Doing Business 2018 Armenia Economy Pro le of Armenia 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 Armenia 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 Europe & Central Asia DB 2018 Rank 190 1 Armenia Income Category Lower middle income 47 Population 2,924,816 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 3,760 0 100 72.51 City Covered Yerevan DB 2018 Distance to Frontier (DTF) 0 100 82.04: Georgia (Rank: 9) 72.87: Romania (Rank: 45) 72.51: Armenia (Rank: 47) 71.91: Bulgaria (Rank: 50) 71.33: Regional Average (Europe & Central Asia) Page 3   68.02: Greece (Rank: 67) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Armenia Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Armenia Income Category Lower middle income 47 Population 2,924,816 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 3,760 0 100 72.51 City Covered Yerevan DB 2018 Distance to Frontier (DTF) 0 100 82.04: Georgia (Rank: 9) 72.87: Romania (Rank: 45) 72.51: Armenia (Rank: 47) 71.91: Bulgaria (Rank: 50) 71.33: Regional Average (Europe & Central Asia) 68.02: Greece (Rank: 67) 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 - Armenia 1 15 13 28 42 47 52 55 66 62 82 89 87 97 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Armenia 100 94.47 87.78 86.45 78.53 80 72.49 67.99 70.00 66.00 58.33 60 DTF 43.01 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+5.36 Change:+0.42 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+0.08 Change:0.00 Permits Change:0.00 Change:0.00 Change:+0.02 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:+5.36 Change:+0.42 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:+0.08 Change:0.00 Permits Change:0.00 Change:0.00 Doing Business 2018 Armenia Change:+0.02 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 Armenia Standardized Company Legal form LLC Paid-in minimum capital requirement AMD 0 City Covered Yerevan Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Procedure – Men (number) 4 5.2 4.9 1.00 (New Zealand) Time – Men (days) 4.5 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 0.9 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 4 5.2 4.9 1.00 (New Zealand) Time – Women (days) 4.5 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 0.9 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.84: Georgia (Rank: 4) 94.47: Armenia (Rank: 15) 92.30: Greece (Rank: 37) 90.62: Regional Average (Europe & Central Asia) 89.67: Romania (Rank: 64) 85.37: Bulgaria (Rank: 95) 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 Armenia – Procedure, Time and Cost Time Cost 4.5 1 4 0.8 ost (% of income per capita) 3.5 3 Time (days) 0.6 2.5 2 0.4 1.5 Page 6   1 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Armenia Figure – Starting a Business in Armenia – Procedure, Time and Cost Time Cost 4.5 1 4 0.8 Cost (% of income per capita) 3.5 3 Time (days) 0.6 2.5 2 0.4 1.5 1 0.2 0.5 0 0 1 2 *3 *4 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 Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register at the One-stop shop 2 days no charge Agency : State Register of Legal Entities In March 2011, the Business Entry One-stop Shop was launched within the Ministry of Justice. Companies and individual entrepreneurs can now obtain the name reservation, business registration and tax identi cation number at a single location and at the same time. An application for a taxpayer identi cation number is led to tax authority at the one-stop shop and the TIN is issued by the State Registrar. VAT registration can take place a year after a business exceeds the threshold of 115 million AMD. The legal time limit is 2 working days but the application may be dealt with in one day. Electronic registration is available at www.e-register.am/am/ but it is not commonly used in practice. The forms provided for online registration are standard with no option to make amendments. When registration is done online, founder(s) still need to visit the registry in order to obtain hard copy of the incorporation documents. 2 Order a company seal 1 day AMD 15,500 Agency : Seal maker The seal is not required by law but entrepreneurs tend to obtain the company's seal that may be asked during the operations of the company. The fee for seal issuance varies according to turnaround time as following. Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Armenia Details – Starting a Business in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register at the One-stop shop 2 days no charge Agency : State Register of Legal Entities In March 2011, the Business Entry One-stop Shop was launched within the Ministry of Justice. Companies and individual entrepreneurs can now obtain the name reservation, business registration and tax identi cation number at a single location and at the same time. An application for a taxpayer identi cation number is led to tax authority at the one-stop shop and the TIN is issued by the State Registrar. VAT registration can take place a year after a business exceeds the threshold of 115 million AMD. The legal time limit is 2 working days but the application may be dealt with in one day. Electronic registration is available at www.e-register.am/am/ but it is not commonly used in practice. The forms provided for online registration are standard with no option to make amendments. When registration is done online, founder(s) still need to visit the registry in order to obtain hard copy of the incorporation documents. 2 Order a company seal 1 day AMD 15,500 Agency : Seal maker The seal is not required by law but entrepreneurs tend to obtain the company's seal that may be asked during the operations of the company. The fee for seal issuance varies according to turnaround time as following. - 1 day: AMD 15,500. - 30 days: AMD 2,800. 3 Register for VAT 1 day no charge Agency : Tax Service (VAT o ce) (simultaneous with previous The company may submit an application for the voluntary VAT registration procedure) to the tax authority immediately once the company is registered with the Agency. The company shall submit an application for the VAT registration within 30 days after the relevant ground for obligatory VAT registration occurs. The application may be submitted either by a document or via electronic means. The tax authority provides a certi cate on registration within one week if the application is submitted by a document or within one day if the application is submitted via electronic means. If the company is considered a VAT payer due to the fact that it has exceeded the VAT threshold the previous taxable year, than there is no obligation of submitting the application for the VAT registration (the company is considered a VAT payer automatically). At the same time, if the company exceeds the VAT threshold during the current year, than the submission of the application is compulsory. According to the changes in ''Law on Turnover tax'' from July 2015 the VAT Page 8   threshold was increased to 115 mln. AMD. 30 days: AMD Doing -Business 2,800. Armenia 2018 3 Register for VAT 1 day no charge Agency : Tax Service (VAT o ce) (simultaneous with previous The company may submit an application for the voluntary VAT registration procedure) to the tax authority immediately once the company is registered with the Agency. The company shall submit an application for the VAT registration within 30 days after the relevant ground for obligatory VAT registration occurs. The application may be submitted either by a document or via electronic means. The tax authority provides a certi cate on registration within one week if the application is submitted by a document or within one day if the application is submitted via electronic means. If the company is considered a VAT payer due to the fact that it has exceeded the VAT threshold the previous taxable year, than there is no obligation of submitting the application for the VAT registration (the company is considered a VAT payer automatically). At the same time, if the company exceeds the VAT threshold during the current year, than the submission of the application is compulsory. According to the changes in ''Law on Turnover tax'' from July 2015 the VAT threshold was increased to 115 mln. AMD. 4 Register employees Less than one day no charge Agency : Tax Service (online form for employees registration) (online procedure, simultaneous with Company has to register all employees with the Tax authorities on the 20th previous day of the month following the month of their hiring. The registration is done procedure) online (www.taxservice.am) using a speci c registration form. 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): 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 Page 9   not assumed to have any other employees who are technical or licensed Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Armenia 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 Armenia Standardized Warehouse Estimated value of warehouse AMD 88,380,944.10 City Covered Yerevan Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Procedures (number) 19 16.0 12.5 7.00 (Denmark) Time (days) 98 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.9 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 8.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 77.57: Georgia (Rank: 29) 73.35: Bulgaria (Rank: 51) 72.48: Greece (Rank: 58) 68.09: Regional Average (Europe & Central Asia) 67.99: Armenia (Rank: 89) 58.13: Romania (Rank: 150) 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 Armenia – Procedure, Time and Cost Time Cost 0.45 0.4 80 Cost (% of warehouse value) 0.35 0.3 60 Time (days) 0.25 0.2 40 0.15 20 0.1 0.05 0 0 1 *2 3 *4 *5 6 *7 8 9 10 11 12 * 13 14 15 * 16 17 18 * 19 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Armenia Figure – Dealing with Construction Permits in Armenia – Procedure, Time and Cost Time Cost 0.45 0.4 80 Cost (% of warehouse value) 0.35 0.3 60 Time (days) 0.25 0.2 40 0.15 20 0.1 0.05 0 0 1 *2 3 *4 *5 6 *7 8 9 10 11 12 * 13 14 15 * 16 17 18 * 19 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 Armenia and comparator economies – Measure of Quality 14 13.0 13.0 12.0 12 11.4 10 Index score 8.0 8 7.0 6 4 2 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Dealing with Construction Permits in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply and obtain architectural-constructional assignment (АПЗ) 15 days no charge Agency : Yerevan Municipality The company submits an application form to the Architectural and Urban Development Department of the Yerevan Municipality with the following information: the purpose of usage, building type and address, and the name(s). As part of this process, the owner receives technical conditions from appropriate authorities for drawing, building, and using the building’s engineering substructures. The fee and time line are determined by the agreement with the company. For BuildCo to obtain a building permit, the municipality awards an Page 12   architectural design assignment to a licensed building design rm, upon Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Doing Business 2018 Armenia Details – Dealing with Construction Permits in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply and obtain architectural-constructional assignment (АПЗ) 15 days no charge Agency : Yerevan Municipality The company submits an application form to the Architectural and Urban Development Department of the Yerevan Municipality with the following information: the purpose of usage, building type and address, and the name(s). As part of this process, the owner receives technical conditions from appropriate authorities for drawing, building, and using the building’s engineering substructures. The fee and time line are determined by the agreement with the company. For BuildCo to obtain a building permit, the municipality awards an architectural design assignment to a licensed building design rm, upon receiving the application and the drawings. The design rm prepares the drawing(s) with information on technical, urban, and other necessary conditions. The architectural drawing undergoes a review performed by the Chief Architect at the Municipality. The drawings are then approved by the Yerevan Municipality, citing the duration of the construction. According to legislation the o cial time limit to issue the APZ is 15 days. The APZ is issued after receiving all technical conditions from utilities. 2 Obtain topographic survey of the land plot 10 days AMD 35,000 Agency : Private licensed company A topographic survey of the land plot must be obtained prior to developing the architectural plans of the warehouse. 3 Request and obtain technical conditions approval from Veolia Water 15 days no charge Agency : Veolia Water According to Regulation No. 257-N (2011), applicants must seek individual technical condition approvals from each authority. All technical conditions must be free of charge. Before starting earthwork, BuildCo must apply to utility providers, citing the planned route(s) of underground communications. 4 Request and obtain technical conditions approval from Electrical 15 days no charge Networks of Armenia Agency : Electrical Networks of Armenia BuildCo must obtain the technical conditions for electricity connection in order to be able to apply for the building permit. The municipality speci es the required technical conditions in the Architectural Planning Assignment (APZ), and the construction company has to obtain the technical conditions from each utility provider individually. 5 Request and obtain technical conditions approval on Fire Safety from 3 days no charge Ministry of Emergency Situations Agency : Ministry of Emergency Situations 6 Request and obtain building permit from Yerevan Municipality 15 days AMD 350,000 Page 13   Agency : Municipality Ministry of Emergency Situations Agency : Ministry of Emergency Situations Doing Business 2018 Armenia 6 Request and obtain building permit from Yerevan Municipality 15 days AMD 350,000 Agency : Municipality The company must resubmit the approved architectural drawings to the municipality. In Yerevan, the mayor grants the construction permit. The construction permit fee for the case study warehouse is AMD 350,000. The building permit is valid for 2 years. 7 Notify State Inspection of the Ministry of Urban Development of the 1 day no charge start of construction works Agency : Ministry of Urban Development BuildCo writes a letter 3 days prior to construction works and does not wait for approval. 8 Receive inspection by the Municipality 1 day no charge Agency : Municipality - Urban Development and Land Inspection Department The construction site will be visited at least once by the Municipality during the duration of project, provided all works are done properly. There is no need to stop works. Inspections occur on a random basis. According to the Law on Inspection, all inspections must take place only once a year. However, so-called operational inspections are widespread. 9 Receive inspection by State Inspection of Urban Development of Ministry 1 day no charge of Urban Development Agency : State Inspection of Urban Development of Ministry of Urban Development The construction site will be visited at least once by the State Inspection of Urban Development during the duration of project, provided all works are done properly. There is no need to stop works. Inspections occur on a random basis. According to the Law on Inspection, all inspections must take place only once a year. However, so-called operational inspections are widespread. 10 Request water and sewage services 9 days AMD 2,600 Agency : Veolia Water 11 Receive water and sewage inspection and obtain connection 1 day no charge Agency : Veolia Water Upon starting work, BuildCo must request the presence of utility company representatives while connecting the building to utilities. 12 Submit the construction logbook to the Municipality and request 1 day no charge occupancy permit Agency : Municipality/State Inspection of Urban Development of Ministry of Urban Development Upon completion of construction, BuildCo must inform the Municipality about the completion and must submit the construction logbook to the Municipality. The Municipality then calls a an acceptance commission consisting of representatives of BuildCo, the project design rm, the municipality, the state urban development inspection and utility providers. The members of the commission conduct a nal inspection of the building to verify that the building was built in accordance with the approved plans and applicable norms and regulations. Page 14   Upon starting work, BuildCo must request the presence of utility company Doing representatives Business 2018 connecting the building to utilities. whileArmenia 12 Submit the construction logbook to the Municipality and request 1 day no charge occupancy permit Agency : Municipality/State Inspection of Urban Development of Ministry of Urban Development Upon completion of construction, BuildCo must inform the Municipality about the completion and must submit the construction logbook to the Municipality. The Municipality then calls a an acceptance commission consisting of representatives of BuildCo, the project design rm, the municipality, the state urban development inspection and utility providers. The members of the commission conduct a nal inspection of the building to verify that the building was built in accordance with the approved plans and applicable norms and regulations. Notify the Ministry of Urban Planning about the completion of 1 day no charge 13 construction works Agency : Ministry of Urban Planning 14 Receive nal inspection from Ministry of Urban Planning 1 day no charge Agency : Municipality/State Inspection of Urban Development of Ministry of Urban Development The completion of construction certi cate, obtained upon completion through a joint meeting between the investor and the builder, is required to le for the nal inspection process and is required to obtain the occupancy permit from the Municipality. The application is then made to receive a nal inspection by the State Inspection of Urban Development under the Ministry of Urban Development and the Municipality. 15 Receive nal inspection from the Ministry of Emergency Situations 7 days no charge Agency : Civil Defense Receive nal inspection from the Municipality 1 day no charge 16 Agency : Municipality/State Inspection of Urban Development of Ministry of Urban Development By Ministerial Decree, the Municipality must undertake the nal inspection within 15 days of receiving the application. After the inspection, the application is forwarded to the State Expert O ce for nal approval. This takes another 10 -- 15 business days. Inspection by State Inspection of Urban Development of Ministry of Urban Development takes place separately. 17 Obtain occupancy permit from the Municipality 28 days AMD 100,000 Agency : Municipality After all signatures are signed the occupancy permit is issued by the Mayor's O ce. 18 Register the building with the Cadastre 2 days AMD 127,332 Agency : Local Cadastre O ce The company must register the building with the cadastre by submitting the land title, the allocation permit, the building permit, and the construction plans. The next step is an on-site inspection required for metering the building. Documents to be submitted are the following: • Construction permit • Architectural construction assignment Page 15   • Occupancy permit After all signatures are signed the occupancy permit is issued by the Mayor's Doing O ce. Business 2018 Armenia 18 Register the building with the Cadastre 2 days AMD 127,332 Agency : Local Cadastre O ce The company must register the building with the cadastre by submitting the land title, the allocation permit, the building permit, and the construction plans. The next step is an on-site inspection required for metering the building. Documents to be submitted are the following: • Construction permit • Architectural construction assignment • Occupancy permit Receive on-site inspection for building registration 1 day AMD 200,000 19 Agency : Licensed Private Company On-site inspection is done for all projects, both rst time and re-sale of property. The mapping team visits the site and draws all relevant measurements in the records. A BuildCo representative must be present at the moment of inspection. This procedure has been completed by licensed private companies since January 1, 2012 according to the amendments of the Law on Registration of Rights Upon Property." Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Armenia – Measure of Quality Answer Score Building quality control index (0-15) 8.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 0.0 Which third-party entities are required by law to verify that the building plans are in By law, there is 0.0 compliance with existing building regulations? (0-1) no need to verify plans compliance. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 Page 16   inspections are Takes place simultaneously with previous procedure. Doing Business 2018 Armenia Details – Dealing with Construction Permits in Armenia – Measure of Quality Answer Score Building quality control index (0-15) 8.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 0.0 Which third-party entities are required by law to verify that the building plans are in By law, there is 0.0 compliance with existing building regulations? (0-1) no need to verify plans compliance. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. 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) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. 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 . Page 17   building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the Doing Business 2018 Armenia law. 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) 1.0 What are the quali cation requirements for the professional responsible for verifying There are no 0.0 that the architectural plans or drawings are in compliance with existing building speci c regulations? (0-2) requirements. What are the quali cation requirements for the professional who supervises the Minimum 1.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management. 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 Page 18   The reliability of supply and transparency of because the warehouse has access to a road. construction management. Doing Business 2018 Armenia 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 Armenia Standardized Connection Price of electricity (US cents per kWh) 8.0 Name of utility Electric Networks of Armenia (ENA) CJSC City Covered Yerevan Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Procedures (number) 3 5.4 4.7 2 (United Arab Emirates) Time (days) 127 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 78.9 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 84.32: Georgia (Rank: 30) 78.53: Armenia (Rank: 66) 75.97: Greece (Rank: 76) 70.35: Regional Average (Europe & Central Asia) 54.80: Bulgaria (Rank: 141) 53.34: Romania (Rank: 147) 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 Armenia – Procedure, Time and Cost Time Cost 90 120 80 Cost (% of income per capita) 100 70 60 80 Time (days) 50 60 40 40 30 20 20 Page 20   10 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Armenia Figure – Getting Electricity in Armenia – Procedure, Time and Cost Time Cost 90 120 80 Cost (% of income per capita) 100 70 60 80 Time (days) 50 60 40 40 30 20 20 10 0 0 1 2 3 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 Armenia and comparator economies – Measure of Quality 8 7 7 7 6 6 5.3 5 5 Index score 5 4 3 2 1 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Getting Electricity in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Electrical Networks of Armenia and await 9 calendar days AMD 0 technical conditions and connection contract from the utility Agency : Electric Networks of Armenia (ENA) Since January 1, 2013, following the implementation of the PSRC Resolution N208-N dated June 13, 2012, a customer can submit an online application for a new connection on the following website: www.ena.am. If the client is a legal entity, the following documents must be submitted: Application form, accompanied by a certi cate of the state cadaster, tax code, bank account information, a certi cate of privatization of the land/area (in case of a land lease the agreement of the property owner), a notarized certi cate authorizing the applicant to act on behalf of the legal entity Page 21   In addition, information on the requested capacity, voltage level, connection Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Doing Business 2018 Armenia Details – Getting Electricity in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Electrical Networks of Armenia and await 9 calendar days AMD 0 technical conditions and connection contract from the utility Agency : Electric Networks of Armenia (ENA) Since January 1, 2013, following the implementation of the PSRC Resolution N208-N dated June 13, 2012, a customer can submit an online application for a new connection on the following website: www.ena.am. If the client is a legal entity, the following documents must be submitted: Application form, accompanied by a certi cate of the state cadaster, tax code, bank account information, a certi cate of privatization of the land/area (in case of a land lease the agreement of the property owner), a notarized certi cate authorizing the applicant to act on behalf of the legal entity In addition, information on the requested capacity, voltage level, connection type (single-phase, three-phase) and connection point(s) as well as request for an alternative power supply must also be submitted. Online application also requires a copy of passport and an e-mail address of the company’s director, private entrepreneur, physical entity or their authorized persons. According to the Public Services Regulatory Commission (PSRC) decision #230N from September 3, 2016 upon receiving the application from a new customer, the utility must submit the signed connection contract to the applicant in 5 working days (7 calendar days) from the application date. During that time the utility should: 1) Prepare the technical-economic conditions for the connection, 2) Present to the customer a signed connection contract, based on the o cial template approved by the PSRC, which sets the deadline for completion of the connection works, the estimated cost of connection and schedule of payment. 2 Await completion of external works by Electrical Networks of Armenia 115 calendar days AMD 1,394,166.67 Agency : Electric Networks of Armenia (ENA) All connection works including cable laying and installation of a meter are performed by ENA and its subcontractor. According to the Public Services Regulatory Commission (PSRC) decision #230N of September 3, 2016 the utility has 115 days, after signing the connection contract (Procedure 1), to complete the external connection works and submit a supply contract to the new customer. During that time the utility has to: 1) Prepare the electrical design of the new connection. In simple cases - technical characteristics of the new connection. 2) Obtain all required approvals from a number of government agencies and local government. 3) Implement construction works for connecting the new customer to electric network and installs the metering devices. 4) Submit the electricity supply contract to the customer. Connection fees are established according to the PSRC Resolutions N 658-N and N 659-N dated December 21, 2007. The connection fee is excluding VAT. 3 Sign supply contract and receive nal connection 3 calendar days AMD 0 Agency : Electrical Networks of Armenia The electricity will start owing as soon as the supply contract between ENA and the applicant is concluded. Page 22   Connection fees are established according to the PSRC Resolutions N 658-N Doing and dated December N 659-N2018 Business Armenia 21, 2007. The connection fee is excluding VAT. 3 Sign supply contract and receive nal connection 3 calendar days AMD 0 Agency : Electrical Networks of Armenia The electricity will start owing as soon as the supply contract between ENA and the applicant is concluded. Takes place simultaneously with previous procedure. Details – Getting Electricity in Armenia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 3.8 System average interruption frequency index (SAIFI) 3.3 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 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) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://psrc.am/imag es/docs/monitoring/ electric/Texekanq_Sa kagner_Sayt.pdf 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 Armenia Details – Getting Electricity in Armenia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 3.8 System average interruption frequency index (SAIFI) 3.3 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 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) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://psrc.am/imag es/docs/monitoring/ electric/Texekanq_Sa kagner_Sayt.pdf Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 24   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Armenia 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 AMD 88,380,944.10 City Covered Yerevan Page 25   Europe & OECD high Doing Business 2018 Armenia Standard Property Transfer Property value AMD 88,380,944.10 City Covered Yerevan Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Procedures (number) 3 5.3 4.6 1.00 (4 Economies) Time (days) 7 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 0.2 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 21.5 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.85: Georgia (Rank: 4) 87.78: Armenia (Rank: 13) 76.02: Regional Average (Europe & Central Asia) 74.70: Romania (Rank: 45) 69.30: Bulgaria (Rank: 67) 49.67: Greece (Rank: 145) 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 Armenia – Procedure, Time and Cost Time Cost 7 0.12 6 0.1 Cost (% of property value) 5 0.08 Time (days) 4 0.06 3 0.04 2 0.02 1 0 0 1 2 3 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 Armenia Figure – Registering Property in Armenia – Procedure, Time and Cost Time Cost 7 0.12 6 0.1 Cost (% of property value) 5 0.08 Time (days) 4 0.06 3 0.04 2 0.02 1 0 0 1 2 3 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 Armenia and comparator economies – Measure of Quality 25 21.5 21.5 19.0 19.8 20 17.0 Index score 15 10 4.5 5 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Registering Property in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Seller obtains a special reference on restrictions on the property at the 3 working days AMD 10,000 (regular State Committee of the Real Property Cadastre of the Republic of (regular procedure) procedure) and AMD Armenia (SCRPC) and 2 working days 20,000 (expedited Agency : State Committee of the Real Property Cadastre of the Republic of (expedited procedure) Armenia (SCRPC) procedure) The seller has to obtain extract from SCRPC about the encumbrances and other restrictions (mortgage, easement, etc.) on the real property which could be obtained online prior visiting the SCRPC o ce. Moreover, there is also an option available for customer to submit an electronic request and receive a reference on the property online within 2 days. Page 27   Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Doing Business 2018 Armenia Details – Registering Property in Armenia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Seller obtains a special reference on restrictions on the property at the 3 working days AMD 10,000 (regular State Committee of the Real Property Cadastre of the Republic of (regular procedure) procedure) and AMD Armenia (SCRPC) and 2 working days 20,000 (expedited Agency : State Committee of the Real Property Cadastre of the Republic of (expedited procedure) Armenia (SCRPC) procedure) The seller has to obtain extract from SCRPC about the encumbrances and other restrictions (mortgage, easement, etc.) on the real property which could be obtained online prior visiting the SCRPC o ce. Moreover, there is also an option available for customer to submit an electronic request and receive a reference on the property online within 2 days. Agricultural land AMD 500 (regular procedure) and AMD 1,000 (expedited procedure). Besides there is a 50% discount for high mountain or border areas regardless of the type of property according to the Article 75 of the Law on state registration of rights to property of RA. Starting from January 2015, notaries in Armenia can obtain the relevant information from the SCRPC the relevant documentation and application can be submitted through the electronic notary system instead of the SCRPC. The notary veri es the accurateness of the documents submitted online to the original ones. 2 Payment of stamp duty and notarization of sale-purchase agreement by 1 day AMD 5,000 (Stamp public notary duty for Agency : Notary Notarization) + AMD 10,000 – 20,000 Given that minimum changes or supplementary clauses made to the sample (Notary’s fees) shall require notarization, most people still prefer to have the sale and purchase contract notarized. When the notary is involved, he/she explains to the parties the point and signi cance of the contract, and checks whether the provisions of the contract comply with the intention of the parties and whether it does not contradict the law. Along with the status of the property rights and the absence of prohibition, the notary checks the authority of the representatives and legal entities of the contract parties and notarizes the agreement. The documentation for notarization of sale-purchase agreement shall include: • Sale-purchase agreement • Registration certi cate (in possession of the seller) • Reference on restrictions (obtained in Procedure 1) • Corporate documents of the parties (e.g. charters, foundation agreements, powers of attorney) 3 The local o ce of the SCRPC registers the title and provides a Fast procedure: 2 AMD 20,000 (State registration certi cate to the new owner working days (3 duty for registration) Agency : The State Committee of the Real Property Cadastre of the calendar days), + AMD 25,000 Page 28   • Corporate documents of the parties (e.g. charters, foundation agreements, Doing powers of attorney) Business 2018 Armenia 3 The local o ce of the SCRPC registers the title and provides a Fast procedure: 2 AMD 20,000 (State registration certi cate to the new owner working days (3 duty for registration) Agency : The State Committee of the Real Property Cadastre of the calendar days), + AMD 25,000 Government of the Republic of Armenia (SCRPC) Expedited (Registration fee; procedure: 3 regular procedure); The law speci es 30 working days for registration of the ownership titles over working days (4 AMD 20,000 (State real property. Either seller or buyer can submit all documents for calendar days), duty for registration) registration. According to the law the ownership right arises only after the registration has been completed. Regular procedure: + AMD 50,000 The documentation required for registration include: 4 working days (6 to (expedited (a) Application; 7 calendar days) procedure ); (b) One copy of the notarized agreement in case the parties chose to AMD 20,000 (State undergo Procedure 2 (otherwise the parties shall sign a sample agreement duty for registration) on site); + AMD 75,000 (fast in (c) Statement certifying the payment of the state duty; state registration 2 working days) certi cate of the buyer; (d) In case an authorized person is representing the company then a power of attorney and the copy of the latter's passport or (e) If the company is represented by its director then the latter's passport's copy and the state registration certi cate of the company certifying its position. SCRPC inspects the authenticity of the presented documents, including veri cation through the database, surveys building and land, makes a decision about registration, registers in the registry and issues a certi cate of title registration to the new owner. According to the State registration of rights to property of June 23, 2011, which came into force on January 1, 2012 the current applicable fees are included in Articles 73 and 74: (a) 25,000 AMD for the standard registration procedure in 4 working days; (b) Double fee for title registration in 3 working days; and (c) Triple fee for title registration in 2 working days. Registration fees can be paid: (a) Online via web-portal of SCRPC (www.e-cadastre.am); (b) By using the terminals at SCRPC; or (c) At any commercial bank. Stamp duty in this case equals AMD 20,000, which can be paid at the commercial bank. No fee is charged for cameral works since January 1, 2012. Takes place simultaneously with previous procedure. Details – Registering Property in Armenia – Measure of Quality Answer Score Quality of the land administration index (0-30) 21.5 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? State Committee of the Real Property Cadastre of the Republic of Page 29   Armenia Takes place simultaneously with previous procedure. Doing Business 2018 Armenia Details – Registering Property in Armenia – Measure of Quality Answer Score Quality of the land administration index (0-30) 21.5 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? State Committee of the Real Property Cadastre of the Republic of Armenia In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: State Committee of the Real Property Cadastre of the Republic of Armenia In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Single database 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 4.5 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, online 0.5 made publicly available–and if so, how? Link for online access: http://www.cada stre.am/page/ynt acik_grancum Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.cada Page 30   stre.am/page/38 immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Armenia Link for online access: http://www.cada stre.am/page/38 2, http://www.cada stre.am/page/38 3, http://www.cada stre.am/page/38 4 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.cada stre.am/page/36 4 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 Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 173568.0 Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.cada stre.am/page/38 4 Does the cadastral or mapping agency commit to delivering an updated map within a Yes, on public 0.5 speci c time frame—and if so, how does it communicate the service standard? boards 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 No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Page 31   Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable Doing Businessproperty 2018 registry? Armenia Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 7.0 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 Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a The Court of First property worth 50 times gross national income (GNI) per capita and located in the Instance of the largest business city, what court would be in charge of the case in the rst instance? relevant Community of Yerevan where the property is located. 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? Yes 0.5 Number of land disputes in the largest business city in 2015: 37.0 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. Page 32   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Armenia 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. Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.3 6.6 8.00 (34 Economies) Page 33   Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Armenia Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 77.2 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.00: Georgia (Rank: 12) 80.00: Romania (Rank: 20) 70.00: Armenia (Rank: 42) 70.00: Bulgaria (Rank: 42) 64.58: Regional Average (Europe & Central Asia) 50.00: Greece (Rank: 90) 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 Armenia and comparator economies 10 9 9 9 9 8 7 6.6 6 Index score 6 5 4 3 3 2 1 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Legal Rights in Armenia Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 34   Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Doing Business 2018 Armenia Details – Legal Rights in Armenia Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring No 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 No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be 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 Armenia and comparator economies 10 8 8 8 7 7 6.3 Index score 6 5 4 2 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Credit Information in Armenia Page 35   0 Armenia Doing Business 2018 Bulgaria Armenia Georgia Greece Romania Europe & Central Asia Details – Credit Information in Armenia 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 Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 1,553,927 0 Number of firms 34,389 0 Total 1,588,316 0 Percentage of adult population 77.2 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 77.2 0.0 Doing Business 2018 Armenia 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. Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5.3 6.6 6.4 Page 37   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Armenia Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5.3 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 81.67: Georgia (Rank: 2) 70.00: Bulgaria (Rank: 24) 64.31: Regional Average (Europe & Central Asia) 63.33: Greece (Rank: 43) 60.00: Romania (Rank: 57) 58.33: Armenia (Rank: 62) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Armenia and comparator economies – Measure of Quality Armenia 7 6 5 2 7 8 Bulgaria 9 2 10 5 8 8 Georgia 9 6 9 9 7 9 Greece 8 4 7 7 7 5 Romania 7 4 9 5 6 5 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 10 20 30 40 50 60 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 Armenia – 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 Armenia Details – Protecting Minority Investors in Armenia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.3 Extent of disclosure index (0-10) 5 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest 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) 6 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by 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) 8 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Page 39   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Armenia Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without Yes 1.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 5.3 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 No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 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? 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 Page 40   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Doing Business 2018 Armenia 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? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 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? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions 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 Page 41   post ling processes. Information is also compiled on frequency of ling Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Armenia 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 tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index 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. Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Payments (number per year) 14 16.5 10.9 3 (Hong Kong SAR, China) Page 42   return, but within the tax assessment period. Doing Business 2018 Armenia Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Payments (number per year) 14 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 313 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 18.5 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 49.08 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 87.14: Georgia (Rank: 22) 80.86: Romania (Rank: 42) 76.97: Greece (Rank: 65) 75.78: Regional Average (Europe & Central Asia) 72.49: Armenia (Rank: 87) 71.78: Bulgaria (Rank: 90) 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 Armenia and comparator economies – Measure of Quality 90 85.89 80 75.70 76.82 69.30 70 65.20 60 Index score 49.08 50 40 30 20 10 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Paying Taxes in Armenia Total tax and Tax or contribution mandatory Payments Notes on Time rate (% of Notes Page 43   contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Doing Business 2018 Armenia Figure – Paying Taxes in Armenia and comparator economies – Measure of Quality 90 85.89 80 75.70 76.82 69.30 70 65.20 60 Index score 49.08 50 40 30 20 10 0 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Paying Taxes in Armenia Total tax and Tax or contribution mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Corporate 1 online 113 20% taxable 17.63 income tax profit Land Tax 2 1% cadastral 0.51 value Property tax on 2 0.3% cadastral 0.29 Building value Vehicle tax 2 varies depends on 0.02 horsepower Environmental 4 AMD 600 ton of non- 0.02 fee toxic waste Environmental 1 AMD 50 per horsepower engine of 0.01 pollution the vehicle charge for (in vehicles horsepower) Income tax 1 online 103 (i) 24.4% of monthly taxable gross 0.00 (includes social income up to AMD 120,000; (ii) salaries security AMD 29,280 plus 26% of the contributions - monthly taxable income exceeding employees) AMD 120,000; (iii) AMD 518,080 plus 36% of the monthly taxable income exceeding AMD 2,000,000. Value added 1 online 97 20% value added, 0.00 not tax (VAT) land sale included Totals 14 313 18.5 Details – Paying Taxes in Armenia – Tax by Type Page 44   Totals 14 313 18.5 Doing Business 2018 Armenia Details – Paying Taxes in Armenia – Tax by Type Taxes by type Answer Profit tax (% of profit) 17.6 Labor tax and contributions (% of profit) 0.0 Other taxes (% of profit) 0.8 Details – Paying Taxes in Armenia – Measure of Quality Answer Score Post ling index (0-100) 49.08 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders and others Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 3.5 96.33 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Page 45   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 Doing Business 2018 Armenia a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 46   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Armenia Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 47   of agriculture or industry, national security agencies and any other Doing Business 2018 Armenia government authorities. Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Time to export: Border compliance (hours) 39 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 100 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 2 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 150 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 41 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 100 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 2 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 100 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.41: Bulgaria (Rank: 21) 93.72: Greece (Rank: 29) 86.45: Armenia (Rank: 52) 83.96: Regional Average (Europe & Central Asia) 82.43: Georgia (Rank: 62) 100.00: Romania (Rank: 1) 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 Armenia – Time and Cost Time Cost 45 150 41 160 39 40 140 35 120 30 100 100 100 Time (hours) Cost (USD) 100 25 80 20 60 15 10 40 5 2 2 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 48   Doing Business 2018 Armenia Figure – Trading across Borders in Armenia – Time and Cost Time Cost 45 150 41 160 39 40 140 35 120 30 100 100 100 Time (hours) Cost (USD) 100 25 80 20 60 15 10 40 5 2 2 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Armenia Characteristics Export Import Product HS 22 : Beverages, spirits and vinegar HS 8708: Parts and accessories of motor vehicles Trade partner Russian Federation Russian Federation Border Bagratashen-Sadakhlo border crossing Bagratashen-Sadakhlo border crossing Distance (km) 211 211 Domestic transport time (hours) 5 5 Domestic transport cost (USD) 371 371 Details – Trading across Borders in Armenia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 36.0 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 2.5 0.0 Import: Clearance and inspections required by customs authorities 38.5 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.5 0.0 Details – Trading across Borders in Armenia – Trade Documents Export Import Commercial invoice Invoice CMR waybill CMR waybill Page 49   Domestic transport cost (USD) 371 371 Doing Business 2018 Armenia Details – Trading across Borders in Armenia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 36.0 100.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 2.5 0.0 Import: Clearance and inspections required by customs authorities 38.5 100.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.5 0.0 Details – Trading across Borders in Armenia – Trade Documents Export Import Commercial invoice Invoice CMR waybill CMR waybill Packing list Transit document (T1) Transit document (by Georgian customs) Packing list 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. Page 50   Transit document (by Georgian customs) Packing list Doing Business 2018 Armenia 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 AMD 3,473,320.00 Court name Yerevan Court of First Instance City Covered Yerevan Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Time (days) 570 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 16.0 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 9.5 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.97: Georgia (Rank: 7) 72.25: Romania (Rank: 17) 67.04: Bulgaria (Rank: 40) Page 51   of judicial processes Quality Business Doing index (0-18) 2018 Armenia 9.5 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.97: Georgia (Rank: 7) 72.25: Romania (Rank: 17) 67.04: Bulgaria (Rank: 40) 66.00: Armenia (Rank: 47) 65.38: Regional Average (Europe & Central Asia) 50.19: Greece (Rank: 131) 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 Armenia – Time and Cost Time Cost 1800 30 26.2 1580 25.8 1600 25.0 25 Cost (% of claim value) 1400 21.5 1200 18.6 20 Time (days) 16.0 1000 14.4 15 800 570 564 577.8 600 489.9 512 10 400 285 5 200 0 0 Armenia Bulgaria Europe & Georgia Greece OECD high income Romania Central Asia Figure – Enforcing Contracts in Armenia and comparator economies – Measure of Quality Armenia 3 2.5 2 2 Bulgaria 2.5 2.5 2 3.5 Georgia 2.5 4.5 2.5 3 Greece 2.5 4.5 2 3 Romania 3 4 2 5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 52   16 Armenia Bulgaria Europe & Georgia Greece OECD high income Romania Central Asia Doing Business 2018 Armenia Figure – Enforcing Contracts in Armenia and comparator economies – Measure of Quality Armenia 3 2.5 2 2 Bulgaria 2.5 2.5 2 3.5 Georgia 2.5 4.5 2.5 3 Greece 2.5 4.5 2 3 Romania 3 4 2 5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 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 Armenia Indicator Time (days) 570 Filing and service 30 Trial and judgment 420 Enforcement of judgment 120 Cost (% of claim value) 16.0 Attorney fees 12 Court fees 4 Enforcement fees 0 Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 2.0 Case management (0-6) 2.5 Court automation (0-4) 2.0 Alternative dispute resolution (0-3) 3.0 Details – Enforcing Contracts in Armenia – Measure of Quality Page 53   Alternative dispute resolution (0-3) 3.0 Doing Business 2018 Armenia Details – Enforcing Contracts in Armenia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 2.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 2.5 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 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 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) 2.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 54   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Armenia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 3.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., Yes 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 55   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 Armenia 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) Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 36.4 38.0 71.2 93.1 (Norway) Time (years) 1.9 2.3 1.7 0.4 (Ireland) Page 56   Cost (% of estate) 11.0 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Armenia Europe & OECD high Indicator Armenia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 36.4 38.0 71.2 93.1 (Norway) Time (years) 1.9 2.3 1.7 0.4 (Ireland) Cost (% of estate) 11.0 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.5 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Armenia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 60.02: Bulgaria (Rank: 50) 59.78: Romania (Rank: 51) 55.59: Georgia (Rank: 57) 55.59: Greece (Rank: 57) 54.19: Regional Average (Europe & Central Asia) 43.01: Armenia (Rank: 97) 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 Armenia – Time and Cost Time Cost 4 13.1 14 3.5 3.5 3.3 3.3 11.0 12 10.5 3 10.0 9.0 9.0 9.1 10 Cost (% of estate) Time (years) 2.5 2.3 1.9 2.0 8 2 1.7 6 1.5 4 1 0.5 2 0 0 Armenia Bulgaria Europe & Georgia Greece OECD high income Romania Central Asia Figure – Resolving Insolvency in Armenia and comparator economies – Measure of Quality Armenia 2 2.5 1 2 Page 57   Bulgaria 4 2.5 4 2.5 Armenia Bulgaria Europe & Georgia Greece OECD high income Romania Central Asia Doing Business 2018 Armenia Figure – Resolving Insolvency in Armenia and comparator economies – Measure of Quality Armenia 2 2.5 1 2 Bulgaria 4 2.5 4 2.5 Georgia 5.5 2.5 3 0 Greece 5.5 2.5 1 3 Romania 6 2.5 2 2.5 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Armenia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 40 39.4 39 38.0 38 37 36.4 36.0 36 35.6 35 34 33.6 33 32 31 30 Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Details – Resolving Insolvency in Armenia Indicator Answer Explanation Proceeding foreclosure BizBank will initiate foreclosure, because its interest is secured and automatic stay provisions do not apply to secured creditors, even if a debtor files for bankruptcy. Foreclosure is the most effective procedure for the bank. Outcome piecemeal sale Insolvent businesses in Armenia rarely continue operating. In more than 90% of the cases, company’s assets are sold piecemeal. Time (in years) 1.9 BizBank can commence foreclosure proceedings 60 days after Mirage fails to pay the loan. After the court receives BizBank's petition, it will review the case and set a day for pre-trial hearing. Mirage will be informed of the case and will have an opportunity to respond before the hearing. The first pre-trial hearing will be held, where the parties would submit proof of their claims. The court will then hold a number of hearings before making the final decision Page 58   on BizBank's claim. After the court renders a judgment in BizBank's favor, BizBank will obtain Armenia Bulgaria Georgia Greece Romania Europe & Central Asia Doing Business 2018 Armenia Details – Resolving Insolvency in Armenia Indicator Answer Explanation Proceeding foreclosure BizBank will initiate foreclosure, because its interest is secured and automatic stay provisions do not apply to secured creditors, even if a debtor files for bankruptcy. Foreclosure is the most effective procedure for the bank. Outcome piecemeal sale Insolvent businesses in Armenia rarely continue operating. In more than 90% of the cases, company’s assets are sold piecemeal. Time (in years) 1.9 BizBank can commence foreclosure proceedings 60 days after Mirage fails to pay the loan. After the court receives BizBank's petition, it will review the case and set a day for pre-trial hearing. Mirage will be informed of the case and will have an opportunity to respond before the hearing. The first pre-trial hearing will be held, where the parties would submit proof of their claims. The court will then hold a number of hearings before making the final decision on BizBank's claim. After the court renders a judgment in BizBank's favor, BizBank will obtain a writ of execution and submit it for enforcement with the Compulsory Enforcement Service (CES). CES will hire an expert to evaluate Mirage's assets and will set a date for a public auction. An announcement will be published in print and on line, and then the auction will take place. There also may be several auctions in case of difficulties in finding buyers. After the auction is held, BizBank will be repaid. Cost (% of 11.0 Major expenses include remuneration of the auctioneer (up to 5%), attorneys' fees (up to estate) 5%), assessors' fees (up to 2%), and court fees (up to 2%). Recovery rate (cents on the 36.4 dollar) Details – Resolving Insolvency in Armenia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 Page 59   dollar) Doing Business 2018 Armenia Details – Resolving Insolvency in Armenia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 2.0 Which creditors vote on the proposed reorganization plan? (c) Other 1.0 Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 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? Page 60   Creditor Doing participation Business 2018 index (0-4) Armenia 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) Page 61   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 Armenia 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 Armenia Answer Hiring Page 62   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Armenia Details – Labor Market Regulation in Armenia 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) 117.0 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 30.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? 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) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 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? Yes Page 63   Third-party Doing approval Business 2018 if nine workers are dismissed? Armenia No Retraining or reassignment obligation before redundancy? Yes 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 8.7 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure 8.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 4.3 Severance pay for redundancy dismissal for a worker with 10 years of tenure 4.3 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 140.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? N/A Business Reforms in Armenia 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 Armenia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Electricity: Armenia made getting electricity easier by imposing new deadlines for connection procedures and introducing a new geographic information system at the utility. Registering Property: Armenia made registering property easier by improving the land dispute resolution mechanisms of the land administration system. DB2017 Page 64   Getting Credit: Armenia strengthened access to credit by adopting a new law on secured transactions that establishes a modern Minimum contribution period for unemployment protection (months)? N/A Doing Business 2018 Armenia Business Reforms in Armenia 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 Armenia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Getting Electricity: Armenia made getting electricity easier by imposing new deadlines for connection procedures and introducing a new geographic information system at the utility. Registering Property: Armenia made registering property easier by improving the land dispute resolution mechanisms of the land administration system. DB2017 Getting Credit: Armenia strengthened access to credit by adopting a new law on secured transactions that establishes a modern and centralized collateral registry. Armenia improved its credit information system by adopting a new law on personal data protection. Enforcing Contracts: Armenia made enforcing contracts easier by introducing a consolidated chapter regulating voluntary mediation and by establishing nancial incentives for the parties to attempt mediation. DB2016 Dealing with Construction Permits: Armenia made dealing with construction permits easier by exempting lower-risk projects from requirements for approval of the architectural drawings by an independent expert and for technical supervision of the construction. Trading across Borders: Armenia reduced the time and cost for documentary and border compliance for trade with the Russian Federation by joining the Eurasian Economic Union. Enforcing Contracts: Armenia made enforcing contracts easier through a new law requiring that cases be assigned to judges randomly—and through a fully automated system—in courts throughout the country. DB2015 Starting a Business: Armenia made starting a business easier by streamlining postregistration procedures. DB2014 Starting a Business: Armenia made starting a business easier by eliminating the company registration fees. Paying Taxes: Armenia made paying taxes easier by merging the employee and employer social contributions and individual income tax into one uni ed income tax. DB2013 Getting Electricity: Armenia made getting electricity easier by streamlining procedures and reducing connection fees. Protecting Minority Investors: Armenia strengthened investor protections by introducing a requirement for shareholder approval of related-party transactions, requiring greater disclosure of such transactions in the annual report and making it easier to sue directors when such transactions are prejudicial. DB2012 Starting a Business: Armenia made starting a business easier by establishing a one-stop shop that merged the procedures for name reservation, business registration and obtaining a tax identi cation number and by allowing for online company registration. Dealing with Construction Permits: Armenia made dealing with construction permits easier by eliminating the requirement to obtain an environmental impact assessment for small projects. Page 65   Getting Credit: Armenia improved its credit information system by introducing a requirement to collect and distribute name reservation, business registration and obtaining a tax identi cation number and by allowing for online company registration. Doing Business Dealing 2018 Armenia with Construction Permits: Armenia made dealing with construction permits easier by eliminating the requirement to obtain an environmental impact assessment for small projects. Getting Credit: Armenia improved its credit information system by introducing a requirement to collect and distribute information from utility companies. Paying Taxes: Armenia made tax compliance easier for rms by reducing the number of payments for social security contributions and corporate income, property and land taxes and by introducing mandatory electronic ling and payment for major taxes. Resolving Insolvency: Armenia amended its bankruptcy law to clarify procedures for appointing insolvency administrators, reduce the processing time for bankruptcy proceedings and regulate asset sales by auction. Labor Market Regulation: Armenia increased the maximum duration of xed-term contracts, reduced the premium applicable in case of night work as well as decreased the notice period and the severance pay applicable in case of redundancy dismissals. DB2011 Trading across Borders: Armenia made trading easier by introducing self-declaration desks at customs houses and warehouses, investing in new equipment to improve border operations and introducing a risk management system. DB2010 Starting a Business: Armenia made starting a business easier by making the registration forms available online and by eliminating the minimum capital requirement and the requirement to obtain approval from the National Police Department to prepare the company seal. Getting Credit: Armenia improved its credit information system through a new law establishing a legal and regulatory framework for the activities of credit bureaus, including collecting credit information and preparing credit reports. Trading across Borders: Armenia reduced the time required for trading across borders by encouraging greater competition in the banking and transport sectors and customs brokerage service industry and by reducing the number of goods requiring inspection and the number of documents needed to clear goods. DB2009 Dealing with Construction Permits: Armenia made dealing with construction permits easier by abolishing the requirement to pay “charitable contributions” in order to obtain design rights. Enforcing Contracts: Armenia made enforcing contracts easier by reorganizing its court system, reducing procedural complexity and introducing monetary thresholds for cases heard by di erent jurisdictions. DB2008 Getting Credit: In Armenia a private credit bureau started operating that distributes credit information on rms and individuals, has no minimum threshold for loans included in its database and guarantees all borrowers access to their credit reports. Trading across Borders: Armenia made trading across borders easier by implementing an electronic data interchange system (Direct Trader Input) that enables customs brokers to submit customs declarations electronically. Resolving Insolvency: Armenia adopted a new bankruptcy law with the aim of improving its reorganization proceedings and also set a time limit for judges to approve a reorganization plan. Page 66   Resolving Insolvency: Armenia adopted a new bankruptcy law with the aim of improving its reorganization proceedings and also set a time Doing 2018 to approve limit for judges Business Armenia a reorganization plan. Page 67