Doing Business 2018 Guatemala Economy Pro le of Guatemala 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 Guatemala 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 Guatemala Income Category Lower middle income 97 DB 2018 Distance to Frontier (DTF) Population 16,582,469 0 100 GNI Per Capita (US$) 3,790 61.18 City Covered Guatemala City DB 2018 Distance to Frontier (DTF) 0 100 69.41: Colombia (Rank: 59) 69.13: Costa Rica (Rank: 61) 66.42: El Salvador (Rank: 73) 61.18: Guatemala (Rank: 97) 58.66: Regional Average (Latin America & Caribbean) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Guatemala Ease of Doing Business in Latin America & DB 2018 Rank Region 190 1 Caribbean Guatemala Income Category Lower middle income 97 DB 2018 Distance to Frontier (DTF) Population 16,582,469 0 100 GNI Per Capita (US$) 3,790 61.18 City Covered Guatemala City 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) 61.18: Guatemala (Rank: 97) 58.66: Regional Average (Latin America & Caribbean) 58.46: Honduras (Rank: 115) 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 - Guatemala 1 20 28 36 55 79 85 82 Rank 100 109 116 139 136 153 163 172 176 190 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 - Guatemala 100 84.02 79.30 80.00 80 75.31 70.30 64.63 64.44 60 DTF 40 31.67 34.55 27.57 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:-0.22 Change:+0.05 Change:0.00 Investors Change:+0.31 Borders Change:0.00 Change:+0.05 Change:+0.22 Permits Change:0.00 Change:0.00 Change:-4.68 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:-0.22 Change:+0.05 Change:0.00 Investors Change:+0.31 Borders Change:0.00 Change:+0.05 Change:+0.22 Permits Change:0.00 Change:0.00 Doing Business 2018 Guatemala Change:-4.68 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 Guatemala Standardized Company Legal form Sociedad Anónima (SA) - Corporation Paid-in minimum capital requirement GTQ 5,000 City Covered Guatemala City Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Procedure – Men (number) 8 8.4 4.9 1.00 (New Zealand) Time – Men (days) 26.5 31.7 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 22.9 37.5 3.1 0.00 (United Kingdom) Procedure – Women (number) 8 8.5 4.9 1.00 (New Zealand) Time – Women (days) 26.5 31.8 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 22.9 37.5 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 16.3 2.1 8.7 0.00 (113 Economies) Figure – Starting a Business in Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.32: Colombia (Rank: 96) 81.65: Costa Rica (Rank: 127) 79.30: Guatemala (Rank: 139) 78.88: El Salvador (Rank: 140) 78.09: Regional Average (Latin America & Caribbean) 76.98: Honduras (Rank: 150) 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 Guatemala – Procedure, Time and Cost Time Cost 25 25 20 ost (% of income per capita) 20 Time (days) 15 15 10 10 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Guatemala Figure – Starting a Business in Guatemala – Procedure, Time and Cost Time Cost 25 25 20 Cost (% of income per capita) 20 Time (days) 15 15 10 10 5 5 0 0 1 2 3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the company name and obtain a letter from a notary public to 3 days GTQ 30 for each open a bank account name Agency : Notary Public The notary has to conduct a company name availability search on the website of the Mercantile Registry of Guatemala and then they can proceed with the issuance of the letter to open a bank account. The paid-in minimum capital requirement of GTQ 5,000 must be deposited in a local bank before the articles of incorporation are signed. For this purpose, a notary public must issue a letter con rming that he or she has been requested to draw up and register the company’s deed of constitution. This letter allows for the opening of a temporary bank account while registration is completed. The letter has to indicate the exact address for the new company, which has to be supported by a bill of a public service. 2 Deposit the subscribed capital in a bank and obtain a receipt 1 day no charge Agency : Bank The legal representative opens a bank account and deposits the subscribed capital. The bank will require a bill of any public service with the address of the new company. The deposit slip is presented to the notary. 3 A notary public draws the deed of constitution 1 day included in Agency : Notary Public procedure 4 The notary issues a certi ed copy of the deed and draws the appointment of the legal representative (Sole Administrator or members of the Board), who Page 7   has to be personally registered before the Tax Authorities (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Guatemala Details – Starting a Business in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the company name and obtain a letter from a notary public to 3 days GTQ 30 for each open a bank account name Agency : Notary Public The notary has to conduct a company name availability search on the website of the Mercantile Registry of Guatemala and then they can proceed with the issuance of the letter to open a bank account. The paid-in minimum capital requirement of GTQ 5,000 must be deposited in a local bank before the articles of incorporation are signed. For this purpose, a notary public must issue a letter con rming that he or she has been requested to draw up and register the company’s deed of constitution. This letter allows for the opening of a temporary bank account while registration is completed. The letter has to indicate the exact address for the new company, which has to be supported by a bill of a public service. 2 Deposit the subscribed capital in a bank and obtain a receipt 1 day no charge Agency : Bank The legal representative opens a bank account and deposits the subscribed capital. The bank will require a bill of any public service with the address of the new company. The deposit slip is presented to the notary. 3 A notary public draws the deed of constitution 1 day included in Agency : Notary Public procedure 4 The notary issues a certi ed copy of the deed and draws the appointment of the legal representative (Sole Administrator or members of the Board), who has to be personally registered before the Tax Authorities 4 A notary public completes registration forms and pays the registration Less than one day see procedure fees online (online procedure) details Agency : MiNegocio (Commercial Registry) The notary completes the forms required by the Commercial Registry online. On March 18th, 2013, Guatemala launched Mi Negocio, an online platform that allows registering a new company with the commercial registrar (Registro Mercantil), the tax authority (Superintendencia de Administración Tributaria), the social security institute (Instituto Guatemalteco de Seguridad Social) and the Ministry of Labor (Ministerio de Trabajo) through a single form online (https://minegocio.gt/). The following forms are required by the Commercial Registry: a- certi ed copy of the deed of constitution b- appointment of legal representative c- letter of intent from the owner of the address d- bank receipt Finally, the notary pays in Banrural Bank online the amount required by the Registry: GTQ 5,000 average notarial fees + GTQ 250 stamp tax + GTQ 300 notarial stamp tax for the certi ed copy + GTQ 112 stamp tax for the appointment + GTQ 275 at free + GTQ 15 edict + GTQ 75 appointment + GTQ 100 Commercial License. Page 8   the legal representative (Sole Administrator or members of the Board), who Doing has 2018 registered to be personally Business before the Tax Authorities Guatemala 4 A notary public completes registration forms and pays the registration Less than one day see procedure fees online (online procedure) details Agency : MiNegocio (Commercial Registry) The notary completes the forms required by the Commercial Registry online. On March 18th, 2013, Guatemala launched Mi Negocio, an online platform that allows registering a new company with the commercial registrar (Registro Mercantil), the tax authority (Superintendencia de Administración Tributaria), the social security institute (Instituto Guatemalteco de Seguridad Social) and the Ministry of Labor (Ministerio de Trabajo) through a single form online (https://minegocio.gt/). The following forms are required by the Commercial Registry: a- certi ed copy of the deed of constitution b- appointment of legal representative c- letter of intent from the owner of the address d- bank receipt Finally, the notary pays in Banrural Bank online the amount required by the Registry: GTQ 5,000 average notarial fees + GTQ 250 stamp tax + GTQ 300 notarial stamp tax for the certi ed copy + GTQ 112 stamp tax for the appointment + GTQ 275 at free + GTQ 15 edict + GTQ 75 appointment + GTQ 100 Commercial License. 5 Obtain the certi cation of the legal representative's registration, the 5 days no charge proof of registration at the tax administration and the edict Agency : Commercial Registry The notary or another authorized person has to go to the Commercial Registry in person to review and pick up the following documents: certi cation of the legal representative´s registration, the proof of registration at the tax administration and the edict that needs to be published. 6 Publication of the edict and opposition period for the provisional 2 days for the edict GTQ 627 company registration by a ected third parties to be published and Agency : O cial Gazette (Diario de Centroamérica) 8 working days for the opposition to The notary or legal representative must go to the O cial Gazette o ce to the provisional request the publication of the company's edict. The edict is typically registration by published 2 days after the request. The law establishes an opposition term third parties of 8 working days, upon the day after the publication, in case any third party disagrees with the registration of the corporation. 7 Obtain the Articles of Incorporation registration certi cate, the 3 days GTQ 250 stamp tax commercial license (patente), the Social Security Number and the authorization for social and accounting books Agency : Commercial Registry Once registration is completed, the social security identi cation number, certi cation of the articles of incorporation registration, the commercial license, and the authorization for social and accounting books can be obtained at the Commercial Registry. In addition, once a corporation is registered, by law, it has 1 year to send the Commercial Registry a notice stating the number of shares issued, in relation to the paid-in capital. 8 Register the company’s employees at the Guatemalan Social Security 1 day no charge Page 9   third parties of 8 working days, upon the day after the publication, in case any third party Doing disagrees Business with the registration 2018 Guatemala of the corporation. 7 Obtain the Articles of Incorporation registration certi cate, the 3 days GTQ 250 stamp tax commercial license (patente), the Social Security Number and the authorization for social and accounting books Agency : Commercial Registry Once registration is completed, the social security identi cation number, certi cation of the articles of incorporation registration, the commercial license, and the authorization for social and accounting books can be obtained at the Commercial Registry. In addition, once a corporation is registered, by law, it has 1 year to send the Commercial Registry a notice stating the number of shares issued, in relation to the paid-in capital. 8 Register the company’s employees at the Guatemalan Social Security 1 day no charge Institute (IGSS) Agency : Guatemalan Social Security Institute (IGSS) Once the Social Security number is obtained from the Registry, the entrepreneur must go to the Guatemalan Social Security Institute (IGSS) o ces to register the company’s employees in the system. Registration is mandatory for companies with 3 or more employees and it is made at the Sección de Inscripciones en la División de Registro de Patronos y Trabajadores. The following documents are required: certi cate of company registration, appointment of representative, company deeds, identi cation document of the representative and the list of employees to be registered. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion 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 Page 10   The warehouse: Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Guatemala Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 11   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Guatemala Standardized Warehouse Estimated value of warehouse GTQ 1,537,118.70 City Covered Guatemala City Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Procedures (number) 12 15.7 12.5 7.00 (Denmark) Time (days) 205 191.8 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 7.0 3.2 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 8.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Guatemala 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) 65.44: Honduras (Rank: 113) 64.63: Guatemala (Rank: 116) 63.59: Regional Average (Latin America & Caribbean) 60.16: El Salvador (Rank: 139) 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 Guatemala – Procedure, Time and Cost Time Cost 5 200 4 Cost (% of warehouse value) 150 Time (days) 3 100 2 50 1 0 0 1 *2 *3 *4 *5 *6 7 8 9 10 11 12 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Guatemala Figure – Dealing with Construction Permits in Guatemala – Procedure, Time and Cost Time Cost 5 200 4 Cost (% of warehouse value) 150 Time (days) 3 100 2 50 1 0 0 1 *2 *3 *4 *5 *6 7 8 9 10 11 12 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 Guatemala and comparator economies – Measure of Quality 11.5 11.0 11.0 11.0 11 10.5 10.0 10.0 Index score 10 9.5 9 8.8 8.5 8 7.5 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Dealing with Construction Permits in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain a feasibility study by EMPAGUA 40 days GTQ 6,132 Agency : One-Stop Shop under the Municipality of Guatemala City According to regulatory changes this procedure should be done in 27 working days. EMPAGUA must issue a resolution regarding feasibility or nonfeasibility and the steps to be taken by BuildCo for EMPAGUA to make the necessary hook-up connections. Upon completion of the feasibility study, EMPAGUA noti es the applicant of the amount to be paid to the Municipality for the feasibility study and the connections to be made. The cost may vary depending on the work to be done and the estimated required potable water supply and sewage volume to be drained from the project. Page 13   The inspections performed by EMPAGUA experts may vary depending on the Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Doing Business 2018 Guatemala Details – Dealing with Construction Permits in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain a feasibility study by EMPAGUA 40 days GTQ 6,132 Agency : One-Stop Shop under the Municipality of Guatemala City According to regulatory changes this procedure should be done in 27 working days. EMPAGUA must issue a resolution regarding feasibility or nonfeasibility and the steps to be taken by BuildCo for EMPAGUA to make the necessary hook-up connections. Upon completion of the feasibility study, EMPAGUA noti es the applicant of the amount to be paid to the Municipality for the feasibility study and the connections to be made. The cost may vary depending on the work to be done and the estimated required potable water supply and sewage volume to be drained from the project. The inspections performed by EMPAGUA experts may vary depending on the number of inspections needed to determine service feasibility. 2 Obtain project approval from the Ministry of Health 30 days no charge Agency : Ministry of Health The Health Code of Guatemala 1997, requires that all constructions in Guatemala City need a clearance from the Ministry of Health to obtain a Construction License. This requirement was never implemented in practice till 2016. In January 2016, the Government of Guatemala started asking in practice for this clearance from the Ministry of Health, to issue a building permit. 3 Hire an environmental specialist and obtain an environmental 14 days GTQ 14,000 assessment of minimum impact Agency : Independent Specialist The environmental assessment of minimum impact is generally prepared by a professional (engineer/architect) authorized to do so. BuildCo hires the professional and the cost will vary depending on the project's characteristics. 4 Verify compliance with Standard for Disaster Reduction Two (NDR-2 14 days no charge Norma de Reduccion de Desastres Numero Dos ) Agency : National Coordinator for Disaster Reduction (CONRED) Since October 2013, the National Coordinator for Disasters Reduction (known as CONRED) is now required to verify that each building is in compliance with Agreement Number 04-2011 Standard for Disaster Reduction Number Two (Acuerdo Número 04-2011 Normas de Reducción de Desastres Número Dos-NDR-2) adopted on July 27, 2011. This regulation includes minimum security standards in public buildings. 5 Request and obtain certi cate of land ownership 8 days GTQ 50 Agency : One-Stop Shop under the Municipality of Guatemala City The application is done at the ventanilla unica de la construccion or directly in the main headquarters of the registro genera de la propiedad. The applicant lls out the application form for certi cation of inscriptions providing all necessary information pertaining to the property, as well as the contact details of the applicant. Payment is made in the respective bank Page 14   according to the established fees (from 1 to 10 sheets gtq 50.00). A proof of Desastres Número Dos-NDR-2) adopted on July 27, 2011. This regulation Doing includes Business 2018 security minimum standards in public buildings. Guatemala 5 Request and obtain certi cate of land ownership 8 days GTQ 50 Agency : One-Stop Shop under the Municipality of Guatemala City The application is done at the ventanilla unica de la construccion or directly in the main headquarters of the registro genera de la propiedad. The applicant lls out the application form for certi cation of inscriptions providing all necessary information pertaining to the property, as well as the contact details of the applicant. Payment is made in the respective bank according to the established fees (from 1 to 10 sheets gtq 50.00). A proof of payment is obtained which constitutes the password for the receipt and the expected date of delivery is also indicated on this receipt. 6 Submit a brief or simple industrial report 1 day no charge Agency : One-Stop Shop under the Municipality of Guatemala City It is a simple form that is obtained at the Municipality and is completed by the architect. This form must also be submitted when requesting a building permit. This report contains an a davit regarding storage use and any industrial processes to be carried out in the warehouse. 7 Submit evironmental assessment of minimum impact and receive 75 days GTQ 9,050 approval from MARN (Ministerio de Ambiente y Recursos Naturales) Agency : One-Stop Shop under the Municipality of Guatemala City The environmental assessment along with application is submitted to the one-stop shop. Other required documents include: 1. Sworn statement of the petitioner 2. Photocopy of identity card or DPI 3. Legal representation of the representative 4. Location or sketch plan of the project 5. A photocopy of the complete le 6. Copy of certi cate of land ownership Since this procedure can be done at the one-stop shop as well, it can be simultaneous. 8 Request and obtain a construction license 14 days GTQ 70,232 Agency : One-Stop Shop under the Municipality of Guatemala City The Municipality of Guatemala City introduced a new Land Management Plan (Plan de Ordenamiento Territorial- “POT”) as of January 7, 2009, and new building control regulations that also regulate the construction permit issuance. According to the new POT of Guatemala City the land use classi cations were changed based on the principles of sustainability, certainty, and better quality of life. In the old system the land was divided into industrial, residential, and commercial zones, whereas the new zoning regimes are established according to general use of land which among others introduced mixed use of zoning regimes. This tool was developed in consultation with both private and public sector and widely publicized. It also introduces a more sophisticated risk-based system of approval of construction permits. Before, the application had only one process of approval, whereby the application would be classi ed as complete and compliant with all requirements. This led to the issuance of construction permit. However, if incomplete it would need to be corrected. Under the new implementing regulations of POT this mechanism is based on Page 15   three stages: Simpli ed Procedure (Precedimiento Directo); Approval of Land Since this procedure can be done at the one-stop shop as well, it can be Doing simultaneous. Business 2018 Guatemala 8 Request and obtain a construction license 14 days GTQ 70,232 Agency : One-Stop Shop under the Municipality of Guatemala City The Municipality of Guatemala City introduced a new Land Management Plan (Plan de Ordenamiento Territorial- “POT”) as of January 7, 2009, and new building control regulations that also regulate the construction permit issuance. According to the new POT of Guatemala City the land use classi cations were changed based on the principles of sustainability, certainty, and better quality of life. In the old system the land was divided into industrial, residential, and commercial zones, whereas the new zoning regimes are established according to general use of land which among others introduced mixed use of zoning regimes. This tool was developed in consultation with both private and public sector and widely publicized. It also introduces a more sophisticated risk-based system of approval of construction permits. Before, the application had only one process of approval, whereby the application would be classi ed as complete and compliant with all requirements. This led to the issuance of construction permit. However, if incomplete it would need to be corrected. Under the new implementing regulations of POT this mechanism is based on three stages: Simpli ed Procedure (Precedimiento Directo); Approval of Land Management Council (Junta de Ordenamiento Territorial); Approval of Land Management Council and Neighbours’ Consent. Each phase is triggered if the previous phase is not complied with. BuildCo's case would fall into the ‘Simpli ed Procedure' scheme and does not require the subsequent procedure with Land Management Council and neighbors. Under this scheme if all requirements established in the regulations are satisfactory and complied with, the application would be approved in 10 working days. As of February 28, 2009 out of 580 applications for a new construction permit to the Central Territorial Directorate under the Municipality of Guatemala City (Direccion Central Territorial), 40% of cases underwent the simpli ed procedure and was approved within this time-limit. This procedure is administered under a newly operationalized single window principle. Additionally, the application forms have been substantially simpli ed and reduced in volume from 27 pages to 3 pages. BuildCo must submit the corresponding form with all the requested speci cs, together with all the requirements in the previous procedures, photocopies of the identi cation cards of its legal agent and the professional responsible for the construction, and a photocopy of the latest Single Real Estate Tax (Impuesto Unico sobre Inmueble) receipt and any other required receipts. An architect or engineer must be responsible for the construction work, signing the submitted form and the plans. All the information to obtain the construction license can now be submitted in a digital form. 9 Request water and sewage connection and receive requirements from 1 day no charge Page 16   EMPAGUA Doing Business 2018 Guatemala 9 Request water and sewage connection and receive requirements from 1 day no charge EMPAGUA Agency : One-Stop Shop under the Municipality of Guatemala City Once the construction is nalized, BuildCo must ll out the application at the one-stop shop and receive the requirements from the Water and Sewerage Authority (Empresa Municipal de Agua, EMPAGUA). EMPAGUA will notify BuildCo of the fee to be paid as a deposit to cover the completion of the procedure and a service feasibility study that must be carried out by EMPAGUA. EMPAGUA will start the feasibility study within about 15 days. In 2007 the Municipality of Guatemala uni ed the application forms and relevant requirements for EMPAGUA, Department of Urban Construction Control (Departamento de Control de Construcción Urbana) and Infrastructure Directorate (Dirección de Infraestructura). Another change is that the approvals from all these entities are given simultaneously. However, this has not had any practical impact on the ground. 10 Notify the Construction Licensing Department upon construction 1 day no charge completion and return the license Agency : Construction Licensing Department (Departamento de Licencias de Construcción) The license must be returned to the Construction Licensing Department who performs the nal inspection. If the construction work conforms to approved speci cations, the occupancy permit is issued. When the license is returned, the Municipality noti es the Cadastre O ce about the construction and its cost. Within 7 -- 14 days, the Municipality visits the site to verify that the building complies with the approved speci cations. 11 Receive nal connection to water 60 days GTQ 8,800 Agency : Municipality/EMPAGUA This procedure entails the reception of the water connection. 12 Receive nal inspection and obtain occupancy permit 14 days no charge Agency : One-Stop Shop under the Municipality of Guatemala City According to Article 78, upon completion of the construction work, the interested parties shall request a nal inspection from the Construction Licensing Department. This request can now be done at the one-stop shop. This inspection shall be performed by the supervisor in charge, who shall record the result on an inspection card. If the building does not comply with approved speci cations, the card must state the reasons and the appropriate remedies. If all aspects are in order and the card expressly states so, after the return of the respective license, the interested parties may request the building occupancy permit from the head of the o ce by completing the form stated in Annex 1 of the Regulation. If no objections are raised during the inspection (meaning that every part of the construction is authorized as complying with the plans submitted to the Construction Licensing Department), the professional in charge of the inspection may immediately go back to the o ce and issue the occupancy permit to be delivered to BuildCo. After that, BuildCo will be refunded its deposit of 0.01% of warehouse value that was paid at the stage of building permit approval. Takes place simultaneously with previous procedure. Page 17   Agency : Municipality/EMPAGUA Doing This procedure Business 2018entails the reception of the water connection. Guatemala 12 Receive nal inspection and obtain occupancy permit 14 days no charge Agency : One-Stop Shop under the Municipality of Guatemala City According to Article 78, upon completion of the construction work, the interested parties shall request a nal inspection from the Construction Licensing Department. This request can now be done at the one-stop shop. This inspection shall be performed by the supervisor in charge, who shall record the result on an inspection card. If the building does not comply with approved speci cations, the card must state the reasons and the appropriate remedies. If all aspects are in order and the card expressly states so, after the return of the respective license, the interested parties may request the building occupancy permit from the head of the o ce by completing the form stated in Annex 1 of the Regulation. If no objections are raised during the inspection (meaning that every part of the construction is authorized as complying with the plans submitted to the Construction Licensing Department), the professional in charge of the inspection may immediately go back to the o ce and issue the occupancy permit to be delivered to BuildCo. After that, BuildCo will be refunded its deposit of 0.01% of warehouse value that was paid at the stage of building permit approval. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Guatemala – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Page 18   Takes place simultaneously with previous procedure. Doing Business 2018 Guatemala Details – Dealing with Construction Permits in Guatemala – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction Page 19   company; Owner Liability Doing 2018 regimes and insurance Business index (0-2) Guatemala 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company; 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 Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 2.0 What are the quali cation requirements for the professional responsible for verifying University 1.0 that the architectural plans or drawings are in compliance with existing building degree in regulations? (0-2) architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the University 1.0 construction on the ground? (0-2) degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (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 Page 20   time. architect or engineer. Doing Business 2018 Guatemala Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 21   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Guatemala Standardized Connection Price of electricity (US cents per kWh) 12.3 Name of utility Empresa Electrica de Guatemala, S.A City Covered Guatemala City Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Procedures (number) 5 5.5 4.7 2 (United Arab Emirates) Time (days) 44 66.0 79.1 10 (United Arab Emirates) Cost (% of income per capita) 550.6 927.4 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 7 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.21: Costa Rica (Rank: 21) 84.02: Guatemala (Rank: 36) 74.18: Colombia (Rank: 81) 71.40: El Salvador (Rank: 88) 70.45: Regional Average (Latin America & Caribbean) 53.61: Honduras (Rank: 144) 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 Guatemala – Procedure, Time and Cost Time Cost 500 40 35 400 Cost (% of income per capita) 30 Time (days) 300 25 20 200 15 10 100 5 Page 22   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Guatemala Figure – Getting Electricity in Guatemala – Procedure, Time and Cost Time Cost 500 40 35 400 Cost (% of income per capita) 30 Time (days) 300 25 20 200 15 10 100 5 0 0 1 *2 3 4 *5 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 Guatemala and comparator economies – Measure of Quality 9 8 8 7 7 6 6 6 Index score 5 4.2 4 3 2 1 0 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Getting Electricity in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application request to EEGSA and await estimate 11 calendar days GTQ 0 Agency : Empresa Eléctrica de Guatemala S.A. (EEGSA) The client requests the connection to the grid via online or in person. The application must include: A. A copy of the notarized legal representation document. B. The local identity card (ID) of the legal representative. C. Notarized proof of ownership of the property or lease contract. D. List of technical data of the load required. The utility will perform a feasibility study to verify the conditions of the new Page 23   connection point and will con rm that the network has the capacity Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Doing Business 2018 Guatemala Details – Getting Electricity in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application request to EEGSA and await estimate 11 calendar days GTQ 0 Agency : Empresa Eléctrica de Guatemala S.A. (EEGSA) The client requests the connection to the grid via online or in person. The application must include: A. A copy of the notarized legal representation document. B. The local identity card (ID) of the legal representative. C. Notarized proof of ownership of the property or lease contract. D. List of technical data of the load required. The utility will perform a feasibility study to verify the conditions of the new connection point and will con rm that the network has the capacity requested by the client. 2 Receive external inspection by EEGSA 1 calendar day GTQ 0 Agency : Empresa Eléctrica de Guatemala S.A. (EEGSA) EEGSA performs an external inspection. The utility that the electrician in charge of the internal installations is present to clarify technical details. The visit consists of reviewing EEGSA's network and its interactions with the new user. There is no review of the user's internal wiring installation. During the inspection, the utility will verify that the voltage, capacity, and distance comply with the safety regulations. After EEGSA performs the external visit and checks the suitability of the connection's technical conditions, it will deliver a letter to the customer specifying the amount to be paid as a guarantee deposit and will con rm that the technical conditions are adequate to connect the warehouse to the grid. 3 Pay deposit and sign supply contract 2 calendar days GTQ 23,500 Agency : Empresa Electrica de Guatemala S.A. EEGSA will only provide its services once the client has signed the contract and paid the guarantee deposit. For loads above 100 kW, the deposit is not paid in cash but is covered by a bond issued by a guarantee agency in Guatemala. The guarantee deposit will be refunded when the customer no longer requires the service of the power supply (according to the General Electricity Law). As soon as the customer pays the deposit, he is able to sign the supply contract. 4 Hire private company to construct transformer post and install 21 calendar days USD 17,970 transformer Agency : Empresa privada For EEGSA to make the connection, it is needed that the civil works are completed. EEGSA is only responsible for the measuring equipment and therefore does not supervise the construction and laying of the cables, so the customer should contract the services of an independent engineer for this part of the works. Page 24   As soon as the customer pays the deposit, he is able to sign the supply Doing contract. Business 2018 Guatemala 4 Hire private company to construct transformer post and install 21 calendar days USD 17,970 transformer Agency : Empresa privada For EEGSA to make the connection, it is needed that the civil works are completed. EEGSA is only responsible for the measuring equipment and therefore does not supervise the construction and laying of the cables, so the customer should contract the services of an independent engineer for this part of the works. The electrical engineer hired by the client installs the transformer, the pipe onto the post, the meter box, and the underground wiring to the main board. 5 Receive external works, meter installation and nal connection 30 calendar days GTQ 0 Agency : Empresa Eléctrica de Guatemala S.A. (EEGSA) When the civil works are completed, the internal wiring are ready and the contract is signed, EEGSA installs the meter, transformers and connects the internal wiring to the transformers. The physical installation is performed by the Distributor (EEGSA) although subcontractors do the job. The electricity distribution company has a su cient stock of materials. The customer does not buy any materials for the external connection. The meter installation is simultaneous with the connection and the electricity begins to ow from the moment the connection is made. It is necessary to mount the transformer station, which involves installing a post and installing the metering equipment, all of this is paid by EEGSA. Takes place simultaneously with previous procedure. Details – Getting Electricity in Guatemala – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 3.6 System average interruption frequency index (SAIFI) 2.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Page 25   Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes Takes place simultaneously with previous procedure. Doing Business 2018 Guatemala Details – Getting Electricity in Guatemala – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 3.6 System average interruption frequency index (SAIFI) 2.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.cnee.gob .gt/Calculadora/plieg os.php Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 26   What the indicators measure Case study assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Guatemala 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 GTQ 1,537,118.70 City Covered Guatemala City Page 27   Latin America & OECD high Doing Business 2018 Guatemala Standard Property Transfer Property value GTQ 1,537,118.70 City Covered Guatemala City Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Procedures (number) 7 7.2 4.6 1.00 (4 Economies) Time (days) 24 63.3 22.3 1.00 (3 Economies) Cost (% of property value) 3.7 5.8 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 13.0 12.0 22.7 29.00 (Singapore) Figure – Registering Property in Guatemala 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) 64.44: Guatemala (Rank: 85) 63.42: Honduras (Rank: 91) 55.36: Regional Average (Latin America & Caribbean) 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 Guatemala – Procedure, Time and Cost Time Cost 4 3.5 20 Cost (% of property value) 3 15 2.5 Time (days) 2 10 1.5 1 5 0.5 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. Page 28   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 Guatemala Figure – Registering Property in Guatemala – Procedure, Time and Cost Time Cost 4 3.5 20 Cost (% of property value) 3 15 2.5 Time (days) 2 10 1.5 1 5 0.5 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. Figure – Registering Property in Guatemala and comparator economies – Measure of Quality 20 17.5 18 16.5 16 14.0 13.0 13.5 14 12.0 Index score 12 10 8 6 4 2 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Registering Property in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a property certi cate ("Certi cacion del historial de la nca") and 4 days QTG 214: Non- the cadastral value certi cate ("Valor de matricula") (simultaneous with encumbrance Agency : Property Registry (Registro General de la Propiedad de Guatemala) procedures 2 and certificate QTG 50 (www.rgp.org.gt) 3) (for first 10 pages, each additional page The seller obtains a certi cate at the Property Registry in which the buyer +QTG 5) + Legal Fees can verify that the property is free from mortgages and encumbrances, and QTG 164 to verify that the property is owned by the seller. In order to obtain the certi cate, the buyer needs to know the registry numbers where the property is registered. Usually this information is provided by the seller. It is usually the lawyer who veri es the books at the registry and obtains this information. This updated certi cate of the property will be used later by the Page 29   Notary to prepare the public deed. Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Doing Business 2018 Guatemala Details – Registering Property in Guatemala – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a property certi cate ("Certi cacion del historial de la nca") and 4 days QTG 214: Non- the cadastral value certi cate ("Valor de matricula") (simultaneous with encumbrance Agency : Property Registry (Registro General de la Propiedad de Guatemala) procedures 2 and certificate QTG 50 (www.rgp.org.gt) 3) (for first 10 pages, each additional page The seller obtains a certi cate at the Property Registry in which the buyer +QTG 5) + Legal Fees can verify that the property is free from mortgages and encumbrances, and QTG 164 to verify that the property is owned by the seller. In order to obtain the certi cate, the buyer needs to know the registry numbers where the property is registered. Usually this information is provided by the seller. It is usually the lawyer who veri es the books at the registry and obtains this information. This updated certi cate of the property will be used later by the Notary to prepare the public deed. It is possible for the parties or the Notary to consult encumbrances, rights and privileges a ecting a property electronically through www.rpg.org.gt. However, most practitioners still request a non-encumbrance certi cate in paper format as the online information does not have the same legal e ect as a certi ed document issued by the Property Registry. The certi cate can be requested in person at the Property Registry, or can be requested by email. However, it has to be picked up in person. 2 Obtain the cadastral value of the property from DICABI (Dirección de 1 day No cost Catastro y Avalúo de Bienes Inmuebles) (simultaneous with Agency : National Cadastre (Dirección de Catastro y Avalúo de Bienes procedures 1 and Inmuebles, DICABI) 3) In parallel to requesting a non-encumbrance certi cate at the Property Registry, the Notary must obtain a certi cate from the National Cadastre (Dirección de Catastro y Avalúo de Bienes Inmuebles, DICABI) indicating the cadastral value of the property. DICABI is a national institution containing information based on a “personal registry type” on all the regional registries in the country. Pursuant to amendments in Tax Law (Article 171 Decree 10-2012), authorized valuation of property and declaration of value of the real estate are mandatory. The request can be either submitted online, or at a speci c counter of the Superintendencia de Impuestos located in the Property Registry in Guatemala City. As of May 2017, the most common practice by Notaries is to request all the certi cates necessary to proceed with the property transfer physically at the di erent counters located in the Property Registry building. It is common for Notaries to pick up the DICABI certi cate once the non- encumbrance certi cate has been issued by the Property Registry. 3 Obtain the cadastral value from the Municipality of Guatemala 1 day No cost Agency : Municipality of Guatemala (simultaneous with procedures 1 and A certi cate of the cadastral value is requested from the Municipality of 2) Guatemala and obtained on the same day. This certi cate is necessary as the Stamp Duty will be determined based on the highest value between the sale price, the cadastral value from DICABI and the cadastral value from the Page 30   Municipality. For taxation purposes, the sale price cannot be smaller than It is common for Notaries to pick up the DICABI certi cate once the non- Doing encumbrance Business 2018certi cate has been issued by the Property Registry. Guatemala 3 Obtain the cadastral value from the Municipality of Guatemala 1 day No cost Agency : Municipality of Guatemala (simultaneous with procedures 1 and A certi cate of the cadastral value is requested from the Municipality of 2) Guatemala and obtained on the same day. This certi cate is necessary as the Stamp Duty will be determined based on the highest value between the sale price, the cadastral value from DICABI and the cadastral value from the Municipality. For taxation purposes, the sale price cannot be smaller than the cadastral value of the property. 4 Lawyer/notary prepares the sale agreement and notarizes it, along with 2 days 3% of the property the public deed value for Stamp Duty Agency : Lawyer / notary (2nd or subsequent transfer) and The lawyer/notary (in Guatemala, the lawyer is also a notary public) prepares between QTG 6500 - the sale and purchase agreement and notarizes it by redacting the QTG 8200 for notary agreement on a public deed. The deed would be read by the Notary and fees plus QTG 500 rati ed and signed by the parties, accepting thus the transaction. (tax stamps, copies, There is a scale in the Notary Act that regulates the fees, but nowadays since and others) the market has driven prices for notary services down, one will likely pay between $800 and $1000 for such a transaction. The notary will oversee buying the State stamps for the Stamp Duty tax of 3% charged to second and subsequent sales of properties (this is assumed to be the case in the Doing Business scenario). For the rst sale of a property a VAT payment of 12% of the property value is paid. Stamps are adhered to the Public Deed. Payments of registration fees (GTQ.160.00 plus GTQ 1.5 for each GTQ 1,000 of transaction value) are made to the notary, who will then pay the property registry. The documentation requested by the notary shall include: (i) Updated non-encumbrance certi cate of the property issued by the Property Registry (Obtained in Procedure 1); (ii) Photocopy of the ID of seller and buyer (passport or local ID). In case the seller/buyer is a Company, a photocopy of the appointment in which the Company gives su cient faculties to proceed with the transfer of property is necessary. In some cases, a Board of Director´s resolution may be required; (iii) Cadastral value obtained at DICABI (Obtained in Procedure 2); (iv) Last receipt of payment of the property tax (Impuesto Único Sobre Inmuebles, IUSI); (v) Cadastral value obtained at the Municipality of Guatemala (Obtained in procedure 3). 5 Public deed is delivered to the Property Registry for its recording 7 days QTG 160 + 0.15% of Agency : Property Registry (Registro General de la Propiedad de Guatemala) transaction value (www.rgp.org.gt) (registration fees) The public deed is delivered to the Property Registry for its recording under the name of the buyer. It is also advisable to obtain a certi cate at the Property Registry to verify that the change of ownership has been properly recorded after registration is completed. The internal procedures conducted by the Property Registry are as follows: Page 31   (1) All incoming cases are scanned and then assigned to the o cials (v) Cadastral value obtained at the Municipality of Guatemala (Obtained in Doing procedure Business 3). 2018 Guatemala 5 Public deed is delivered to the Property Registry for its recording 7 days QTG 160 + 0.15% of Agency : Property Registry (Registro General de la Propiedad de Guatemala) transaction value (www.rgp.org.gt) (registration fees) The public deed is delivered to the Property Registry for its recording under the name of the buyer. It is also advisable to obtain a certi cate at the Property Registry to verify that the change of ownership has been properly recorded after registration is completed. The internal procedures conducted by the Property Registry are as follows: (1) All incoming cases are scanned and then assigned to the o cials (Operadores). Since 2005, an electronic system is fully implemented to randomly assign cases to o cials; (2) The o cial registers the property electronically; issues the case le (Expediente) and if the legal requirements are met, registers the transaction (Inscripción); (3) The Accounting Department veri es the payment of fees; (4) The Registrar or auxiliary registrars approve and sign the registration certi cate. With Decree 42-2006, electronic signatures from auxiliary registrars are legally valid. Each one is assigned a unique number by which they can electronically sign, facilitating the registration process; (5) The Archives Department prints the Inscription of the Property Transfer and prepares it for the user. It is also possible to verify the authenticity of the inscription of the transaction through www.rpg.org.gt (section “Validar razones registrales”). The buyer accesses to this information though a verifying code and a reference code previously given by the Property Registry. 6 Notify the Municipality of the transaction 10 days no cost Agency : Municipality of Guatemala (simuntaneous with procedure 6) Once the transaction is concluded the notary noti es the Municipality of Guatemala City of the change in ownership. This step is important to update the cadastral value of the property for tax collection purposes. There is a small ne if this procedure is not ful lled, but it has no e ect on the validity of the registration of the property transfer obtained in the previous step. The notary needs to provide a copy of the title deed together with the notice. She/he will follow up with the municipality until they receive a statement of the updated records showing the updated information regarding the ownership of the property. Since 2015, Notaries can notify the registration of property transfers to the Municipality of Guatemala City online. This system was updated in 2017. However, as of May 2017, the majority of Notaries are still communicating property transfers by courier to the Municipality. 7 Notify the National Cadastre and Valuation Agency (DICABI) of the 10 days no cost transaction (simuntaneous with Agency : National Cadastre (Dirección de Catastro y Avalúo de Bienes procedure 5) Inmuebles, DICABI) The National Cadastre and Valuation Agency (DICABI) must also be noti ed of Page 32   the change of ownership. This noti cation is presented simultaneously with However, as of May 2017, the majority of Notaries are still communicating Doing property Business 2018 byGuatemala transfers courier to the Municipality. 7 Notify the National Cadastre and Valuation Agency (DICABI) of the 10 days no cost transaction (simuntaneous with Agency : National Cadastre (Dirección de Catastro y Avalúo de Bienes procedure 5) Inmuebles, DICABI) The National Cadastre and Valuation Agency (DICABI) must also be noti ed of the change of ownership. This noti cation is presented simultaneously with the noti cation provided to the municipality. Since 2015, Notaries can notify the registration of property transfers to DICABI online. This system was updated in 2017. However, as of May 2017, the majority of Notaries are still communicating property transfers by courier to DICABI. Takes place simultaneously with previous procedure. Details – Registering Property in Guatemala – Measure of Quality Answer Score Quality of the land administration index (0-30) 13.0 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? Registro General de la Propiedad In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Guatemala Municipality In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the 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) 4.0 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: www.rgp.org.gt Page 33   Takes place simultaneously with previous procedure. Doing Business 2018 Guatemala Details – Registering Property in Guatemala – Measure of Quality Answer Score Quality of the land administration index (0-30) 13.0 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? Registro General de la Propiedad In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Guatemala Municipality In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the 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) 4.0 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: www.rgp.org.gt 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: www.rgp.org.gt Does the agency in charge of immovable property registration commit to delivering a Yes, in person 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 Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: Fiscalía de Page 34   Delitos contra el Link for Doing online access: Business 2018 Guatemala Is there a speci c and separate mechanism for ling complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: Fiscalía de Delitos contra el Registro de la Propiedad, Ministerio Publico located at 15 Avenida 15- 16, Zona 1 Edi cio Gerona Ciudad de Guatemala, teléfonos 2411- 9903 https://www.rgp. org.gt/index.php /seguridad- registral; O cina de Acceso a la Información Pública y Procedimientos Jurídicos (Ocursos) Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 16.0 Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, in person 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 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? Page 35   Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property Doing registry? Business 2018 Guatemala 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) 5.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a Juzgado de property worth 50 times gross national income (GNI) per capita and located in the Primera largest business city, what court would be in charge of the case in the rst instance? Instancia Civil y Mercantil How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 36   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Guatemala 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 Guatemala Caribbean income Overall Best Performer Strength of legal rights index (0-12) 9 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.8 6.6 8.00 (34 Economies) Page 37   Credit registry coverage (% of adults) 17.5 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Guatemala Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Strength of legal rights index (0-12) 9 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 17.5 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 7.4 43.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Guatemala 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) 85.00: Honduras (Rank: 12) 80.00: Guatemala (Rank: 20) 80.00: El Salvador (Rank: 20) 50.94: Regional Average (Latin America & Caribbean) 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 Guatemala and comparator economies 14 12 12 10 10 9 9 9 Index score 8 6 5.3 4 2 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Legal Rights in Guatemala Strength of legal rights index (0-12) 9 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 38   Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Doing Business 2018 Guatemala Details – Legal Rights in Guatemala Strength of legal rights index (0-12) 9 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and Yes enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Guatemala and comparator economies 10 8 8 7 7 7 7 Index score 6 4.8 4 2 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Credit Information in Guatemala Page 39   0 Guatemala Doing Business 2018 Colombia Guatemala Costa Rica El Salvador Honduras Latin America & Caribbean Details – Credit Information in Guatemala 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 Yes 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 Yes 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? No 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 No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 700,012 1,691,114 Number of firms 18,252 14,929 Total 718,264 1,706,043 Percentage of adult population 7.4 17.5 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 40   transactions; Available legal remedies (damages, Percentage of adult population 7.4 17.5 Doing Business 2018 Guatemala 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 Guatemala Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 3.3 5.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 3 4.1 6.4 Page 41   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Guatemala Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Extent of conflict of interest regulation index (0- 3.3 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 Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.33: Colombia (Rank: 16) 48.33: Costa Rica (Rank: 119) 47.24: Regional Average (Latin America & Caribbean) 45.00: Honduras (Rank: 129) 38.33: El Salvador (Rank: 160) 31.67: Guatemala (Rank: 172) 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 Guatemala and comparator economies – Measure of Quality Guatemala 3 2 3 1 5 5 Colombia 6 7 9 8 6 8 Costa Rica 3 5 5 4 4 8 El Salvador 6 0 3 1 6 7 Honduras 3 8 3 2 5 6 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 Guatemala – Measure of Quality Answer Score Page 42   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Guatemala Details – Protecting Minority Investors in Guatemala – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 3.3 Extent of disclosure index (0-10) 3 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) 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) 2 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Not liable 0.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused 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 No 0.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 5 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) 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 43   Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 Doing Business 2018 Guatemala 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) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) No 0.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 3 Extent of shareholder rights index (0-10) 5 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of No 0.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 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 Page 44   Buyer pay declared MustBusiness Doing dividends within a maximum period set by law? 2018 Guatemala 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) 3 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 No 0.0 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? No 0.0 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 Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, Page 45   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 Yes 1.0 audited by an external auditor? Doing Business 2018 Guatemala 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 Guatemala Caribbean income Overall Best Performer Payments (number per year) 8 28.0 10.9 3 (Hong Kong SAR, China) Page 46   return, but within the tax assessment period. Doing Business 2018 Guatemala Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Payments (number per year) 8 28.0 10.9 3 (Hong Kong SAR, China) Time (hours per year) 248 332.1 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 35.2 46.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 33.04 47.50 83.45 99.38 (Estonia) Figure – Paying Taxes in Guatemala 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) 70.30: Guatemala (Rank: 100) 60.16: Regional Average (Latin America & Caribbean) 59.08: Colombia (Rank: 142) 51.74: Honduras (Rank: 164) 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 Guatemala and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 48.17 49.54 47.50 50 40 33.04 35.14 30 20 10 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Paying Taxes in Guatemala 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 47   Corporate income tax 1 online 23 25% or taxable profits 19.65 Doing Business 2018 Guatemala Figure – Paying Taxes in Guatemala and comparator economies – Measure of Quality 90 85.06 80 70 60 Index score 48.17 49.54 47.50 50 40 33.04 35.14 30 20 10 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Paying Taxes in Guatemala 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 Corporate income tax 1 online 23 25% or taxable profits 19.65 7% or gross income Solidarity tax (ISO) 1 online 1% net asset or 17.68 included in gross income other taxes Employer paid - Social 1 online 126 12.67% gross salaries 14.29 security contributions Capital Gains Tax 1 online 10% capital gains 0.51 Property tax 1 online 0.9% property value 0.45 Tax on interest 1 10% interest income 0.26 Advertising tax 1 0.5% advertising 0.01 expenses Employee paid - Social 0 jointly 4.83% gross salaries 0.00 withheld security contributions Value added tax (VAT) 1 online 99 12% value added 0.00 not and land sale included Totals 8 248 35.2 Details – Paying Taxes in Guatemala – Tax by Type Taxes by type Answer Profit tax (% of profit) 20.2 Labor tax and contributions (% of profit) 14.3 Other taxes (% of profit) 0.7 Page 48   Totals 8 248 35.2 Doing Business 2018 Guatemala Details – Paying Taxes in Guatemala – Tax by Type Taxes by type Answer Profit tax (% of profit) 20.2 Labor tax and contributions (% of profit) 14.3 Other taxes (% of profit) 0.7 Details – Paying Taxes in Guatemala – Measure of Quality Answer Score Post ling index (0-100) 33.04 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process Restricted to international traders and others Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund 0 per case study scenario Time to obtain a VAT refund (weeks) No VAT refund 0 per case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 50% - 74% Time to comply with a corporate income tax audit (hours) 15.0 75.23 Time to complete a corporate income tax audit (weeks) 13.8 56.92 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Page 49   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Guatemala 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 shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 50   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Guatemala 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 shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 51   of agriculture or industry, national security agencies and any other Doing Business 2018 Guatemala government authorities. Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Time to export: Border compliance (hours) 36 62.5 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 310 526.5 149.9 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) 105 110.4 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) 405 684.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 32 79.9 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 140 119.5 25.6 0.00 (30 Economies) Figure – Trading across Borders in Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 89.29: El Salvador (Rank: 43) 79.32: Costa Rica (Rank: 73) 75.31: Guatemala (Rank: 79) 68.71: Regional Average (Latin America & Caribbean) 65.85: Honduras (Rank: 115) 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 Guatemala – Time and Cost Time Cost 80 450 72 405 70 400 350 60 310 48 300 Time (hours) Cost (USD) 50 250 40 36 32 200 30 140 150 105 20 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 52   Doing Business 2018 Guatemala Figure – Trading across Borders in Guatemala – Time and Cost Time Cost 80 450 72 405 70 400 350 60 310 48 300 Time (hours) Cost (USD) 50 250 40 36 32 200 30 140 150 105 20 100 10 50 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Guatemala Characteristics Export Import Product HS 09 : Coffee, tea, matï and spices HS 8708: Parts and accessories of motor vehicles Trade partner United States United States Border Santo Tomás de Castilla port Santo Tomás de Castilla port Distance (km) 298 298 Domestic transport time (hours) 8 8 Domestic transport cost (USD) 750 750 Details – Trading across Borders in Guatemala – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 33.3 105.0 Export: Clearance and inspections required by agencies other than customs 8.0 0.0 Export: Port or border handling 28.0 205.0 Import: Clearance and inspections required by customs authorities 72.0 200.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 72.0 205.0 Details – Trading across Borders in Guatemala – Trade Documents Export Import Phytosanitary Certificate Customs Import Declaration Export Permit /Permiso de la Asociacion Nacional del Café Bill of Lading Page 53   Domestic transport cost (USD) 750 750 Doing Business 2018 Guatemala Details – Trading across Borders in Guatemala – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 33.3 105.0 Export: Clearance and inspections required by agencies other than customs 8.0 0.0 Export: Port or border handling 28.0 205.0 Import: Clearance and inspections required by customs authorities 72.0 200.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 72.0 205.0 Details – Trading across Borders in Guatemala – Trade Documents Export Import Phytosanitary Certificate Customs Import Declaration Export Permit /Permiso de la Asociacion Nacional del Café Bill of Lading Commercial Invoice Commercial Invoice Bill of Lading Packing List Customs Export Declaration Certificate of Origin Packing List Terminal Handling Receipts Terminal Handling Receipts SOLAS certificate Inspection Report Certificate of Origin 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 54   Time to enforce the judgment several assumptions about the case: SOLAS certificate Doing Business 2018 Guatemala 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 GTQ 58,279.00 Court name Guatemala City Court of First Instance City Covered Guatemala City Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Time (days) 1402 767.1 577.8 164.00 (Singapore) Cost (% of claim value) 26.5 31.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.0 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) 51.48: Costa Rica (Rank: 129) Page 55   of judicial processes Quality Business Doing index (0-18) 2018 Guatemala 6.0 8.4 11.0 15.50 (Australia) Figure – Enforcing Contracts in Guatemala and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.20: El Salvador (Rank: 105) 53.13: Regional Average (Latin America & Caribbean) 51.48: Costa Rica (Rank: 129) 45.54: Honduras (Rank: 152) 34.55: Guatemala (Rank: 176) 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 Guatemala – Time and Cost Time Cost 1600 45.8 50 1402 1400 1288 Cost (% of claim value) 35.2 40 1200 31.4 Time (days) 1000 920 852 26.5 30 24.3 786 767.1 800 21.5 19.2 577.8 600 20 400 10 200 0 0 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Figure – Enforcing Contracts in Guatemala and comparator economies – Measure of Quality Guatemala 2 0.5 0.5 3 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 Honduras 2.5 2 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 56   12 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Doing Business 2018 Guatemala Figure – Enforcing Contracts in Guatemala and comparator economies – Measure of Quality Guatemala 2 0.5 0.5 3 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 Honduras 2.5 2 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 Guatemala Indicator Time (days) 1402 Filing and service 66 Trial and judgment 796 Enforcement of judgment 540 Cost (% of claim value) 26.5 Attorney fees 15 Court fees 6.5 Enforcement fees 5 Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 0.5 Court automation (0-4) 0.5 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Guatemala – Measure of Quality Page 57   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Guatemala Details – Enforcing Contracts in Guatemala – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.0 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? No 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) 0.5 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 58   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Guatemala 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 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No 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 59   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 Guatemala 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 Guatemala Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 28.0 30.8 71.2 93.1 (Norway) Time (years) 3.0 2.9 1.7 0.4 (Ireland) Page 60   Cost (% of estate) 14.5 16.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Guatemala Latin America & OECD high Indicator Guatemala Caribbean income Overall Best Performer Recovery rate (cents on the dollar) 28.0 30.8 71.2 93.1 (Norway) Time (years) 3.0 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) 4.0 7.2 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Guatemala 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) 38.95: Regional Average (Latin America & Caribbean) 34.42: Costa Rica (Rank: 131) 32.07: Honduras (Rank: 142) 27.57: Guatemala (Rank: 153) 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 Guatemala – Time and Cost Time Cost 4 3.8 16.8 18 3.5 3.5 14.5 14.5 14.5 16 3.0 3.0 2.9 3 14 12.0 Cost (% of estate) Time (years) 12 2.5 8.5 9.1 10 2 1.7 1.7 8 1.5 6 1 4 0.5 2 0 0 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Figure – Resolving Insolvency in Guatemala and comparator economies – Measure of Quality Guatemala 0 2 2 0 Page 61   Colombia 5.5 3 1 1.5 Colombia Costa Rica El Salvador Guatemala Honduras Latin America & OECD high income Caribbean Doing Business 2018 Guatemala Figure – Resolving Insolvency in Guatemala and comparator economies – Measure of Quality Guatemala 0 2 2 0 Colombia 5.5 3 1 1.5 Costa Rica 2 3 1 0 El Salvador 4 2 3 0 Honduras 4 2 1 0 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 Guatemala and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 70 66.2 60 50 40 32.6 30.8 28.0 29.1 30 18.9 20 10 0 Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Details – Resolving Insolvency in Guatemala Indicator Answer Explanation Proceeding foreclosure A foreclosure would probably be the most likely procedure to apply, based on the Civil Procedure code, the Commercial Code and Decree 107 (Art. 294). In general, collective insolvency proceedings are less frequent than foreclosures in Guatemala. The foreclosure proceeding would take around 3 years. It would start with the creditor filing a claim before the court for the enforcement of the sale of the property used as a collateral. The debtor has to be personally notified about the claim. The debtor will have the opportunity to counter- claim. The claim has to be sent to the debtor’s home and he has to personally acknowledge the receipt of the claim. This can take a while, delays at this stage are very common. Once the debtor is finally reached, he has three days to object. Several rounds of objections are very common. Even though in “via de apremio” there are limits to the objections the debtor can make, it is common to face a lot of delays because of the objections. After that, it will take about 1.5 years until the approval to initiate foreclosure is handed down by the Court. Once the debtor finally accepts the claim, after several rounds of objections, the judge sets a time Page 62   Guatemala Colombia Costa Rica El Salvador Honduras Latin America & Caribbean Doing Business 2018 Guatemala Details – Resolving Insolvency in Guatemala Indicator Answer Explanation Proceeding foreclosure A foreclosure would probably be the most likely procedure to apply, based on the Civil Procedure code, the Commercial Code and Decree 107 (Art. 294). In general, collective insolvency proceedings are less frequent than foreclosures in Guatemala. The foreclosure proceeding would take around 3 years. It would start with the creditor filing a claim before the court for the enforcement of the sale of the property used as a collateral. The debtor has to be personally notified about the claim. The debtor will have the opportunity to counter- claim. The claim has to be sent to the debtor’s home and he has to personally acknowledge the receipt of the claim. This can take a while, delays at this stage are very common. Once the debtor is finally reached, he has three days to object. Several rounds of objections are very common. Even though in “via de apremio” there are limits to the objections the debtor can make, it is common to face a lot of delays because of the objections. After that, it will take about 1.5 years until the approval to initiate foreclosure is handed down by the Court. Once the debtor finally accepts the claim, after several rounds of objections, the judge sets a time and date for the public auction. It can take around from 6 months to 1 year to organize and complete the auction. Also, it is not uncommon to organize several auctions because the hotel is not sold in the first one. Also, it is common that the debtor opposes how the hotel was valued. The public auction has to be published in the Diario Oficial at least three times, and also at the court (this will take a minimum of one month). Outcome piecemeal sale Because of the sale of the property through a public auction, the hotel won’t be able to continue operating and its assets will be sold piecemeal. Time (in years) 3.0 The foreclosure proceeding will take approximately 3 years in Guatemala from the moment of Mirage’s default until the debt is repaid to the secured creditor. It will take 1.5 years until the approval to initiate foreclosure is handed down by the Court, including the notification period and the debtor’s counter-claim. After that stage, it will take 1 year 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). It will take additional 6 months for the judge to approve the sale and have it registered. Cost (% of 14.5 The cost for a foreclosure proceeding as described above would amount approximately to estate) 15% of the value of 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. The rest would be the costs of the custodian and property appraisal which would amount to 5% of the value of Mirage’s estate. The rest of the cost would be judicial and notification expenses. Article 396 of the Procedural Civil and Commercial Code of Guatemala provides that in no case the total fees of all professionals involved in the insolvency process may not exceed 12% of the value of the claim. However, this article does not apply to foreclosures. They can be calculated according to the professional schedules for arbitrators, attorneys, judicial leaders, experts, auditors and trustees. (Decree 111-96) Recovery rate (cents on the 28.0 dollar) Details – Resolving Insolvency in Guatemala – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 4.0 Commencement of proceedings index (0-3) 2.0 Page 63   dollar) Doing Business 2018 Guatemala Details – Resolving Insolvency in Guatemala – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 4.0 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) 0.0 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? No 0.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 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) 2.0 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 No 0.0 assets of the debtor? Page 64   Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment Doing Businessof the 2018insolvency representative? Guatemala Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) 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 65   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 Guatemala 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 Guatemala Answer Hiring Page 66   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Guatemala Details – Labor Market Regulation in Guatemala Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 411.2 Ratio of minimum wage to value added per worker 0.8 Maximum length of probationary period (months) 2.0 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) 50.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? Yes Restrictions on overtime work? Yes Paid annual leave for a worker with 1 year of tenure (working days) 15.0 Paid annual leave for a worker with 5 years of tenure (working days) 15.0 Paid annual leave for a worker with 10 years of tenure (working days) 15.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 15.0 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 67   Third-party Doing approval Business 2018 if nine workers are dismissed? Guatemala 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 5.1 Severance pay for redundancy dismissal for a worker with 5 years of tenure 25.3 Severance pay for redundancy dismissal for a worker with 10 years of tenure 50.6 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 27.0 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Guatemala 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 Guatemala implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Guatemala made dealing with construction permits more complicated and expensive by expanding the classi cation of projects requiring an environmental impact assessment. DB2017 Paying Taxes: Guatemala made paying taxes less costly by reducing the rate of corporate income tax. DB2016 Page 68   Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Guatemala Business Reforms in Guatemala 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 Guatemala implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Guatemala made dealing with construction permits more complicated and expensive by expanding the classi cation of projects requiring an environmental impact assessment. DB2017 Paying Taxes: Guatemala made paying taxes less costly by reducing the rate of corporate income tax. DB2016 Paying Taxes: Guatemala made paying taxes less costly for companies by reducing the corporate income tax rate. Trading across Borders: Guatemala reduced the documentary and border compliance time for importing by making electronic submission of documents compulsory and eliminating the need for many hard-copy documents. DB2015 Starting a Business: Guatemala made starting a business easier by eliminating certain registration fees and reducing the time to publish a notice of incorporation. Paying Taxes: Guatemala made paying taxes easier and less costly for companies by enhancing the electronic system for ling and paying corporate income tax and VAT and by reducing the capital gains and corporate income tax rates. On the other hand, it also made paying taxes more complicated by introducing a new form for capital gains tax. DB2014 Dealing with Construction Permits: Guatemala made dealing with construction permits easier by streamlining procedures through the creation of a one-stop shop, backed by agreements between institutions and agencies involved in the permitting process. Paying Taxes: Guatemala made paying taxes easier for companies by introducing a new electronic ling and payment system. DB2013 Dealing with Construction Permits: Guatemala made dealing with construction permits easier by introducing a risk-based approval system DB2010 Dealing with Construction Permits: Guatemala made dealing with construction permits easier through a new land management plan that simpli ed the risk-based approval process for building permits and through new zoning regimes that speeded up the approval process. Getting Credit: Guatemala strengthened its secured transactions system by creating a new movable asset registry that covers all types of movable assets as well as creditors and debtors and improved access to credit information by guaranteeing borrowers’ right to inspect their own data. Paying Taxes: Guatemala made paying taxes easier for companies by expanding the category of businesses for which electronic ling and payment of value added and corporate income tax is mandatory and by extending the electronic system to most banks. DB2009 Getting Credit: Guatemala strengthened its secured transactions system through a new law creating a new form of pledge over movable assets and a registry for these pledges, allowing a general description of accounts receivable and inventory used as Page 69   collateral and permitting parties to a security agreement to agree to out-of-court enforcement of the security right when signing the Doing Business 2018 DB2009 Guatemala Getting Credit: Guatemala strengthened its secured transactions system through a new law creating a new form of pledge over movable assets and a registry for these pledges, allowing a general description of accounts receivable and inventory used as collateral and permitting parties to a security agreement to agree to out-of-court enforcement of the security right when signing the agreement. DB2008 Starting a Business: Guatemala reduced the time required for new company registration through full implementation of its one- stop shop. Dealing with Construction Permits: Guatemala made dealing with construction permits less time consuming by accelerating the issuance of decisions by the Ministry of Environment and Natural Resources. Registering Property: Guatemala reduced the time required to register property by allowing registrars to submit electronic signatures. Trading across Borders: Guatemala made trading across borders easier by implementing a new electronic data interchange system, training customs sta and improving its risk-based inspection system. Enforcing Contracts: Guatemala made enforcing contracts easier by increasing the maximum size of claims that can be brought to justices of the peace. Page 70   Enforcing Contracts: Guatemala made enforcing contracts easier by increasing the maximum size of claims that can be brought to justices Doing of the peace. Business 2018 Guatemala Page 71