Doing Business 2018 Malawi Economy Pro le of Malawi Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Malawi Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Sub-Saharan Africa DB 2018 Rank 190 1 Malawi Income Category Low income 110 Population 18,091,575 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 320 0 100 58.94 City Covered Blantyre DB 2018 Distance to Frontier (DTF) 0 100 73.40: Rwanda (Rank: 41) 65.15: Kenya (Rank: 80) 59.94: Namibia (Rank: 106) 58.94: Malawi (Rank: 110) 54.00: Mozambique (Rank: 138) Page 3   50.43: Regional Average (Sub­Saharan Africa) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Malawi Ease of Doing Business in Region Sub-Saharan Africa DB 2018 Rank 190 1 Malawi Income Category Low income 110 Population 18,091,575 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 320 0 100 58.94 City Covered Blantyre DB 2018 Distance to Frontier (DTF) 0 100 73.40: Rwanda (Rank: 41) 65.15: Kenya (Rank: 80) 59.94: Namibia (Rank: 106) 58.94: Malawi (Rank: 110) 54.00: Mozambique (Rank: 138) 50.43: Regional Average (Sub­Saharan Africa) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Malawi 1 6 28 55 82 96 96 Rank 109 117 134 138 136 144 152 151 166 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Malawi 100 90.00 80 76.43 65.29 62.45 62.10 59.22 60 DTF 51.67 43.43 45.55 40 33.28 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+1.07 Change:+0.04 Change:+45.00 Investors Change:0.00 Borders Change:0.00 Change:+11.03 Change:-0.30 Permits Change:0.00 Change:+1.97 Change:+4.46 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+1.07 Change:+0.04 Change:+45.00 Investors Change:0.00 Borders Change:0.00 Change:+11.03 Change:-0.30 Permits Change:0.00 Change:+1.97 Doing Business 2018 Malawi Change:+4.46 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Malawi Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement MWK 0 City Covered Blantyre Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Procedure – Men (number) 7 7.6 4.9 1.00 (New Zealand) Time – Men (days) 37 24.0 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 44.6 49.9 3.1 0.00 (United Kingdom) Procedure – Women (number) 7 7.7 4.9 1.00 (New Zealand) Time – Women (days) 37 24.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 44.6 49.9 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 25.6 8.7 0.00 (113 Economies) Figure – Starting a Business in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 87.66: Rwanda (Rank: 78) 83.20: Kenya (Rank: 117) 79.86: Mozambique (Rank: 137) 76.82: Regional Average (Sub-Saharan Africa) 76.43: Malawi (Rank: 152) 68.90: Namibia (Rank: 172) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Malawi – Procedure, Time and Cost Time Cost 35 35 30 30 ost (% of income per capita) 25 25 Time (days) 20 20 15 15 10 Page 6   10 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malawi Figure – Starting a Business in Malawi – Procedure, Time and Cost Time Cost 35 35 30 30 Cost (% of income per capita) 25 25 Time (days) 20 20 15 15 10 10 5 5 0 0 1 2 *3 *4 *5 *6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for a Certi cate of Incorporation at the Registrar General of the 5 days on average if MWK 1,000 for name Ministry of Justice done in person, 14 search + MWK 10,000 Agency : Registrar General days by mail for reservation of the company name + Company name search is done manually at the same desk of company MWK 50,000 for registration by completing a form and submitting it to the Registrar general. application to The Business Registration Act 2013, Government Notive No. 11, dated 24th of register the May 2013, established the electronic Malawi Business Registration Database company which stores information for both non incorporated and incorporated businesses. Although it is not fully implemented yet, the registry is moving towards automation. The law provides standard articles of association. By law, registration has to be completed in a maximum delay of 21 days. 2 Register for income tax at the Malawi Revenue Authority 1 day if application no charge Agency : Malawi Revenue Authority is hand delivered Company promoters must register with the Malawi Revenue Authority by ling the memorandum and articles of association, the certi cate of incorporation (copy), and an application letter or completed application for registration form, including the accounting date, the name of a public o cer, and the nature of the business. The Malawi Revenue Authority then issues a taxpayer income tax number. 3 Apply for a license from the City Assembly 7 days, MWK 1,000 Agency : Blantyre City Assembly simultaneous procedure Under the Business Licensing Act, wholesalers must apply for a wholesaler’s license; and retailers, for a retailer’s license. For industrial activities, relevant Page 7   fees, procedures, and licensing requirements depend on the manufactured (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Malawi Details – Starting a Business in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for a Certi cate of Incorporation at the Registrar General of the 5 days on average if MWK 1,000 for name Ministry of Justice done in person, 14 search + MWK 10,000 Agency : Registrar General days by mail for reservation of the company name + Company name search is done manually at the same desk of company MWK 50,000 for registration by completing a form and submitting it to the Registrar general. application to The Business Registration Act 2013, Government Notive No. 11, dated 24th of register the May 2013, established the electronic Malawi Business Registration Database company which stores information for both non incorporated and incorporated businesses. Although it is not fully implemented yet, the registry is moving towards automation. The law provides standard articles of association. By law, registration has to be completed in a maximum delay of 21 days. 2 Register for income tax at the Malawi Revenue Authority 1 day if application no charge Agency : Malawi Revenue Authority is hand delivered Company promoters must register with the Malawi Revenue Authority by ling the memorandum and articles of association, the certi cate of incorporation (copy), and an application letter or completed application for registration form, including the accounting date, the name of a public o cer, and the nature of the business. The Malawi Revenue Authority then issues a taxpayer income tax number. 3 Apply for a license from the City Assembly 7 days, MWK 1,000 Agency : Blantyre City Assembly simultaneous procedure Under the Business Licensing Act, wholesalers must apply for a wholesaler’s license; and retailers, for a retailer’s license. For industrial activities, relevant fees, procedures, and licensing requirements depend on the manufactured goods. Licenses are thus administered by the corresponding ministry. By law, a business is to be deemed as fully licensed if the authority does not respond within 7 days of the day of the application. The Department of Planning checks whether the premises location and business use is consistent with the city code. 4 Pay the requisite fee and Obtain the license 1 day, simultaneous MWK 30,000 Agency : Ministry procedure (Blantyre City Council) Upon approval, the license is issued in a couple of days and mailed to the investor. The amount payable depends on the type and location of the business in the city. Pursuant to section 37 of the Business Licensing Act of 2012, the Minister of Industry and Trade made the Business Licensing Regulations, 2014 (‘‘new Regulations’’). The new Regulations came into operation in November 2014. The issuance of a business license for Malawians where the premises are in a city or municipal council such as Blantyre are xed at MWK 30,000. 5 Apply for a registration of the workplace 28 days, MWK 1,000, depends Agency : Occupational Safety, Health, and Welfare Department of the simultaneous on the number of Ministry of Labor procedure employees Promoters must le Form Lab/W/1 (application for registration of workplace) with the Occupational Safety, Health, and Welfare Department of the Ministry of Labor. Page 8   Fee schedule for workplace registration: Malawians where the premises are in a city or municipal council such as Doing Blantyre Business xed at MWK are 2018 30,000. Malawi 5 Apply for a registration of the workplace 28 days, MWK 1,000, depends Agency : Occupational Safety, Health, and Welfare Department of the simultaneous on the number of Ministry of Labor procedure employees Promoters must le Form Lab/W/1 (application for registration of workplace) with the Occupational Safety, Health, and Welfare Department of the Ministry of Labor. Fee schedule for workplace registration: - Fewer than 20 employees: MWK 1,000. - 21 to 50 employees: MWK 3,000. - 51 to 200 employees: MWK 5,000. - 201 to 500 employees: MWK 10,000. - More than 500 employees: MWK 15,000. 6 Receive inspection of the company premises by the Occupational Safety, 7 days, no charge Health, and Welfare Department simultaneous Agency : Occupational Safety, Health, and Welfare Department procedure When a company les an application for the registration of its workplace, o cers from the Occupational Safety, Health and Welfare Department inspect the premises. If they are satis ed with its conditions, they issue a Certi cate of registration to the Company. Otherwise, they will advise the company on certain measures to implement in order to improve the working conditions. 7 Register for PAYE and fringe bene t tax at the Malawi Revenue 4 days no charge Authority (by mail) Agency : Malawi Revenue Authority Promoters must le Form P1 (PAYE) and Form FBT1 (fringe bene t tax). On registering for pay-as-you-earn (PAYE) tax, applicants are provided with the following forms: WTF1 (withholding tax certi cate); WTF2 (summary of withholding tax); P9 (PAYE certi cate of total emoluments and tax deducted); P10 (advice of employees tax deduction certi cates issued); P12 (PAYE monthly deduction payment form; and P16 (reconciliation of the number of tax deduction certi cates and schedule of tax deductions to be sent to the Inspector of Taxes). Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Page 9   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Malawi Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 10   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Malawi Standardized Warehouse Estimated value of warehouse MWK 10,419,800.30 City Covered Blantyre Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Procedures (number) 13 14.8 12.5 7.00 (Denmark) Time (days) 153 147.5 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 11.6 9.9 1.6 0.10 (5 Economies) Building quality control index (0-15) 9.5 8.0 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.80: Mozambique (Rank: 56) 66.10: Namibia (Rank: 107) 65.56: Rwanda (Rank: 112) 63.16: Kenya (Rank: 124) 59.22: Malawi (Rank: 144) 56.91: Regional Average (Sub-Saharan Africa) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Malawi – Procedure, Time and Cost Time Cost 10 140 120 8 Cost (% of warehouse value) 100 Time (days) 6 80 60 4 40 2 20 0 0 1 *2 3 4 5 6 7 *8 9 10 * 11 12 13 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Malawi Figure – Dealing with Construction Permits in Malawi – Procedure, Time and Cost Time Cost 10 140 120 8 Cost (% of warehouse value) 100 Time (days) 6 80 60 4 40 2 20 0 0 1 *2 3 4 5 6 7 *8 9 10 * 11 12 13 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Malawi and comparator economies – Measure of Quality 16 14.0 14 12 11.0 9.5 Index score 10 9.0 8.0 8 6.5 6 4 2 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Dealing with Construction Permits in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain approval of plan from the City Council 60 days MWK 941,432 Agency : City Council The general procedure for obtaining the approval of the project plan is as follows: 1. BuildCo arranges for a private engineering consultant to complete the building plans. The plans must be prepared by licensed architects and signed by an engineer. However, the type of engineer is not speci ed, so they do not have to know anything about construction. There is an abusive practice of architects / engineers signing plans prepared by technicians who worked independently without actually reviewing them simply to obtain the Page 12   payment. Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Details – Dealing with Construction Permits in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain approval of plan from the City Council 60 days MWK 941,432 Agency : City Council The general procedure for obtaining the approval of the project plan is as follows: 1. BuildCo arranges for a private engineering consultant to complete the building plans. The plans must be prepared by licensed architects and signed by an engineer. However, the type of engineer is not speci ed, so they do not have to know anything about construction. There is an abusive practice of architects / engineers signing plans prepared by technicians who worked independently without actually reviewing them simply to obtain the payment. 2. BuildCo completes the “application for permission to develop or to subdivide land” and a by-laws form, and submits the forms and the plans to the City Council with payment of a fee based on the size of the building and the assessed value of the land. 3. The plans and application are then forwarded to a technical panel for consideration. The panel’s members are representatives from the following organizations: • Electricity Supply Corporation of Malawi • Malawi Telecommunications Limited • Water Board • City Council - Physical Planning Department • City Council - Engineering Department • City Council - Parks and Recreation Department • City Council - Health and Environment Department • City Council - Building Department • Occupational Safety, Health, and Welfare Department of the Ministry of Labor • Malawi Housing Corporation • Ministry of Transport and Public Works The panel reviews the building plans and application and either approves the development or suggests amendments. If the panel requires amendments, BuildCo is noti ed by mail of the changes required. BuildCo can also contact the City Council by phone or in person to inquire about the status of the application. A water connection application is led along with the site plan. If the panel accepts the application, it is forwarded to the Town and Country Planning Committee, which meets monthly. The committee noti es BuildCo by mail and a notice of decision, a legally binding document, and the by-laws form are issued. The meeting of the City Planning Committee takes place only once a month, and the Technical Panel meets only once every 2 weeks. However, companies may choose to opt for a fast-track option which allows companies to convene an emergency meeting of the Town and Planning Committee at a higher fee charged on top of standard fees. The fee for a fast-track option Page 13   would be MWK 50,000. In this case, the meeting will take place within about The meeting of the City Planning Committee takes place only once a month, and the Technical Panel meets only once every 2 weeks. However, companies Business Doing may choose 2018 Malawi to opt for a fast-track option which allows companies to convene an emergency meeting of the Town and Planning Committee at a higher fee charged on top of standard fees. The fee for a fast-track option would be MWK 50,000. In this case, the meeting will take place within about one week of the payment being made. BuildCo will receive an oral decision at the end of the meeting. If there is an a rmative decision, construction can begin right away. The o cial document will be issued soon after. In practice however, this option is seldom used seldom by companies. Many companies plan ahead of the time and have prior consultations with the municipal o cials. Under normal circumstances under Town and Country Planning Act, the Planning Committee should either approve the application or inform the applicant why it cannot be approved within 60 days of the application being submitted. In reality, this does not happen often. However, the silence-is- consent rule applies. If after 60 days there is no response, construction can begin. As of May 1, 2004 the cost according to Blantyre City Council is 0.8% or construction cost + MWK 800.00 (local tax) + MWK 100.00 (application fee). 2 Submit project brief and obtain certi cate of EIA (environmental impact 15 days MWK 5,000 assessment) exemption from Director of Environmental A airs Department Agency : Environmental A airs Department Unless a project is likely to have a signi cant environmental impact, project developers can prepare and submit a project brief with little or no assistance from environmental specialists. Since projects and their stage in the project cycle vary widely, detailed guidelines for the content of a project brief are not possible. However, Section 24 of the Environmental Management Act requires that a project brief should at least state: 1. The nature of the project; 2. The activities that shall be undertaken; 3. The possible products and by-products anticipated; 4. The number of people the project shall employ; 5. The area of land, air or water that may be a ected; and 6. Any other matters as may be prescribed. More generally, a project brief should also contain: 1. A basic description of the project purpose, size, location and preliminary design, including any alternatives which are being considered (i.e., site, technology, construction and operation procedures, handling of waste). 2. The stage of the project in the project cycle. 3. A location map of the project site or site alternatives, and a site plan as it is currently known. Maps and plans should conform to the standards discussed below. 4. A discussion of which aspects of the project are likely to cause environmental concerns and the proposed environmental management measures. 3 Notify the City Council of the commencement of construction and 14 days no charge receive inspection Agency : City Council During the construction phase of an approved project, the City Assembly sends out inspectors at various stages of construction. Inspectors from the City Assembly’s Departments of Building, Environment and Health, and Fire Page 14   join the national-level Occupational Safety, Health, and Welfare Department environmental concerns and the proposed environmental management Doing measures. Business 2018 Malawi 3 Notify the City Council of the commencement of construction and 14 days no charge receive inspection Agency : City Council During the construction phase of an approved project, the City Assembly sends out inspectors at various stages of construction. Inspectors from the City Assembly’s Departments of Building, Environment and Health, and Fire join the national-level Occupational Safety, Health, and Welfare Department to inspect the construction site approximately ve times. These inspectors come as a team, and there is no charge for these visits. The Building Department issues six cards that specify when a building should be inspected. BuildCo noti es the inspectors by sending a card at the appropriate stage of construction. The City Assembly inspectors come within 2 days to 2 weeks of noti cation. However in reality many do not come due to scarcity of resources. In practice, builders continue construction after submitting the notice without waiting for the inspection. 4 Notify the City Council of foundation excavation and receive inspection 14 days no charge Agency : City Council 5 Notify the City Council of brick work foundation and receive inspection 14 days no charge Agency : City Council 6 Notify the City Council of damp roof course and receive inspection 14 days no charge Agency : City Council 7 Notify the City Council when the construction reaches wall plate level 14 days no charge and receive inspection Agency : City Council 8 Apply for water and sewerage connections at the City Council 1 day MWK 20,000 Agency : Water Board of the City Council Sewerage services can be obtained by completing a form that asks for technical information about the capacity needed and the location of the pipelines. In practice, the type of construction considered here would include a septic tank. 9 Receive water and sewerage inspection by the City Council engineers 1 day no charge Agency : City Council After the inspection, the cost of extending the sewer pipes to the facilities is estimated, and the BuildCo is informed of how much to pay to complete the connection. 10 Obtain water and sewerage connection 14 days no charge Agency : Water Board of the City Council Apply for occupancy permit 3 days MWK 234,108 11 Agency : City Council The fee for the occupancy permit is a debatable matter between o cials and construction companies. To de ne the base for the levying fee, the Municipality has to evaluate the construction cost according to its methodology. In addition, quantitative surveyors who work for construction companies provide monthly updates to the authorities on the cost incurred. Page 15   The fee will be 0.1% of the construction value and must be paid before the 10 Obtain water and sewerage connection 14 days no charge Agency : Water Board of the City Council Doing Business 2018 Malawi Apply for occupancy permit 3 days MWK 234,108 11 Agency : City Council The fee for the occupancy permit is a debatable matter between o cials and construction companies. To de ne the base for the levying fee, the Municipality has to evaluate the construction cost according to its methodology. In addition, quantitative surveyors who work for construction companies provide monthly updates to the authorities on the cost incurred. The fee will be 0.1% of the construction value and must be paid before the occupancy permit is issued. 12 Receive nal inspection and obtain occupancy permit 1 day no charge Agency : City Council 13 Register the property title in the Lands Registry 7 days MWK 5,000 Agency : Lands Registry Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Malawi – Measure of Quality Answer Score Building quality control index (0-15) 9.5 Quality of building regulations index (0-2) 0.0 How accessible are building laws and regulations in your economy? (0-1) Not easily 0.0 accessible. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Available only on request. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 1.0 What types of inspections (if any) are required by law to be carried out during Inspections at 1.0 construction? (0-2) various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction; Mandatory inspections are done most of the Page 16   time during Takes place simultaneously with previous procedure. Doing Business 2018 Malawi Details – Dealing with Construction Permits in Malawi – Measure of Quality Answer Score Building quality control index (0-15) 9.5 Quality of building regulations index (0-2) 0.0 How accessible are building laws and regulations in your economy? (0-1) Not easily 0.0 accessible. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 0.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Available only on request. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 1.0 What types of inspections (if any) are required by law to be carried out during Inspections at 1.0 construction? (0-2) various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction; Mandatory inspections are done most of the time during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.5 Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 Page 17   possible structural aws or problems in the building once it is in use (Latent Defect required by law Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 building Doing once it is Business in use (Latent 2018 Malawi Defect Liability or Decennial Liability)? (0-1) company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is Page 18   purchasing material for these works in an area with no physical constraints. For example, the property is not certi cation exam. Doing Business 2018 Malawi Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 19   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Malawi Standardized Connection Price of electricity (US cents per kWh) 13.3 Name of utility Electricity Supply Corporation of Malawi (ESCOM) City Covered Blantyre Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Procedures (number) 6 5.3 4.7 2 (United Arab Emirates) Time (days) 127 115.3 79.1 10 (United Arab Emirates) Cost (% of income per capita) 2341.6 3737.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 0 0.9 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.12: Namibia (Rank: 68) 76.68: Kenya (Rank: 71) 60.69: Rwanda (Rank: 119) 52.54: Mozambique (Rank: 150) 45.91: Regional Average (Sub-Saharan Africa) 43.43: Malawi (Rank: 166) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Malawi – Procedure, Time and Cost Time Cost 2500 120 2000 Cost (% of income per capita) 100 80 Time (days) 1500 60 1000 40 500 20 Page 20   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malawi Figure – Getting Electricity in Malawi – Procedure, Time and Cost Time Cost 2500 120 2000 Cost (% of income per capita) 100 80 Time (days) 1500 60 1000 40 500 20 0 0 1 *2 3 *4 5 *6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Malawi and comparator economies – Measure of Quality 7 6 6 5 Index score 4 4 3 2 0.9 1 0 0 0 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Getting Electricity in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to ESCOM, receive quotation and sign contract 22 calendar days USD 3.87 Agency : Electricity Supply Corporation of Malawi (ESCOM) In order to have a new electricity service connection: The customer must visit any customer care center or ESCOM o ce and ll an Application Form. The customer may ask the utility's sta to help to ll the form. The following details will be required in an application: -A sketch map with directions to locate your premises. The map must indicate landmarks of the area, features for the premises, the location of ESCOM network in the area and any other details that may assist ESCOM sta to locate the premises easily. Page 21   - A list of the electrical appliances that the customer will be using; and Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Details – Getting Electricity in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to ESCOM, receive quotation and sign contract 22 calendar days USD 3.87 Agency : Electricity Supply Corporation of Malawi (ESCOM) In order to have a new electricity service connection: The customer must visit any customer care center or ESCOM o ce and ll an Application Form. The customer may ask the utility's sta to help to ll the form. The following details will be required in an application: -A sketch map with directions to locate your premises. The map must indicate landmarks of the area, features for the premises, the location of ESCOM network in the area and any other details that may assist ESCOM sta to locate the premises easily. - A list of the electrical appliances that the customer will be using; and - Details of the owner of the premises. The customer immediately signs the contract. The utility will give a quotation and the customer can sign the contract. The security deposit has to be paid at the utility. 2 Receive external site inspection by ESCOM 1 calendar day MWK 0 Agency : Electricity Supply Corporation of Malawi (ESCOM) The customer has to wait for the external inspection. The inspection is necessary to prepare a technical study. Someone from the customer’s party with an electrical background has to be present. 3 Purchase material on behalf of ESCOM 60 calendar days MWK 4,700,000 Agency : Customer The policy of the utility is to provide all material. However, the customer can also purchase material that is not available. The customer would purchase material on behalf of ESCOM. The transformer would be property of ESCOM and not the customer. The customer can be refunded the part of material cost that exceed what he/she has to pay to ESCOM for connection charges as contribution to the total project cost. However, in practice the partly refund of connection cost is rarely done. 4 Obtain excavation permit from road authority 14 calendar days MWK 10,000 Agency : Municipality A excavation permit is needed in case a road has to be crossed. The client obtains the excavation permit at the Road Authority and noti es the City Council. 5 Receive external works from ESCOM 45 calendar days MWK 167,000 Agency : Electricity Supply Corporation of Malawi (ESCOM) The utility is in charge of the design of the external connection. The external connection works are carried out by the utility. 6 Receive internal inspection and meter installation from ESCOM 1 calendar day MWK 250 Agency : Electricity Supply Corporation of Malawi (ESCOM) There is an internal inspection when the meter is installed. Someone from the customer’s party has to be present. The meter is installed by the utility, however by a di erent team from the one in charge of the connection works. Page 22   The utility is in charge of the design of the external connection. The external Business works Doing connection carried out by the utility. 2018 areMalawi 6 Receive internal inspection and meter installation from ESCOM 1 calendar day MWK 250 Agency : Electricity Supply Corporation of Malawi (ESCOM) There is an internal inspection when the meter is installed. Someone from the customer’s party has to be present. The meter is installed by the utility, however by a di erent team from the one in charge of the connection works. Electricity starts owing the moment the connection is done. Takes place simultaneously with previous procedure. Details – Getting Electricity in Malawi – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) .. System average interruption frequency index (SAIFI) .. What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI N/A Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.escom.m w/current- tari s.php Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 23   Takes place simultaneously with previous procedure. Doing Business 2018 Malawi Details – Getting Electricity in Malawi – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) .. System average interruption frequency index (SAIFI) .. What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI N/A Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.escom.m w/current- tari s.php Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 24   What the indicators measure Case study assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Malawi Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value MWK 10,419,800.30 City Covered Blantyre Page 25   Sub-Saharan OECD high Doing Business 2018 Malawi Standard Property Transfer Property value MWK 10,419,800.30 City Covered Blantyre Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Procedures (number) 6 6.2 4.6 1.00 (4 Economies) Time (days) 69 59.3 22.3 1.00 (3 Economies) Cost (% of property value) 1.6 7.8 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 10.5 8.6 22.7 29.00 (Singapore) Figure – Registering Property in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.26: Rwanda (Rank: 2) 62.45: Malawi (Rank: 96) 59.27: Mozambique (Rank: 104) 54.49: Kenya (Rank: 125) 51.71: Regional Average (Sub-Saharan Africa) 38.35: Namibia (Rank: 175) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Malawi – Procedure, Time and Cost Time Cost 1.6 60 1.4 Cost (% of property value) 1.2 50 1 Time (days) 40 0.8 30 0.6 20 0.4 10 0.2 0 0 1 2 3 4 *5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 26   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Malawi Figure – Registering Property in Malawi – Procedure, Time and Cost Time Cost 1.6 60 1.4 Cost (% of property value) 1.2 50 1 Time (days) 40 0.8 30 0.6 20 0.4 10 0.2 0 0 1 2 3 4 *5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Malawi and comparator economies – Measure of Quality 30 28.0 25 20 Index score 16.0 15 10.5 9.5 10 8.5 8.6 5 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Registering Property in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Search for encumbrances at the Lands Registry 1 day MWK 5,000 Agency : Lands Registry Parties conduct a search at the Deeds Registry to ensure that no encumbrances are still pending on the property. The search can be conducted either by the title number (faster) or by plot number (slower). Malawi still has two systems of land title registration i.e. Title registration under the Registered Land Act and Title registration under the Deeds Registration Act. The former is simpler and searches are also simpler and quicker. If it is just one property search it takes no more than 15 minutes in the Title Registry but it may take longer in the Deeds Registry because of cross-referencing. For one property it could take on average about an hour. Page 27   An o cial search certi cate may be issued if the parties request one. The Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Details – Registering Property in Malawi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Search for encumbrances at the Lands Registry 1 day MWK 5,000 Agency : Lands Registry Parties conduct a search at the Deeds Registry to ensure that no encumbrances are still pending on the property. The search can be conducted either by the title number (faster) or by plot number (slower). Malawi still has two systems of land title registration i.e. Title registration under the Registered Land Act and Title registration under the Deeds Registration Act. The former is simpler and searches are also simpler and quicker. If it is just one property search it takes no more than 15 minutes in the Title Registry but it may take longer in the Deeds Registry because of cross-referencing. For one property it could take on average about an hour. An o cial search certi cate may be issued if the parties request one. The search certi cate details all subsisting entries in the register of the property at the date of the search. 2 Obtain City rates clearance certi cate 1 - 3 days MWK 500 Agency : Blantyre City Council A letter is sent to the City Assembly to obtain a City rates clearance certi cate. The parties search for unpaid city taxes on the property at the Municipality, which is free of charge . The system is computerized and it is just a matter of punching in the Rate Payer's details and the account comes up on the screen with all outstanding taxes. One can call to obtain the basic information, but this information cannot be used for o cial purposes. However, a written certi cate is required to be signed by the Chief Executive, which substantially extends the time. 3 Apply to Ministry of Lands for consent to transfer the property 1.5 - 2 months on MWK 5,000 Agency : Ministry of Lands average Parties apply to the Ministry of Lands for consent to transfer the property. The application now is done directly in Blantyre since The Ministry must give its approval of the transaction. The process starts with an application to the Regional Commissioner for Lands, who then forwards the application with an accompanying memo to the Principal Secretary at the Ministry of Lands, who then passes it on to the Minister’s o ce. The application is also sent to the Anti-Corruption Bureau. 4 Obtain a Tax Clearance Certi cate from the Malawi Revenue Authority 7 days no cost Agency : Malawi Revenue Authority (simultaneous with Procedure 5) Parties apply for a Tax Clearance Certi cate from the Malawi Revenue Authority. The following documents must be provided to MRA (i) Original Title Deed (ii) Sale-purchase agreement (iii) Evaluation report from a certi ed evaluator 5 Stamping of the conveyance deed at the Registrar General’s o ce 1 day 1.5% of property (simultaneous with value Page 28   Agency : Registrar General's o ce Doing (iii) Evaluation Business from a certi ed evaluator report Malawi 2018 5 Stamping of the conveyance deed at the Registrar General’s o ce 1 day 1.5% of property Agency : Registrar General's o ce (simultaneous with value Procedure 4) The deed is taken for stamping at the Registrar General’s o ce. If done in person will take 1 day, but by mail could take 1 month. 6 Apply for registration at the Deeds Registry 7 days MWK 5,000 Agency : Deeds Registry The parties take all the documents for registration at the Deeds Registry that will issue a title deed under the name of the buyer. The City rates clearance certi cate must be presented at that time The documentation shall include: Stamped deed (obtained in Procedure 4) Tax clearance certi cate (obtained in Procedure 5) Takes place simultaneously with previous procedure. Details – Registering Property in Malawi – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Ministry of Lands In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for 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: Survey Department, Ministry of Lands In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 1.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Page 29   Takes place simultaneously with previous procedure. Doing Business 2018 Malawi Details – Registering Property in Malawi – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Ministry of Lands In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for 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: Survey Department, Ministry of Lands In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 1.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, in person 0.0 made publicly available–and if so, how? Link for online access: Is the applicable fee schedule for any property transaction at the agency in charge of Yes, in person 0.0 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Page 30   Link for Doing online access: Business 2018 Malawi Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available No 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a No 0.0 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Interested Parties. Page 31   Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? Doing Business 2018 Malawi If yes, who is responsible for checking the legality of the documents? Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Interested Parties. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a The High Court property worth 50 times gross national income (GNI) per capita and located in the of Malawi largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender Page 32   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Malawi Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Strength of legal rights index (0-12) 11 5.1 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 3.0 6.6 8.00 (34 Economies) Page 33   Credit registry coverage (% of adults) 0.0 6.3 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Malawi Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Strength of legal rights index (0-12) 11 5.1 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 3.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 6.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 23.5 8.2 63.7 100.00 (23 Economies) Figure – Getting Credit in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.00: Malawi (Rank: 6) 90.00: Rwanda (Rank: 6) 75.00: Kenya (Rank: 29) 60.00: Namibia (Rank: 68) 40.73: Regional Average (Sub-Saharan Africa) 25.00: Mozambique (Rank: 159) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Malawi and comparator economies 12 11 10 10 8 Index score 7 6 5 5.1 4 2 1 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Legal Rights in Malawi Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 34   Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Details – Legal Rights in Malawi Strength of legal rights index (0-12) 11 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be Yes performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Malawi and comparator economies 10 8 8 8 7 7 Index score 6 4 4 3.0 2 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Credit Information in Malawi Page 35   0 Malawi Doing Business 2018 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Credit Information in Malawi Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 2,000,419 0 Number of firms 199,431 0 Total 2,199,850 0 Percentage of adult population 23.5 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 36   transactions; Available legal remedies (damages, Percentage of adult population 23.5 0.0 Doing Business 2018 Malawi Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 6 4.8 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 4.3 4.0 6.4 Page 37   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Malawi Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 6 4.8 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 4.3 4.0 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.33: Rwanda (Rank: 16) 58.33: Kenya (Rank: 62) 53.33: Namibia (Rank: 89) 51.67: Malawi (Rank: 96) 43.72: Regional Average (Sub-Saharan Africa) 41.67: Mozambique (Rank: 138) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Malawi and comparator economies – Measure of Quality Malawi 4 7 4 2 7 7 Kenya 4 5 6 6 5 9 Mozambique 1 4 5 2 6 7 Namibia 8 5 5 3 4 7 Rwanda 7 9 7 8 8 5 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Sub-Saharan Africa 4.2 3.5 5.5 3.3 4.6 5.6 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Malawi – Measure of Quality Answer Score Page 38   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Malawi Details – Protecting Minority Investors in Malawi – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 4 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 7 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove speci c facts in the plainti ’s Page 39   Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction Doing 2018 (0-1) documents? Business Malawi Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove speci c facts in the plainti ’s claim Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti 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 plainti s recover their legal expenses from the company? (0-2) Yes regardless of 2.0 outcome Extent of shareholder governance index (0-10) 4.3 Extent of shareholder rights index (0-10) 7 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 2 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Page 40   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of Doing their term? Business 2018 Malawi Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 4 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. Page 41   Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Malawi Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Payments (number per year) 35 37.2 10.9 3 (Hong Kong SAR, China) Page 42   return, but within the tax assessment period. Doing Business 2018 Malawi Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Payments (number per year) 35 37.2 10.9 3 (Hong Kong SAR, China) Time (hours per year) 177.5 280.8 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 34.5 46.8 40.1 18.47% (32 Economies) Postfiling index (0-100) 33.41 54.39 83.45 99.38 (Estonia) Figure – Paying Taxes in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.60: Rwanda (Rank: 31) 74.52: Namibia (Rank: 79) 71.67: Kenya (Rank: 92) 66.13: Mozambique (Rank: 117) 62.10: Malawi (Rank: 134) 57.49: Regional Average (Sub-Saharan Africa) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Malawi and comparator economies – Measure of Quality 90 77.17 80 70 62.03 63.68 58.56 60 54.39 Index score 50 40 33.41 30 20 10 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Paying Taxes in Malawi Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Page 43   Corporate Income tax 5 67 30% taxable profits 20.41 Doing Business 2018 Malawi Figure – Paying Taxes in Malawi and comparator economies – Measure of Quality 90 77.17 80 70 62.03 63.68 58.56 60 54.39 Index score 50 40 33.41 30 20 10 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Paying Taxes in Malawi Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Corporate Income tax 5 67 30% taxable profits 20.41 Pension contribution 12 78 7.5% gross salaries 11.28 TEVETA Levy 1 1% gross salaries 1.13 Property transfer 1 1.5% sale value 0.91 (stamp duty) Road tax 1 various vehicle weight 0.79 rates Stamp duty 1 MK 0.8 per contract 0.00 small amount Property tax 1 0.005% assessed 0.00 building value Employee paid - 0 jointly 5% gross salaries 0.00 withheld Pension contributions Fuel tax 1 included into 0.00 small the fuel price amount Value added tax (VAT) 12 33 16.5% value added 0.00 not and land sale included Totals 35 177.5 34.5 Details – Paying Taxes in Malawi – Tax by Type Taxes by type Answer Profit tax (% of profit) 20.4 Labor tax and contributions (% of profit) 12.4 Page 44   Totals 35 177.5 34.5 Doing Business 2018 Malawi Details – Paying Taxes in Malawi – Tax by Type Taxes by type Answer Profit tax (% of profit) 20.4 Labor tax and contributions (% of profit) 12.4 Other taxes (% of profit) 1.7 Details – Paying Taxes in Malawi – Measure of Quality Answer Score Post ling index (0-100) 33.41 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 3 months Percentage of cases exposed to a VAT audit (%) 75% - 100% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 33.0 34 Time to obtain a VAT refund (weeks) 44.3 20.64 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax audit (hours) 20.0 66.06 Time to complete a corporate income tax audit (weeks) 27.9 12.95 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 45   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Malawi Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 46   of agriculture or industry, national security agencies and any other Doing Business 2018 Malawi government authorities. Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Time to export: Border compliance (hours) 78 100.1 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 243 592.1 149.9 0.00 (19 Economies) Time to export: Documentary compliance 75 87.8 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 342 215.1 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 55 136.4 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 143 686.8 111.6 0.00 (27 Economies) Time to import: Documentary compliance 55 103.0 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 162 300.1 25.6 0.00 (30 Economies) Figure – Trading across Borders in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.44: Rwanda (Rank: 87) 67.63: Kenya (Rank: 106) 67.25: Mozambique (Rank: 109) 65.29: Malawi (Rank: 117) 61.47: Namibia (Rank: 132) 52.56: Regional Average (Sub-Saharan Africa) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Malawi – Time and Cost Time Cost 90 400 78 342 80 75 350 70 300 60 243 55 55 Time (hours) Cost (USD) 250 50 200 40 162 143 150 30 100 20 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 47   Doing Business 2018 Malawi Figure – Trading across Borders in Malawi – Time and Cost Time Cost 90 400 78 342 80 75 350 70 300 60 243 55 55 Time (hours) Cost (USD) 250 50 200 40 162 143 150 30 100 20 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Malawi Characteristics Export Import Product HS 24 : Tobacco and manufactured tobacco HS 8708: Parts and accessories of motor substitutes vehicles Trade partner Belgium South Africa Border Mwanza border crossing Mwanza border crossing Distance (km) 105 105 Domestic transport time 3 3 (hours) Domestic transport cost 197 276 (USD) Details – Trading across Borders in Malawi – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 25.0 220.0 Export: Clearance and inspections required by agencies other than customs 48.0 22.9 Export: Port or border handling 7.1 0.0 Import: Clearance and inspections required by customs authorities 49.5 131.5 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 5.7 11.9 Details – Trading across Borders in Malawi – Trade Documents Export Import Page 48   (USD) Doing Business 2018 Malawi Details – Trading across Borders in Malawi – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 25.0 220.0 Export: Clearance and inspections required by agencies other than customs 48.0 22.9 Export: Port or border handling 7.1 0.0 Import: Clearance and inspections required by customs authorities 49.5 131.5 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 5.7 11.9 Details – Trading across Borders in Malawi – Trade Documents Export Import Through bill of landing Inland bill of lading Cargo release order SADC- Certificate of origin EUR 1 - Certificate of origin Commercial Invoice Commercial invoice Customs and Excise Declaration (Form 12) Exchange control - CD1 form Delivery order Customs and Excise Declaration (Form 12) Declaration of Value (Form 19) Customs Transit Declaration Packing list Quality Certificate Report order Inspection report from scanner (Mozambique) Advise Note Packing List Release order Terminal Handling Receipt Phytosanitary certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 49   SOLAS certificate Doing Business 2018 Malawi Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value MWK 2,593,413.00 Court name Blantyre High Court, Commercial Division City Covered Blantyre Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Time (days) 522 656.8 577.8 164.00 (Singapore) Cost (% of claim value) 69.1 44.0 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 8.5 6.5 11.0 15.50 (Australia) Figure – Enforcing Contracts in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 61.58: Namibia (Rank: 59) 58.62: Rwanda (Rank: 85) 58.27: Kenya (Rank: 90) Page 50   of judicial processes Quality Business Doing index (0-18) 2018 Malawi 8.5 6.5 11.0 15.50 (Australia) Figure – Enforcing Contracts in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 61.58: Namibia (Rank: 59) 58.62: Rwanda (Rank: 85) 58.27: Kenya (Rank: 90) 48.14: Regional Average (Sub-Saharan Africa) 45.55: Malawi (Rank: 151) 27.32: Mozambique (Rank: 184) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Malawi – Time and Cost Time Cost 1000 950 140 119.0 120 Cost (% of claim value) 800 656.8 100 577.8 82.7 Time (days) 600 522 80 465 69.1 460 60 400 44.0 41.8 35.8 230 40 200 21.5 20 0 0 Kenya Malawi Mozambique Namibia OECD high income Rwanda Sub-Saharan Africa Figure – Enforcing Contracts in Malawi and comparator economies – Measure of Quality Malawi 1.5 1 1.5 4.5 Kenya 2 2 0.5 4.5 Mozambique 2.5 2 0 4.5 Namibia 2 4 2 1.5 Rwanda 2.5 4.5 4 3 OECD high income 2.5 2.9 2 3.6 Sub-Saharan Africa 2 1.1 0.3 3.2 0 2 4 6 8 10 12 14 Page 51   16 0 0 Kenya Malawi Mozambique Namibia OECD high income Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Figure – Enforcing Contracts in Malawi and comparator economies – Measure of Quality Malawi 1.5 1 1.5 4.5 Kenya 2 2 0.5 4.5 Mozambique 2.5 2 0 4.5 Namibia 2 4 2 1.5 Rwanda 2.5 4.5 4 3 OECD high income 2.5 2.9 2 3.6 Sub-Saharan Africa 2 1.1 0.3 3.2 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Malawi Indicator Time (days) 522 Filing and service 42 Trial and judgment 360 Enforcement of judgment 120 Cost (% of claim value) 69.1 Attorney fees 50 Court fees 5.3 Enforcement fees 13.8 Quality of judicial processes index (0-18) 8.5 Court structure and proceedings (-1-5) 4.5 Case management (0-6) 1.0 Court automation (0-4) 1.5 Alternative dispute resolution (0-3) 1.5 Details – Enforcing Contracts in Malawi – Measure of Quality Page 52   Alternative dispute resolution (0-3) 1.5 Doing Business 2018 Malawi Details – Enforcing Contracts in Malawi – Measure of Quality Answer Score Quality of judicial processes index (0-18) 8.5 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 No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 1.5 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? Page 53   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Malawi 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? 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 No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 1.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.0 2.a. Is voluntary mediation or conciliation available? No 2.b. Are mediation, conciliation or both governed by a consolidated law or n.a. consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., n.a. if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 54   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Malawi Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Recovery rate (cents on the dollar) 12.5 20.3 71.2 93.1 (Norway) Time (years) 2.6 2.9 1.7 0.4 (Ireland) Page 55   Cost (% of estate) 25.0 22.7 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Malawi Sub-Saharan OECD high Indicator Malawi Africa income Overall Best Performer Recovery rate (cents on the dollar) 12.5 20.3 71.2 93.1 (Norway) Time (years) 2.6 2.9 1.7 0.4 (Ireland) Cost (% of estate) 25.0 22.7 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 8.5 6.2 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Malawi and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 48.20: Mozambique (Rank: 75) 47.79: Rwanda (Rank: 78) 43.11: Kenya (Rank: 95) 37.04: Namibia (Rank: 123) 33.28: Malawi (Rank: 138) 30.28: Regional Average (Sub-Saharan Africa) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Malawi – Time and Cost Time Cost 5 35 4.5 29.0 30 4 25.0 22.7 25 Cost (% of estate) 22.0 Time (years) 20.5 2.9 3 2.6 2.5 2.5 20 14.5 15 2 1.7 1.5 9.1 10 1 5 0 0 Kenya Malawi Mozambique Namibia OECD high income Rwanda Sub-Saharan Africa Figure – Resolving Insolvency in Malawi and comparator economies – Measure of Quality Malawi 4 3 1 0.5 Page 56   Kenya 3 3 1 2 0 0 Kenya Malawi Mozambique Namibia OECD high income Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Figure – Resolving Insolvency in Malawi and comparator economies – Measure of Quality Malawi 4 3 1 0.5 Kenya 3 3 1 2 Mozambique 4 2.5 2 1.5 Namibia 2 3 1 0 Rwanda 6 3 3 0 OECD high income 5.4 2.8 2.3 1.9 Sub-Saharan Africa 4.1 2.3 1 0.4 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Malawi and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 40 34.0 35 31.5 30 27.9 25 19.1 20.3 20 15 12.5 10 5 0 Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Details – Resolving Insolvency in Malawi Indicator Answer Explanation Proceeding liquidation After Mirage's default on payment, Bizbank would commence a creditor's Winding Up action by filing a petition in the High Court (Commercial Division). The High Court will then review the case, hold hearing and appoint liquidator to proceed with the liquidation. Although the new law provides for a room for reorganization, the liquidation will still be applicable in this case. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal after the liquidation procedure as the assets will be sold in a public auction by the liquidator. Time (in years) 2.6 The liquidation proceeding until BizBank is repaid some or all of the money owed to it takes approximate 2.6 years. The delay is largely due to the time for the court appointed liquidator to gather information on Mirage’s assets and prepare the auction sale (210 days), and the execution of the auction until BizBank received the payment (1 year). Page 57   Malawi Kenya Mozambique Namibia Rwanda Sub-Saharan Africa Doing Business 2018 Malawi Details – Resolving Insolvency in Malawi Indicator Answer Explanation Proceeding liquidation After Mirage's default on payment, Bizbank would commence a creditor's Winding Up action by filing a petition in the High Court (Commercial Division). The High Court will then review the case, hold hearing and appoint liquidator to proceed with the liquidation. Although the new law provides for a room for reorganization, the liquidation will still be applicable in this case. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal after the liquidation procedure as the assets will be sold in a public auction by the liquidator. Time (in years) 2.6 The liquidation proceeding until BizBank is repaid some or all of the money owed to it takes approximate 2.6 years. The delay is largely due to the time for the court appointed liquidator to gather information on Mirage’s assets and prepare the auction sale (210 days), and the execution of the auction until BizBank received the payment (1 year). Cost (% of 25.0 The costs associated with the case would amount to approximately 25% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include court or government agency fees (1%), attorney fees (3-10%), costs of notification and publication (1%), insolvency representative fees (3-5%), fees of accountants, assessors, inspectors and other professionals (1-2%), fees of auctioneers (5-10%), and fees of service providers and/or government levies (3-10%). Recovery rate (cents on the 12.5 dollar) Details – Resolving Insolvency in Malawi – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 Page 58   dollar) Doing Business 2018 Malawi Details – Resolving Insolvency in Malawi – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 Page 59   Creditor Doing participation Business 2018 index (0-4) Malawi 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to Page 60   the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Malawi Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Malawi Answer Hiring Page 61   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Malawi Details – Labor Market Regulation in Malawi Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 27.5 Ratio of minimum wage to value added per worker 0.5 Maximum length of probationary period (months) 12.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 18.0 Paid annual leave for a worker with 5 years of tenure (working days) 18.0 Paid annual leave for a worker with 10 years of tenure (working days) 18.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 18.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 62   Third-party Doing approval Business 2018 if nine workers are dismissed? Malawi No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 2.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 10.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 25.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 12.3 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 56.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Malawi In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Malawi implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Malawi made starting a business more expensive by increasing the cost of registering a business with the Registrar General. Dealing with Construction Permits: Malawi made dealing with construction permits cheaper by halving the fees charged by the city council to process building plan approvals. Getting Credit: Malawi strengthened access to credit by adopting a new law that establishes clear priority rules inside and outside bankruptcy procedures. Malawi improved access to credit information by establishing a new credit bureau. Page 63   Trading across Borders: Malawi made exporting and importing easier by upgrading to a web-based customs data management Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Malawi Business Reforms in Malawi In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Malawi implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Malawi made starting a business more expensive by increasing the cost of registering a business with the Registrar General. Dealing with Construction Permits: Malawi made dealing with construction permits cheaper by halving the fees charged by the city council to process building plan approvals. Getting Credit: Malawi strengthened access to credit by adopting a new law that establishes clear priority rules inside and outside bankruptcy procedures. Malawi improved access to credit information by establishing a new credit bureau. Trading across Borders: Malawi made exporting and importing easier by upgrading to a web-based customs data management platform, ASYCUDA World. Resolving Insolvency: Malawi made resolving insolvency easier by introducing a reorganization procedure, facilitating continuation of the debtor’s business during insolvency proceedings and introducing regulations for insolvency practitioners. DB2017 Starting a Business: Malawi made starting a business easier by eliminating the legal requirement to use a company seal and making it optional for entrepreneurs. Getting Credit: Malawi strengthened access to credit by adopting a new law on secured transactions that implements a functional secured transactions system and establishes a centralized, notice-based, online collateral registry. Protecting Minority Investors: Malawi strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions, by clarifying ownership and control structures through the prohibition of a subsidiary company from acquiring shares issued by its parent company, and by extending the ability for shareholders to recover their legal expenses. DB2015 Starting a Business: Malawi made starting a business easier by streamlining company name search and registration and by eliminating the requirement for inspection of company premises before issuance of a business license. Getting Electricity: Malawi reduced the time required to get electricity by engaging subcontractors to carry out external connection works. DB2014 Registering Property: Malawi made transferring property easier by reducing the stamp duty. DB2013 Dealing with Construction Permits: Malawi made dealing with construction permits more expensive by increasing the cost to obtain the plan approval and to register the property. Paying Taxes: Malawi introduced a mandatory pension contribution for companies. Trading across Borders: Trading across borders in Malawi became easier thanks to improvements in customs clearance procedures and transport links between the port of Beira in Mozambique and Blantyre. DB2012 Registering Property: Malawi made property registration slower by no longer sustaining last year’s time improvement in Compliance Certi cate processing times at the Ministry of Lands. Page 64   Getting Credit: Malawi improved its credit information system by passing a new law allowing the creation of a private credit DB2012 Doing Business Registering Malawi 2018Malawi Property: made property registration slower by no longer sustaining last year’s time improvement in Compliance Certi cate processing times at the Ministry of Lands. Getting Credit: Malawi improved its credit information system by passing a new law allowing the creation of a private credit bureau. Resolving Insolvency: Malawi adopted new rules providing clear procedural requirements and time frames for winding up a company. Labor Market Regulation: Malawi decreased the severance pay applicable in case of redundancy dismissals of workers with 10 years of service. DB2011 Registering Property: Malawi eased property transfers by cutting the wait for consents and registration of legal instruments by half. Enforcing Contracts: Malawi simpli ed the enforcement of contracts by raising the ceiling for commercial claims that can be brought to the magistrates court. DB2010 Paying Taxes: Malawi made paying taxes less time consuming for companies by encouraging the use of electronic systems. Trading across Borders: Malawi reduced delays in clearing goods by implementing a risk-based inspection system and a postdestination clearance program for preapproved traders. Resolving Insolvency: Malawi enhanced its insolvency process through a new law limiting the liquidator’s fees. DB2008 Enforcing Contracts: Malawi made enforcing contracts easier by opening a commercial court and hiring judges for the court. Page 65   DB2008 Enforcing Doing Contracts: Business 2018 Malawi made enforcing contracts easier by opening a commercial court and hiring judges for the court. Malawi Page 66