58877 Marshall Islands © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Marshall Islands. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Marshall Islands is ranked 108 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Marshall Islands - Compared to global good practice economy as well as selected economies: Marshall Islands's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 108 Starting a Business 39 Dealing with Construction Permits 6 Registering Property 183 Getting Credit 89 Protecting Investors 154 Paying Taxes 90 Trading Across Borders 70 Enforcing Contracts 62 Closing a Business 127 2 Summary of Indicators - Marshall Islands Starting a Business Procedures (number) 5 Time (days) 17 Cost (% of income per capita) 17.3 Min. capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 10 Time (days) 55 Cost (% of income per capita) 36.0 Registering Property Procedures (number) no practice Time (days) no practice Cost (% of property value) no practice Getting Credit Strength of legal rights index (0-10) 8 Depth of credit information index (0-6) 0 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 0.0 Protecting Investors Extent of disclosure index (0-10) 2 Extent of director liability index (0-10) 0 Ease of shareholder suits index (0-10) 8 Strength of investor protection index (0-10) 3.3 Paying Taxes Payments (number per year) 21 Time (hours per year) 128 Profit tax (%) 0.0 Labor tax and contributions (%) 11.8 Other taxes (%) 53.0 Total tax rate (% profit) 64.9 Trading Across Borders Documents to export (number) 5 Time to export (days) 21 Cost to export (US$ per container) 945 Documents to import (number) 5 Time to import (days) 33 Cost to import (US$ per container) 945 3 Enforcing Contracts Procedures (number) 36 Time (days) 476 Cost (% of claim) 27.4 Closing a Business Recovery rate (cents on the dollar) 17.9 Time (years) 2.0 Cost (% of estate) 38 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.06 0.05 Doing 0.04 business has become easier (DB 0.03 change score) 0.02 0.01 Doing business has 0.00 become more difficult or more -0.01 Solomon Micronesia, Marshall Samoa Kiribati Palau costly Islands Fed. Sts. Islands 6 1. Benchmarking Starting a Business Regulations: Marshall Islands is ranked 39 overall for Starting a Business. Ranking of Marshall Islands in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Marshall Islands compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Marshall Islands 5 17 17.3 0.0 Comparator Economies Kiribati 6 21 40.2 21.7 Micronesia, Fed. Sts. 7 16 150.5 0.0 Palau 8 28 4.2 11.2 Samoa 5 9 9.8 0.0 Solomon Islands 7 57 68.1 0.0 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Marshall Islands Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 36 39 Procedures (number) 5 5 5 5 Time (days) 17 17 17 17 Cost (% of income per capita) 17.7 17.3 16.2 17.3 Min. capital (% of income per capita) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Starting a Business sub indicators in Marshall Islands over the past 4 years: 9 Starting a Business Summary - Marshall Islands This table summarizes the procedures and costs associated with setting up a business in the Marshall Islands. STANDARDIZED COMPANY Legal Form: Private Limited Liability Company City: Majuro Registration Requirements: No: Procedure Time to complete Cost to complete 1 Check the uniqueness of the proposed company name 1 USD 100 2 Have company charters and documents notarized 2 USD 10 3 Register the company with the Registrar of Corporations 5 USD 250 4 Obtain the employer identification number at the Marshall Islands 2 USD 20 Social Security Administration 5 Apply for a business license from the relevant licensing authority 7 USD 150 10 Starting a Business Details - Marshall Islands Procedure 1 Check the uniqueness of the proposed company name Time to complete: 1 Cost to complete: USD 100 Comment: The Registrar of Corporations performs a name search. Procedure 2 Have company charters and documents notarized Time to complete: 2 Cost to complete: USD 10 Comment: Notarization can be done at the Attorney General's Office. Procedure 3 Register the company with the Registrar of Corporations Time to complete: 5 Cost to complete: USD 250 Comment: To register the company with the Registrar of Corporations, the promoters must file the following documents: - Articles of incorporation, including company name, duration, purpose, registered address, names of directors, number of shares, and so forth. - Corporate charter (copy). - Bylaws (copy). - Incorporation fee receipt (copy). - Foreign investment business license receipt, if applicable (copy). - Affidavit of shareholders. Procedure 4 Obtain the employer identification number at the Marshall Islands Social Security Administration Time to complete: 2 Cost to complete: USD 20 Comment: The employer identification number is also the company's tax identification number. Procedure 5 Apply for a business license from the relevant licensing authority Time to complete: 7 Cost to complete: USD 150 Comment: Business licenses are issued by the local government in about 7 business days by filing a company charter along with an application form. 11 Representative fee schedule for business licenses (in Majuro): - Retail business license: USD 150. - Banks: USD 5,000. - Professional: USD 3,000. - Hotels: USD 500. 12 13 1. Benchmarking Dealing with Construction Permits Regulations: Marshall Islands is ranked 6 overall for Dealing with Construction Permits. Ranking of Marshall Islands in Dealing with Construction Permits - Compared to good practice and selected economies: 14 The following table shows Dealing with Construction Permits data for Marshall Islands compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Marshall Islands 10 55 36.0 Comparator Economies Kiribati 14 160 446.5 Micronesia, Fed. Sts. 14 73 19.2 Palau 25 118 5.1 Samoa 18 88 78.7 Solomon Islands 12 62 665.4 15 2. Historical data: Dealing with Construction Permits in Marshall Islands Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 5 6 Procedures (number) 10 10 10 10 Time (days) 55 55 55 55 Cost (% of income per capita) 36.8 35.9 33.7 36.0 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Marshall Islands over the past 4 years: 16 Dealing with Construction Permits in Marshall Islands The table below summarizes the procedures, time, and costs to build a warehouse in the Marshall Islands. BUILDING A WAREHOUSE City: Majuro Registration Requirements: No: Procedure Time to complete Cost to complete 1 Request and obtain a permit from the Historical Preservation Office 1 day USD 100 (Ministry of Internal Affairs) 2 Request and obtain an Earth Moving Permit from the Environmental 10 days USD 553 Protection Agency 3 Receive an inspection by the Environmental Protection Agency 1 day no charge 4 * Request a power connection 1 day USD 215 5 * Receive an inspection by the Marshall Islands Energy Company and 21 days no charge connect to electricity 6 * Apply for water and sewage connection with the Majuro Water and Sewer 1 day USD 200 Company 7 * Request water and sewerage connection from the Majuro Water and Sewer 1 day no charge Company 17 8 * Receive an inspection and estimate from the Majuro Water and Sewer 13 days no charge Company 9 * Connect to water and sewerage services 1 day USD 35 10 Request a telephone connection 21 days no charge * Takes place simultaneously with another procedure. 18 Dealing with Construction Permits Details - Marshall Islands Procedure 1 Request and obtain a permit from the Historical Preservation Office (Ministry of Internal Affairs) Time to complete: 1 day Cost to complete: USD 100 Agency: Historical Preservation Office (Ministry of Internal Affairs) Comment: BuildCo must fill out an application form to obtain a permit from the Historical Preservation Office (HPO). If the project is likely to cause problems, the HPO may visit the site during the building process. Builders must report to the authority anything they find. The documents to be filed are the land lease, the land owner's permission to build, the plans/drawings, and a description of the activities that will take place in the building. The application fee must be paid at the time of filing. Procedure 2 Request and obtain an Earth Moving Permit from the Environmental Protection Agency Time to complete: 10 days Cost to complete: USD 553 Agency: Environmental Protection Agency Comment: BuildCo must fill out a questionnaire. The documents to file are the HPO permit, the lease, the landowner's permission, the plans/drawings, and the application fee must be paid at the time of filing. For large projects that might have a negative environmental impact, the builder must file an environmental protection assessment report, which may take months. Procedure 3 Receive an inspection by the Environmental Protection Agency Time to complete: 1 day Cost to complete: no charge Agency: Environmental Protection Agency Comment: The Environmental Protection Agency (EPA) may or may not inspect the worksite. Procedure 4 Request a power connection Time to complete: 1 day Cost to complete: USD 215 Agency: Marshalls Islands Energy Company Comment: The documents to file are the land lease, and the HPO and EPA permits. 19 Procedure 5 Receive an inspection by the Marshall Islands Energy Company and connect to electricity Time to complete: 21 days Cost to complete: no charge Agency: Marshalls Islands Energy Company Comment: The Marshall Islands Energy Company (MEC) sends linemen to establish the connection. Procedure 6 Apply for water and sewage connection with the Majuro Water and Sewer Company Time to complete: 1 day Cost to complete: USD 200 Agency: #N/A Comment: The documents that must be filed to apply for a water and sewage connection are a copy of land lease and HPO and EPA permits. Procedure 7 Request water and sewerage connection from the Majuro Water and Sewer Company Time to complete: 1 day Cost to complete: no charge Agency: Majuro Water & Sewer Company Comment: The documents to be filed are the land lease and the HPO and EPA permits. Procedure 8 Receive an inspection and estimate from the Majuro Water and Sewer Company Time to complete: 13 days Cost to complete: no charge Agency: Majuro Water & Sewer Company Comment: Procedure 9 Connect to water and sewerage services Time to complete: 1 day Cost to complete: USD 35 Agency: Majuro Water & Sewer Company Comment: The connection takes place after the company pays the fees. 20 Procedure 10 Request a telephone connection Time to complete: 21 days Cost to complete: no charge Agency: Marshall Islands National Telecommunication Authority (NTA) Comment: BuildCo must fill out an application form at the National Telecommunication Authority (NTA). 21 22 1. Benchmarking Registering Property Regulations: Marshall Islands is ranked 183 overall for Registering Property. Ranking of Marshall Islands in Registering Property - Compared to good practice and selected economies: 23 The following table shows Registering Property data for Marshall Islands compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Marshall Islands no practice no practice no practice Comparator Economies Kiribati 5 513 0.0 Micronesia, Fed. Sts. no practice no practice no practice Palau 5 14 0.3 Samoa 5 27 1.6 Solomon Islands 10 297 4.9 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 24 2. Historical data: Registering Property in Marshall Islands Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 183 183 Procedures (number) no practice no practice no practice no practice Time (days) no practice no practice no practice no practice Cost (% of property value) no practice no practice no practice no practice 3. The following graphs illustrate the Registering Property sub indicators in Marshall Islands over the past 4 years: 25 Registering Property in Marshall Islands This topic examines the steps, time, and cost involved in registering property in the Marshall Islands. STANDARDIZED PROPERTY Property Value: 150,479.12 City: Majuro Registration Requirements: No: Procedure Time to complete Cost to complete 26 Registering Property Details - Marshall Islands Procedure Time to complete: Cost to complete: Comment: 27 28 1. Benchmarking Getting Credit Regulations: Marshall Islands is ranked 89 overall for Getting Credit. Ranking of Marshall Islands in Getting Credit - Compared to good practice and selected economies: 29 The following table shows Getting Credit data for Marshall Islands compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Marshall Islands 8 0 0.0 0.0 Comparator Economies Kiribati 5 0 0.0 0.0 Micronesia, Fed. Sts. 7 0 0.0 0.0 Palau 0 0 0.0 0.0 Samoa 6 0 0.0 0.0 Solomon Islands 8 0 0.0 0.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 30 2. Historical data: Getting Credit in Marshall Islands Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 150 89 Strength of legal rights index (0-10) 4 4 4 8 Depth of credit information index (0-6) 0 0 0 0 Private bureau coverage (% of adults) 0.0 0.0 0.0 0.0 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Marshall Islands over the past 4 years: 31 Getting Credit in Marshall Islands The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in the Marshall Islands. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 0 bureau registry Are data on both firms and individuals distributed? No No 0 Are both positive and negative data distributed? No No 0 Does the registry distribute credit information from retailers, trade No No 0 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? No No 0 Is data on all loans below 1% of income per capita distributed? No No 0 Is it guaranteed by law that borrowers can inspect their data in the No No 0 largest credit registry? Coverage 0.0 0.0 Number of individuals 0 0 Number of firms 0 0 32 Strength of legal rights index (0-10) 8 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Yes without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Yes requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, Yes proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the Yes grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? Yes 33 34 1. Benchmarking Protecting Investors Regulations: Marshall Islands is ranked 154 overall for Protecting Investors. Ranking of Marshall Islands in Protecting Investors - Compared to good practice and selected economies: 35 The following table shows Protecting Investors data for Marshall Islands compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Marshall Islands 3.3 Comparator Economies Kiribati 6.0 Micronesia, Fed. Sts. 2.7 Palau 2.7 Samoa 6.3 Solomon Islands 5.7 36 2. Historical data: Protecting Investors in Marshall Islands Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 153 154 Strength of investor protection index (0-10) 3.3 3.3 3.3 3.3 3. The following graph illustrates the Protecting Investors index in Marshall Islands compared to best practice and selected Economies: 9.7 6.3 6.0 5.7 3.3 2.7 2.7 i at nd on oa nd u nd ll St ia, ib Is lom la sha la m d. es ir a s Pa Sa al K s Fe ron ar s. So Ze la M ic ew Is M N Note: The higher the score, the greater the investor protection. 37 Protecting Investors in Marshall Islands The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in the Marshall Islands. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 2 0 What corporate body provides legally sufficient approval for the transaction? 0 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 1 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 1 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 0 0 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 0 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 38 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 Whether fines and imprisonment can be applied against Mr. James? 0 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 8 4 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 1 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 3.3 39 40 1. Benchmarking Paying Taxes Regulations: Marshall Islands is ranked 90 overall for Paying Taxes. Ranking of Marshall Islands in Paying Taxes - Compared to good practice and selected economies: 41 The following table shows Paying Taxes data for Marshall Islands compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Marshall Islands 21 128 64.9 Comparator Economies Kiribati 7 120 31.8 Micronesia, Fed. Sts. 21 128 58.7 Palau 19 128 73.0 Samoa 37 224 18.9 Solomon Islands 33 80 36.4 * The following economies are also good practice economies for : Payments (number per year): Qatar 42 2. Historical data: Paying Taxes in Marshall Islands Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 92 90 Total tax rate (% profit) 64.9 64.9 64.9 64.9 Payments (number per year) 21 21 21 21 Time (hours per year) 128 128 128 128 3. The following graphs illustrate the Paying Taxes sub indicators in Marshall Islands over the past 4 years: 43 Paying Taxes in Marshall Islands The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Marshall Islands, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Vehicle tax 0 paid jointly fixed fee 0.00 ($50) Fuel tax 1 8 cents gallon 0.10 Health insurance 4 3.5% gross salaries 3.90 contribution Social security 12 96 7.0% gross salaries 7.90 contributions Gross revenue tax 4 32 3.0% sales 52.90 Totals 21 128 64.9 44 45 1. Benchmarking Trading Across Borders Regulations: Marshall Islands is ranked 70 overall for Trading Across Borders. Ranking of Marshall Islands in Trading Across Borders - Compared to good practice and selected economies: 46 The following table shows Trading Across Borders data for Marshall Islands compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Marshall Islands 5 21 945 5 33 945 Comparator Economies Kiribati 6 21 1070 7 21 1070 Micronesia, Fed. Sts. 3 30 1295 6 30 1295 Palau 6 29 1070 10 33 1022 Samoa 7 27 820 7 31 848 Solomon Islands 7 24 1023 4 21 1237 * The following economies are also good practice economies for : Time to export (days): Estonia 47 2. Historical data: Trading Across Borders in Marshall Islands Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 67 70 Cost to export (US$ per container) 765 875 945 945 Cost to import (US$ per container) 765 875 945 945 Documents to export (number) 5 5 5 5 Documents to import (number) 5 5 5 5 Time to export (days) 21 21 21 21 Time to import (days) 33 33 33 33 3. The following graphs illustrate the Trading Across Borders sub indicators in Marshall Islands over the past 4 years: 48 49 Trading Across Borders in Marshall Islands These tables list the procedures necessary to import and export a standardized cargo of goods in Marshall Islands. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 7 120 Customs clearance and technical control 1 25 Ports and terminal handling 11 250 Inland transportation and handling 2 550 Totals 21 945 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 18 120 Customs clearance and technical control 2 25 Ports and terminal handling 12 250 Inland transportation and handling 1 550 Totals 33 945 50 Documents for Export and Import Export Bill of lading Cargo release order Commercial invoice Customs export declaration Packing List Import Bill of lading Commercial invoice Customs import declaration Cargo release order Packing List 51 52 1. Benchmarking Enforcing Contracts Regulations: Marshall Islands is ranked 62 overall for Enforcing Contracts. Ranking of Marshall Islands in Enforcing Contracts - Compared to good practice and selected economies: 53 The following table shows Enforcing Contracts data for Marshall Islands compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Marshall Islands 36 476 27.4 Comparator Economies Kiribati 32 660 25.8 Micronesia, Fed. Sts. 34 965 66.0 Palau 38 885 35.3 Samoa 44 455 19.7 Solomon Islands 37 455 78.9 54 2. Historical data: Enforcing Contracts in Marshall Islands Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 61 62 Procedures (number) 36 36 36 36 Time (days) 476 476 476 476 Cost (% of claim) 27.4 27.4 27.4 27.4 3. The following graphs illustrate the Enforcing Contracts sub indicators in Marshall Islands over the past 4 years: 55 Enforcing Contracts in Marshall Islands This topic looks at the efficiency of contract enforcement in Marshall Islands. Nature of Procedure (2010) Indicator Procedures (number) 36 Time (days) 476 Filing and service 51.0 Trial and judgment 60.0 Enforcement of judgment 365.0 Cost (% of claim)* 27.40 Attorney cost (% of claim) 26.2 Court cost (% of claim) 0.3 Enforcement Cost (% of claim) 0.9 56 Court information: Majuro District Court * Claim assumed to be equivalent to 200% of income per capita. 57 58 1. Benchmarking Closing Business Regulations: Marshall Islands is ranked 127 overall for Closing a Business. Ranking of Marshall Islands in Closing Business - Compared to good practice and selected economies: 59 The following table shows Closing Business data for Marshall Islands compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Marshall Islands 17.9 2.0 38 Comparator Economies Kiribati 0.0 no practice no practice Micronesia, Fed. Sts. 3.2 5.3 38 Palau 37.9 1.0 23 Samoa 14.6 2.5 38 Solomon Islands 23.4 1.0 38 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 60 2. Historical data: Closing Business in Marshall Islands Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 126 127 Time (years) 2.0 2.0 2.0 2.0 Cost (% of estate) 38 38 38 38 Recovery rate (cents on the dollar) 17.9 17.9 17.9 17.9 3. The following graphs illustrate the Closing Business sub indicators in Marshall Islands over the past 4 years: 61 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 62 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Marshall Islands The Marshall Islands improved access to credit through a new law on secured transactions that establishes a central collateral registry, broadens the range of assets that can be used as collateral, allows a general description of debts and obligations and assets granted as collateral and establishes clear priority rules outside bankruptcy for secured creditors. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Samoa Samoa shifted from a deed system to a title system and fully computerized its land registry, which reduced the time required to register property by 4 months. Solomon Islands The Solomon Islands strengthened access to credit by passing a new secured transactions law that broadens the range of assets that can be used as collateral, allows a general description of debts and obligations secured by collateral, permits out-of-court enforcement and creates a collateral registry. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 63 Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 64 65