, The and comparator economies – Measure of Quality the Bahamas 2 1 0.5 4.5 Antigua and Barbuda 2.5 3 1.5 4.5 Barbados 2.5 1 0.5 3 Dominican Republic 2.5 0.5 0 3.5 St. Kitts and Nevis 2.5 3 1.5 4.5 OECD high income 2.5 3.2 2.4 3.6 Latin America & Caribbean 2.4 2.2 1 3.6 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Bahamas, The Indicator Time (days) 545 Filing and service 20 Trial and judgment 345 Enforcement of judgment 180 Cost (% of claim value) 28.9 Attorney fees 18 Court fees 2.9 Enforcement fees 8 Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 4.5 Case management (0-6) 1.0 Court automation (0-4) 0.5 Alternative dispute resolution (0-3) 2.0 Page 54 Doing Business 2020 Bahamas, The Details – Enforcing Contracts in Bahamas, The – Measure of Quality Answer Score Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 4.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? 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 court as a man's? Yes 0.0 Case management (0-6) 1.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be granted? No 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) No 0.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? No 0.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? No 0.0 Court automation (0-4) 0.5 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? No 0.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the general public No through publication in official gazettes, 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 Yes available to the general public through 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 Yes section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— No that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 55 Doing Business 2020 Bahamas, The 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 No section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 56 Doing Business 2020 Bahamas, The Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have • Assessors’ and auctioneers’ fees been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 57 Doing Business 2020 Bahamas, The Resolving Insolvency - Bahamas, The Indicator Bahamas, The Latin America & OECD high Best Regulatory Caribbean income Performance Recovery rate (cents on the dollar) 64.4 31.2 70.2 92.9 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Cost (% of estate) 12.0 16.8 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. .. Strength of insolvency framework index (0-16) 6.0 7.2 11.9 None in 2018/19 Figure – Resolving Insolvency in Bahamas, The – Score 69.4 37.5 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Bahamas, The and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 69.8: Barbados (Rank: 35) 53.4: Bahamas, The (Rank: 71) 39.2: Regional Average (Latin America & Caribbean) 38.0: Dominican Republic (Rank: 124) 35.6: Antigua and Barbuda (Rank: 132) 0.0: St. Kitts and Nevis (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 58 Doing Business 2020 Bahamas, The Figure – Resolving Insolvency in Bahamas, The – Time and Cost Time (years) Cost (% of estate) 4 38.0 40 3.5 Cost (% of estate) 3.5 35 3.0 3.0 2.9 Time (years) 3 30 2.5 25 2 1.8 16.8 1.7 20 15.0 1.5 12.0 15 9.3 1 7.0 10 0.5 5 0 0 Antigua Bahamas, Barbados Dominican Latin OECD No and The Republic America high Practice Barbuda & income St. Caribbean Kitts and Nevis Page 59 Doing Business 2020 Bahamas, The Figure – Resolving Insolvency in Bahamas, The and comparator economies – Measure of Quality the Bahamas 3 2 1 0 Antigua and Barbuda 2 2 1 0 Barbados 4.5 2.5 3 1 Dominican Republic 5.5 2.5 2 0.5 St. Kitts and Nevis 4.5 2.5 3 1 OECD high income 5.3 2.8 2.1 1.9 Latin America & Caribbean 3.7 2.4 1.9 0.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Bahamas, The and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 70 64.4 65.7 60 50 40 37.1 31.2 30 20 9.6 10 0 No Practice Bahamas, The Antigua and Barbuda Dominican Republic St. Kitts and Nevis Barbados Latin America & Caribbean Page 60 Doing Business 2020 Bahamas, The Details – Resolving Insolvency in Bahamas, The Indicator Answer Score Proceeding receivership According to Section 139 of the Companies Act - Chapter 308, BizBank, as a debenture holder, is entitled to realize its security interest and appoint a receiver of any assets of a company pursuant to the instrument creating the debenture. After Mirage's default on payment, BizBank would initiate receivership by appointing a receiver to take charge of Mirage's business, receive the income deriving from the hotel property, pay the liabilities connected with the property and attempt sell Mirage as a going concern to maximize the return. Outcome going concern Yes, the hotel will continue operating as a going concern after the receiver will sell Mirage as a going concern to a third party. Time (in years) 3.0 A receivership procedure would take approximately 3 years in total. The delay is largely due to the time it takes to find a potential buyer in the market. The main procedural steps are as follows:- 1) Debenture holder realizes the security interest and appoints a receiver; 2) Holder gives notice within ten (10) days to the Registrar, causing the same to be filed at the Registry; 3) Receiver then sends notice to the company of its appointment; 4) Within fourteen (14) days after receipt of notice, a statement is prepared by the company and submitted to the receiver. Such statement pertains to the affairs of the company, pursuant to Section 151 of the Companies Act; 5) Receiver shall within two (2) months after receipt of statement, send a copy of the same to the Registrar, debenture holders etc.; 6) Within two (2) months after the expiration of twelve (12) months from the date of his appointment, the receiver will send to the Registrar, debenture holders etc. an abstract in the form approved by the Registrar. The said abstract will show the receiver's receipts and payments during the period of twelve months, as well as the aggregate amounts of his receipts and his payments during all preceding periods since his appointment. Cost (% of estate) 12.0 The costs associated with the case would amount to approximately 12% of the value of the debtor's estate. The main components of this total cost would be the attorney's fees (BSD 400-700/h, approximate 4% based on 3 year estimation), receiver fees (BSD 400-700/h, approximate 4% based on 3 year estimation), and fees for accountants, assessors, inspectors and other professionals (BSD 400-700/h, approximate 4% based on 3 year estimation). Recovery rate 64.4 (cents on the dollar) Page 61 Doing Business 2020 Bahamas, The Details – Resolving Insolvency in Bahamas, The – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 6.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may file for 0.5 liquidation only Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor 0.5 may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (c) Both (a) and (b) 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value options are available, of its assets but only one of them needs to be complied with Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the No 0.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? No 0.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as No 0.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote No 0.0 separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency No 0.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency No 0.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 62 Doing Business 2020 Bahamas, The Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 63 Doing Business 2020 Bahamas, The Employing Workers - Bahamas, The Details – Employing Workers in Bahamas, The Answer Hiring Fixed-term contracts prohibited for permanent tasks? No 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 (US$/month) 910.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 0.0 Working hours Standard workday 8.0 Maximum number of working days per week 5.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 10.0 Paid annual leave for a worker with 5 years of tenure (working days) 10.0 Paid annual leave for a worker with 10 years of tenure (working days) 15.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 11.7 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes 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? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.0 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 2.0 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 2.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 2.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 10.0 Page 64 Doing Business 2020 Bahamas, The Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 20.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 10.7 Unemployment protection after one year of employment? Yes Page 65 Doing Business 2020 Bahamas, The Business Reforms in Bahamas, The From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Starting a Business: The Bahamas made starting a business faster by reducing the registration time for business license and value added tax and by eliminating the business registration fee. Getting Electricity: The Bahamas made getting electricity more transparent by publishing electricity tariffs online. Registering Property: The Bahamas made property registration more costly by increasing the stamp duty on property transfers. Protecting Minority Investors: The Bahamas strengthened minority investor protections by increasing disclosure requirements for conflicts of interest, clarifying ownership and control structures, and requiring greater corporate transparency. Paying Taxes: The Bahamas made paying taxes easier by enhancing the online value added tax reporting system and making it more accessible to taxpayers. DB2019 Getting Credit: The Bahamas improved access to credit information through the introduction of regulations that govern the licensing, functioning, and regulation of credit bureaus in the country. Paying Taxes: The Bahamas made paying taxes easier by establishing an online system for filing and paying value added tax. DB2018 Starting a Business: The Bahamas made starting a business easier by merging the processes of registering for a business license and registering for value added tax. Getting Electricity: The Bahamas improved the monitoring and regulation of power outages by beginning to record data for the annual system average interruption duration index (SAIDI) and system average interruption frequency index (SAIFI). Paying Taxes: The Bahamas made paying taxes less costly by decreasing the stamp duty on the sale of land. Employing Workers: The Bahamas amended its legislation to introduce priority rules that apply to reemployment. DB2017 Starting a Business: The Bahamas made starting a business easier by allowing local limited liability companies to register online. On the other hand, The Bahamas made starting a business more costly by increasing the fees for registering a company name and incorporation. Registering Property: The Bahamas made registering property easier by reducing the cost of transferring a property. Paying Taxes: The Bahamas made paying taxes more complicated by introducing a value added tax. DB2016 Starting a Business: The Bahamas made starting a business more difficult by adding a requirement for value added tax (VAT) registration. Paying Taxes: The Bahamas made paying taxes less costly for companies by reducing the business license tax—though it also raised the wage ceiling used in calculating social security contributions. Trading across Borders: The Bahamas made trading across borders easier by fully implementing an electronic data interchange system, which reduced the time for preparation and submission of trade documents for both exporting and importing. DB2015 Dealing with Construction Permits: The Bahamas made dealing with construction permits more costly by increasing the building permit fees. Enforcing Contracts: The Bahamas made enforcing contracts easier by introducing new rules of civil procedure focused on streamlining and simplifying court proceedings and ensuring less costly resolution of disputes. DB2014 Registering Property: The Bahamas made transferring property easier by reducing the stamp duty. Resolving Insolvency: The Bahamas enhanced its insolvency process by implementing rules for the remuneration of liquidators, allowing voluntary liquidations and outlining clawback provisions for suspect transactions. Page 66 DB2012 Doing Business 2020 Bahamas, The DB2009 Registering Property: The Bahamas reduced the time required for transferring property by introducing a computerized system at the Registry of Records. Page 67 Doing Business 2020 Bahamas, The Page 68