Doing Business 2018 Nicaragua Economy Pro le of Nicaragua 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 Nicaragua 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 Latin America & DB 2018 Rank Region 190 1 Caribbean Nicaragua Income Category Lower middle income 131 DB 2018 Distance to Frontier (DTF) Population 6,149,928 0 100 GNI Per Capita (US$) 2,050 55.39 City Covered Managua DB 2018 Distance to Frontier (DTF) 0 100 69.41: Colombia (Rank: 59) 69.13: Costa Rica (Rank: 61) 66.42: El Salvador (Rank: 73) 65.27: Panama (Rank: 79) 58.66: Regional Average (Latin America & Caribbean) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Nicaragua Ease of Doing Business in Latin America & DB 2018 Rank Region 190 1 Caribbean Nicaragua Income Category Lower middle income 131 DB 2018 Distance to Frontier (DTF) Population 6,149,928 0 100 GNI Per Capita (US$) 2,050 55.39 City Covered Managua DB 2018 Distance to Frontier (DTF) 0 100 69.41: Colombia (Rank: 59) 69.13: Costa Rica (Rank: 61) 66.42: El Salvador (Rank: 73) 65.27: Panama (Rank: 79) 58.66: Regional Average (Latin America & Caribbean) 55.39: Nicaragua (Rank: 131) 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 - Nicaragua 1 28 55 74 82 87 Rank 100 102 105 109 138 136 148 159 167 163 174 190 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 - Nicaragua 100 79.61 78.99 80 68.33 58.58 60 DTF 52.86 48.85 45.82 45.00 40.89 40 35.00 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:+0.14 Change:-0.01 Change:0.00 Investors Change:-0.16 Borders Change:0.00 Change:+0.23 Change:+0.33 Permits Change:0.00 Change:0.00 Change:+0.40 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.14 Change:-0.01 Change:0.00 Investors Change:-0.16 Borders Change:0.00 Change:+0.23 Change:+0.33 Permits Change:0.00 Change:0.00 Doing Business 2018 Nicaragua Change:+0.40 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 Nicaragua Standardized Company Legal form Sociedad Anónima (S.A.) - Corporation Paid-in minimum capital requirement NIO 0 City Covered Managua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Procedure – Men (number) 7 8.4 4.9 1.00 (New Zealand) Time – Men (days) 14 31.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 65.4 37.5 3.1 0.00 (United Kingdom) Procedure – Women (number) 7 8.5 4.9 1.00 (New Zealand) Time – Women (days) 14 31.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 65.4 37.5 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 2.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.02: Panama (Rank: 39) 85.32: Colombia (Rank: 96) 81.65: Costa Rica (Rank: 127) 79.61: Nicaragua (Rank: 138) 78.88: El Salvador (Rank: 140) 78.09: Regional Average (Latin America & Caribbean) 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 Nicaragua – Procedure, Time and Cost Time Cost 14 45 40 12 ost (% of income per capita) 35 10 30 Time (days) 8 25 6 20 15 4 Page 6   10 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Nicaragua Figure – Starting a Business in Nicaragua – Procedure, Time and Cost Time Cost 14 45 40 12 Cost (% of income per capita) 35 10 30 Time (days) 8 25 6 20 15 4 10 2 5 0 0 1 2 3 *4 5 6 *7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Sign the incorporation papers before a notary public 3 days USD 875 Agency : Public Notary The documents of incorporation and the company bylaws must be drafted by a notary public. It is customary to include the company bylaws in the document of incorporation. Most notaries will also perform the remaining steps (explained in the following steps) in the incorporation process, for a fee of USD 200 (on average). The notary cost is in between USD 750–1,000. 2 Buy the company's accounting and corporate books 1 day NIO 800 Agency : Bookstore According to Article 28 of the Commercial Code, all companies must keep four corporate books: two accounting books (diary and ledger) and two corporate books (minute book and share book). The cost of the books may vary from one bookstore to another. 3 File the company's deeds (acta constitutiva), register the accounting 1 week NIO 350 (registration books (sellado de libros) and register as a trader (inscripción como of accounting books) comerciante) + NIO 300 Agency : Representation of the Commercial Registry at the one-stop shop (application as a (Ventanilla Única de Inversiones - VUI) trader) In February of 2014, the Public Registry of Nicaragua approved a resolution in allowing entrepreneurs to le the incorporation statutes, to register the accounting books and the inscription as a trader at the same time at the one-stop shop. Page 7   The cost for commercial registration is 1% of capital (with a minimum of NIO (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Nicaragua Details – Starting a Business in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Sign the incorporation papers before a notary public 3 days USD 875 Agency : Public Notary The documents of incorporation and the company bylaws must be drafted by a notary public. It is customary to include the company bylaws in the document of incorporation. Most notaries will also perform the remaining steps (explained in the following steps) in the incorporation process, for a fee of USD 200 (on average). The notary cost is in between USD 750–1,000. 2 Buy the company's accounting and corporate books 1 day NIO 800 Agency : Bookstore According to Article 28 of the Commercial Code, all companies must keep four corporate books: two accounting books (diary and ledger) and two corporate books (minute book and share book). The cost of the books may vary from one bookstore to another. 3 File the company's deeds (acta constitutiva), register the accounting 1 week NIO 350 (registration books (sellado de libros) and register as a trader (inscripción como of accounting books) comerciante) + NIO 300 Agency : Representation of the Commercial Registry at the one-stop shop (application as a (Ventanilla Única de Inversiones - VUI) trader) In February of 2014, the Public Registry of Nicaragua approved a resolution in allowing entrepreneurs to le the incorporation statutes, to register the accounting books and the inscription as a trader at the same time at the one-stop shop. The cost for commercial registration is 1% of capital (with a minimum of NIO 1,000, maximum of NIO 30,000) and the following fees apply: - Inscription of constitution of internal books: NIO 100. - Registration fee for books (diario, mayor, actas y acciones) NIO 350.00. - Registration as a trader (inscripcion como comerciante): NIO 300. - Form for municipal license (matricula): NIO 5. - Municipal license: for social capital lower than NIO 50,000 is NIO 500; higher than NIO 50,000 is 1% of capital. - Municipal license document (constancia de matricula): 1% of license fee. The payment must be made in Banpro or Banco de Finanzas, and the payment receipt must be presented at the one-stop shop. Regardless whether the company has income, it must declare before the Nicaraguan Tax Authority (Dirección General de Impuestos) each month. If the company has no sales, it will not pay any taxes. However, it will have to pay the fees for the services performed by their representative in Nicaragua before the DGI. 4 Pay the inscription fees 1 day 1% of capital Agency : Commercial Bank (simultaneous with (Commercial previous Registration) within a Fees must be paid into any bank and the receipt presented to the one-stop procedure) minimum of NIO shop (see Procedure 5). There is a commercial bank within the Commercial 1,000 and a Registry where the payment can be made. maximum of NIO 30,000 + NIO 100 (inscription of internal books) Page 8   has no sales, it will not pay any taxes. However, it will have to pay the fees for Doing the performed services 2018 Business by their representative in Nicaragua before the DGI. Nicaragua 4 Pay the inscription fees 1 day 1% of capital Agency : Commercial Bank (simultaneous with (Commercial previous Registration) within a Fees must be paid into any bank and the receipt presented to the one-stop procedure) minimum of NIO shop (see Procedure 5). There is a commercial bank within the Commercial 1,000 and a Registry where the payment can be made. maximum of NIO 30,000 + NIO 100 (inscription of internal books) 5 File the Single Document (DUR - Documento Único de Registro) to obtain 1 day 1% of capital registration with Tax Authorities (RUC), social security (INSS), and the (municipal license pre-municipal license (pre-matrícula) fee) + 1% of Agency : Representation of DUR (Documento Único de Registro) at the one- municipal license fee stop shop (VUI) or the Tax Authorities (Dirección General de Ingresos - DGI) (municipal license document)+ NIO 5 Companies must obtain the Single Registration Document or DUR (form for municipal (Documento Único de Registro), a document that allows to register at the license) same time for sales tax (Registro Unico de Contribuyentes - RUC), pre- registration at social security (INSS), and the pre-municipal license (pre- matrícula) at the one-stop shop or at the DGI (Dirección General de Ingresos). In addition, the payment of the pre-municipal license is now made at the one-stop shop with the same document. 6 Obtain a municipal license (matrícula) 1 day no charge Agency : Representation of the Municipality (Alcaldia de Managua) at the one- stop shop (Ventanilla Única de Inversiones - VUI) After obtaining the pre-municipal license with the application of DUR, entrepreneurs must go to the delegation of the Municipality (Alcaldía) at the one-stop shop to obtain the o cial license (matrícula). 7 Obtain a Social Security certi cate and register the company's 1 day no charge employees (simultaneous with Agency : Social Security Institute (INSS – Instituto Nicaraguense de Seguridad previous Social) procedure) Business founders previously obtain an Employer’s number (número patronal) through the Single Document or DUR (Documento Unico de Registro). Then, an Employer’s Certi cate (certi cado patronal) must be requested at the Social Security Institute (INSS – Instituto Nicaraguense de Seguridad Social). This visit is to obtain an activation procedure of the pre- obtained registration at INSS, and to activate the registration the company must have at least one employee. The employee needs to ll a form and with a copy of the employee’s ID the employer can request employee’s registration. At the same time, the company can request access to the online declaration service. INSS usually gives a training to use the system, which is set up a couple of days after the registration of the employee is requested. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of Page 9   building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Nicaragua 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 10   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Nicaragua Standardized Warehouse Estimated value of warehouse NIO 2,998,256.70 City Covered Managua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Procedures (number) 18 15.7 12.5 7.00 (Denmark) Time (days) 225 191.8 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 6.1 3.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 3.5 8.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 71.02: Costa Rica (Rank: 70) 68.71: Colombia (Rank: 81) 68.16: Panama (Rank: 88) 63.59: Regional Average (Latin America & Caribbean) 60.16: El Salvador (Rank: 139) 45.82: Nicaragua (Rank: 174) 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 Nicaragua – Procedure, Time and Cost Time Cost 3 200 2.5 Cost (% of warehouse value) 150 2 Time (days) 1.5 100 1 50 0.5 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 11   component indicators. Doing Business 2018 Nicaragua Figure – Dealing with Construction Permits in Nicaragua – Procedure, Time and Cost Time Cost 3 200 2.5 Cost (% of warehouse value) 150 2 Time (days) 1.5 100 1 50 0.5 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 Nicaragua and comparator economies – Measure of Quality 12 11.0 11.0 10.0 10 9.0 8.8 8 Index score 6 4 3.5 2 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Dealing with Construction Permits in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a soil test study 18 days USD 2,600 Agency : Instituto Nicaragüense de Estudios Territoriales According to Article 27 (f) of Reglamento de Permiso de construcción para el Área del Municipio de Managua – Reg No 2996-R/F 858897, a soil study is a requirement by law. This is to ensure that the foundation of the building is solid since Nicaragua is a country with seismic activity. The engineer must understand the suitability of the soil for the proposed construction work. Soil test allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned. 2 Obtain a topographical survey of the land 11 days USD 700 Page 12   Agency : Private Engineer Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Doing Business 2018 Nicaragua Details – Dealing with Construction Permits in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a soil test study 18 days USD 2,600 Agency : Instituto Nicaragüense de Estudios Territoriales According to Article 27 (f) of Reglamento de Permiso de construcción para el Área del Municipio de Managua – Reg No 2996-R/F 858897, a soil study is a requirement by law. This is to ensure that the foundation of the building is solid since Nicaragua is a country with seismic activity. The engineer must understand the suitability of the soil for the proposed construction work. Soil test allows to build a solid foundation and avoid structures to be damaged or collapsed or leaned. 2 Obtain a topographical survey of the land 11 days USD 700 Agency : Private Engineer Build Co. needs to obtain the topographical survey for the site plan design. 3 Request and obtain consultations with Municipality of Managua 7 days no charge (Alcaldía de Managua - ALMA) about the urban plans Agency : Municipality of Managua (Alcaldía de Managua – ALMA) It is common practice to have an initial consultation with the Technical Urban Planning Committee (Comité Técnico Urbanístico) to verify all conditions before submitting any document. The board will open a le for the building permit if it is considered feasible. If BuildCo does not agree with the decision, an appeal may be led with the Technical Urban Planning Committee (Comité Técnico Urbanístico). 4 Request and obtain the land use certi cate (constancia de uso de suelo) 30 days NIO 500 from the Municipality of Managua Agency : Municipality of Managua (Alcaldía de Managua – ALMA) Once the le and the decision are obtained, a record number is created (to be used for the following procedures until the project is approved). The documents to be submitted at this stage are an application form, a copy of the location map, a site map, and the cadastral number of the property. 5 Request feasibility analysis from ENACAL 15 days NIO 5,000 Agency : ENACAL Upon the reception of the certi cate for land use, a feasibility analysis from ENACAL is required to determine whether the site can be connected to water and sewerage services. If no sewage system exists, an alternative would be a treatment system approved by the MARENA (Environmental Impact Assessment, Ministry of the Environment and Natural Resources). Measurement of pressures at each coupling point - NIO 2,000 Gauging sewage in each probably discharge point: NIO 3,000 Total = 5,000 The costs are based on Resolution No. CD-RT-028-2008 published in O cial Gazette No. 212 of November 4, 2008 The documents to be submitted are an application form, the land use certi cate, a project description (physical modulation and activities), a plot plan on a scale of 1:10,000, the water demand and use statement, and speci cations of the in ow rate and the sewage characteristics. The ENACAL approval certi cate covers the project conceptualization and indicates that the project is compliant with the standards and regulations. Page 13   The required documents are a project identi cation title page, topographic documents to be submitted at this stage are an application form, a copy of Doing the map, a site location 2018 Business map, and the cadastral number of the property. Nicaragua 5 Request feasibility analysis from ENACAL 15 days NIO 5,000 Agency : ENACAL Upon the reception of the certi cate for land use, a feasibility analysis from ENACAL is required to determine whether the site can be connected to water and sewerage services. If no sewage system exists, an alternative would be a treatment system approved by the MARENA (Environmental Impact Assessment, Ministry of the Environment and Natural Resources). Measurement of pressures at each coupling point - NIO 2,000 Gauging sewage in each probably discharge point: NIO 3,000 Total = 5,000 The costs are based on Resolution No. CD-RT-028-2008 published in O cial Gazette No. 212 of November 4, 2008 The documents to be submitted are an application form, the land use certi cate, a project description (physical modulation and activities), a plot plan on a scale of 1:10,000, the water demand and use statement, and speci cations of the in ow rate and the sewage characteristics. The ENACAL approval certi cate covers the project conceptualization and indicates that the project is compliant with the standards and regulations. The required documents are a project identi cation title page, topographic maps, an urban development plan, an existing infrastructure plan, design drawings, detail drawings, and a descriptive report. 6 Request feasibility analysis from DISNORTE-DISSUR 7 days no charge Agency : DISNORTE-DISSUR In parallel, regarding electrical connection, a feasibility analysis from DISNORTE-DISSUR is required to determine whether the site can be connected to the electrical network. The following documents are needed: the (original) location map, a speci cation of the electrical capacity to be installed, and the estimated start date of construction work. Moreover, DISNORTE-DISSUR provides a review, design approval, and authorization, and issues a decision stating that the proposed project conforms with the Manual of Norms of Construction of Distribution (Manual de Normas de Construcción de Distribución), the electrical power supply company. The following documents are required: • Design license • Electrical speci cations • Stack-out sheet • List of materials • Project drawings • Photocopy of the electrical power and light contract • Photocopy of the feasibility certi cate 7 Request and obtain preliminary design approval from the Municipality 25 days NIO 1,000 of Managua Agency : Municipality of Managua (Alcaldía de Managua – ALMA) BuildCo must obtain an approval stating that the proposed preliminary designs conform to the Regulating Plan of the Municipality of Managua and to the land-use certi cate. The required documents are the land-use certi cate; a notarized deed certifying ownership of the land; the feasibility analyses by the Nicaraguan Institute of Energy (INE) and the Nicaraguan Company of Water and Sewage (ENACAL); a local fault study endorsed by the Nicaraguan Institute of Territorial Studies INETER, if required by the land use certi cate; and two Page 14   sets of maps, each consisting of a location map on a scale of 1:10,000 (a site • Photocopy of the electrical power and light contract Photocopy 2018 Doing •Business of the feasibility Nicaragua certi cate 7 Request and obtain preliminary design approval from the Municipality 25 days NIO 1,000 of Managua Agency : Municipality of Managua (Alcaldía de Managua – ALMA) BuildCo must obtain an approval stating that the proposed preliminary designs conform to the Regulating Plan of the Municipality of Managua and to the land-use certi cate. The required documents are the land-use certi cate; a notarized deed certifying ownership of the land; the feasibility analyses by the Nicaraguan Institute of Energy (INE) and the Nicaraguan Company of Water and Sewage (ENACAL); a local fault study endorsed by the Nicaraguan Institute of Territorial Studies INETER, if required by the land use certi cate; and two sets of maps, each consisting of a location map on a scale of 1:10,000 (a site map on a scale of 1:10,000, 1:500, or 1:200 and a contour map); an architectural layout; exterior work drawings; and area frames. 8 Request and obtain project approval at the Municipality of Managua 30 days NIO 3,902 Agency : Municipality of Managua (Alcaldía de Managua – ALMA) A project approval is a decision stating that the project conforms to the Regulating Plan of the Municipality of Managua. The fee for obtaining the approval is NIO 3.00 per sq. m., and payment can be made either in cash or in two equal installments. The required documents are three sets of plans and the approved preliminary designs. The following documents are required: Letter of request for service Public deed duly registered Preliminary Design approved Two sets of plans Memory calculation of the drainage system Detailed Project Budget Detailed Project Programming Technical approval issued by ENACAL and UNION FENOSA 9 Request and obtain approval from Dirección General de Bomberos (DGB) 15 days USD 650 Agency : Dirección General de Bomberos (DGB) Upon the approval from the municipality, BuildCo. can engage in the electric part of the construction. is granted.Indoor electrical layout drawings must be reviewed and be found to conform to all re protection standards. For construction projects with commercial and service purposes, the fee is US$ 0.50 per sq. m. (15-05-13 La Gaceta-Diario O cial) The required documents are electrical installation layouts, re protection system plans, safety measures, or plans provided for the construction work. Because the national re ghting system (SINACOI) no longer exists, the institution in charge of this procedure is now Dirección General de Bomberos (DGB). 10 Request and obtain building permit from the Municipality of Managua 20 days NIO 38,183 Agency : Municipality of Managua (Alcaldía de Managua – ALMA), One-Stop Shop The building permit authorizes the start of construction. The cost of a building permit includes a tax of 1.1% of the total market value Page 15   of the construction. This tax must be paid in full at the start of construction institution in charge of this procedure is now Dirección General de Doing Bomberos Business (DGB). 2018 Nicaragua 10 Request and obtain building permit from the Municipality of Managua 20 days NIO 38,183 Agency : Municipality of Managua (Alcaldía de Managua – ALMA), One-Stop Shop The building permit authorizes the start of construction. The cost of a building permit includes a tax of 1.1% of the total market value of the construction. This tax must be paid in full at the start of construction work. Buildings are also subject to an inspection fee, as follows: -NIO 2.00 per sq. m. for areas from 101 to 200 sq. m. -NIO 3.00 per sq. m. for areas from 201 to 1,000 sq. m. -NIO 4.00 per sq. m. for areas from 1,001 sq m and above (in the case considered here, NIO 4.00 x 1,300.6 = NIO 5202.4). Therefore, 1.1%* warehouse value + 4 * sq m. = NIO 29,648.4 The required documents are a project approval, an annual real estate tax (solvencia de bienes inmuebles), the registration number with ALMA (the business registration), a tax clearance certi cate (solvencia municipal) for the project owner and builder, a builder’s license granted by the Ministry of Transportation and Infrastructure (Ministerio de Transporte e Infraestructura, MTI), the builder's signature on the construction plans, bank guarantees, and o cial payment receipts. The building permit carries the same weight as a public deed. Inspections may occur during construction. However, these are rare due to a shortage of inspectors. Even if an inspection is carried out, the inspector would simply verify that the building permit is valid. 11 Request re inspection 1 day no charge Agency : Dirección General de Bomberos (DGB) The cost of a re and electricity inspection is included in the inspection fee, which is paid at the Dirección General de Bomberos (DGB). A site visit may be scheduled, but it is not a rigid procedure. 12 Request and connect to water and sewage services 45 days NIO 20,000 Agency : ENACAL (Empresa Nicaraguense de Acueductos y Alcantarillados), Municipality of Managua (Alcaldía de Managua – ALMA) According to Resolution No. CD-RT-028-2008 published in O cial Gazette No. 212 of November 4, 2008 ("Norma para el Desarrollo de Proyectos de Agua Potable y Alcantarillado Sanitario de Centros Residenciales, Industriales y Comerciales") the cost associated to review and approval of designs of industrial developments is NIO 17,000. Moreover,the installation cost is approximately NIO 3000. This cost can be higher or lower depending on a possible rupture of pipelines. Receive re inspection 1 day no charge 13 Agency : Dirección General de Bomberos (DGB) Fire inspection is conducted in parallel with water and sewage request. 14 Receive inspection from the Municipality of Managua 1 day no charge Agency : Municipality of Managua (Alcaldía de Managua – ALMA) The municipal inspection is a random inspection that may occur at least once during the 30-week construction period. Thus, no request is needed. An Page 16   inspection report is drafted and provided to BuildCo. The construction work 13 Agency : Dirección General de Bomberos (DGB) Doing Fire inspection Business is conducted 2018 in parallel with water and sewage request. Nicaragua 14 Receive inspection from the Municipality of Managua 1 day no charge Agency : Municipality of Managua (Alcaldía de Managua – ALMA) The municipal inspection is a random inspection that may occur at least once during the 30-week construction period. Thus, no request is needed. An inspection report is drafted and provided to BuildCo. The construction work is not stopped during the inspection, and no costs are associated with this procedure. 15 Receive inspection from the Ministry of Labor 1 day no charge Agency : Ministry of Labor Inspection by the Ministry of Labor is a random inspection that may occur at least once during the 30-week construction period. Thus, no request is needed. An inspection report is drafted and provided to the company. The construction work is not stopped during the inspection, and no costs are associated with this procedure. 16 Receive inspection from the General Directorate of Hygiene and 1 day no charge Occupational Safety of Ministry of Labor Agency : General Directorate of Hygiene and Occupational Safety of Ministry of Labor Inspection from the General Directorate of Hygiene and Occupational Safety of Ministry of Labor is a random inspection that may occur at least once during the 30-week construction period. Thus, no request is needed. An inspection report is drafted and provided to the company. The construction is not stopped during the inspection, and no costs are associated with this procedure. 17 Receive inspection from the National Social Security Institute 1 day no charge Agency : National Social Security Institute Inspection by the National Social Security Institute is a random inspection that may occur at least once during the 30-week construction period. Thus, no request is needed. An inspection report is drafted and provided to the company. The construction work is not stopped during the inspection, and no costs are associated with this procedure. 18 Register the building with the Real Estate Appraisal O ce 15 days no charge Agency : Real Estate Appraisal O ce (Avalúo de Bienes Inmuebles), Municipality of Managua (Alcaldía de Managua – ALMA) As a nal step, BuildCo. register the new warehouse in the Real Estate Agency. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Nicaragua – Measure of Quality Answer Score Building quality control index (0-15) 3.5 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. Page 17   Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 Takes place simultaneously with previous procedure. Doing Business 2018 Nicaragua Details – Dealing with Construction Permits in Nicaragua – Measure of Quality Answer Score Building quality control index (0-15) 3.5 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. Quality control during construction index (0-3) 0.0 What types of inspections (if any) are required by law to be carried out during Unscheduled 0.0 construction? (0-2) inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction; Mandatory inspections are done most of the time during construction. Quality control after construction index (0-3) 0.0 Is there a nal inspection required by law to verify that the building was built in Final inspection 0.0 accordance with the approved plans and regulations? (0-2) is not required by law. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 0.0 does not always occur in practice. Liability and insurance regimes index (0-2) 0.5 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 0.5 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Owner or investor. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Page 18   Liability Insurance or Decennial Insurance)? (0-1) to obtain building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Owner Doing Business 2018 Nicaragua or investor. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 0.0 What are the quali cation requirements for the professional responsible for verifying University 0.0 that the architectural plans or drawings are in compliance with existing building degree in regulations? (0-2) architecture or engineering. What are the quali cation requirements for the professional who supervises the University 0.0 construction on the ground? (0-2) degree in engineering, construction or construction management. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out 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 Page 19   has already been completed up to and including the customer’s service construction management. Doing Business 2018 Nicaragua 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 Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out 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 20   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Nicaragua Standardized Connection Price of electricity (US cents per kWh) 33.2 Name of utility DISNORTE - DISSUR City Covered Managua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Procedures (number) 6 5.5 4.7 2 (United Arab Emirates) Time (days) 55 66.0 79.1 10 (United Arab Emirates) Cost (% of income per capita) 856.5 927.4 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 4 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 89.77: Panama (Rank: 18) 88.21: Costa Rica (Rank: 21) 74.18: Colombia (Rank: 81) 71.40: El Salvador (Rank: 88) 70.45: Regional Average (Latin America & Caribbean) 68.33: Nicaragua (Rank: 100) 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 Nicaragua – Procedure, Time and Cost Time Cost 900 50 800 Cost (% of income per capita) 700 40 600 Time (days) 30 500 400 20 300 200 10 Page 21   100 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Nicaragua Figure – Getting Electricity in Nicaragua – Procedure, Time and Cost Time Cost 900 50 800 Cost (% of income per capita) 700 40 600 Time (days) 30 500 400 20 300 200 10 100 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 Nicaragua and comparator economies – Measure of Quality 9 8 8 8 7 6 6 6 Index score 5 4.2 4 4 3 2 1 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Getting Electricity in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit informal application to DISNORTE-DISSUR to establish feasibility 7 calendar days NIO 0 of project Agency : DISNORTE - DISSUR The customer submits a rst informal application to DISNORTE-DISSUR indicating the required electricity load and the location of the business that is to be connected. The Planning Department of the utility will prepare a feasibility study based on its own plans for the primary distribution lines in Managua and the existing demand in the system. No inspection of the site is necessary if the connection point is within 150 meters. 2 Obtain compliance certi cate for internal wiring from Fire Department 7 calendar days USD 155 Page 22   Agency : Direcciòn General de Bomberos Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Doing Business 2018 Nicaragua Details – Getting Electricity in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit informal application to DISNORTE-DISSUR to establish feasibility 7 calendar days NIO 0 of project Agency : DISNORTE - DISSUR The customer submits a rst informal application to DISNORTE-DISSUR indicating the required electricity load and the location of the business that is to be connected. The Planning Department of the utility will prepare a feasibility study based on its own plans for the primary distribution lines in Managua and the existing demand in the system. No inspection of the site is necessary if the connection point is within 150 meters. 2 Obtain compliance certi cate for internal wiring from Fire Department 7 calendar days USD 155 Agency : Direcciòn General de Bomberos The customer has to obtain a certi cation of the internal wiring installations from the Fire Department. The Fire Department (Dirección General de Bomberos ) certi es that the internal wiring has been done in accordance with the relevant standards for buildings as speci ed by the ""Norma CIEN"" (Código de instalaciones Eléctricas de Nicaragua). This certi cation has to be obtained before applying for a new electricity connection with the utility. In order to prepare the certi cation of the internal wiring the Fire Department (Dirección General de Bomberos ) will visit the site. 3 Submit design and service application to DISNORTE-DISSUR and await 21 calendar days NIO 0 approval Agency : DISNORTE - DISSUR The customer submits the service application together with the designs in person. The following documents have to accompany the application: • Name, address and telephone number of the applicant • Photocopy of national identity card or power of attorney • Photocopy of the property title or rental contract • Inspection certi cate from the Fire Department indicating that the internal wiring installation complies with the norms established by the CIEN (Código de instalaciones Eléctricas de Nicaragua). • Photocopy of the social security number or business registration number of the customer (RUC - Registro único del contribuyente) • Photocopy of the company registration of the rm (used to assess which electricity tari is applicable). DISNORTE-DISSUR has a list of approved rms that will realize the design of the actual connection works. In order to be part of the list, rms have to be approved every year by the utility. In most cases the design is done by the same rm that also will later do the works. The utility will also approve the designs that have been prepared by the approved rm and work hand in hand with the executing rm. 4 Receive site inspection by DISNORTE-DISSUR for design approval 1 calendar day NIO 0 Agency : DISNORTE - DISSUR The utility inspects the site to approve the design Page 23   Doing Business 2018 Nicaragua 4 Receive site inspection by DISNORTE-DISSUR for design approval 1 calendar day NIO 0 Agency : DISNORTE - DISSUR The utility inspects the site to approve the design 5 Await completion of connection works by private rm 18 calendar days USD 17,025 Agency : Contratista Privado The works are done according to the relevant standards. They can be done either by a construction rm or an approved electrical design rm. The customer can decide who he wants to delegate the works to. The works are supervised by the technical department of the utility. 6 Sign supply contract and receive meter installation and electricity ow 8 calendar days NIO 11,057.57 Agency : DISNORTE - DISSUR Once the works are nalized, the meter and metering accessories are installed by the distribution utility and remain property of the utility. The meter is installed in a location that can be accessed from outside the premise of the customer for inspections and meter reading. Otherwise the customer has to given a written consent that the distribution utility can enter the premise. The customer has to deposit a security that is calculated on the basis of one month of the future consumption of the customer. The security deposit is returned with interest (average deposit rate in the country) after 18 months if the customer had no late payment in this period. Takes place simultaneously with previous procedure. Details – Getting Electricity in Nicaragua – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 4 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 73.7 System average interruption frequency index (SAIFI) 39.6 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) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No Page 24   exceed a certain cap? Takes place simultaneously with previous procedure. Doing Business 2018 Nicaragua Details – Getting Electricity in Nicaragua – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 4 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 73.7 System average interruption frequency index (SAIFI) 39.6 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) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.ine.gob.n i/pliegos2017.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. What the indicators measure Case study assumptions Page 25   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 Nicaragua Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value NIO 2,998,256.70 City Covered Managua Page 26   Latin America & OECD high Doing Business 2018 Nicaragua Standard Property Transfer Property value NIO 2,998,256.70 City Covered Managua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Procedures (number) 9 7.2 4.6 1.00 (4 Economies) Time (days) 56 63.3 22.3 1.00 (3 Economies) Cost (% of property value) 5.0 5.8 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 6.5 12.0 22.7 29.00 (Singapore) Figure – Registering Property in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 74.36: Costa Rica (Rank: 49) 71.34: Colombia (Rank: 60) 67.92: El Salvador (Rank: 69) 65.17: Panama (Rank: 83) 55.36: Regional Average (Latin America & Caribbean) 48.85: Nicaragua (Rank: 148) 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 Nicaragua – Procedure, Time and Cost Time Cost 2.5 50 2 Cost (% of property value) 40 Time (days) 1.5 30 1 20 10 0.5 0 0 1 *2 3 4 5 *6 7 8 9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 27   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 Nicaragua Figure – Registering Property in Nicaragua – Procedure, Time and Cost Time Cost 2.5 50 2 Cost (% of property value) 40 Time (days) 1.5 30 1 20 10 0.5 0 0 1 *2 3 4 5 *6 7 8 9 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 Nicaragua and comparator economies – Measure of Quality 20 17.5 18 16.5 16 13.5 14 12.0 Index score 12 11.0 10 8 6.5 6 4 2 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Registering Property in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a non-encumbrance certi cate ("Libertad de gravamen") from 5 days NIO 100 (simple non- Land registry (simultaneous with encumbrance Agency : Land registry (Registro Público de la Propiedad Inmueble y Procedure 2) certificate) + NIO 50 Mercantil) (for annotation of last property The non-encumbrance certi cate ("certi cado de libertad de gravamen") is transfer). an o cial document that lists all encumbrances tied to a particular immovable property, and the successive list of owners of that property since its rst annotation or since the time that the petitioner requests. The certi cate must be obtained by the seller before before notarizing the sale and purchase agreement. Additionally, anyone can request a "certi cado de historia registral" (cost NIO 150 + NIO 50 for every additional past Page 28   transaction), which lists all previous transactions related to the property, Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Doing Business 2018 Nicaragua Details – Registering Property in Nicaragua – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a non-encumbrance certi cate ("Libertad de gravamen") from 5 days NIO 100 (simple non- Land registry (simultaneous with encumbrance Agency : Land registry (Registro Público de la Propiedad Inmueble y Procedure 2) certificate) + NIO 50 Mercantil) (for annotation of last property The non-encumbrance certi cate ("certi cado de libertad de gravamen") is transfer). an o cial document that lists all encumbrances tied to a particular immovable property, and the successive list of owners of that property since its rst annotation or since the time that the petitioner requests. The certi cate must be obtained by the seller before before notarizing the sale and purchase agreement. Additionally, anyone can request a "certi cado de historia registral" (cost NIO 150 + NIO 50 for every additional past transaction), which lists all previous transactions related to the property, and therefore contains the list of all owners since its rst registration. 2 Obtain tax clearance from the Municipality (Solvencia Municipal) 1 day NIO 20 Agency : Municipality (simultaneous with Procedure 1) A tax clearance certi cate ("Solvencia Municipal") must be obtained by the seller from the municipality. The registered time of 1 day assumes that the seller is up-to-date with tax payments on the property, and that he pays a fee of NIO 20. If he were to wait till the next business day to obtain it, it would be free of charge. This certi cate is valid for one year. 3 A notary prepares and signs the public deed 2 days 1.5 – 2.0% of Agency : Notary property value (notary’s fees) A notary public prepares the sale and purchase agreement and notarizes it as a public deed. The preparation of the deed is an exclusive act of the notary. The notary will review all past transactions from the record book on the Land Registry with the documents obtained above, to verify the ownership of the property. Additionally, he will request the (i) non- encumbrance certi cate; (ii) tax clearance certi cate; (iii) cadastral certi cate; (iv) cadastral valuation; and (v) payment receipt of the Property Transfer Tax. In practice, the notaries estimate their fees for this type of contract based on a percentage of the property value, which varies between 1.5 and 2% according to agreement between the parties and notary. 4 Obtain the Cadastre certi cate at INETER 2 weeks NIO 500 Agency : National Cadaster (Dirección Catastro Físico del INETER) INETER is the national cadaster and is in charge of surveying the land and keeping a database of plots and boundaries. This certi cate is necessary to obtain the cadaster valuation at the DGI 5 Obtain Cadastre valuation at the DGI 14 – 21 days NIO 50 (in Tax Agency : Fiscal Cadaster (Catastro Fiscal, Dirección General de Ingresos) Stamps) Parties must obtain the Cadaster Certi cate and request a valuation from an inspector. In practice, the Cadaster requires a special power granted to notaries or any other person when the interested parties cannot realize this Procedure. The parties can go to the Cadaster directly, in which case they do not need to present a special power. The Cadaster requests to see original property title (of the Seller). In case a special power is needed, the costs rise about NIO 2,000 as the fees for the person who will go to the Cadaster, and Page 29   NIO 1,000 for the notary who will previously authorize and issue the special keeping a database of plots and boundaries. This certi cate is necessary to Doing obtain 2018 valuation the cadaster Business at the DGI Nicaragua 5 Obtain Cadastre valuation at the DGI 14 – 21 days NIO 50 (in Tax Agency : Fiscal Cadaster (Catastro Fiscal, Dirección General de Ingresos) Stamps) Parties must obtain the Cadaster Certi cate and request a valuation from an inspector. In practice, the Cadaster requires a special power granted to notaries or any other person when the interested parties cannot realize this Procedure. The parties can go to the Cadaster directly, in which case they do not need to present a special power. The Cadaster requests to see original property title (of the Seller). In case a special power is needed, the costs rise about NIO 2,000 as the fees for the person who will go to the Cadaster, and NIO 1,000 for the notary who will previously authorize and issue the special power. 6 Inspector visits property to assess value 2 to 3 days NIO 20 (must provide Agency : Fiscal Cadaster (Catastro scal - Direccion General de Ingresos) (simultaneous with transportation to Procedure 5) inspector) After the cadastral certi cate is obtained, an inspector visits the property to assess the value. In practice, one picks up the inspector and drives him/her to the property. It will take the inspector about one week to write the report on the value. 7 Payment of Income/Transfer Tax 1 day According to Article Agency : Tax agency (Administracion de Rentas - Direccion General de 87 of the new Tax, Ingresos) the property the transfer tax is The Income/Transfer Tax to the Tax Administration O ce depends on the calculated and paid Cadaster value of the plot. The Cadaster value generally is not the same as as follows: 1% for the market price. For payment of transfer taxes, the scal authority takes as properties with a a base of calculation the highest value between the sale price in the public deed of purchase or the Cadastral value. Then, according to the value, a value between di erent rate will apply (the tax follows a progressive scheme). USD1.00 and USD 50,000.00, 2% for Additionally, it will be necessary to pay fees of NIO 4 + 2 stamps of NIO 10. values between USD 50,000.01 and USD Art. 87 of Law No. 822 "Tax Law" of November 30th of 2012, establishes the 100,000.00 and 3% following fee scheme for the Property Transfer Tax: 1% for properties with a for values between value between NIO 0.01 and NIO 50,000.00, 2% for values between NIO USD 100,000.01 and 50,000.01 and NIO 100,000.00; 3% for values between NIO 100,000.01 and USD 200,000.00 and 200,000; and 4% for values above NIO 200,000.01. 4% for values above USD 200,001. Fees of NIO 4 + 2 stamps of NIO 10 need to be paid to make the payment. 8 Apply for registration of the public deed at the Land Registry 15 days (expedited 1% of cadastral value Agency : Land Registry (Registro Público de la Propiedad Inmueble y Procedure) (registration fee) + Mercantil ) NIO 500 (Notary’s fees) + 20% of the Parties submit the public deed at the Land Registry for registration. The fee registration fee for for this procedure is calculated based on 1% of the cadastral value, with a the expedited maximum fee of NIO 30,000 and a minimum of NIO 100. This payment is Procedure made directly in the branch of a commercial bank that is located inside the Land Registry O ce. The notary applying for registration will charge NIO 500 as fees. At submission, the request for transfer is recorded manually in books, signaling priority rights over the property. When nalized, the Land registry will write down in the original deed, the book and page where the transfer has been recorded. This document is then returned to the notary with all the other certi cates provided. The Land registry operates with Page 30   paper documents. However, deeds are being scanned by the Land Registry paid to make the Doing Business 2018 Nicaragua payment. 8 Apply for registration of the public deed at the Land Registry 15 days (expedited 1% of cadastral value Agency : Land Registry (Registro Público de la Propiedad Inmueble y Procedure) (registration fee) + Mercantil ) NIO 500 (Notary’s fees) + 20% of the Parties submit the public deed at the Land Registry for registration. The fee registration fee for for this procedure is calculated based on 1% of the cadastral value, with a the expedited maximum fee of NIO 30,000 and a minimum of NIO 100. This payment is Procedure made directly in the branch of a commercial bank that is located inside the Land Registry O ce. The notary applying for registration will charge NIO 500 as fees. At submission, the request for transfer is recorded manually in books, signaling priority rights over the property. When nalized, the Land registry will write down in the original deed, the book and page where the transfer has been recorded. This document is then returned to the notary with all the other certi cates provided. The Land registry operates with paper documents. However, deeds are being scanned by the Land Registry in Managua. In the rest of the departments in the country, records are not always accessible digitally. Newer transactions (less than 1 year) are not always digitized. Any person can access past deeds with computers at the Land registry at no cost. It is possible to track the status of the deed registration online through the website: www.registropublico.gob.ni/servicios/consultatramite.aspx. 9 Apply for name change at Municipality 1 day no cost Agency : Municipal cadastre The new owner should update the records at the municipal cadaster in order to update ownership records as to determine the new taxpayer for the Property Tax. It is not compulsory to carry out this procedure, but common in practice. Takes place simultaneously with previous procedure. Details – Registering Property in Nicaragua – Measure of Quality Answer Score Quality of the land administration index (0-30) 6.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Land Registry (Registro Público de la Propiedad Inmueble y Mercantil) In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Cadastral O ce (Instituto Nicaraguense de Estudios Territoriales INETER, Page 31   Dirección del Takes place simultaneously with previous procedure. Doing Business 2018 Nicaragua Details – Registering Property in Nicaragua – Measure of Quality Answer Score Quality of the land administration index (0-30) 6.5 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? Land Registry (Registro Público de la Propiedad Inmueble y Mercantil) In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Cadastral O ce (Instituto Nicaraguense de Estudios Territoriales INETER, Dirección del Catastro Físico) In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 3.0 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone 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.regist ropublico.gob.ni/ Servicios/Inscrip cion/BienesInmu ebles/Default.as px http://www.regist ropublico.gob.ni/ MonoX/Pages/Ne Page 32   wsDetails.aspx? Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made Doing publicly available–and Business if so, how? 2018 Nicaragua Link for online access: http://www.regist ropublico.gob.ni/ Servicios/Inscrip cion/BienesInmu ebles/Default.as px http://www.regist ropublico.gob.ni/ MonoX/Pages/Ne wsDetails.aspx? newsid=e7a194b b-c666-4bb5- b0f8- a45300c7e342 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.pode rjudicial.gob.ni/pj upload/registros /pdf/rg_gaceta01 .pdf http://www.regist ropublico.gob.ni/ Files/PDF/MarcoL egal/Leyes/Ley- 920-Tasas- Registros- Publicos.pdf http://www.pode rjudicial.gob.ni/pj upload/sgc/pdf/2 017_18.PDF Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries (notaries, lawyers, etc.) Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, on public 0.5 —and if so, how? boards Page 33   (notaries, Doing Business 2018 Nicaragua lawyers, etc.) Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, on public 0.5 —and if so, how? boards Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: http://www.inete r.gob.ni/articulos /areas- tecnicas/Catastr o/Catastro sico/ contenido/Requi sitos2.html 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) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 Page 34   For a standard land dispute between two local businesses over tenure rights of a The Civil District If yes, who is responsible for verifying the identity of the parties? Registrar; Doing Business 2018 Nicaragua Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a The Civil District property worth 50 times gross national income (GNI) per capita and located in the Court largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for More than 3 0.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (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 Page 35   of movable assets, for example, its machinery or its inventory. ABC wants Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Nicaragua 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. Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Strength of legal rights index (0-12) 1 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Page 36   Credit registry coverage (% of adults) 20.4 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Nicaragua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Strength of legal rights index (0-12) 1 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 20.4 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 55.9 43.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 95.00: Colombia (Rank: 2) 85.00: Costa Rica (Rank: 12) 80.00: El Salvador (Rank: 20) 75.00: Panama (Rank: 29) 50.94: Regional Average (Latin America & Caribbean) 45.00: Nicaragua (Rank: 105) 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 Nicaragua and comparator economies 14 12 12 10 10 9 Index score 8 7 6 5.3 4 2 1 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Legal Rights in Nicaragua Strength of legal rights index (0-12) 1 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 37   Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Doing Business 2018 Nicaragua Details – Legal Rights in Nicaragua Strength of legal rights index (0-12) 1 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring No a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No 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 No 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? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No 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 Nicaragua and comparator economies 10 8 8 8 7 7 7 Index score 6 4.8 4 2 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Credit Information in Nicaragua Page 38   0 Nicaragua Doing Business 2018 Colombia Nicaragua Costa Rica El Salvador Panama Latin America & Caribbean Details – Credit Information in Nicaragua Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes 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 Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 2,229,685 811,891 Number of firms 12,167 5,343 Total 2,241,852 817,234 Percentage of adult population 55.9 20.4 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 39   transactions; Available legal remedies (damages, Percentage of adult population 55.9 20.4 Doing Business 2018 Nicaragua 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. Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 4 5.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3 4.1 6.4 Page 40   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Nicaragua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 4 5.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3 4.1 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.33: Colombia (Rank: 16) 51.67: Panama (Rank: 96) 48.33: Costa Rica (Rank: 119) 47.24: Regional Average (Latin America & Caribbean) 38.33: El Salvador (Rank: 160) 35.00: Nicaragua (Rank: 167) 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 Nicaragua and comparator economies – Measure of Quality Nicaragua 4 5 1 1 4 6 Colombia 6 7 9 8 6 8 Costa Rica 3 5 5 4 4 8 El Salvador 6 0 3 1 6 7 Panama 6 4 4 1 8 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Latin America & Caribbean 4.1 5.4 4.4 3.4 5.6 6.5 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Nicaragua – Measure of Quality Answer Score Page 41   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Nicaragua Details – Protecting Minority Investors in Nicaragua – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 4 Extent of disclosure index (0-10) 1 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) No disclosure 0.0 obligation Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) No disclosure 0.0 obligation Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 5 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 6 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 No 0.0 identifying speci c ones? (0-1) Page 42   Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Doing Business 2018 Nicaragua document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) No 0.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 3 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 1 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 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 Page 43   Buyer pay declared MustBusiness Doing dividends within a maximum period set by law? 2018 Nicaragua No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 4 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? No 0.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? No 0.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. 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, Page 44   and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Nicaragua 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. Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Payments (number per year) 43 28.0 10.9 3 (Hong Kong SAR, China) Page 45   return, but within the tax assessment period. Doing Business 2018 Nicaragua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Payments (number per year) 43 28.0 10.9 3 (Hong Kong SAR, China) Time (hours per year) 201 332.1 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 60.2 46.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 52.55 47.50 83.45 99.38 (Estonia) Figure – Paying Taxes in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 77.46: Costa Rica (Rank: 60) 77.35: El Salvador (Rank: 61) 60.16: Regional Average (Latin America & Caribbean) 59.08: Colombia (Rank: 142) 52.86: Nicaragua (Rank: 159) 39.66: Panama (Rank: 180) 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 Nicaragua and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 52.55 49.54 48.17 47.50 50 40 30 20 12.84 10 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Paying Taxes in Nicaragua Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes on contribution (number) Payments (hours) tax rate Tax base profit) TTR Page 46   Employer paid - Social 12 76 18.5% gross 20.87 Doing Business 2018 Nicaragua Figure – Paying Taxes in Nicaragua and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 52.55 49.54 48.17 47.50 50 40 30 20 12.84 10 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Paying Taxes in Nicaragua Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes on contribution (number) Payments (hours) tax rate Tax base profit) TTR Employer paid - Social 12 76 18.5% gross 20.87 security contributions salaries Turnover tax 12 1% sales 17.68 (purchase cost) Corporate income tax 1 online 63 30% taxable 17.47 income Employer paid - Training 12 2% gross 2.26 tax salaries Real estate tax 1 1% property 1.19 value Capital Gains tax on 1 10% land value 0.51 property sale Tax on interest income 1 10% interest 0.26 income Vehicle Tax 1 0 fixed weight of the 0.02 amount truck Value added tax (VAT) 0 online and 62 15% value added 0.00 not jointly included Employee paid - Social 0 jointly 6.25% gross 0.00 withheld security contributions salaries Fuel tax 1 0.6985% fuel 0.00 small consumption amount Minimum tax 1 online 1% turnover 0.00 included in other taxes Totals 43 201 60.2 Page 47   Fuel tax 1 0.6985% fuel 0.00 small Doing Business 2018 Nicaragua consumption amount Minimum tax 1 online 1% turnover 0.00 included in other taxes Totals 43 201 60.2 Details – Paying Taxes in Nicaragua – Tax by Type Taxes by type Answer Profit tax (% of profit) 17.5 Labor tax and contributions (% of profit) 23.1 Other taxes (% of profit) 19.6 Details – Paying Taxes in Nicaragua – Measure of Quality Answer Score Post ling index (0-100) 52.55 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders and others Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 54.0 0 Time to obtain a VAT refund (weeks) 42.6 23.95 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 9.0 86.24 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with Page 48   a corporate income tax audit and time to complete a corporate income tax audit. 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. Doing The Business hours 2018 all Nicaragua for VAT include the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. 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) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road Page 49   police, border guards, standardization agencies, ministries or departments a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Nicaragua 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) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 50   of agriculture or industry, national security agencies and any other Doing Business 2018 Nicaragua government authorities. Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Time to export: Border compliance (hours) 60 62.5 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 150 526.5 149.9 0.00 (19 Economies) Time to export: Documentary compliance 48 53.3 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 47 110.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 72 64.4 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 400 684.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 16 79.9 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 86 119.5 25.6 0.00 (30 Economies) Figure – Trading across Borders in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 89.29: El Salvador (Rank: 43) 85.47: Panama (Rank: 54) 79.32: Costa Rica (Rank: 73) 78.99: Nicaragua (Rank: 74) 68.71: Regional Average (Latin America & Caribbean) 62.83: Colombia (Rank: 125) 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 Nicaragua – Time and Cost Time Cost 80 450 72 400 70 400 60 350 60 48 300 Time (hours) Cost (USD) 50 250 40 200 30 150 150 20 16 86 100 47 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 51   Doing Business 2018 Nicaragua Figure – Trading across Borders in Nicaragua – Time and Cost Time Cost 80 450 72 400 70 400 60 350 60 48 300 Time (hours) Cost (USD) 50 250 40 200 30 150 150 20 16 86 100 47 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Nicaragua Characteristics Export Import Product HS 09 : Coffee, tea, matï and spices HS 8708: Parts and accessories of motor vehicles Trade partner United States Japan Border Peñas Blancas border crossing Corinto port Distance (km) 140 153 Domestic transport time (hours) 7 4 Domestic transport cost (USD) 933 611 Details – Trading across Borders in Nicaragua – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 12.0 150.0 Export: Clearance and inspections required by agencies other than customs 48.0 0.0 Export: Port or border handling 12.0 0.0 Import: Clearance and inspections required by customs authorities 72.0 270.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 72.0 129.8 Details – Trading across Borders in Nicaragua – Trade Documents Export Import Phytosanitary certificate Customs Import Declaration Export License Commercial Invoice Page 52   Domestic transport cost (USD) 933 611 Doing Business 2018 Nicaragua Details – Trading across Borders in Nicaragua – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 12.0 150.0 Export: Clearance and inspections required by agencies other than customs 48.0 0.0 Export: Port or border handling 12.0 0.0 Import: Clearance and inspections required by customs authorities 72.0 270.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 72.0 129.8 Details – Trading across Borders in Nicaragua – Trade Documents Export Import Phytosanitary certificate Customs Import Declaration Export License Commercial Invoice Export Customs Declaration Packing List Bill of lading Fiscal Solvency Commercial invoice Bill of Lading Documento Unico de Transporte SOLAS certificate Certificate of Origin Transit Document Terminal handling receipt SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions 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 Page 53   Time to enforce the judgment several assumptions about the case: SOLAS certificate Doing Business 2018 Nicaragua 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 NIO 142,412.00 Court name Managua Local Civil Court City Covered Managua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Time (days) 490 767.1 577.8 164.00 (Singapore) Cost (% of claim value) 26.8 31.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.5 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 58.58: Nicaragua (Rank: 87) 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) Page 54   of judicial processes Quality Business Doing index (0-18) 2018 Nicaragua 6.5 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 58.58: Nicaragua (Rank: 87) 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) 51.48: Costa Rica (Rank: 129) 46.19: Panama (Rank: 148) 34.29: Colombia (Rank: 177) 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 Nicaragua – Time and Cost Time Cost 1400 1288 45.8 50 1200 Cost (% of claim value) 38.0 40 1000 31.4 852 Time (days) 786 767.1 26.8 790 30 800 24.3 19.2 577.8 21.5 600 490 20 400 10 200 0 0 Colombia Costa Rica El Salvador Latin America & Nicaragua OECD high income Panama Caribbean Figure – Enforcing Contracts in Nicaragua and comparator economies – Measure of Quality Nicaragua 2.5 0.5 0 3.5 Colombia 2.5 1.5 1.5 3.5 Costa Rica 2.5 1.5 1 2.5 El Salvador 2.5 2 0.5 2.5 Panama 2.5 1 0 3 OECD high income 2.5 2.9 2 3.6 Latin America & Caribbean 2.4 2 0.9 3.5 0 2 4 6 8 10 Page 55   12 Colombia Costa Rica El Salvador Latin America & Nicaragua OECD high income Panama Caribbean Doing Business 2018 Nicaragua Figure – Enforcing Contracts in Nicaragua and comparator economies – Measure of Quality Nicaragua 2.5 0.5 0 3.5 Colombia 2.5 1.5 1.5 3.5 Costa Rica 2.5 1.5 1 2.5 El Salvador 2.5 2 0.5 2.5 Panama 2.5 1 0 3 OECD high income 2.5 2.9 2 3.6 Latin America & Caribbean 2.4 2 0.9 3.5 0 2 4 6 8 10 12 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Nicaragua Indicator Time (days) 490 Filing and service 60 Trial and judgment 230 Enforcement of judgment 200 Cost (% of claim value) 26.8 Attorney fees 16.3 Court fees 5.5 Enforcement fees 5 Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 0.5 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Nicaragua – Measure of Quality Page 56   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Nicaragua Details – Enforcing Contracts in Nicaragua – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, 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) 0.5 1. Time standards 0.5 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? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the 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) 0.0 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 57   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Nicaragua 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? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No 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 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 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., No 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 58   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 Nicaragua 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) Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 35.3 30.8 71.2 93.1 (Norway) Time (years) 2.2 2.9 1.7 0.4 (Ireland) Page 59   Cost (% of estate) 14.5 16.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Nicaragua Latin America & OECD high Indicator Nicaragua Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 35.3 30.8 71.2 93.1 (Norway) Time (years) 2.2 2.9 1.7 0.4 (Ireland) Cost (% of estate) 14.5 16.8 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.0 7.2 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Nicaragua and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 70.02: Colombia (Rank: 33) 45.69: El Salvador (Rank: 84) 40.89: Nicaragua (Rank: 102) 39.59: Panama (Rank: 107) 38.95: Regional Average (Latin America & Caribbean) 34.42: Costa Rica (Rank: 131) 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 Nicaragua – Time and Cost Time Cost 4 30 3.5 3.5 25.0 3.0 25 2.9 3 2.5 Cost (% of estate) Time (years) 20 2.5 16.8 2.2 14.5 14.5 2 1.7 1.7 15 12.0 1.5 8.5 9.1 10 1 5 0.5 0 0 Colombia Costa Rica El Salvador Latin America & Nicaragua OECD high income Panama Caribbean Figure – Resolving Insolvency in Nicaragua and comparator economies – Measure of Quality Nicaragua 2 2 3 0 Page 60   Colombia 5.5 3 1 1.5 Colombia Costa Rica El Salvador Latin America & Nicaragua OECD high income Panama Caribbean Doing Business 2018 Nicaragua Figure – Resolving Insolvency in Nicaragua and comparator economies – Measure of Quality Nicaragua 2 2 3 0 Colombia 5.5 3 1 1.5 Costa Rica 2 3 1 0 El Salvador 4 2 3 0 Panama 3 2.5 2 0.5 OECD high income 5.4 2.8 2.3 1.9 Latin America & Caribbean 3.7 2.4 1.9 0.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Nicaragua and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 70 66.2 60 50 40 35.3 32.6 30.8 29.1 27.1 30 20 10 0 Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Details – Resolving Insolvency in Nicaragua Indicator Answer Explanation Proceeding foreclosure As a secured creditor, the bank will face only one option: a judicial foreclosure proceeding. In Nicaragua, banks prefer the foreclosure judicial track in order to request the sale of the assets used as collateral in satisfaction of the secure lending. It is not possible to start a reorganization procedure in Nicaragua. The foreclosure proceeding would start by the creditor filing a claim before the court requesting the sale of the property used as a collateral. The debtor will have the opportunity to counter-claim. After that an approval to initiate foreclosure will be handed down by the Court and an order to set up an auction will be issued. Once the time allocated by law for appeal lapses the auction would take place and the sale of debtor’s real estate will occur. The sale in public auction shall be validated by the court. Outcome piecemeal sale As a result of the foreclosure proceeding, the hotel will cease operations and its assets will be sold separately. The foreclosure will take place based on article 66 of Law No. 561. Page 61   Nicaragua Colombia Costa Rica El Salvador Panama Latin America & Caribbean Doing Business 2018 Nicaragua Details – Resolving Insolvency in Nicaragua Indicator Answer Explanation Proceeding foreclosure As a secured creditor, the bank will face only one option: a judicial foreclosure proceeding. In Nicaragua, banks prefer the foreclosure judicial track in order to request the sale of the assets used as collateral in satisfaction of the secure lending. It is not possible to start a reorganization procedure in Nicaragua. The foreclosure proceeding would start by the creditor filing a claim before the court requesting the sale of the property used as a collateral. The debtor will have the opportunity to counter-claim. After that an approval to initiate foreclosure will be handed down by the Court and an order to set up an auction will be issued. Once the time allocated by law for appeal lapses the auction would take place and the sale of debtor’s real estate will occur. The sale in public auction shall be validated by the court. Outcome piecemeal sale As a result of the foreclosure proceeding, the hotel will cease operations and its assets will be sold separately. The foreclosure will take place based on article 66 of Law No. 561. Time (in years) 2.2 The foreclosure procedure in Nicaragua will take approximately 2.2 years until the debt is fully paid from the moment of the debtor's default until the debt is repaid to the secured creditor. It will take 1 year until the approval to initiate foreclosure is handed down by the Court including all required notifications and the debtor’s counter-claim. Henceforward, it will take 1 years for the auction to take place (including the necessary time to appoint an auctioneer, the scheduling of the auction and the sale of the real estate). There hasn’t been any improvements in the time to resolve foreclosure cases in the last 5 years. Cost (% of 14.5 The cost for a foreclosure proceeding will amount to approximately 14.5% of the value of estate) Mirage’s estate. The main component of this expenditure would be the attorney’s fees, which would amount 8% of the value of Mirage’s estate and the auctioneer’s fees, which will amount 4%. The rest will include notification and other judicial costs (0.25%), expenses related to the auction (0.25%) and fees of other professionals (2%). Recovery rate (cents on the 35.3 dollar) Details – Resolving Insolvency in Nicaragua – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only 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 (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Page 62   dollar) Doing Business 2018 Nicaragua Details – Resolving Insolvency in Nicaragua – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only 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 (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 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? Page 63   Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment Doing Businessof the 2018insolvency representative? Nicaragua 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 No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) 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 Page 64   leave; (iv) whether employees on maternity leave 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 Nicaragua 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 Nicaragua Answer Hiring Page 65   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Nicaragua Details – Labor Market Regulation in Nicaragua Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 227.3 Ratio of minimum wage to value added per worker 0.9 Maximum length of probationary period (months) 1.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 100.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? Yes Restrictions on overtime work? Yes Paid annual leave for a worker with 1 year of tenure (working days) 30.0 Paid annual leave for a worker with 5 years of tenure (working days) 30.0 Paid annual leave for a worker with 10 years of tenure (working days) 30.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 30.0 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 66   Third-party Doing approval Business 2018 if nine workers are dismissed? Nicaragua 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 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 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 18.8 Severance pay for redundancy dismissal for a worker with 10 years of tenure 21.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 14.9 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Nicaragua 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 Nicaragua implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Enforcing Contracts: Nicaragua made enforcing contracts easier by adopting a new code of civil procedure that introduces stricter case management rules. DB2017 Trading across Borders: Nicaragua made trading across borders more expensive by introducing a new security fee, increasing the cost of border compliance for exporting and importing. Page 67   Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Nicaragua Business Reforms in Nicaragua 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 Nicaragua implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Enforcing Contracts: Nicaragua made enforcing contracts easier by adopting a new code of civil procedure that introduces stricter case management rules. DB2017 Trading across Borders: Nicaragua made trading across borders more expensive by introducing a new security fee, increasing the cost of border compliance for exporting and importing. DB2015 Starting a Business: Nicaragua made starting a business easier by combining multiple registration procedures. Getting Credit: Nicaragua improved access to credit information by starting to provide credit scores to banks and nancial institutions. DB2014 Starting a Business: Nicaragua made starting a business easier by merging the procedures for registering with the revenue authority and with the municipality and by reducing the time required for incorporation. Getting Electricity: Nicaragua reduced the time required for getting electricity by increasing e ciency in granting approval of the connection design and by informing the customer in advance what the amount of the security deposit will be. DB2012 Registering Property: Nicaragua made transferring property more e cient by introducing a fast-track procedure for registration. Paying Taxes: Nicaragua made paying taxes easier for companies by promoting electronic ling and payment of the major taxes, an option now used by the majority of taxpayers. Enforcing Contracts: Nicaragua raised the monetary threshold for commercial claims that can be brought to the Managua local civil court, leaving lower-value claims in the local courts, where proceedings are simpler and faster. DB2011 Paying Taxes: Nicaragua increased taxes on rms by raising social security contribution rates and introducing a 10% withholding tax on the gross interest accrued from deposits. It also improved electronic payment of taxes through bank transfer. Trading across Borders: Nicaragua expedited trade by migrating to a new electronic data interchange system for customs, setting up a physical one-stop shop for exports and investing in new equipment at the port of Corinto. Page 68   Trading across Borders: Nicaragua expedited trade by migrating to a new electronic data interchange system for customs, setting Doing up one-stop a physical2018 Business shop for exports and investing in new equipment at the port of Corinto. Nicaragua Page 69