Doing Business 2018 Bulgaria Economy Pro le of Bulgaria 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 Bulgaria 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 Bulgaria Income Category Upper middle income 50 Population 7,127,822 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 7,470 0 100 71.91 City Covered Sofia DB 2018 Distance to Frontier (DTF) 0 100 77.30: Poland (Rank: 27) 76.27: Czech Republic (Rank: 30) 72.39: Hungary (Rank: 48) 71.91: Bulgaria (Rank: 50) 71.33: Regional Average (Europe & Central Asia) Page 3   68.02: Greece (Rank: 67) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Bulgaria Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Bulgaria Income Category Upper middle income 50 Population 7,127,822 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 7,470 0 100 71.91 City Covered Sofia DB 2018 Distance to Frontier (DTF) 0 100 77.30: Poland (Rank: 27) 76.27: Czech Republic (Rank: 30) 72.39: Hungary (Rank: 48) 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 - Bulgaria 1 24 21 28 42 40 51 50 55 67 82 90 95 Rank 109 141 136 163 190 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 - Bulgaria 97.41 100 85.37 80 73.35 71.78 69.30 70.00 70.00 67.04 60.02 60 54.80 DTF 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:-0.30 Change:+0.07 Change:0.00 Investors Change:-0.03 Borders Change:0.00 Change:+0.64 Change:+0.02 Permits Change:0.00 Change:0.00 Change:+0.60 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:-0.30 Change:+0.07 Change:0.00 Investors Change:-0.03 Borders Change:0.00 Change:+0.64 Change:+0.02 Permits Change:0.00 Change:0.00 Doing Business 2018 Bulgaria Change:+0.60 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 Bulgaria Standardized Company Legal form Druzestvo s Ogranichena Otgovornost (OOD) Paid-in minimum capital requirement BGN 2 City Covered Sofia Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Procedure – Men (number) 7 5.2 4.9 1.00 (New Zealand) Time – Men (days) 23 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 1.2 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 7 5.2 4.9 1.00 (New Zealand) Time – Women (days) 23 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 1.2 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 Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.30: Greece (Rank: 37) 90.62: Regional Average (Europe & Central Asia) 87.60: Hungary (Rank: 79) 87.44: Czech Republic (Rank: 81) 85.37: Bulgaria (Rank: 95) 82.78: Poland (Rank: 120) 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 Bulgaria – Procedure, Time and Cost Time Cost 0.7 20 0.6 ost (% of income per capita) 0.5 15 Time (days) 0.4 10 0.3 Page 6   0.2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Bulgaria Figure – Starting a Business in Bulgaria – Procedure, Time and Cost Time Cost 0.7 20 0.6 Cost (% of income per capita) 0.5 15 Time (days) 0.4 10 0.3 0.2 5 0.1 0 0 1 2 3 4 *5 *6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a 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 Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Execute the minutes of the constituent meeting of the shareholders in 1 day BGN 5 the OOD; obtain a notary certi ed statement of consent and signature specimen of the manager, and a certi ed copy of the articles of incorporation of the OOD. Agency : Public Notary Each newly appointed general manager must sign and submit the following a davits: (1) a davit under Article 141 of the Commercial Act, where the general manager declares that (s)he has not been declared in bankruptcy and (s)he has not been a general manager, a member of a managing or controlling body of a company, dissolved because of bankruptcy during the last two years preceding the date of the resolution declaring the bankruptcy, and that, in addition, (s)he has not been a general manager or a member of a managing or controlling body of a company, that has been ascertained by an e ective and enforceable penalty decree as not complying with such company's obligations for establishment and storage of the determined levels of reserves under the Bulgarian Law on Reserves of Oil and Oil Products; (2) a davit under Article 142 of the Commercial Act where the general manager declares that without the prior consent of the company (s)he will not (i) enter into commercial transactions either in his/her personal capacity or on behalf of third parties; (ii) participate in general partnerships, limited Page 7   partnerships and limited liability companies; and (iii) occupy positions in the (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Bulgaria Details – Starting a Business in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Execute the minutes of the constituent meeting of the shareholders in 1 day BGN 5 the OOD; obtain a notary certi ed statement of consent and signature specimen of the manager, and a certi ed copy of the articles of incorporation of the OOD. Agency : Public Notary Each newly appointed general manager must sign and submit the following a davits: (1) a davit under Article 141 of the Commercial Act, where the general manager declares that (s)he has not been declared in bankruptcy and (s)he has not been a general manager, a member of a managing or controlling body of a company, dissolved because of bankruptcy during the last two years preceding the date of the resolution declaring the bankruptcy, and that, in addition, (s)he has not been a general manager or a member of a managing or controlling body of a company, that has been ascertained by an e ective and enforceable penalty decree as not complying with such company's obligations for establishment and storage of the determined levels of reserves under the Bulgarian Law on Reserves of Oil and Oil Products; (2) a davit under Article 142 of the Commercial Act where the general manager declares that without the prior consent of the company (s)he will not (i) enter into commercial transactions either in his/her personal capacity or on behalf of third parties; (ii) participate in general partnerships, limited partnerships and limited liability companies; and (iii) occupy positions in the managing bodies of other partnerships or companies; and (3) a davit under Article 13 paragraph 4 of the Commercial Register Act to declare that the circumstances, as would be applied for registration in the Commercial Register and the adoption of the acts as would be applied for promulgation therein, are genuine and true. 2 Deposit paid-up capital in a bank 1 day BGN 10 -30 BGN Agency : Commercial Bank (depending on the bank) The capital-accruing bank account must be opened either by the company manager or by a person authorized by a notary-certi ed power of attorney. Those persons delegated authority over the bank account must provide a signature specimen in person or a notary-certi ed specimen. The amount of capital stays blocked in the bank account until the registry issues a decision on the company registration. The Commercial Act requires the minimum capital prescribed by law, i.e. BGN 2, to be paid-in prior to incorporation. After opening the escrow account and depositing the funds therein the company under incorporation is issued a certi cate evidencing the shareholders' deposit of the capital. The certi cate must be presented at the registry. Alternatively, Commercial Register can also accept the proof of transfer of the share capital to into a regular bank account of the company. 3 Register with the Commercial Register at the Registry Agency 2 days BGN 55 for electronic Agency : Registry Agency registration and Page 8   BGN registry. Alternatively, Commercial Register can also accept the proof of Doing transfer Businessof the capital to into a regular bank account of the company. share Bulgaria 2018 3 Register with the Commercial Register at the Registry Agency 2 days BGN 55 for electronic Agency : Registry Agency registration and BGN 110 for hard copy The registration is done using a Standard Application (A4 Form – "Application application for registration of circumstances related to a limited liability company"). The following documents must be attached to the application: (1) Articles of Association, (2) Resolution for setting up of a new company and appointment of manager(s), (3) Notary certi ed consent and signature specimen of manager(s), and (4) Bank certi cate for deposited capital. The state fees are BGN 110 if hard copies of the documents are led with the Registry Agency or BGN 55 if the registration documents are led with the Registry Agency electronically. The following a davits by each of the appointed general managers of the company must also be attached to application A4: A davit under Article 141 paragraph 8 of the Commercial Act; A davit under Article 142 of the Commercial Act; and A davit under Article 13 paragraph 4 of the Commercial Register Act. As of January 1, 2016 the applications for initial registration of companies have to be reviewed by the Commercial Register o cials by the end of the next business day following submission of the application. 4 Register for VAT 12 days no charge Agency : National Revenue Agency (So a-City Territorial Directorate of NRA - o ce responsible for VAT-related matters) The Value Added Tax Act (promulgated on August 4, 2006 in State Gazette issue 63) became e ective on January 1, 2007 (Bulgaria's EU accession date). Under this new law, the company may voluntarily register for VAT purposes at any time, because the current threshold requirement has been abolished. A voluntarily registered person shall remain VAT-registered for 24 months starting from the beginning of the year following the year of VAT registration. The company must register for VAT purposes in Bulgaria if its turnover for 12 consecutive months exceeds BGN 50,000. Speci c grounds for obligatory registration for VAT purposes apply when: - A person from an EU member state who is not established in Bulgaria and provides taxable supplies of goods that are to be assembled or installed in Bulgaria by that person or at his or her expense (if the recipient is not registered for VAT in Bulgaria). - A person from another EU member state supplies goods to Bulgaria exceeding total value of BGN 70,000 under the conditions of distance sales of Page 9   goods within a given calendar year. have to be reviewed by the Commercial Register o cials by the end of the Doing next business Business day following 2018 submission of the application. Bulgaria 4 Register for VAT 12 days no charge Agency : National Revenue Agency (So a-City Territorial Directorate of NRA - o ce responsible for VAT-related matters) The Value Added Tax Act (promulgated on August 4, 2006 in State Gazette issue 63) became e ective on January 1, 2007 (Bulgaria's EU accession date). Under this new law, the company may voluntarily register for VAT purposes at any time, because the current threshold requirement has been abolished. A voluntarily registered person shall remain VAT-registered for 24 months starting from the beginning of the year following the year of VAT registration. The company must register for VAT purposes in Bulgaria if its turnover for 12 consecutive months exceeds BGN 50,000. Speci c grounds for obligatory registration for VAT purposes apply when: - A person from an EU member state who is not established in Bulgaria and provides taxable supplies of goods that are to be assembled or installed in Bulgaria by that person or at his or her expense (if the recipient is not registered for VAT in Bulgaria). - A person from another EU member state supplies goods to Bulgaria exceeding total value of BGN 70,000 under the conditions of distance sales of goods within a given calendar year. - A person (whether resident or not) performs taxable intra-community acquisitions in Bulgaria exceeding BGN 20,000 within a given calendar year. - A person (whether resident or not) receives supplies of services under chargeable supplies having place of performance on Bulgarian territory with respect to which the VAT is due by the recipient. - A Bulgarian resident performing supplies of services having place of supply the territory of another EU member state. Within 7 days from submission of the application for VAT registration, the Revenue Agency shall perform a check of the grounds for registration. Once the grounds for registration are concluded, the decision on VAT registration shall be issued within 7 days. In practice, VAT registration is performed within 12 days. 5 Purchase and register scal device (cash register) 2 days BGN 50 - 200 Agency : Authorized seller (simultaneous with previous Ordinance No. 18 of 2006 (amended SG49, June 29, 2010 for registration and procedure) sales register in the commercial objects through scal device) on the recording and reporting of sales mandates that companies conducting commercial activities register their cash register machine. Once the company has purchased the scal device from an authorized seller, representatives of the authorized seller install the device. After installation at the company’s premises, the registration of scal device with the National Revenue Authority is performed electronically. After verifying that the established connection is in line with the technical and functional requirements set by the National Revenue Authority, a con rmation of successful registration is sent to the user. The nal step to complete the registration is to obtain a standard certi cate of registration, which is provided by the authorized seller. Such certi cate is usually given the day Page 10   after the registration of the scal device with the National Revenue Authority. shall be issued within 7 days. In practice, VAT registration is performed Doing within 12 days. Business 2018 Bulgaria 5 Purchase and register scal device (cash register) 2 days BGN 50 - 200 Agency : Authorized seller (simultaneous with previous Ordinance No. 18 of 2006 (amended SG49, June 29, 2010 for registration and procedure) sales register in the commercial objects through scal device) on the recording and reporting of sales mandates that companies conducting commercial activities register their cash register machine. Once the company has purchased the scal device from an authorized seller, representatives of the authorized seller install the device. After installation at the company’s premises, the registration of scal device with the National Revenue Authority is performed electronically. After verifying that the established connection is in line with the technical and functional requirements set by the National Revenue Authority, a con rmation of successful registration is sent to the user. The nal step to complete the registration is to obtain a standard certi cate of registration, which is provided by the authorized seller. Such certi cate is usually given the day after the registration of the scal device with the National Revenue Authority. The company has no right to report sales via a cash register or scal printer introduced for work after the purchase or change of ownership, without a certi ed certi cate of registration. The price of the machines can vary from 50 BGN - 300 BGN 6 Register employees with NRA Less than one day no charge Agency : National Revenue Agency (one of the 13 territorial o ces in So a, (online procedure, depending on the location of taxpayer - o ce responsible for employees simultaneous with registration) previous procedure) Company has to register employees with NRA within 3 days from conclusion of the employment agreement. This requirement is based on the Bulgarian Labor Code, article 62, para 3 and 5. The registration of employees with NRA has a noti cation nature, and is done using a speci c form as determined in the Attachment 1 of Ordinance No. 5 on the rules for submission of noti cations to the National Revenue Agency (“NRA”), related to the terms and conditions for registration of the employment agreements. The following information should be inserted in the noti cation: - Name of the company, Uni ed Identi cation Number (UIC) of the company and the number given by the NRA to the employer in its capacity of insurer; - Date of conclusion of the employment agreement; - Legal grounds for conclusion; - Personal data of the employee; - Basic salary; - Employee’s position and code of the position. Companies can register employees with NRA either online on a speci c page (https://inetdec.nra.bg/), by mail, or in person (by visiting the competent territorial directorate of NRA). In case the noti cation refers to ve labor agreements simultaneously, then it should be sent though the website with electronic signature or on a soft copy. After submission of the noti cation, the NRA shall issue a reference note (sample set as Appendix No. 3 to the Ordinance 5) containing a list of the certi ed noti cations and a list of the noti cations which have not been accepted /if any/ containing a description of the reason for non-acceptance. The reference note shall be certi ed by an o cial of NRA and shall be presented to a representative of the employer or it shall be sent by a Page 11   registered mail or by Internet. Doing The the machines price of 2018 Business can vary from 50 BGN - 300 BGN Bulgaria 6 Register employees with NRA Less than one day no charge Agency : National Revenue Agency (one of the 13 territorial o ces in So a, (online procedure, depending on the location of taxpayer - o ce responsible for employees simultaneous with registration) previous procedure) Company has to register employees with NRA within 3 days from conclusion of the employment agreement. This requirement is based on the Bulgarian Labor Code, article 62, para 3 and 5. The registration of employees with NRA has a noti cation nature, and is done using a speci c form as determined in the Attachment 1 of Ordinance No. 5 on the rules for submission of noti cations to the National Revenue Agency (“NRA”), related to the terms and conditions for registration of the employment agreements. The following information should be inserted in the noti cation: - Name of the company, Uni ed Identi cation Number (UIC) of the company and the number given by the NRA to the employer in its capacity of insurer; - Date of conclusion of the employment agreement; - Legal grounds for conclusion; - Personal data of the employee; - Basic salary; - Employee’s position and code of the position. Companies can register employees with NRA either online on a speci c page (https://inetdec.nra.bg/), by mail, or in person (by visiting the competent territorial directorate of NRA). In case the noti cation refers to ve labor agreements simultaneously, then it should be sent though the website with electronic signature or on a soft copy. After submission of the noti cation, the NRA shall issue a reference note (sample set as Appendix No. 3 to the Ordinance 5) containing a list of the certi ed noti cations and a list of the noti cations which have not been accepted /if any/ containing a description of the reason for non-acceptance. The reference note shall be certi ed by an o cial of NRA and shall be presented to a representative of the employer or it shall be sent by a registered mail or by Internet. 7 Register Commercial Object of the company 1 week no charge Agency : So a Municipal Council Companies need to register the commercial object with the So a Municipal Council in order to inform the municipality about the type of activity the company will perform. The following documents are needed to complete the registration process. - Application form; - Declaration, Registry Agency Certi cate, - Registration certi cate of the scal device. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits Page 12   This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Bulgaria 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 agencies, these are counted as procedures. Building quality control index (0-15) - 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 13   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Bulgaria Standardized Warehouse Estimated value of warehouse BGN 643,901.30 City Covered Sofia Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Procedures (number) 18 16.0 12.5 7.00 (Denmark) Time (days) 97 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 4.2 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.16: Poland (Rank: 41) 73.35: Bulgaria (Rank: 51) 72.48: Greece (Rank: 58) 68.09: Regional Average (Europe & Central Asia) 67.93: Hungary (Rank: 90) 62.77: Czech Republic (Rank: 127) 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 Bulgaria – Procedure, Time and Cost Time Cost 1.8 1.6 80 Cost (% of warehouse value) 1.4 1.2 60 Time (days) 1 0.8 40 0.6 20 0.4 0.2 0 0 1 2 3 *4 *5 6 7 8 9 10 * 11 12 13 14 15 16 17 18 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 14   component indicators. Doing Business 2018 Bulgaria Figure – Dealing with Construction Permits in Bulgaria – Procedure, Time and Cost Time Cost 1.8 1.6 80 Cost (% of warehouse value) 1.4 1.2 60 Time (days) 1 0.8 40 0.6 20 0.4 0.2 0 0 1 2 3 *4 *5 6 7 8 9 10 * 11 12 13 14 15 16 17 18 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 Bulgaria and comparator economies – Measure of Quality 14 13.0 13.0 12.0 12.0 12 11.4 10.0 10 Index score 8 6 4 2 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Dealing with Construction Permits in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain current cadastral extract from the Agency for Geodesy, 1 day BGN 90 Cartography and Cadastre Agency : Agency for Geodesy, Cartography and Cadastre in So a Based on the size of BuildCo's warehouse (1,300 sq. m.) and on the number of workers (60), the building falls under construction category IV which encompasses medium-sized buildings between 1,000-5,000 sq. m. employing between 50-100 workers, according to Regulation № 1 of the Ministry of Regional Development and Public Works, from 30 July 2003, for the requirements of the di erent types of construction. Pursuant to Law for the Cadaster and Property Register; Regulation №3 from Page 15   28.04.2005 for the content, creation and maintenance of the cadastral Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Doing Business 2018 Bulgaria Details – Dealing with Construction Permits in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain current cadastral extract from the Agency for Geodesy, 1 day BGN 90 Cartography and Cadastre Agency : Agency for Geodesy, Cartography and Cadastre in So a Based on the size of BuildCo's warehouse (1,300 sq. m.) and on the number of workers (60), the building falls under construction category IV which encompasses medium-sized buildings between 1,000-5,000 sq. m. employing between 50-100 workers, according to Regulation № 1 of the Ministry of Regional Development and Public Works, from 30 July 2003, for the requirements of the di erent types of construction. Pursuant to Law for the Cadaster and Property Register; Regulation №3 from 28.04.2005 for the content, creation and maintenance of the cadastral extract and the cadastral registers, BuildCo must obtain an extract from the Agency for Geodesy, Cartography and Cadastre in So a. The following documents must be submitted: - Application form - Proof of ownership - Copy of original sketch issued with the original land title - Proof of fee payment 2 Apply for VISA from the Chief Architect of the Municipality 3 days BGN 80 Agency : Municipality To obtain the design permit, BuildCo must submit an application form, a title of property or proof of ownership, a sketch of the acting regulation plan, and a change proposal with tax receipts. The time limit for obtaining the design permit is 14 days, according to the Law of the Spatial Planning (Article 140). The design permit fees are set according to Decision No 894, Protocol No 93 (dated November 23, 2006) of the So a Municipal Council, Addendum 4, Article 2, as shown below. 3 Obtain decision from the Director of the Regional Inspectorate of 14 days no charge Environment and Water Agency : Regional Inspectorate of Environment and Water The Law on Environment Protection (Appendix 1 and Appendix 2) de nes the investment projects that are subject to an environmental impact assessment (EIA). The warehouse building for storing books and stationary does not fall among the investment projects listed in both appendices. Thus, the EIA is not obligatory. However, a decision issued by the Director of the Regional Inspectorate of Protection of Environment is required to con rm that EIA is not necessary. The decision is issued within 14 days of submitting the request. The decision is valid for 5 years. 4 Sign preliminary contracts with the water authorities 7 days BGN 600 Agency : Water Authorities In principle, BuildCo must obtain approval from the water authorities. The approval is valid for a year. Several documents are necessary to obtain this approval, including proof of ownership, the plan, the application form, the design permit, and the investment design by the Municipality's Chief Architect. The ling can be submitted at the same time with obtaining a decision from the Director of the Regional Inspectorate of Environment and Water. On these grounds, the water company undertakes a preliminary Page 16   that EIA is not necessary. The decision is issued within 14 days of submitting Doing the The decision request. 2018 Business is valid for 5 years. Bulgaria 4 Sign preliminary contracts with the water authorities 7 days BGN 600 Agency : Water Authorities In principle, BuildCo must obtain approval from the water authorities. The approval is valid for a year. Several documents are necessary to obtain this approval, including proof of ownership, the plan, the application form, the design permit, and the investment design by the Municipality's Chief Architect. The ling can be submitted at the same time with obtaining a decision from the Director of the Regional Inspectorate of Environment and Water. On these grounds, the water company undertakes a preliminary survey and subsequently issues a report that contains the necessary technical data and the speci cations for the network connection. The cost and time vary according to the service: - Regular service: Free of charge, 26 days, - Fast service: BGN 300, 14 days, - Express service: BGN 600, 7 days 5 Request and obtain preliminary assessment of the building for its 5 days BGN 2,601 compliance with energy e ciency requirements from licensed company Agency : Licensed Company Every investment project for construction, reconstruction and modernization, on the basis of which permission for construction is granted, has to be assessed for its compliance with the energy e ciency requirements. There is no xed price for the issuance of a certi cate for energy e ectiveness. The rates are subject to negotiation. The assessment is done by a privately licensed company. 6 Hire a construction supervision company for evaluation of the project 7 days BGN 9,150 and supervision during construction Agency : Construction Supervision Company In order to be able to apply for a nal construction permit, BuildCo must obtain an evaluation of the project plans to make sure that the building project design complies with essential construction requirements, according to Article 142 from the Law of Spatial Planning. This evaluation is prepared by an independent licensed construction supervision company. This part of the procedure costs BGN 2000 and takes 7 days. In addition, BuildCo signs a contract with the same independent construction supervision company. The supervisor must be licensed by the Ministry of Regional Development and Public Works. The supervisor will sign all acts and records during construction. This part of the procedure costs BGN 7150 and the time is included in the 7 days mentioned above. The rm’s instructions and orders are binding for BuildCo and the technical manager. Within 3 days of being issued, objections against the supervisory rm’s instructions can be made before the Directorate for National Construction Control. Construction will be stopped until a decision is reached, and the decision is considered to be a new set of binding rules. The supervisor must notify the Regional Directorate for National Construction control of any irregularities within 3 days of detection. The supervisor will be responsible for damages caused to the assignor and to the other participants in the construction, and jointly responsible with BuildCo for damages caused by not complying with the technical rules and the approved designs. The supervision contract must be valid for the entire Page 17   construction process. energy e ectiveness. The rates are subject to negotiation. The assessment is Doing done 2018 licensed by a privately Business company. Bulgaria 6 Hire a construction supervision company for evaluation of the project 7 days BGN 9,150 and supervision during construction Agency : Construction Supervision Company In order to be able to apply for a nal construction permit, BuildCo must obtain an evaluation of the project plans to make sure that the building project design complies with essential construction requirements, according to Article 142 from the Law of Spatial Planning. This evaluation is prepared by an independent licensed construction supervision company. This part of the procedure costs BGN 2000 and takes 7 days. In addition, BuildCo signs a contract with the same independent construction supervision company. The supervisor must be licensed by the Ministry of Regional Development and Public Works. The supervisor will sign all acts and records during construction. This part of the procedure costs BGN 7150 and the time is included in the 7 days mentioned above. The rm’s instructions and orders are binding for BuildCo and the technical manager. Within 3 days of being issued, objections against the supervisory rm’s instructions can be made before the Directorate for National Construction Control. Construction will be stopped until a decision is reached, and the decision is considered to be a new set of binding rules. The supervisor must notify the Regional Directorate for National Construction control of any irregularities within 3 days of detection. The supervisor will be responsible for damages caused to the assignor and to the other participants in the construction, and jointly responsible with BuildCo for damages caused by not complying with the technical rules and the approved designs. The supervision contract must be valid for the entire construction process. The rates for a contract are between BGN 6.00 and BGN 10.00 per sq. m. of built area. However, the cost for this procedure is subject to negotiation between the investor and the surveillance company. There is no legally regulated minimum cost, but the Bulgarian Association of Architects and Engineers has issued an act containing recommended fees. The fees depend on the value of the construction work but may not be less than BGN 800.00. After the end of the construction, the person exercising construction supervision will prepare a nal report to the assignor. In total, the the procedure costs BGN 9150 and takes 7 days. 7 Obtain nal construction approval from the Chief Architect of the 35 days BGN 10,405 Municipality Agency : Municipality The fees are BGN 8.00 per sq. m., according to Decision No. 894, Protocol No. 93 (dated November 23, 2006, and amended in February 5, 2008) of the So a Municipal Council, Addendum 4, Table 1, assuming suburban Zone V. Once the Chief of Architect of the Municipality has issued the permission (or VISA) BuildCo must submit a folder with 12-13 les, including all the approvals from di erent departments (water, electricity, environment, etc.). A "project number" or tracking number is issued to BuildCo by the Municipality con rming that the complete le has been received. It takes about one month (sometimes more depending on the Municipality) to receive the nal construction approval. However, even though the construction approval has been issued, construction is not allowed to Page 18   commence yet, as there is a 14-day period which allows for an appeal on Doing In total, the the Business 2018procedure costs BGN 9150 and takes 7 days. Bulgaria 7 Obtain nal construction approval from the Chief Architect of the 35 days BGN 10,405 Municipality Agency : Municipality The fees are BGN 8.00 per sq. m., according to Decision No. 894, Protocol No. 93 (dated November 23, 2006, and amended in February 5, 2008) of the So a Municipal Council, Addendum 4, Table 1, assuming suburban Zone V. Once the Chief of Architect of the Municipality has issued the permission (or VISA) BuildCo must submit a folder with 12-13 les, including all the approvals from di erent departments (water, electricity, environment, etc.). A "project number" or tracking number is issued to BuildCo by the Municipality con rming that the complete le has been received. It takes about one month (sometimes more depending on the Municipality) to receive the nal construction approval. However, even though the construction approval has been issued, construction is not allowed to commence yet, as there is a 14-day period which allows for an appeal on behalf of the residents in the area where the construction will take place (Article 149 (4) of Bulgarian Law of Spatial Planning from 2003). Construction work can only start on the 15th day. 8 Obtain approval for opening a construction site and determining 2 days BGN 20 construction line and construction level Agency : Municipality In order for BuildCo to be able to start the construction process, it needs to obtain approval to open a construction site (Law of Spatial Planning). A special document is prepared by the construction supervision company and submitted to the Municipality. The document stipulates the security and health precautions for labor, the safeguarding of any adjacent buildings, safety of movement, protective fences, large plants that will not be removed. To apply for the approval, BuildCo must submit: - Application form - Construction permit - Permission to dispose of land masses - Receipt for paid fees Tme and cost vary: Regular service: BGN 10, 7 days Fast service: BGN 15, 4 days Express service: BGN 20, 2 days 9 Obtain approval from Municipality once the superstructure is complete 4 days BGN 1,500 Agency : Municipality This is the rst step of the construction control process after construction of the carcass of the building is complete. When the the foundation, walls and roo ng have been completed, a document called Act 14 must be prepared by the investor (BuildCo), the construction supervision company and the architect. This document is then submitted for approval to the So a Municipality, as per Article 181 of the Law of Spatial Planning. The cost and time vary according to the service: - Regular service: BGN 750, 14 days Page 19   - Fast service: BGN 1,125, 7 days, Fast service: BGN 15, 4 days Doing Express service: Business 2018 20, 2 days BGN Bulgaria 9 Obtain approval from Municipality once the superstructure is complete 4 days BGN 1,500 Agency : Municipality This is the rst step of the construction control process after construction of the carcass of the building is complete. When the the foundation, walls and roo ng have been completed, a document called Act 14 must be prepared by the investor (BuildCo), the construction supervision company and the architect. This document is then submitted for approval to the So a Municipality, as per Article 181 of the Law of Spatial Planning. The cost and time vary according to the service: - Regular service: BGN 750, 14 days - Fast service: BGN 1,125, 7 days, - Express service: BGN 1,500, 4 days 10 Sign contract with water provider and receive connection 7 days BGN 600 Agency : Water Authorities The decision is valid for 3 years, according to the Order of the Environmental Protection Law. Obtain geodetic measurement from a licensed company 7 days BGN 350 11 Agency : Licensed company A licensed geodetic company must outline the measurements of the completed warehouse and prepare a sketch for amending the cadastral map. The price is agreed upon with the licensed company, but no o cial fee schedule exists. 12 Map the building in the cadastral map and receive registration 3 days BGN 124 certi cate Agency : Agency for Geodesy, Cartography and Cadastre Once BuildCo completes the construction of the warehouse, it must have the building mapped in the Agency for Geodesy, Cartography and Cadastre in So a. There are a number of documents that BuildCo needs to present: - Application form - Sketch for amending the cadastral map - Materials and data from geodetic measurements - Proof of ownership - Documents for check with a control computer program - Copy of proof of payment - Copy of the licensed of the expert who conducted the geodetic measurements - Copy of the insurance documents of the geodetic expert - Other documents indicating grounds for amendments 13 Request and obtain certi cate for energy e ciency 7 days BGN 500 Agency : Licensed Company After completing a new construction, a certi cate for energy e ciency (energy passport) must be issued as part of the technical passport of the construction. The issuance of the certi cate is performed under a contract signed by the assignor and natural person/entity and is entered in the register for the persons authorized to perform certi cation for energy e ciency. Page 20   14 Have the Construction Surveillance le a report on the completed 1 day no charge - Other documents indicating grounds for amendments Doing Business 2018 Bulgaria 13 Request and obtain certi cate for energy e ciency 7 days BGN 500 Agency : Licensed Company After completing a new construction, a certi cate for energy e ciency (energy passport) must be issued as part of the technical passport of the construction. The issuance of the certi cate is performed under a contract signed by the assignor and natural person/entity and is entered in the register for the persons authorized to perform certi cation for energy e ciency. 14 Have the Construction Surveillance le a report on the completed 1 day no charge construction Agency : Construction Supervision Company After the construction is nished, the assignor, the designer, the constructor, and the supervisor must issue a document con rming that the construction has been carried out in accordance with the approved designs, the certi ed executive documentation, the requirements of the construction and the conditions of the contract. The records for conducted trials on the machines and on the facilities should also be attached. The transfer of the construction by the constructor to the assignor is also implemented. 15 A technical passport is registered with the Chief Architect of the 3 days no charge Municipality Agency : Municipality The Law on Spatial Development was supplemented on September 15, 2006, State Gazette, Issue No. 76. The law contains a new requirement for licensed experts performing surveillance control. A technical passport for the construction should be prepared after the completion of construction. This document de nes all terms for the performance of any major or current repairs and contains data on all certi cates issued (those required by the construction legislation). Inspections should also be recorded in the passport. The technical passport must be prepared by the surveillance company. Either the surveillance company or the investor les two copies of the technical passport (one for the investor and one for the Chief Architect of the Municipality) and an electronic copy with the Chief Architect of the Municipality -- O ce for Registration. The registration of the technical passport may take 2 or 3 days (no charge) after which the investor or the surveillance company may take back their original (it should bear a stamp with the date and the registration number). 16 File a copy of the registered technical passport with the Cadastre 1 day no charge Agency : Cadastre A copy of the registered original technical passport (notarization not required), along with the original technical passport, should be led with the Cadastre Agency (this second procedure costs BGN 2.00 and is completed in one day). The copy is to be kept by the Cadastre Agency, while the original (with a stamped registration number) is returned to the investor. 17 Receive nal inspection by the Municipality 1 day no charge Agency : Municipality - National Construction Control Department A State Commission coordinated by National Construction Control Department grants nal approval of the building construction. The commission is comprised of members from di erent authorities, including the Hygienic Epidemiological Institute and the Fire Alarm Security Service. Page 21   one day). The copy is to be kept by the Cadastre Agency, while the original Doing (with a stamped Business 2018registration Bulgarianumber) is returned to the investor. 17 Receive nal inspection by the Municipality 1 day no charge Agency : Municipality - National Construction Control Department A State Commission coordinated by National Construction Control Department grants nal approval of the building construction. The commission is comprised of members from di erent authorities, including the Hygienic Epidemiological Institute and the Fire Alarm Security Service. 18 Obtain approval of the building and occupancy permit from the 7 days BGN 750 Municipality Agency : Municipality After completing the construction and tests of facilities, the assignor must register before the Chief Architect of the Municipality, present the ultimate report, the utility provider contracts, and document from the cadastral agency that its requirements have been ful lled in order to obtain an occupancy permit. The Municipality issues the occupancy permit within 7 days. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Bulgaria – Measure of Quality Answer Score Building quality control index (0-15) 13.0 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) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. 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; Inspections by external engineer or rm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 Page 22   inspections are Takes place simultaneously with previous procedure. Doing Business 2018 Bulgaria Details – Dealing with Construction Permits in Bulgaria – Measure of Quality Answer Score Building quality control index (0-15) 13.0 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) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer; Private rm. 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; Inspections by external engineer or rm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a 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; Yes, external engineer submits report for nal inspection. 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) 2.0 Page 23   always occurs in Doing Business 2018 Bulgaria practice. Liability and insurance regimes index (0-2) 2.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover Architect or 1.0 possible structural aws or problems in the building once it is in use (Latent Defect engineer; Liability Insurance or Decennial Insurance)? (0-1) Professional in charge of the supervision; Construction company; Insurance is commonly taken in practice. Professional certi cations index (0-4) 3.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the University 1.0 construction on the ground? (0-2) degree in engineering, construction or construction management; Being a registered architect or engineer. 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 Page 24   (number) used. architect or engineer. Doing Business 2018 Bulgaria 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 25   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Bulgaria Standardized Connection Price of electricity (US cents per kWh) 9.0 Name of utility CEZ Distribution Bulgaria AD City Covered Sofia Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Procedures (number) 6 5.4 4.7 2 (United Arab Emirates) Time (days) 262 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 468.4 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.33: Czech Republic (Rank: 15) 81.35: Poland (Rank: 54) 75.97: Greece (Rank: 76) 70.35: Regional Average (Europe & Central Asia) 63.26: Hungary (Rank: 110) 54.80: Bulgaria (Rank: 141) 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 Bulgaria – Procedure, Time and Cost Time Cost 450 250 400 Cost (% of income per capita) 200 350 300 Time (days) 150 250 200 100 150 100 50 Page 26   50 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Bulgaria Figure – Getting Electricity in Bulgaria – Procedure, Time and Cost Time Cost 450 250 400 Cost (% of income per capita) 200 350 300 Time (days) 150 250 200 100 150 100 50 50 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Bulgaria and comparator economies – Measure of Quality 9 8 8 7 7 7 7 6 6 Index score 5.3 5 4 3 2 1 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Getting Electricity in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for and await preliminary contract 25 calendar days BGN 211.92 Agency : CEZ Distribution Bulgaria The customer submits an application to join the electricity distribution network at one of CEZ Distribution’s o ces. Although the steps and process for applying are explained online, the application should be done in-person. The following documents have to be submitted with the application: • Copy of the visa for exploration (excerpt/blueprint from the acting detailed development plan delivered by the Municipality); • Proof of ownership of the warehouse; • BULSTAT and other identi cation documents (if needed, e.g. Court decision for registration); Page 27   • Power of Attorney of the person submitting the application on behalf of the Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Doing Business 2018 Bulgaria Details – Getting Electricity in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Apply for and await preliminary contract 25 calendar days BGN 211.92 Agency : CEZ Distribution Bulgaria The customer submits an application to join the electricity distribution network at one of CEZ Distribution’s o ces. Although the steps and process for applying are explained online, the application should be done in-person. The following documents have to be submitted with the application: • Copy of the visa for exploration (excerpt/blueprint from the acting detailed development plan delivered by the Municipality); • Proof of ownership of the warehouse; • BULSTAT and other identi cation documents (if needed, e.g. Court decision for registration); • Power of Attorney of the person submitting the application on behalf of the customer (if needed). After submitting the application, the customer awaits the preliminary contract. Within 25 days, the customer is invited to go back to CEZ Distribution’s o ce to receive it. The preliminary contract states the terms and conditions of the agreement between the customer and CEZ Distribution, and describes the technical speci cations of the new connection. Note: This procedure takes place at early stage, before the issuance of the construction permit for the warehouse. 2 Await completion and approval of project design 67 calendar days BGN 5,800 Agency : Electrical design rm, Construction supervision rm The customer’s private design and construction supervision companies prepare the design and have it approved by the relevant agencies. All the approval process is done by the design and construction supervision companies, without further interaction with the customer. The design of the external connection is prepared in accordance with the Ordinance № 6 of 24.02.2014, art. 21, which states that for connections to the medium-voltage the preparation of the design and the construction of the connection are undertaken by the customer’s design company. The design has to correspond to the technical requirements set forth by the Law of Spatial Planning (LSP) of 31.03.2001. The design company on behalf of the customer submits the design for approval to the utilities/agencies whose communication lines and activities may be a ected by the new connection (e.g. water, gas, heating, telecoms, re department, etc.). In practice, several copies of the document are prepared to be sent to all agencies simultaneously in order to save time. Once the design has been approved by relevant agencies/utilities, it has to be approved by CEZ Distribution. 3 Apply for and await nal contract 30 calendar days BGN 1,150 Agency : CEZ Distribution Bulgaria The customer has to sign a nal contract with CEZ Distribution within a period of maximum one year after the signature of the preliminary contract. During this period, the customer must have obtained the construction permit for the warehouse, which is required to sign the nal contract. When applying for the nal contract, the customer needs to submit a set of additional documents, including: • Approved building design (only chapters "Architecture" and "Electrical Page 28   installations"); Once the design has been approved by relevant agencies/utilities, it has to Doing be by CEZ Distribution. approved2018 Business Bulgaria 3 Apply for and await nal contract 30 calendar days BGN 1,150 Agency : CEZ Distribution Bulgaria The customer has to sign a nal contract with CEZ Distribution within a period of maximum one year after the signature of the preliminary contract. During this period, the customer must have obtained the construction permit for the warehouse, which is required to sign the nal contract. When applying for the nal contract, the customer needs to submit a set of additional documents, including: • Approved building design (only chapters "Architecture" and "Electrical installations"); • Construction permit for the building (warehouse); • Copy of the preliminary contract. After submitting the application, the customer awaits the nal contract. Within 30 days, the customer is invited to go back to CEZ Distribution’s o ce to receive it. The nal contract speci es all legal and technical terms as well as the responsibilities of the customer and the distribution utility. Upon signature of the signature of the nal contract, the customer pays an administrative fee to CEZ Distribution, which cover all expenses that CEZ Distribution will make throughout the process. Note: Connection fees regulated by DKER do not apply here, as the customer is in charge of conducting and paying for the construction of the connection him/herself. 4 Sign guarantee contract for pavement recovery, obtain construction 49 calendar days BGN 971.75 permit and other authorizations from the Municipality Agency : Customer, So a Municipality, Construction supervision rm This procedure is completed at the Municipality. It involves signing the contract for pavement recovery and obtaining the construction permit for the connection. The customer signs a contract for pavement recovery with the Municipality to guarantee that the pavement will be recovered upon completion of the external works (as it involves excavating under the road/pavement). In parallel, the customer pays a deposit, which will be reimbursed 20% per year over a period of ve years if no damages to the pavement are observed. There are no interests paid on this deposit. The conditions of the guarantee contract and deposit are regulated by the Municipality. Once the contract for pavement recovery has been signed and the deposit paid the Municipality can grant the construction permit for the connection. Within the deadlines set by the Law of Spatial Planning (art. 144(3) and art. 148(4)), the Municipality approves the design and issues the construction. 5 Await completion of external works, inspections and issuance of 84 calendar days BGN 52,185 relevant documents Agency : Construction rm, Construction supervision rm The customer hires a construction and supervision rms to conduct the external connection works and acquire all necessary inspections and approvals. The CEZ Distribution Internal Committee has to provide an approval of the completed external connections work in the form of the protocol of compliance of the completed site (Act 15). In parallel, the municipality reviews the pavement works and prepares a document stating that the pavement is in the required condition—which allows the reimbursement of the rst segment of the deposit paid by the customer. The Permit to Use for the newly built connection (Act 16) is provided by the Commission at the Directorate for National Construction Control (DNSK), according to art. 177.2, LSP based on the approvals received Page 29   from the CEZ Distribution and the Municipality. Within the deadlines set by the Law of Spatial Planning (art. 144(3) and art. Doing 148(4)), Business the Municipality 2018 Bulgariaapproves the design and issues the construction. 5 Await completion of external works, inspections and issuance of 84 calendar days BGN 52,185 relevant documents Agency : Construction rm, Construction supervision rm The customer hires a construction and supervision rms to conduct the external connection works and acquire all necessary inspections and approvals. The CEZ Distribution Internal Committee has to provide an approval of the completed external connections work in the form of the protocol of compliance of the completed site (Act 15). In parallel, the municipality reviews the pavement works and prepares a document stating that the pavement is in the required condition—which allows the reimbursement of the rst segment of the deposit paid by the customer. The Permit to Use for the newly built connection (Act 16) is provided by the Commission at the Directorate for National Construction Control (DNSK), according to art. 177.2, LSP based on the approvals received from the CEZ Distribution and the Municipality. Once the works are completed, a digitalized geodesist image of the connection is taken and is added to the project documentation by the construction supervision company. Together with the technical passport of the construction, this documentation is archived at the Regional and State Agencies for Geodesy Cartography and Cadaster 6 Conclude contract with electricity supplier and await meter installation 7 calendar days BGN 0 and electricity ow Agency : CEZ Electro Bulgaria/CEZ Distribution Bulgaria AD Once the Act 16 has been issued, the customer concludes a supply contract with an electricity supplier of his/her choice, which in most cases is CEZ Electro. The customer is informed when the meter will be installed, tested (72-hour test) and activated, and once the electricity is owing. Takes place simultaneously with previous procedure. Details – Getting Electricity in Bulgaria – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 5.0 System average interruption frequency index (SAIFI) 4.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Page 30   Takes place simultaneously with previous procedure. Doing Business 2018 Bulgaria Details – Getting Electricity in Bulgaria – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 5.0 System average interruption frequency index (SAIFI) 4.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on 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://www.cez.bg/b g/za-klienta/bitovi-i- nebitovi- klienti/calculator- konsumacia.html 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 31   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 Bulgaria 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 purchase. Quality of land administration index (0-30) - 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 BGN 643,901.30 City Covered Sofia Page 32   Europe & OECD high Doing Business 2018 Bulgaria Standard Property Transfer Property value BGN 643,901.30 City Covered Sofia Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Procedures (number) 8 5.3 4.6 1.00 (4 Economies) Time (days) 19 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 2.9 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 19.0 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.09: Hungary (Rank: 29) 79.68: Czech Republic (Rank: 32) 76.49: Poland (Rank: 38) 76.02: Regional Average (Europe & Central Asia) 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 Bulgaria – Procedure, Time and Cost Time Cost 3.5 18 16 3 Cost (% of property value) 14 2.5 12 Time (days) 2 10 8 1.5 6 1 4 0.5 2 0 0 1 *2 *3 *4 *5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 33   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 Bulgaria Figure – Registering Property in Bulgaria – Procedure, Time and Cost Time Cost 3.5 18 16 3 Cost (% of property value) 14 2.5 12 Time (days) 2 10 8 1.5 6 1 4 0.5 2 0 0 1 *2 *3 *4 *5 6 7 8 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 Bulgaria and comparator economies – Measure of Quality 30 25.0 26.0 25 19.0 19.5 19.8 20 Index score 15 10 4.5 5 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Registering Property in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the tax clearance certi cate 7 days No cost Agency : National Revenue Agency (simultaneous with Procedures 2, 3, 4 The tax clearance certi cate, showing that no taxes are owed, is obtained and 5) from the local tax department for the seller, according to Taxation and Insurance Procedure Code in e ect as of 1 January 2006, namely Art. 87, paragraph 6. 2 Obtain the tax valuation of a property 3 days BGN 17 for 5-day Agency : So a Municipality - Local Taxes and Fees Department (simultaneous with procedure, BGN procedures 1, 3, 4, 25.50 for 3-day The tax valuation is the basis for calculating the fees for notary deeds only in and 5) procedure and BGN case when the Purchase (sale) price is equal to the Tax Valuation price, in Page 34   34 for 1-day Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Doing Business 2018 Bulgaria Details – Registering Property in Bulgaria – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the tax clearance certi cate 7 days No cost Agency : National Revenue Agency (simultaneous with Procedures 2, 3, 4 The tax clearance certi cate, showing that no taxes are owed, is obtained and 5) from the local tax department for the seller, according to Taxation and Insurance Procedure Code in e ect as of 1 January 2006, namely Art. 87, paragraph 6. 2 Obtain the tax valuation of a property 3 days BGN 17 for 5-day Agency : So a Municipality - Local Taxes and Fees Department (simultaneous with procedure, BGN procedures 1, 3, 4, 25.50 for 3-day The tax valuation is the basis for calculating the fees for notary deeds only in and 5) procedure and BGN case when the Purchase (sale) price is equal to the Tax Valuation price, in 34 for 1-day case if the Sale price is higher than the basis is Sale Price - or the higher Price procedure is always a Basis but not less that the Tax Valuation Price. The tax valuation is basis for calculation of the tax at acquisition of property, too. According to the Local Taxes and Fees Act a basis for determining the tax shall be the valuation of the property in BGN by the moment of transfer (art. 46). The immovable property shall be valued according to the agreed price or the tax valuation if it is higher than the agreed price. The value of the taxes is determined in Schedule 5 to the Ordinance for the de nition and administration of local taxes and prices of services provided by the So a Municipality (http://so acouncil.bg/?page=ordinance&id=75) last updated 12.09.2013 3 Obtain the non-encumbrance certi cate from the Real Estate Register Regular service (7 BGN 20 for regular Agency : Registry Agency of Bulgaria days); Fast service service (7 working (3 days); days), BGN 60 for The express Procedures are implemented in the Tari for the state fees (simultaneous with Fast service (3 collected by the Registry Agency, published in State Gazette, issue 94 of 25 procedures 1, 2, 4, working days) November 2005, last amended by State Gazette issue 106 of 23 December and 5) 2014. 4 The sketch of the estate is drafted by the Geodesy, Cartography and Ordinary service – 7 BGN 40 for a fast 3- Cadaster Agency days; Fast service - days procedure and Agency : Local Geodesy, Cartography and Cadastre Service 3 days. BGN 20 for a regular 7-days procedure. If The draft of the estate is a graphic sketch of the estate with its borders, obtained online, a square meters, and number of the area where the estate is situated. This 30% discount draft is issued at the Cadastre of Real Estate. If the sketch is for a real estate applies. in the urban area, principally, the sketch is issued by the Local Geodesy, Cartography and Cadastre Service. In case the sketch is required for agricultural land, the sketch is issued by the respective municipal agricultural service. If for the respective territory there is no cadastre card adopted and approved, then the sketch is then issued by the Municipality. 5 Issuance of certi cates of good standing for seller and buyer Less than a day Hard copy Agency : Registration Agency (online procedure, document: BGN 5 simultaneous with first page, BGN 2 Certi cates are issued by the Registry Agency. As of January 1, 2008 all Procedures 1, 2, 3, every following. companies in Bulgaria are registered into the new centralized Business Page 35   and 4) Register. The companies must have been registered by 31 December 2011 service. If for the respective territory there is no cadastre card adopted and Doing approved, Business then the sketch 2018 is then issued by the Municipality. Bulgaria 5 Issuance of certi cates of good standing for seller and buyer Less than a day Hard copy Agency : Registration Agency (online procedure, document: BGN 5 simultaneous with first page, BGN 2 Certi cates are issued by the Registry Agency. As of January 1, 2008 all Procedures 1, 2, 3, every following. companies in Bulgaria are registered into the new centralized Business and 4) Register. The companies must have been registered by 31 December 2011 Electronic document: into the Business Register. Companies that are not registered in the BGN 2.50 for the first Business Register have been liquidated since 1 January, 2012. page and BGN 1.50 Certi cates are issued in order to make sure that the company is registered and active. Certi cates for good standing are issued online since 2009. for each consequent page (Art. 15g of the Tariff for the state fees collected by the Registry Agency, published in State Gazette, issue 94 of 25 November 2005, last amended by State Gazette issue 106 of 23 December 2014. 6 The notary executes the transfer deed 1 day 1. Property Transfer Agency : Notary Public operating within the So a Regional Court Tax According to Art. 47, The notary executes the transfer deed and collects the money for payment para. 2 of the Local of the state fee (transfer tax) and the registration fee. Usually the notary Taxes and Fees Act pays the state and registration fees. This is done for the clients’ convenience. (“LTFA”), the local tax The parties can pay the fees at the account of the tax authority where the for transfer of estate is situated and bring the receipts to the notary. Local tax for acquisition of real estate varies between 0.1% to 3% of either the (i) the property that should purchase price or (ii) the tax evaluation of the real estate (whichever one is be paid in case of higher). The local tax is subject to determination by each municipality on property purchase yearly basis. The local tax in Sophia increased from 2% to 2.5% in 07.03.2008 varies between 0.1 % according to the Local Taxes and Fees Act. and 3 % over the sale prices (or tax evaluation if higher), whereat each municipal council has the authority to set the actual rate within these borders. Currently, the amount of the property transfer tax (for all kinds of property transfers except for donations) for the region of Sofia Municipality, determined with an Ordinance (Art. 35, para. 2 of the Ordinance for determining the amounts of the local Page 36   fees) of the Sofia City para. 2 of the Ordinance for Doing Business 2018 Bulgaria determining the amounts of the local fees) of the Sofia City Council, is 2.5 % of the sale price (or tax evaluation if higher). In the above case scenario, the property transfer tax should amount to BGN 12,812.86 2. State fee for registration of the Notary Deed in the Property Register – Office Sofia According to Art. 2, para. 1 of the Tariff for the fees collected by the Registry Agency, the fee for registration of notary deeds (as well as other documents that may serve as property ownership titles) is 0.1 % over the sale price, but not less than BGN 10. In the case study above, the fee should amount to BGN 512.51. 3. Notary fees for execution of the property transfer and certification of the notary deed According to Art. 8 of the Tariff for the notary fees, the notary fee is calculated on the basis of the sale price/tax evaluation of higher (the so called “material interest”) in the following manner. For property transfers with material interest: 1. Up to BGN 100 – Page 37   the notary fee is BGN For property transfers with Doing Business 2018 Bulgaria material interest: 1. Up to BGN 100 – the notary fee is BGN 30 2. From BGN 101 - to BGN 1,000 – the notary fee is BGN 30 + 1,5 % of excess over BGN 100 3. From BGN 1001 - to BGN 10,000 – the notary fee is BGN 43,50 + 1,3 % of excess over BGN 1,000 4. From BGN 10 001 - to BGN 50,000 – the notary fee is BGN 160,50 + 0,8 % of excess over BGN 10,000 5. From BGN 50 001 - to BGN 100,000 – the notary fee is BGN 480,50 + 0,5 % of excess over BGN 50,000 6. From BGN 100 001 - to BGN 500,000 – the notary fee is BGN 730,50 + 0,2 % of excess over BGN 100,000 7. Over BGN 500,000 – the notary fee is BGN 1530,50 + 0,1 % of excess over BGN 500,000 but no more than BGN 6,000. In the case study above, the notary fees should amount BGN 1,543.01. The total expenses on the procedure before the notary public, given the assumptions of the case study, are in the amount of BGN 14,868.38. 7 Registration of notarized deed at the Registry 10 days Already paid in Agency : Registration Agency Procedure 6 Page 38   The notary will register the notarized deed at the registration o ce with the amount of BGN Doing Business 2018 Bulgaria 14,868.38. 7 Registration of notarized deed at the Registry 10 days Already paid in Agency : Registration Agency Procedure 6 The notary will register the notarized deed at the registration o ce with the respective district court. This can be done by the parties too, but it is most common that the notary will do it (and it is included in the above fees). The notary will pay registration and state fees collected previously. Registration should take 1 day, but it can take up to 3 days during busy periods. According to Art.25, para 5 of the Notary Public and Notarial Activity Law of 2009 (last amendment of the Notary Public and Notarial Activity Act was promulgated in State Gazette, issue 82 of 16 October 2009, http://dv.parliament.bg/DVWeb/broeveList.faces), the notary now has to submit the notarized deed in the same day it is signed. In practice, this generally happens in Sophia. The notarized deed will be registered by the Notary Public with the respective o ce of the Registry Agency. The Notary Public and Notarial Activity Law last amended by State Gazette issue 82 of October 21, 2011. If a notary public does not perform their obligation for entry of a notary deed or other notary certi ed act with the real estate register, the interested persons are entitled to claim the su ered damages. Furthermore, the interested persons may address the Notary Chamber regarding the violations of the notary's obligations. This may entail disciplinary proceedings against the respective notary public. This amendment also ensures that the notaries public have access to the National Database "Population" and to the National Automatic Information Fund for personal identity documents. It also introduced an obligation for the notaries public to make special checks in the database and the fund when performing notary certi cations connected to rights over real estates. 8 Registration of the new owner by the Local Taxes and Fees Department 1 day No cost of the competent Municipality Agency : Local Taxes and Fees Department at the respective Municipality According to Art. 14 of the LTFA, for any newly acquired property, the owner is obliged to submit a declaration to the municipal authorities, where the property is located. The owner must attach a copy of his ownership title (notary deed, etc.) to the declaration before ling it. The new owner must submit a declaration before the municipal authorities within 2 months as of the date of acquisition of the property. The purpose of the declaration is to indicate the new owner of the real estate before the municipal authorities with regard to the calculation of the local tax for owning of a real estate and the waste tax that are due according to Art. 10 and Art. 62 of the LTFA. Takes place simultaneously with previous procedure. Details – Registering Property in Bulgaria – Measure of Quality Page 39   Takes place simultaneously with previous procedure. Doing Business 2018 Bulgaria Details – Registering Property in Bulgaria – Measure of Quality Answer Score Quality of the land administration index (0-30) 19.0 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Registry O ce - So a at the Registry Agency - Property Register 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: Geodesy, Cartography and Cadastre Agency or So a Municipality 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 Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked 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) 4.0 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.prop erty-in- bulgaria.bg/en/B uying_and_sellin g_property/Requ ired_Documents 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? Page 40   Link for online access: http://www.regist g_property/Requ Doing Business 2018 Bulgaria ired_Documents 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.regist ryagency.bg/med ia/ ler_public/12/ d1/12d190c6- f39d-4b50-8e19- 7cd8deea4f45/ta rifa_za_dt_sabira ni_ot_ra_2312201 4_all.pdf 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: https://www.nota ry- chamber.org/ le s/%20%D0%97% D0%90%20%D0% 92%D0%9F%D0% 98%D0%A1%D0% 92%D0%90%D0% 9D%D0%98%D0 %AF%D0%A2%D0 %90.pdf 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: 31,515 is the total number of property transfers that took place in So a in 2016 including donations and exchanges (26,480 excluding donations and exchanges) 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.gis- Page 41   pays the o cial Doing Business 2018 Bulgaria 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.gis- so a.bg/js/backe nd/tiny_mce/plu gins/ajax leman ager/upload/ceni _01_08_2014.pdf http://www.gis- so a.bg/js/backe nd/tiny_mce/plu gins/ajax leman ager/upload/cen orazpis_EN_nov_ 01.08.pdf Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 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; Interested Parties. Page 42   property transaction (e.g., checking the compliance of contracts with requirements of the law)? Doing Business 2018 Bulgaria If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. 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 First Instance property worth 50 times gross national income (GNI) per capita and located in the court shall be largest business city, what court would be in charge of the case in the rst instance? the So a City Court according to Art 104 and Art 109 of the Civil Procedural code How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Page 43   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Bulgaria 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 Bulgaria Central Asia income Overall Best Performer Strength of legal rights index (0-12) 9 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 5 6.3 6.6 8.00 (34 Economies) Page 44   Credit registry coverage (% of adults) 74.3 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Bulgaria Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Strength of legal rights index (0-12) 9 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 5 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 74.3 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 0.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Hungary (Rank: 29) 75.00: Poland (Rank: 29) 70.00: Bulgaria (Rank: 42) 70.00: Czech Republic (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 Bulgaria and comparator economies 12 10 10 9 8 Index score 7 7 6.6 6 4 3 2 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Legal Rights in Bulgaria Strength of legal rights index (0-12) 9 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 Yes requiring a speci c description of collateral? Page 45   Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Doing Business 2018 Bulgaria Details – Legal Rights in Bulgaria Strength of legal rights index (0-12) 9 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 Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No 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 Yes 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 Bulgaria and comparator economies 10 8 8 7 7 6.3 Index score 6 5 5 4 2 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Credit Information in Bulgaria Page 46   0 Bulgaria Doing Business 2018 Czech Republic Bulgaria Greece Hungary Poland Europe & Central Asia Details – Credit Information in Bulgaria Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more No No 0 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? No Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, No Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 5 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 3,309,444 Number of firms 0 155,635 Total 0 3,465,079 Percentage of adult population 0.0 74.3 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 47   transactions; Available legal remedies (damages, Percentage of adult population 0.0 74.3 Doing Business 2018 Bulgaria 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 Bulgaria Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.3 6.6 6.4 Page 48   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Bulgaria Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 7.3 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 70.00: Bulgaria (Rank: 24) 64.31: Regional Average (Europe & Central Asia) 63.33: Greece (Rank: 43) 61.67: Poland (Rank: 51) 58.33: Czech Republic (Rank: 62) 50.00: Hungary (Rank: 108) 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 Bulgaria and comparator economies – Measure of Quality Bulgaria 9 2 10 5 8 8 Czech Republic 5 6 2 7 6 9 Greece 8 4 7 7 7 5 Hungary 7 4 2 5 6 6 Poland 8 2 7 5 6 9 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 5 10 15 20 25 30 35 40 45 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 Bulgaria – Measure of Quality Answer Score Page 49   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Bulgaria Details – Protecting Minority Investors in Bulgaria – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.7 Extent of disclosure index (0-10) 10 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts 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- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 2 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 Not liable 0.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Not liable 0.0 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 No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith 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 Page 50   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Bulgaria 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 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) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 7.3 Extent of shareholder rights index (0-10) 8 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 Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5 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? Yes 1.0 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 Yes 1.0 board members? Page 51   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of Doing their term? Business 2018 Bulgaria Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 9 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 Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general 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 No 0.0 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. Page 52   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 Bulgaria Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Payments (number per year) 14 16.5 10.9 3 (Hong Kong SAR, China) Page 53   return, but within the tax assessment period. Doing Business 2018 Bulgaria Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Payments (number per year) 14 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 453 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 27.1 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 69.30 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.42: Poland (Rank: 51) 79.26: Czech Republic (Rank: 53) 76.97: Greece (Rank: 65) 75.78: Regional Average (Europe & Central Asia) 71.78: Bulgaria (Rank: 90) 71.49: Hungary (Rank: 93) 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 Bulgaria and comparator economies – Measure of Quality 100 90.75 90 75.70 77.36 80 69.30 70 63.94 65.20 Index score 60 50 40 30 20 10 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Paying Taxes in Bulgaria Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) TTR onPage 54   Doing Business 2018 Bulgaria Figure – Paying Taxes in Bulgaria and comparator economies – Measure of Quality 100 90.75 90 75.70 77.36 80 69.30 70 63.94 65.20 Index score 60 50 40 30 20 10 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Paying Taxes in Bulgaria Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Social security 1 online 256 17.8%-18.5% gross salaries 20.19 contributions Corporate income tax 1 online 32 10% taxable income 5.01 Fees for municipal 4 BGN1340+0.37% tax value of land 0.77 services (garbage and building collection fee) - Sofia Registry fee of 1 notary fees of higher of tax 0.52 property transfer BGN 6,000 and value and agreed 0.1% of sales price value of real estate Vignette 1 BGN 1743 type of vehicle 0.29 Real estate tax on the 1 0.1875% tax value of land 0.26 land and building and building Vehicle tax 1 BGN 296, discount per truck 0.05 available Insurance premium tax 1 withheld 2% insurance 0.02 amount Final/one-off tax on 1 online 10% gross expenses 0.00 small certain expenses amount Fuel tax 1 included in the 0.00 small price of fuel amount Employee paid - Social 0 online 12.9% gross salaries 0.00 withheld security contributions and jointly Value added tax (VAT) 1 online 165 20% value added 0.00 not included Page 55   security contributions and Doing Business 2018 Bulgaria jointly Value added tax (VAT) 1 online 165 20% value added 0.00 not included Totals 14 453 27.1 Details – Paying Taxes in Bulgaria – Tax by Type Taxes by type Answer Profit tax (% of profit) 5.0 Labor tax and contributions (% of profit) 20.2 Other taxes (% of profit) 1.9 Details – Paying Taxes in Bulgaria – Measure of Quality Answer Score Post ling index (0-100) 69.30 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 2 months Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 15.0 70 Time to obtain a VAT refund (weeks) 27.4 53.27 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 50% - 74% Time to comply with a corporate income tax audit (hours) 12.5 79.82 Time to complete a corporate income tax audit (weeks) 8.3 74.11 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 56   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not Doing applicable. Business 2018 Bulgaria Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 57   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Bulgaria Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 58   of agriculture or industry, national security agencies and any other Doing Business 2018 Bulgaria government authorities. Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Time to export: Border compliance (hours) 4 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 55 191.4 149.9 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) 52 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 1 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 0 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 1 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 0 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.41: Bulgaria (Rank: 21) 93.72: Greece (Rank: 29) 83.96: Regional Average (Europe & Central Asia) 100.00: Czech Republic (Rank: 1) 100.00: Hungary (Rank: 1) 100.00: Poland (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 Bulgaria – Time and Cost Time Cost 4.5 55 60 4 52 4 50 3.5 3 40 Time (hours) Cost (USD) 2.5 2 30 2 1.5 20 1 1 1 10 0.5 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 59   Doing Business 2018 Bulgaria Figure – Trading across Borders in Bulgaria – Time and Cost Time Cost 4.5 55 60 4 52 4 50 3.5 3 40 Time (hours) Cost (USD) 2.5 2 30 2 1.5 20 1 1 1 10 0.5 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Bulgaria Characteristics Export Import Product HS 74 : Copper and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner Turkey Germany Border Svilengrad border crossing Bulgaria- Romania border crossing Distance (km) 290 55 Domestic transport time (hours) 6 3 Domestic transport cost (USD) 400 115 Details – Trading across Borders in Bulgaria – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.4 55.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.4 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.5 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in Bulgaria – Trade Documents Export Import Commercial Invoice CMR waybill Packing List Commercial invoice Page 60   Domestic transport cost (USD) 400 115 Doing Business 2018 Bulgaria Details – Trading across Borders in Bulgaria – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.4 55.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.4 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.5 0.0 Import: Port or border handling 0.5 0.0 Details – Trading across Borders in Bulgaria – Trade Documents Export Import Commercial Invoice CMR waybill Packing List Commercial invoice Customs Export Declaration Intrastat Certificate of origin Packing list CMR 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) Page 61   - The seller requests a pretrial attachment to secure the claim. Case management (0-6) CMR Doing Business 2018 Bulgaria 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 BGN 23,067.00 Court name Sofia Regional Court City Covered Sofia Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Time (days) 564 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 18.6 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 10.5 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 67.04: Bulgaria (Rank: 40) 65.38: Regional Average (Europe & Central Asia) Page 62   of judicial processes Quality Business Doing index (0-18) 2018 Bulgaria 10.5 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 67.04: Bulgaria (Rank: 40) 65.38: Regional Average (Europe & Central Asia) 63.44: Poland (Rank: 55) 58.21: Czech Republic (Rank: 91) 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 Bulgaria – Time and Cost Time Cost 1800 40 33.8 1580 1600 35 Cost (% of claim value) 1400 30 26.2 1200 Time (days) 21.5 25 1000 18.6 19.4 20 800 14.4 15.0 685 564 611 605 577.8 15 600 489.9 400 10 200 5 0 0 Bulgaria Czech Republic Europe & Greece Hungary OECD high income Poland Central Asia Figure – Enforcing Contracts in Bulgaria and comparator economies – Measure of Quality Bulgaria 2.5 2.5 2 3.5 Czech Republic 2 3 3 1.5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 Poland 3 1.5 1.5 4.5 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 63   16 Bulgaria Czech Republic Europe & Greece Hungary OECD high income Poland Central Asia Doing Business 2018 Bulgaria Figure – Enforcing Contracts in Bulgaria and comparator economies – Measure of Quality Bulgaria 2.5 2.5 2 3.5 Czech Republic 2 3 3 1.5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 Poland 3 1.5 1.5 4.5 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 Bulgaria Indicator Time (days) 564 Filing and service 105 Trial and judgment 334 Enforcement of judgment 125 Cost (% of claim value) 18.6 Attorney fees 10 Court fees 5.6 Enforcement fees 3 Quality of judicial processes index (0-18) 10.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 2.5 Court automation (0-4) 2.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Bulgaria – Measure of Quality Page 64   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Bulgaria Details – Enforcing Contracts in Bulgaria – Measure of Quality Answer Score Quality of judicial processes index (0-18) 10.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 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 1.0 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? Yes 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 No 0.0 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 65   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Bulgaria 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) 2.5 1. Arbitration 1.0 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 Yes 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 66   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 Bulgaria 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 Bulgaria Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 36.0 38.0 71.2 93.1 (Norway) Time (years) 3.3 2.3 1.7 0.4 (Ireland) Page 67   Cost (% of estate) 9.0 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Bulgaria Europe & OECD high Indicator Bulgaria Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 36.0 38.0 71.2 93.1 (Norway) Time (years) 3.3 2.3 1.7 0.4 (Ireland) Cost (% of estate) 9.0 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) 13.0 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Bulgaria and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 77.71: Poland (Rank: 22) 76.69: Czech Republic (Rank: 25) 60.02: Bulgaria (Rank: 50) 55.59: Greece (Rank: 57) 54.75: Hungary (Rank: 62) 54.19: Regional Average (Europe & Central Asia) 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 Bulgaria – Time and Cost Time Cost 4 17.0 18 3.5 3.5 3.3 14.5 15.0 16 13.1 3.0 3 14 Cost (% of estate) Time (years) 2.3 12 2.5 9.0 2.1 9.0 2.0 9.1 10 2 1.7 8 1.5 6 1 4 0.5 2 0 0 Bulgaria Czech Republic Europe & Greece Hungary OECD high income Poland Central Asia Figure – Resolving Insolvency in Bulgaria and comparator economies – Measure of Quality Bulgaria 4 2.5 4 2.5 Page 68   Czech Republic 5.5 2.5 2 3 Bulgaria Czech Republic Europe & Greece Hungary OECD high income Poland Central Asia Doing Business 2018 Bulgaria Figure – Resolving Insolvency in Bulgaria and comparator economies – Measure of Quality Bulgaria 4 2.5 4 2.5 Czech Republic 5.5 2.5 2 3 Greece 5.5 2.5 1 3 Hungary 5 2.5 2 0.5 Poland 6 3 2 3 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 16 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 Bulgaria and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 80 70 67.0 63.1 60 50 43.7 36.0 38.0 40 33.6 30 20 10 0 Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Details – Resolving Insolvency in Bulgaria Indicator Answer Explanation Proceeding liquidation Mirage management must initiate insolvency proceedings when the state of insolvency is discovered. Mirage may propose a restructuring plan (within 30 days), however, acceptance of this plan is not very likely. Hence, the court will declare Mirage bankrupt and initiate liquidation proceedings. Outcome piecemeal sale As a result of the liquidation proceedings, Mirage will be liquidated and its assets will be sold piecemeal. Very few companies survive insolvency proceedings as a going concern. Time (in years) 3.3 Bizbank will first declare the default of Mirage in written form and will invite it to pay the debt. Mirage management will file for bankruptcy with the appropriate court. The court will appoint an expert witness, who will give an opinion on the economical state of Mirage. The court will appoint hearing of the expert witness and later will declare the insolvency of Page 69   Mirage with a decision starting the bankruptcy proceedings. The period between filing for Bulgaria Czech Republic Greece Hungary Poland Europe & Central Asia Doing Business 2018 Bulgaria Details – Resolving Insolvency in Bulgaria Indicator Answer Explanation Proceeding liquidation Mirage management must initiate insolvency proceedings when the state of insolvency is discovered. Mirage may propose a restructuring plan (within 30 days), however, acceptance of this plan is not very likely. Hence, the court will declare Mirage bankrupt and initiate liquidation proceedings. Outcome piecemeal sale As a result of the liquidation proceedings, Mirage will be liquidated and its assets will be sold piecemeal. Very few companies survive insolvency proceedings as a going concern. Time (in years) 3.3 Bizbank will first declare the default of Mirage in written form and will invite it to pay the debt. Mirage management will file for bankruptcy with the appropriate court. The court will appoint an expert witness, who will give an opinion on the economical state of Mirage. The court will appoint hearing of the expert witness and later will declare the insolvency of Mirage with a decision starting the bankruptcy proceedings. The period between filing for bankruptcy and the decision takes 3-12 months. The court will schedule a date for the first meeting of the creditors and invite them to file their claims. The invitation will be published online on the website of the Commercial Registry. The creditors must file their claims within a month, but can have an extension of 2 months to file their claims. If they miss the deadline, they cannot file their claims. At the first meeting, the creditors will choose a permanent official receiver (called "syndik") and the creditor's committee will be established. The syndik will review the claims, decide which of them have grounds and file a list of the accepted claims and another list of the unaccepted claims with the court and in the Commercial Registry. The creditors may object against the lists. The court will review the objections and will decide which of them have grounds. This process can take about 5 months. Mirage may propose a reorganization plan within 30 days after the final list of claims has been published. If there is such plan, a second meeting of the creditors should be scheduled, where creditors will vote for the plan. Bizbank will reject the plan, as it is a privileged creditor and will get all the money from the public sale. This process can take 5 months or longer. After rejecting the plan, the court will declare Mirage bankrupt and will start the procedure of turning the assets of Mirage into cash. One or two public sales will be held for the hotel and one or two public sales for the rest of the property (including the movable assets like furniture, etc.). If the syndik does not succeed in selling the property at the public sales, he will sell the property directly, without a public sale, after the court's approval. After turning the assets into cash, he will prepare lists of amounts to be distributed among the creditors. The creditors may appeal before the court against the lists. Meanwhile, the syndik must collect all amounts owed to Mirage by its debtors (if there are any). When no assets are left, the official receiver will prepare a final report to the court and the creditors, and a final meeting of the creditors will be held. The court will declare the end of the procedure and will erase Mirage from the Commercial Registry. The sale process can take about 15 months. Cost (% of 9.0 The cost of the liquidation procedure would amount to approximately 9% of the value of the estate) hotel. The cost would mainly include: attorneys’ fees - 3%, fees of the bankruptcy trustee (syndik) - about 4%, and fees of accountants and other experts - 2%. Recovery rate (cents on the 36.0 dollar) Details – Resolving Insolvency in Bulgaria – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 13.0 Page 70   dollar) Doing Business 2018 Bulgaria Details – Resolving Insolvency in Bulgaria – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 13.0 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) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit 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) 2.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 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 Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 4.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Page 71   Creditor Doing participation Business 2018 index (0-4) Bulgaria 4.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request Yes 1.0 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) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 72   work of equal value and nondiscrimination based on 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 Bulgaria 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 Bulgaria Answer Hiring Page 73   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Bulgaria Details – Labor Market Regulation in Bulgaria Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) 36.0 Maximum length of xed-term contracts, including renewals (months) 36.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 266.8 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 7.6 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? Yes 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? No Page 74   Third-party Doing approval Business 2018 if nine workers are dismissed? Bulgaria No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 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? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 410.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 9.0 Business Reforms in Bulgaria 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 Bulgaria implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2017 Getting Electricity: Bulgaria increased the reliability of power supply by implementing an automatic energy management system, the Supervisory Control and Data Acquisition (SCADA), to monitor outages and service restoration. DB2015 Starting a Business: Bulgaria made starting a business easier by lowering registration fees. DB2014 Page 75   Minimum contribution period for unemployment protection (months)? 9.0 Doing Business 2018 Bulgaria Business Reforms in Bulgaria 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 Bulgaria implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2017 Getting Electricity: Bulgaria increased the reliability of power supply by implementing an automatic energy management system, the Supervisory Control and Data Acquisition (SCADA), to monitor outages and service restoration. DB2015 Starting a Business: Bulgaria made starting a business easier by lowering registration fees. DB2014 Resolving Insolvency: Bulgaria made resolving insolvency easier by expanding the basis for commencement of insolvency proceedings and making it easier to void suspect transactions. DB2013 Starting a Business: Bulgaria made starting a business easier by reducing the cost of registration. DB2012 Getting Credit: Bulgaria made access to credit information more di cult by stopping the distribution of credit reports to nancial institutions by the private credit bureau (Experian). Trading across Borders: Bulgaria made trading across borders faster by introducing online submission of customs declaration forms. Resolving Insolvency: Bulgaria amended its commerce act to extend further rights to secured creditors and increase the transparency of insolvency proceedings. DB2011 Starting a Business: Bulgaria eased business start-up by reducing the minimum capital requirement from 5,000 leva ($3,250) to 2 leva ($1.30). Paying Taxes: Bulgaria reduced employer contribution rates for social security. DB2010 Starting a Business: Bulgaria made starting a business easier by reducing the paid-in minimum capital requirement and enhancing e ciency at the company registry. Registering Property: Bulgaria reduced the time required to register property by launching an integrated web-based property register making it possible to check the ownership and cadastre status of properties online. DB2009 Starting a Business: Bulgaria made starting a business easier by creating a centralized electronic database for commercial registration, consolidating registration procedures and eliminating some registration formalities. Dealing with Construction Permits: Bulgaria made dealing with construction permits more complicated by increasing the fees, time and number of procedures for obtaining construction-related approvals. Paying Taxes: Bulgaria made paying taxes easier for companies by introducing new corporate income and value added tax laws, abolishing the requirement for an additional annual value added tax return and reducing the employer share of social security contributions. Page 76   Enforcing Contracts: Bulgaria improved its contract enforcement system by amending rules for evidence and default judgment, Paying Taxes: Bulgaria made paying taxes easier for companies by introducing new corporate income and value added tax laws, Doing Business abolishing Bulgaria 2018 for the requirement an additional annual value added tax return and reducing the employer share of social security contributions. Enforcing Contracts: Bulgaria improved its contract enforcement system by amending rules for evidence and default judgment, raising the minimum threshold value for the lower jurisdiction and giving the civil court of last instance the power to select which cases to hear so as to limit abuse of the appeals process. Resolving Insolvency: Bulgaria adopted a new civil procedure code and a new law for the commercial registry, introducing changes expected to reduce delays and allow for faster resolution of bankruptcy. Among other things, the commercial registry law requires that major decisions and rulings of the bankruptcy court be posted on the commercial registry’s website. DB2008 Dealing with Construction Permits: Bulgaria made dealing with construction permits easier by adopting new legislation clarifying the process. Paying Taxes: Bulgaria made paying taxes easier and less costly for companies by encouraging electronic ling and payment and by reducing the corporate income tax rate and employers’ social security contribution rate. Enforcing Contracts: Bulgaria made enforcing contracts easier by introducing changes to its judicial system, increasing transparency in the system and appointing private baili s. Page 77   Enforcing Contracts: Bulgaria made enforcing contracts easier by introducing changes to its judicial system, increasing transparency 2018 and in the system Doing Business appointing private baili s. Bulgaria Page 78