Doing Business 2020 Albania Economy Profile Albania Page 1 Doing Business 2020 Albania Economy Profile of Albania Doing Business 2020 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 permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and 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, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling 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 Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Albania 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 firms. 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 employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business 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 efficient regulation; offers 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 offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies 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 first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study 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 benefited 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. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Albania Ease of Doing Business in DB RANK DB SCORE Region Europe & Central Asia Albania Income Category Upper middle income 82 Population 2,866,376 67.7 City Covered Tirana Rankings on Doing Business topics - Albania 25 39 48 53 98 107 111 123 120 166 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 Topic Scores 91.8 52.7 71.0 63.4 70.0 46.0 65.2 96.3 53.5 67.7 Starting a Business (rank) 53 Getting Credit (rank) 48 Trading across Borders (rank) 25 Score of starting a business (0-100) 91.8 Score of getting credit (0-100) 70.0 Score of trading across borders (0-100) 96.3 Procedures (number) 5 Strength of legal rights index (0-12) 8 Time to export Time (days) 4.5 Depth of credit information index (0-8) 6 Documentary compliance (hours) 6 Cost (number) 10.8 Credit registry coverage (% of adults) 56.2 Border compliance (hours) 9 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 0.0 Cost to export Documentary compliance (USD) 10 Dealing with Construction Permits (rank) 166 Protecting Minority Investors (rank) 111 Border compliance (USD) 55 Score of dealing with construction permits (0-100) 52.7 Score of protecting minority investors (0-100) 46.0 Time to export Procedures (number) 19 Extent of disclosure index (0-10) 9.0 Documentary compliance (hours) 8 Time (days) 324 Extent of director liability index (0-10) 7.0 Border compliance (hours) 10 Cost (% of warehouse value) 6.8 Ease of shareholder suits index (0-10) 7.0 Cost to export Building quality control index (0-15) 13.0 Extent of shareholder rights index (0-6) 0.0 Documentary compliance (USD) 10 Extent of ownership and control index (0-7) 0.0 Border compliance (USD) 77 Getting Electricity (rank) 107 Extent of corporate transparency index (0-7) 0.0 Score of getting electricity (0-100) 71.0 Enforcing Contracts (rank) 120 Procedures (number) 6 Paying Taxes (rank) 123 Score of enforcing contracts (0-100) 53.5 Time (days) 71 Score of paying taxes (0-100) 65.2 Time (days) 525 Cost (% of income per capita) 448.6 Payments (number per year) 35 Cost (% of claim value) 42.7 Reliability of supply and transparency of tariff index (0-8) 5 Time (hours per year) 252 Quality of judicial processes index (0-18) 7.5 Total tax and contribution rate (% of profit) 36.6 Registering Property (rank) 98 Postfiling index (0-100) 60.1 Resolving Insolvency (rank) 39 Score of registering property (0-100) 63.4 Score of resolving insolvency (0-100) 67.7 Procedures (number) 5 Recovery rate (cents on the dollar) 44.6 Time (days) 19 Time (years) 2.0 Cost (% of property value) 8.9 Cost (% of estate) 10.0 Quality of the land administration index (0-30) 16.5 Outcome (0 as piecemeal sale and 1 as going 0 concern) Strength of insolvency framework index (0-16) 14.0 Page 4 Doing Business 2020 Albania Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each 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 the 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 ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are in good health and have no criminal record. -Are married, the marriage is monogamous and registered with the authorities. -Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Page 5 Doing Business 2020 Albania Starting a Business - Albania Standardized Company Legal form Limited Liability Company (Shpk) Paid-in minimum capital requirement No minimum City Covered Tirana Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Procedure – Men (number) 5 5.2 4.9 1 (2 Economies) Time – Men (days) 4.5 11.9 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 10.8 4.0 3.0 0.0 (2 Economies) Procedure – Women (number) 5 5.2 4.9 1 (2 Economies) Time – Women (days) 4.5 11.9 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 10.8 4.0 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 0.7 7.6 0.0 (120 Economies) Figure – Starting a Business in Albania – Score 76.5 96.0 94.6 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Albania and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 96.0: Greece (Rank: 11) 91.8: Albania (Rank: 53) 90.5: Regional Average (Europe & Central Asia) 88.6: North Macedonia (Rank: 78) 86.7: Montenegro (Rank: 101) 85.3: Croatia (Rank: 114) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Albania Figure – Starting a Business in Albania – Procedure, Time and Cost Time (days) Cost (% of income per capita) 4.5 12 4 Cost (% of income per capita) 10 3.5 3 8 Time (days) 2.5 6 2 1.5 4 1 2 0.5 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Albania Details – Starting a Business in Albania – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain the Registration Certification and Unique Business Identification 1 day ALL 100 Number from the National Business Center (Qendra Kombetare e Biznesit) Agency : National Business Center The National Business Center was established by law 131/2015, dated 26.11.2015, through the merger of the National Registration Center and the National Licensing Center. The National Business Center functions as a Single Window where the entrepreneur can complete company registration, tax registration, social and health insurance and labor inspectorate registration using a single application procedure. The registration may be done in person or online via e-Albania portal, which was launched in January 2015. The online company registration is free but requires an authentication process and electronic signature. At present, majority of companies still register in person. 2 Employee registration with the Tax Offic and Labor Office half a day (online no charge Agency : Tax Office, Labor Office procedure) After the registration with NBC, all the information about new company is available to the State Labor Inspectorate immediately through the online portal e- Albania (Law Nr. 9723 of 03/05/2007) To finish employee registration, employer need to register its employees separately with the Tax Office, at least 24 hours before employees' starting work. The registration can be done online by filling the declaration form E-sig 27 at www.tatime.gov.al. In case the employee is not registered in the time mentioned above, the employer gets a fine of 1,000 ALL. The employees are also registered with the Labor Office in the same platform. After registration of employees, every quarter the employer must submit in person the following documents to the Labor Office for unemployment benefits, professional services and other benefits: 1. The declaration of the employed persons (downloaded from http://shkp.gov.al/punedhenes) 2. Submit the payroll every 3 months by keeping a signed and sealed copy 3 Finalize registration with the Municipality Bureau of Internal Revenue and obtain list of 1 day ALL 30,000 (cleaning fee) applicable local fees and taxes + ALL 27,000 (temporary Agency : Municipality Bureau of Internal Revenue educational tax) The National Business Center, within 24 hours from the registration of the company notifies the Municipality Bureau of Internal Revenue and Tax Authorities. After the business has obtained the registration certificate from the NBC, the municipality bureau of internal revenue will request additional documents to assess list and amount of local fees and taxes that are due by the new company. In order to finalize the registration with the Municipality Bureau of Internal Revenue, it is advised that the following documents are submitted in person: 1) The Application form; 2) The Registration Certificate form the National Business Center; 3) the Statute and the By Laws of the Company 4) Rent agreement or proprietorship certificate of the Headquarters of the Company. Under Resolution of the Municipal Council of Tirana no. 59, dated December 30, 2015, as amended by the Municipality Council Decision no. 8 dated March 11, 2016, the taxes / fees to be paid by the company effectively from March 21, 2016 are as follows: - billboard tax for identification purposes up to 2 sq.m.: ALL 0; above 2 sq.m.: ALL 45,000 - cleaning fee: ALL 20,000 - ALL 170,000 - depending on main activity of the company (such as production, or sale of goods or provision of services) and size of the company. Companies that sell industrial items (clothing, perfumery, jewelry, etc) and have annual turnover above ALL 8,000,000 are subject to ALL 30,000 cleaning fee - temporary education tax: ALL 9,000 - ALL 27,000 - depending on the size of the company. Companies that have annual turnover above ALL 8,000,000 are subject to ALL 27,000 education tax All above charges are annual. Billboard tax and cleaning fee are due after 3 months from the registration of a new company; temporary education tax is due after 1 month from the registration of a new company. 4 Purchase pre-printed invoices from Tax Authority 1 day 360 ALL for a batch of 50 Agency : Tax Authority invoices According to the Fiscal Procedure Law, a newly established company must purchase pre-printed invoices from tax authorities. The company may not use invoices other than the pre-printed ones. Following company registration, the company founders or representatives request to purchasing a batch of pre-printed invoices, with company number on them, at the price of 360 ALL for each batch (50 copies). Page 8 Doing Business 2020 Albania 5 Make a company seal 1 day ALL 3,000 to ALL 5,000 Agency : Private sealmakers Based on Order of the Prime Minister no. 70, dated 18.4.2016, the state authorities dealing with the registration and licensing of business should simplify the requests regarding the documentation, by interrupting any request to companies where documentation should be sealed or in original copy. According to this order, the documentation is not required to be sealed and may be presented as a simple copy (i.e. non in original or certified true copy). However, in practice authorities continue to request that the documentation is sealed. Therefore the legal requirement for a company seal is considered as abolished. However, there are still random requests for stamping registration and notification forms based on the interpretation of specific agency officers. Thus, the most companies still prefer to make a company seal. Takes place simultaneously with previous procedure. Page 9 Doing Business 2020 Albania 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 notifications, 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 certification requirements. The most recent round of data collection was completed in May 2019. 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 connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures The warehouse: that can be fully completed online are an exception to this rule - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of 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 income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) 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 tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2020 Albania Dealing with Construction Permits - Albania Standardized Warehouse Estimated value of warehouse ALL 28,379,463.40 City Covered Tirana Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 19 16.2 12.7 None in 2018/19 Time (days) 324 170.1 152.3 None in 2018/19 Cost (% of warehouse value) 6.8 4.0 1.5 None in 2018/19 Building quality control index (0-15) 13.0 12.1 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Albania – Score 44.0 14.1 65.9 86.7 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Albania and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 83.5: North Macedonia (Rank: 15) 76.1: Montenegro (Rank: 40) 69.5: Greece (Rank: 86) 69.0: Regional Average (Europe & Central Asia) 57.8: Croatia (Rank: 150) 52.7: Albania (Rank: 166) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 11 Doing Business 2020 Albania Figure – Dealing with Construction Permits in Albania – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 6 300 5 Cost (% of warehouse value) 250 4 Time (days) 200 3 150 2 100 50 1 0 0 1 2 *3 *4 *5 *6 *7 *8 9 10 * 11 12 13 14 15 16 17 18 19 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 12 Doing Business 2020 Albania Figure – Dealing with Construction Permits in Albania and comparator economies – Measure of Quality 14 13.0 13.0 12.0 12.0 12.1 12 10.0 Index score 10 8 6 4 2 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Details – Dealing with Construction Permits in Albania – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain recent property card 30 days ALL 3,250 Agency : Immovable Properties Registration Office The property card (proof of ownership of the land plot) can be obtained from the Real Estate Registry. As of February 2008 the validity term of the card should be at most 72 hours. The Registry’s automated system expedites this process. As of February 2008 Real Estate Registry started including the mailing fee into the cost of obtaining a recent copy of property ownership card. 2 Request and obtain Project Clearance from Environmental Protection Agency 45 days ALL 10,000 Agency : Environmental Protection Agency The construction of the warehouse is subject to the environmental impact assessment ("EIA") and more specifically to a simple screening/preliminary process of EIA. The BulidCo should file with the Ministry of the Environment and Tourism the following documents: - The technical report of the proposed project; - The preliminary report of EIA, drafted as per the type of the project; - The technical project; - The Invoice evidencing the payment of the respective fee; - The registration certificate of the BuildCo with Commercial Register. The Ministry Of Environment and Tourism forwards the request along with the above set of documents to the National Agency of Environment ("NAE") within 10 days as of the submission thereof by BuildCo. The decision of NAE is delivered to the BuildCo within 45 days as of the submission of the request with the Ministry of Environment. The service fee for the examination amounts to ALL 10,000 and is paid by the BuildCo the the bank account of the Ministry of Environment (Article 3 of the Council of Ministers Decision no. 417, dated 25.06.2014). 3 Request and obtain Extract of Master Plan of the Plot from the Urban Planning Department 30 days no charge Agency : Municipal Urban Planning Department The master and general plans of the plot are issued by the municipality’s Urban Planning Department. The general plan is a topographic map of the situation of the existing property, while the master plan is a plan of the proposed development. Based on the Order of the Mayor of Tirana Municipality No. 275 dated 6.4.2012, before applying for the Development and Construction Permit the Developer of the Project has to obtain the Updated Master Plan from the GIS Kadastre in the Territorial planning Directorate. There is no fee to obtain the mentioned Master Plan. 4 Request and obtain Fire Department Approval for Development Permit 15 days ALL 10,000 Agency : Fire Department This procedure takes 15 days on average because while the Fire Department gives the approval, the Prefecture holds the actual seal that must be used to stamp the approval. In practice, the public actually make this request at the Prefecture (although according to the Fire Department, the law stipulates that Fire Department is the handling agency). The Fire Department then has to call the Prefecture to ask for files, which are forwarded to the Fire Department. The Fire Department must then review and send back to the Prefecture to stamp the approval. The fee for this procedure is 0.5% of the project value for objects with investment value of up to ALL 50 million, according to Decision No. 285 (of June 27, 2002) "On Tariffs of the Police for Protection against Fire Services." The fee is estimated at 0.5% of the design value (generally 10% of the warehouse value). 5 Obtain a geotechnical study / soil test 14 days ALL 75,000 Agency : Private licensed company A soil test is a necessary step for development of the project. The soil investigation helps to determine the bearing capacity of the land, which helps to determine the load capability, the type and depth of foundation, in order to make sure to select a suitable construction technique. Page 13 Doing Business 2020 Albania 6 Request and obtain opinion of the District Urban Planning Department 10 days ALL 2,000 Agency : District Urban Planning Department BuildCo should request an attestation on the drawings’ compliance with urban zoning regulations from the district Urban Planning Department. This requirement is provided for by Point 21 of the regulations on construction (of up to three stories), "Documents That an Investor Should Submit for Obtaining Construction Site Permit and Construction Permit," published by the Council of Tirana Municipality. 7 Request and obtain Project Clearance from Water Authority 9 days ALL 3,000 Agency : Water Authority The water authority approves the project and indicates the nearest water supply sources. Since January 2008 the Water and Sewage Company introduced a new cost for granting a project clearance at the initial stage of designing at the amount of ALL 3,000.00. 8 Request and obtain certificate from General Directorate of Local Taxes and Tariffs 3 days no charge Agency : General Directorate of Local Taxes and Tariffs Based on the Order of the Mayor of Tirana Municipality No. 275 dated 6.4.2012, before applying for the Development and Construction Permit the developer of the project must obtain a certificate from the General Directorate of Local Taxes and Tariffs (under the authority of Tirana Municipality) showing that the developer/constructor does not have any outstanding obligation towards the Municipality of Tirana. 9 Request and obtain a development permit 45 days ALL 13,006 Agency : Mayor of the Municipality/Commune The development permit (first construction-related permit that sets up the conditions for plot use, intensity of construction on a particular plot, the coefficient of plot’ use and the distances and height of the new construction) and the construction permit (second construction-related permit) constitute two different kinds of permits. The development permit is a prerequisite for obtaining a construction permit only for new constructions that include also temporary constructions. According to the Article 9 of DCM No. 408 dated 13.05.2015 "On the approval of the Development Regulation", as amended, the development permit precedes the construction permit for new developments. The development and construction permits can be obtained through e-Albania platform. The development permit fee ALL 10 per square meter of the plot of land that is being used for development. This fee depends on local authorities and is different for every city. For Tirana, this fee has been effective since 30.12.2015. 10 Request and obtain a construction permit 60 days ALL 1,418,973 Agency : Mayor of the Municipality/Commune The mayor is responsible for granting of the construction permit. Under the provisions of the current law on Territorial Planning the mayor grants the construction permit within 45 days from the application date. The technical council provides its opinion on the request as an integral part of the case folder. The construction development permit is issued only after the payment of the tax on infrastructure which for Tirana has been defined between 2 - 4 % of the constuction cost. Based on Law on Territory Planning, additional fees for the examination of the application may be approved by the Municipality. The Municipality of Tirana with Decision of the Municipality Council No. 3 dated 05.02.2007, as amended, has established an examination fee equal to 1% of the value of the investment. 11 Hire an external supervisor for construction works 1 day ALL 354,743 Agency : Licensed supervision company/ engineer According to the CMD no. 408, dated 13.05.2015 “On approval of the regulation on territory development”, as amended, the supervision is conducted by a private engineer who must be present during each construction phase to certify the compliance of construction works with both the construction related permits and the construction schedule. The supervisor is selected externally, by the private investor. Supervisors are not allowed to be part of the company staff that is investing for the construction. According to the decision No. 354 from May 11, 2016 on “The approval of the tariff of services for territorial planning, designing, supervising and testing”, the supervising fee is 25% of the total cost of the design cost. 12 Notify Central Technical Inspectorate about the start of construction works 1 day no charge Agency : Central Technical Inspectorate After receiving the building permit, BuildCo has 7 days to inform the Central Technical Inspectorate about the start of construction works. This is stipulated in Law No. 8402/1998 "On the control and discipline of construction works." 13 Receive on-site inspection of construction foundations 1 day no charge Agency : Municipal Urban Planning Department The on-site inspection occurs in 6 -- 7 days. Page 14 Doing Business 2020 Albania 14 Receive on-site inspection of the completion of construction skeleton 1 day no charge Agency : Municipal Urban Planning Department The on-site inspection occurs in 6 -- 7 days. 15 Request and connect to water and sewage services 20 days ALL 40,000 Agency : Water and Sewerage Agencies 16 Submit Report on the Completion of Works and request on-site inspection 1 day no charge Agency : Municipal Urban Planning Department Within 30 days of completing construction, BuildCo submits to the Urban Planning Department a report that documents construction materials and associated costs and requests an inspection of the construction site. 17 Receive final inspection from Municipality and obtain compliance report 30 days no charge Agency : Municipal Urban Planning Department The final on-site inspection is managed by the Municipality, which sends over an authorized licensed compliance inspector. The inspector examines the adjustment of the surroundings of the building to the drawings, and certifies that the project has been built in compliance with the development and building permit specifications. The inspector then signs the inspection completion statement. Then the Municipal Urban Planning Department issues a compliance report (this is not an occupancy permit, but based on the compliance report, an occupancy permit can then be obtained). 18 Obtain occupancy permit 30 days no charge Agency : Municipal Urban Planning Department The occupancy permit is issued only after the compliance report has been issued. Based on the compliance report, the Municipal Urban Planning Department makes a decision regarding the issuance of the occupancy permit. The occupancy permit grants the right to use the building after construction is completed. Addressed to the Urban Planning Department, the request must be accompanied by a set of documents related to the construction process and by the completion statement, duly signed by the authorized expert. 19 Register with the Real Estate Registry 60 days ALL 4,320 Agency : Immovable Properties Registration Office Upon receiving the occupancy permit, BuildCo registers the warehouse with the Real Estate Registry. Takes place simultaneously with previous procedure. Page 15 Doing Business 2020 Albania Details – Dealing with Construction Permits in Albania – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 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 compliance with existing Licensed architect; 1.0 building regulations? (0-1) 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 construction? (0-2) Inspections by 1.0 external engineer or firm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0 plans and regulations? (0-2) is done by government agency; Yes, in-house engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 2.0 Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Architect or engineer; 1.0 (Latent Defect Liability or Decennial Liability)? (0-1) Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or Construction 1.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) company; Insurance is commonly taken in practice. Professional certifications index (0-4) 3.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 1.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering. What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Page 16 Doing Business 2020 Albania 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 tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 17 Doing Business 2020 Albania Getting Electricity - Albania Standardized Connection Name of utility Operatori i Shperndarjes se Energjise Elektrike (OSHEE) Price of electricity (US cents per kWh) 9.4 City Covered Tirana Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 6 5.1 4.4 3 (28 Economies) Time (days) 71 99.6 74.8 18 (3 Economies) Cost (% of income per capita) 448.6 271.9 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 5 6.2 7.4 8 (26 Economies) Figure – Getting Electricity in Albania – Score 50.0 77.0 94.5 62.5 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Albania and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 86.8: Croatia (Rank: 37) 84.7: Greece (Rank: 40) 81.5: North Macedonia (Rank: 68) 75.6: Regional Average (Europe & Central Asia) 71.0: Albania (Rank: 107) 61.2: Montenegro (Rank: 134) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Albania – Procedure, Time and Cost Time (days) Cost (% of income per capita) 70 400 350 Cost (% of income per capita) 60 300 50 Time (days) 250 40 200 30 150 20 100 10 50 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 18 Doing Business 2020 Albania reflected here, see the summary below. Figure – Getting Electricity in Albania and comparator economies – Measure of Quality 8 7 7 7 6.2 Index score 6 5 5 5 5 4 3 2 1 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Page 19 Doing Business 2020 Albania Details – Getting Electricity in Albania – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain approval for electricity connection 1 calendar day USD 0 Agency : Technical and Industrial State Inspectorate (ISHTI) The customer has to request and obtain an approval from the Technical and Industrial State Inspectorate (ISHTI) for the electricity connection. The customer has to submit the electric design of the warehouse and obtain the approval from the OSSH for the new electricity connection.The electric design must be prepared by a licensed engineer or a licensed company in this regard, together with the rest of required application documentation. 2 Submit application to distribution utility (OSHEE) and await external site inspection 14 calendar days ALL 0 Agency : Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE) The customer submits the application with the electricity distribution utility Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE) in person. A declaration of conformity of the internal wiring signed by a licensed electrical engineer must be submitted with the application. Documents submitted have to be either the originals or notarized. OSHEE checks if the application is completed correctly and they inspect the premise. The time it takes for OSHEE to dispatch their staff to the site to inspect depends on the quality of the application. 3 Receive external site inspection and await estimate 7 calendar days ALL 0 Agency : Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE) After the application has been submitted, the must wait for an estimate. The distribution utility sends a representative to the site to do an external inspection of the warehouse. Someone from the customer's party has to be present during the inspection. After the inspection, the distribution utility prepares the estimate for the connection and sends it to the customer. 4 Obtain design by private firm, get design approved and obtain cost estimate by OSHEE 30 calendar days USD 5,503.92 Agency : Electrical design firm/OSHEE The design of the external connection works is done by an electrical design firm. The design has to be approved by the Central Technical Inspection (IQT) and by the utility. IQT is a state company. The internal wiring of the building is inspected only by IQT at the beginning of the connection works. The inspection can be requested at any time. 5 Obtain external works from private firm 14 calendar days USD 16,300.08 Agency : Electrical Contractor The external connection works are carried out by an electrical contractor hired by the customer. The cost includes physical work including material, labor, equipment, transportation. 6 Receive internal and external inspection and meter installation by utility 5 calendar days ALL 0 Agency : Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE) Once the connection works are completed, the meter will be installed by the distribution utility. Prior to opening the meter, the distribution utility will conduct an inspection of the internal wiring of the transformer cabin and of the external connection works. Takes place simultaneously with previous procedure. Page 20 Doing Business 2020 Albania Details – Getting Electricity in Albania – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 33.5 System average interruption frequency index (SAIFI) 22.0 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 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 reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://www.ere.gov.al/doc/t arifat_e_miratuara_nga_E RE_per_vitin_2019.pdf Are customers notified of a change in tariff 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 tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 21 Doing Business 2020 Albania 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 five 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 May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 22 Doing Business 2020 Albania Registering Property - Albania Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 5 5.5 4.7 1 (5 Economies) Time (days) 19 20.8 23.6 1 (2 Economies) Cost (% of property value) 8.9 2.7 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 16.5 20.4 23.2 None in 2018/19 Figure – Registering Property in Albania – Score 66.7 91.4 40.5 55.0 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Albania and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 77.4: Croatia (Rank: 38) 75.8: Regional Average (Europe & Central Asia) 74.5: North Macedonia (Rank: 48) 65.8: Montenegro (Rank: 83) 63.4: Albania (Rank: 98) 46.9: Greece (Rank: 156) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 23 Doing Business 2020 Albania Figure – Registering Property in Albania – Procedure, Time and Cost Time (days) Cost (% of property value) 9 18 8 16 Cost (% of property value) 7 14 6 12 Time (days) 5 10 4 8 6 3 4 2 2 1 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 different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 24 Doing Business 2020 Albania Figure – Registering Property in Albania and comparator economies – Measure of Quality 30 25.0 25 23.5 20.4 Index score 20 16.5 17.5 15 10 4.5 5 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Details – Registering Property in Albania – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Parties draft contract, validate title, refresh property card and obtain cadastral map 8 days ALL 4,850; (The total fee Agency : Public Notary’s Office applicable for this Seller and Buyer appear before the notary public to draft the contract for the transfer of property, procedure, according to have the certificate of title verified, refresh the property card and obtain a copy of the cadastral the Instruction no. 5341/5, map. dated 09.07.2012 "On •Verification of the certificate of title. The Seller brings the certificate of title to the public notary for approval of the Real verification. Public notaries have access to the records of the IPRO database and thus can verify Estate Registration Offices the validity of the certificate of title. services` fees" of the Ministry of Justice and •Refreshing the Property Card and obtaining the cadastral map: This can be done either by seller Ministry of Finance and going in person to the IPRO or by the public notaries, and is necessary to check for any Order no. 995, dated encumbrances on the property. Notary sends a request to the IPRO, to obtain an updated 31.10.2014 of the Chief property extract. When the IPRO replies confirming the updated info on the property and provides Registrar would be: an updated property card, the public notary alerts the parties that documents are ready. The i) 1500 ALL for property card is valid for 48 hours. certificate/attestation; ii) 1000 ALL copy of the property records; iii) 1000 ALL copy of the registration map fragment; iv) 150 ALL mailing service; v) 200 ALL Bank commission; vi) 100 ALL Service fee for obtaining the ownership certificate; vii) 50 ALL service fee for the copy of the map and all property records. Total: 4,000 ALL. Cadastral Map Fees: i) 700 ALL tariff ii) 50 ALL service fee iii) 100 ALL bank commission Total for map: 850 ALL Total for Procedure: 4,850 ALL) 2 Comparison of property map with the real situation and position of the land 2 days ALL 17,500; (Estimated Agency : Private authorized expert (topographer) between 15,000 ALL - While this procedure is not mandatory by law, it is done in practice by the buyer to avoid any 20,000 ALL) dispute with third parties caused by border issues and/or land surface. Verification is performed by a private authorized expert (topographer). The cost can be agreed upon by the buyer and seller upon which party will cover this expense. The law does not regulate the topographer fees and it is estimated between 15000 ALL - 20 000 ALL. Page 25 Doing Business 2020 Albania 3 Notarization of sale and purchase contract by the notary public 1 day ALL 79,462.5; (Pursuant to Agency : Notary Office the Order Nr. 279, dated In order to execute the sale-purchase contract and get it notarized, the seller submits to the notary 14.6.2012, "For the public: approval of tariffs for notary services", effective (1) Ownership Certificate or the Ownership Attestation; (2) The updated Property Records on 20.6.2012, the notary (3) Property Map fees are calculated as follows: Order Nr. 279, dated 14.6.2012, "For the approval of tariffs for notary services", repealed Minister of Justice's Decree Nr. 96/1, dated 23.1.2001, and went into effect on 20.6.2012. For the property with the transaction value of ..... the respective notary tariff is: for 100.000 - 6.000.000 ALL the tariff is 0.35%; for 6.000.001 - 15.000.000 ALL the tariff is 0.3%; for 15.000.001 - 50.000.000 ALL the tariff is 0.28%; for 50.000.001 - 100.000.000 ALL the tariff is 0.25%; for above 100.000.001 ALL the tariff is 0.23 %.) 4 Payment of taxes (local and income tax) at a second-tier bank 1 day ALL 2,425,589.27; (Local Agency : Second-tier bank Tax for Tirana municipality: Under the law no.9632, dated 30.10 2006 "On local taxes", as amended, in case of transfer of 2000ALL per square meter ownership over a commercial area located in Tirana is applicable a tax rate of 2000 ALL per Income tax for a company: square meter. Whereas the tax rate for transfer of the ownership over the land is 2% of the sale 15% as income tax (not price. included in calculation) Additionally, under the Law No. 156/2014 "On certain amendments to law no. 8438", Dated Transfer tax: 2%.) 28.12.1998, The section "Income tax" was amended in the article 3 specify that the transfer of the right of ownership on real estate, building land, are taxed at 15 percent of the profit. On transactions with immovable property the VAT tax is not applied. Both, fee and tax are payable at any second-tier bank located in Albania. 5 Registration at the Real Estate Registry Office 7 days ALL 7,350; (According to Agency : Immovable Property Registration Office Tirana (in transition to National Cadastre the INSTRUCTION No. Agency) 5341/5, dated 09.07.2012, Pursuant to Law No. 10491, Date 01.03.2012, the notary public registers the transferred property + 3,500 ALL registration at the Immovable Properties Registration Office. fee; The buyer files the original copy of the contract signed by both parties, accompanied by the (1) Original copy of the Ownership Certificate or the Ownership Attestation; + 1,500 ALL for the (2) The updated Property Records issued no later than 72 hours before the contract is signed; Ownership certificate; (3) Property Map, and; + 1,000 ALL for the (4) The receipt of the payment of the fee for transferring the ownership title." property records; + 1,000 ALL for the map; + 150 ALL for the mailing service; + 200 ALL Bank commission. Total fee is 7,350.00 ALL) Takes place simultaneously with previous procedure. Page 26 Doing Business 2020 Albania Details – Registering Property in Albania – Measure of Quality Answer Score Quality of the land administration index (0-30) 16.5 Reliability of infrastructure index (0-8) 6.0 Type of land registration system in the economy: Title Registration System What is the institution in charge of immovable property registration? Immovable Property Registration Office Tirana (in transition to National Cadastre Agency) In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Scanned 1.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional 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: Immovable Property Registration Office of Tirana (In transition to "State Agency of Cadastre") In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Computer/Scanned 1.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information Yes 1.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Different databases 1.0 kept in a single database, in different but linked databases or in separate databases? but linked Do the immovable property registration agency and cadastral or mapping agency use the same identification Yes 1.0 number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Only intermediaries 0.0 in the largest business city? and interested parties Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Link for online access: http://www.zrpp.gov.al /new/sherbimet/ Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Link for online access: http://www.zrpp.gov.al /new/wp- content/uploads/2014 /09/Lista_e_sherbime ve.pdf Does the agency in charge of immovable property registration agency formally commit to deliver a legally Yes, online 0.5 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Link for online access: http://www.zrpp.gov.al /new/wp- content/uploads/2014 /09/Lista_e_sherbime ve.pdf Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property No 0.0 registration agency? Page 27 Doing Business 2020 Albania Number of property transfers in the largest business city in 2018: Who is able to consult maps of land plots in the largest business city? Only intermediaries 0.0 and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Link for online access: http://www.zrpp.gov.al /new/wp- content/uploads/2014 /09/Lista_e_sherbime ve.pdf Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and Yes, online 0.5 if so, how does it communicate the service standard? Link for online access: http://www.zrpp.gov.al /new/wp- content/uploads/2014 /09/Lista_e_sherbime ve.pdf Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the largest business city formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Are all privately held land plots in the economy mapped? No 0.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Legal basis: Article 25 of Law No. 111/2018, dated Feb 7, 2019, "For Cadastre", which has abrogated the previous Law No. 33/2012, "On registration of immovable property", as amended. Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Article 23 of Law No. 111/2018, dated February 7, 2019, "For Cadastre", which has abrogated the previous Law No. 33/2012, "On registration of immovable property", as amended. Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Page 28 Doing Business 2020 Albania Legal basis: Article 6 of Law No. 111/2018, dated February 7, 2019, "For Cadastre", which has abrogated the previous Law No. 33/2012, "On registration of immovable property", as amended. Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., Yes 0.5 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 verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Notary; Is there a national database to verify the accuracy of government issued identity documents? Yes 1.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local Tirana District Court businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without Less than a year 3.0 appeal)? Are there publicly available statistics on the number of land disputes at the economy level in the first instance Yes 0.5 court? Number of land disputes in the economy in 2018: 519 cases on ownership disputes and 0 cases involving property transfer disputes in 2018 - Tirana District Court Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 29 Doing Business 2020 Albania Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. 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 through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - 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. Page 30 Doing Business 2020 Albania Getting Credit - Albania Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Strength of legal rights index (0-12) 8 7.8 6.1 12 (5 Economies) Depth of credit information index (0-8) 6 6.7 6.8 8 (53 Economies) Credit registry coverage (% of adults) 56.2 24.0 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 0.0 41.7 66.7 100.0 (14 Economies) Figure – Getting Credit in Albania – Score 70.0 Score - Getting Credit Figure – Getting Credit in Albania and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 85.0: Montenegro (Rank: 15) 80.0: North Macedonia (Rank: 25) 72.2: Regional Average (Europe & Central Asia) 70.0: Albania (Rank: 48) 50.0: Croatia (Rank: 104) 45.0: Greece (Rank: 119) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 31 Doing Business 2020 Albania Figure – Legal Rights in Albania and comparator economies 14 12 12 Index Score 10 9 8 7.8 8 6 5 4 2 2 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Page 32 Doing Business 2020 Albania Details – Legal Rights in Albania Strength of legal rights index (0-12) 8 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No 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 requiring a specific description Yes of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes 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 unified geographically and by asset type, with an Yes electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third No party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (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 reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and 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 allow the secured creditor to sell Yes 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 Albania and comparator economies 8 7 7 6.7 7 6 Index Score 6 5 5 5 4 3 2 1 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Page 33 Doing Business 2020 Albania Details – Credit Information in Albania Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries No Yes 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or No Yes 1 credit registry? Can banks and financial institutions access borrowers’ credit information online No Yes 1 (for example, 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 No No 0 banks and financial institutions assess the creditworthiness of borrowers? Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 1,058,486 Number of firms 0 58,514 Total 0 1,117,000 Percentage of adult population 0.0 56.2 Page 34 Doing Business 2020 Albania 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 May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal - Has not adopted bylaws or articles of association that go beyond the minimum requirements. corporate documents; Evidence obtainable during trial and allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 35 Doing Business 2020 Albania Protecting Minority Investors - Albania Stock exchange information Stock exchange Albanian Securities Exchange Stock exchange URL https://www.alse.al Listed firms with equity securities 0 City Covered Tirana Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Extent of disclosure index (0-10) 9.0 7.5 6.5 10 (13 Economies) Extent of director liability index (0-10) 7.0 5.0 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 7.0 6.8 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 0.0 3.4 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 0.0 3.7 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 0.0 4.1 5.7 7 (13 Economies) Figure – Protecting Minority in Albania – Score 46.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Albania and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 82.0: North Macedonia (Rank: 12) 70.0: Greece (Rank: 37) 70.0: Croatia (Rank: 37) 62.0: Montenegro (Rank: 61) 61.0: Regional Average (Europe & Central Asia) 46.0: Albania (Rank: 111) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 36 Doing Business 2020 Albania Figure – Protecting Minority Investors in Albania and comparator economies – Measure of Quality Albania 0 7 9 0 7 Croatia 5 6 5 7 6 6 Greece 6 4 9 6 5 5 Montenegro 6 8 5 3 3 6 North Macedonia 6 9 10 6 5 5 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 Europe & Central Asia 4.1 4.8 7.2 3.6 3.4 6.8 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 37 Doing Business 2020 Albania Details – Protecting Minority Investors in Albania – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 9.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Board of directors 2.0 excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of all 2.0 material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Extent of director liability index (0-10) 7.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Liable if unfair or 2.0 prejudicial Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) Yes 1.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) Yes 1.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if negligently 1.0 concluded Ease of shareholder suits index (0-10) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? Yes 1.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) No 0.0 Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 0.0 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 shareholders? Yes 1.0 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 shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 0.0 Page 38 Doing Business 2020 Albania Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? Yes 1.0 Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? No 0.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? Yes 1.0 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? Yes 1.0 Extent of corporate transparency index (0-7) 0.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and directorships in other No 0.0 companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? Yes 1.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Page 39 Doing Business 2020 Albania 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 the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally 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 Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 40 Doing Business 2020 Albania Paying Taxes - Albania Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Payments (number per year) 35 14.4 10.3 3 (2 Economies) Time (hours per year) 252 213.1 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 36.6 31.7 39.9 26.1 (33 Economies) Postfiling index (0-100) 60.1 68.2 86.7 None in 2018/19 Figure – Paying Taxes in Albania – Score 46.7 68.6 85.2 60.1 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Albania and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 84.7: North Macedonia (Rank: 37) 81.8: Croatia (Rank: 49) 77.9: Regional Average (Europe & Central Asia) 77.1: Greece (Rank: 72) 76.7: Montenegro (Rank: 75) 65.2: Albania (Rank: 123) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution 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 and contribution rate below this threshold receive the same score as the economy at the threshold. Page 41 Doing Business 2020 Albania Figure – Paying Taxes in Albania and comparator economies – Measure of Quality 90 80 76.7 66.7 70.5 68.2 70 Index score 60.1 56.4 60 50 40 30 20 10 0 Albania Croatia Greece North Montenegro Europe Macedonia & Central Asia Page 42 Doing Business 2020 Albania Details – Paying Taxes in Albania Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Social security 12.0 61.0 15% gross wages, 16.92 contributions minimum salaries are imposed Corporate 5.0 104.0 15% taxable profit 14.13 income tax Health insurance 0.0 jointly 1.7% gross salaries 1.92 contribution Municipal taxes 1.0 ALL 360,000 fixed fee varies 1.42 by type of business Property transfer 1.0 2% sale price 1.21 tax Tax on impact on 1.0 2% value of 0.61 infrastructure investment Building tax 1.0 0.2% for market value of 0.28 business the building property Land Tax 1.0 12-20 ALL/m2 The surface of 0.12 the land plot Employee paid - 0.0 jointly 11.2% gross salaries 0.00 withheld Labor tax Fuel tax 1.0 included into the 0.00 small amount fuel price Value added tax 12.0 87.0 20% value added 0.00 not included (VAT) Totals 35 252 36.6 Page 43 Doing Business 2020 Albania Details – Paying Taxes in Albania – Tax by Type Taxes by type Answer Profit tax (% of profit) 14.1 Labor tax and contributions (% of profit) 18.8 Other taxes (% of profit) 3.6 Page 44 Doing Business 2020 Albania Details – Paying Taxes in Albania – Measure of Quality Answer Score Postfiling index (0-100) 60.1 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process none Percentage of cases exposed to a VAT audit (%) 75% - 100% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 9.0 82.0 Time to obtain VAT refund (weeks) 37.0 34.7 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax correction (hours) 18.0 69.7 Time to complete a corporate income tax correction (weeks) 14.7 54.0 Notes: Names of taxes have been standardized. For instance income tax, profit 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 postfiling 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 correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 45 Doing Business 2020 Albania 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 tariffs) 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 May 2019. See the methodology for more information. 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 or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route 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 or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 46 Doing Business 2020 Albania Trading across Borders - Albania Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Time to export: Border compliance (hours) 9 16.1 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 55 150.0 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 6 25.1 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 10 87.6 33.4 0 (20 Economies) Time to import: Border compliance (hours) 10 20.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 77 158.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 8 23.4 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 10 85.9 23.5 0 (30 Economies) Figure – Trading across Borders in Albania – Score 95.0 94.8 97.0 97.5 96.8 93.6 97.1 98.6 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Albania and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 96.3: Albania (Rank: 25) 93.9: North Macedonia (Rank: 32) 93.7: Greece (Rank: 34) 91.9: Montenegro (Rank: 41) 87.3: Regional Average (Europe & Central Asia) 100: Croatia (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 47 Doing Business 2020 Albania Figure – Trading across Borders in Albania – Time and Cost Time (hours) Cost (USD) 12 90 10 77 80 10 9 70 Time (hours) 8 Cost (USD) 8 55 60 6 50 6 40 4 30 20 2 10 10 10 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 48 Doing Business 2020 Albania Details – Trading across Borders in Albania Characteristics Export Import Product HS 62 : Articles of apparel and clothing accessories, HS 8708: Parts and accessories of motor vehicles not knitted or crocheted Trade partner Italy Germany Border Durres port Kjafasan border crossing Distance (km) 38 107 Domestic transport time (hours) 3 5 Domestic transport cost (USD) 143 336 Details – Trading across Borders in Albania – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 5.5 54.7 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 4.0 0.0 Import: Clearance and inspections required by 8.5 77.3 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 2.5 0.0 Page 49 Doing Business 2020 Albania Details – Trading across Borders in Albania – Trade Documents Export Import Customs Export Declaration T1/Transit Declaration EUR 1 - Certificate of origin Customs import declaration Commercial invoice TIR Packing list Commercial Invoice CMR Packing List TIR Certificate of quality SOLAS certificate EUR 1 - Certificate of origin CMR Page 50 Doing Business 2020 Albania Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local currency of • Court costs USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 51 Doing Business 2020 Albania Enforcing Contracts - Albania Standardized Case Claim value ALL 1,089,263 Court name Tirana District Court City Covered Tirana Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Time (days) 525 496.4 589.6 120 (Singapore) Cost (% of claim value) 42.7 26.6 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 7.5 10.3 11.7 None in 2018/19 Figure – Enforcing Contracts in Albania – Score 66.8 52.1 41.7 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Albania and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 70.6: Croatia (Rank: 27) 66.8: Montenegro (Rank: 44) 66.0: North Macedonia (Rank: 47) 65.5: Regional Average (Europe & Central Asia) 53.5: Albania (Rank: 120) 48.1: Greece (Rank: 146) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 52 Doing Business 2020 Albania Figure – Enforcing Contracts in Albania – Time and Cost Time (days) Cost (% of claim value) 1800 42.7 1711 45 Cost (% of claim value) 1600 40 1400 35 Time (days) 1200 28.6 30 26.6 25.7 1000 22.4 21.5 25 800 650 634 20 15.2 545 589.6 600 525 496.4 15 400 10 200 5 0 0 Albania Croatia Europe Greece Montenegro North OECD & Macedonia high Central income Asia Page 53 Doing Business 2020 Albania Figure – Enforcing Contracts in Albania and comparator economies – Measure of Quality Albania 1.5 1.5 1 3.5 Croatia 2.5 3.5 2 5 Greece 2.5 5 2 3 Montenegro 2 3.5 1 5 North Macedonia 2.5 3.5 2 5 OECD high income 2.5 3.2 2.4 3.6 Europe & Central Asia 2.3 2.8 1.3 3.6 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Albania Indicator Time (days) 525 Filing and service 45 Trial and judgment 300 Enforcement of judgment 180 Cost (% of claim value) 42.7 Attorney fees 25 Court fees 5.7 Enforcement fees 12 Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 1.5 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 1.5 Page 54 Doing Business 2020 Albania Details – Enforcing Contracts in Albania – Measure of Quality Answer Score Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 1.5 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be granted? No 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) Yes 1.0 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 competent court? No 0.0 5. Are there any electronic case management tools in place within the competent court for use by judges? No 0.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? No 0.0 Court automation (0-4) 1.0 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? No 0.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the general public Yes through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made Yes available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 1.5 1. Arbitration 0.5 1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or No 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 order or public policy— n.a. that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 55 Doing Business 2020 Albania 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 56 Doing Business 2020 Albania 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 was completed in May 2019. 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 used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have • Assessors’ and auctioneers’ fees been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal 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) Page 57 Doing Business 2020 Albania Resolving Insolvency - Albania Indicator Albania Europe & Central OECD high Best Regulatory Asia income Performance Recovery rate (cents on the dollar) 44.6 38.5 70.2 92.9 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.3 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 0 .. .. .. Strength of insolvency framework index (0-16) 14.0 11.2 11.9 None in 2018/19 Figure – Resolving Insolvency in Albania – Score 48.0 87.5 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Albania and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 72.7: North Macedonia (Rank: 30) 67.7: Albania (Rank: 39) 66.1: Montenegro (Rank: 43) 56.5: Croatia (Rank: 63) 55.7: Regional Average (Europe & Central Asia) 53.1: Greece (Rank: 72) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 58 Doing Business 2020 Albania Figure – Resolving Insolvency in Albania – Time and Cost Time (years) Cost (% of estate) 4 14.5 16 3.5 3.5 13.3 14 Cost (% of estate) 3.1 3 12 Time (years) 10.0 10.0 2.5 2.3 9.0 9.3 10 2.0 8.0 2 1.7 8 1.4 1.5 1.5 6 1 4 0.5 2 0 0 Albania Croatia Europe Greece Montenegro North OECD & Macedonia high Central income Asia Page 59 Doing Business 2020 Albania Figure – Resolving Insolvency in Albania and comparator economies – Measure of Quality Albania 6 3 2 3 Croatia 4 3 2 3 Greece 5.5 2.5 1 2.5 Montenegro 6 2.5 1 3 North Macedonia 6 3 3 3 OECD high income 5.3 2.8 2.1 1.9 Europe & Central Asia 4.5 2.5 2.3 1.7 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) 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.” Figure – Resolving Insolvency in Albania and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 60 50.3 50 48.0 44.6 40 38.5 35.2 32.0 30 20 10 0 Albania Croatia Greece North Macedonia Montenegro Europe & Central Asia Page 60 Doing Business 2020 Albania Details – Resolving Insolvency in Albania Indicator Answer Score Proceeding foreclosure Foreclosure is the fastest and most cost effective way for BizBank to enforce its rights, therefore, the bank will likely start this procedure. Foreclosure will entail direct enforcement of the bank's security rights in court, instead of collective proceedings, such as liquidation or reorganization. Outcome piecemeal sale Hotel's assets will be sold by the bailiff piecemeal in order to satisfy the bank's claims. Time (in years) 2.0 A loan agreements executed by a commercial bank constitutes an enforceable title under article 510/(dh) of the Code of Civil Procedure. After application by the creditor, the court will issue an enforcement order without reviewing the merits of the claim. The court order will thereafter, upon demand of the creditor, be enforced by the court bailiff against the debtor and its properties/assets. In case of failure of debtor to pay, the bailiff will seize the debtor’s assets to the amount of unsettled debt, sell them in an auction and use the proceeds for paying the creditor. Delays may occur if the debtor challenges the valuation of the property prepared for the auction or attempts to suspend execution proceedings by the bailiff through court. Delays may also occur if the foreclosure is suspended due to initiation of a bankruptcy proceeding. Cost (% of estate) 10.0 Major expenses include attorney's fees (5%), fees of the bailiff and other professionals involved in the case (4%), and other fees (1%). Recovery rate 44.6 (cents on the dollar) Page 61 Doing Business 2020 Albania Details – Resolving Insolvency in Albania – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 14.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor 1.0 may file for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (c) Both (a) and (b) 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value options are available, of its assets but only one of them needs to be complied with Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the Yes 1.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary 1.0 unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are affected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as Yes 1.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote Yes 1.0 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 appointment of the insolvency No 0.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency Yes 1.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 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.” Page 62 Doing Business 2020 Albania Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to 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, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 63 Doing Business 2020 Albania Employing Workers - Albania Details – Employing Workers in Albania Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 222.6 Ratio of minimum wage to value added per worker 0.4 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 5.5 Premium for night work (% of hourly pay) 50.0 Premium for work on weekly rest day (% of hourly pay) 25.0 Premium for overtime work (% of hourly pay) 25.0 Restrictions on night work? Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 13.0 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 13.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 10.1 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 10.7 Page 64 Doing Business 2020 Albania Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 21.4 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 10.7 Unemployment protection after one year of employment? Yes Page 65 Doing Business 2020 Albania Business Reforms in Albania From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Getting Electricity: Albania increased the reliability of power supply by rolling out a Supervisory Control and Data Acquisition (SCADA) automatic energy management system for the monitoring of outages and the restoration of service. DB2018 Getting Electricity: Albania improved the monitoring and regulation of power outages by beginning to record data on the frequency and duration of power outages lasting longer than five minutes. Albania also made the process of getting electricity faster by imposing strict deadlines for services and payment of connection fees. Registering Property: Albania made registering property easier by increasing the transparency of the land administration system and by establishing a national database to verify the accuracy of identity documents Getting Credit: Albania strengthened access to credit by amending the Albanian Civil Code and the Law on Securing Charges, and by adopting a new Insolvency Law. It is now possible to grant a security interest over any type of movable property – including tangible and intangible assets – and secured creditors are given absolute priority within insolvency proceedings. Employing Workers: Albania amended legislation to reduce the maximum number of hour allowed in a workweek and to mandate that women and men be given equal remuneration for work of equal value. DB2017 Dealing with Construction Permits: Albania made dealing with construction permits easier by reintroducing the issuance of building permits and streamlining the process of receiving the final inspection and compliance certificate. Getting Electricity: Albania made getting electricity easier by speeding up the process for obtaining a new connection. Paying Taxes: Albania made paying taxes easier by introducing an online system for filing and paying taxes. Trading across Borders: Albania made trading across borders more difficult by introducing mandatory scanning inspections for exports and imports, which increased the time and cost for border compliance. DB2016 Dealing with Construction Permits: Albania made dealing with construction permits more difficult by suspending the issuance of building permits. Protecting Minority Investors: Albania strengthened minority investor protections by introducing legal requirements for immediate disclosure of related-party transactions to the public. Trading across Borders: Albania made exporting easier by implementing an electronic risk-based inspection system, which reduced the time for border compliance. DB2015 Starting a Business: Albania made starting a business easier by lowering registration fees. Dealing with Construction Permits: Albania made dealing with construction permits easier by resuming the issuance of construction permits and by consolidating the land permit and construction permit into a single construction development permit. Registering Property: Albania made transferring property easier by establishing effective time limits and computerizing the records on immovable property. Getting Credit: Albania weakened its secured transactions system through an amendment to the Securing Charges Law that does not allow intangible assets to be secured with a nonpossessory pledge. Paying Taxes: Albania made paying taxes more costly for companies by increasing the corporate income tax rate. DB2014 Paying Taxes: Albania made paying taxes easier by allowing corporate income tax to be paid quarterly. DB2013 Starting a Business: Albania made starting a business easier by making the notarization of incorporation documents optional. Paying Taxes: Albania made paying taxes easier for companies by abolishing the vehicle tax and encouraging electronic filing for taxes. Page 66 Doing Business 2020 Albania DB2012 Dealing with Construction Permits: In Albania dealing with construction permits became more difficult because the main authority in charge of issuing building permits has not met since April 2009. Registering Property: Albania made property registration easier by setting time limits for the land registry to register a title. DB2011 Paying Taxes: Albania made it easier and less costly for companies to pay taxes by amending several laws, reducing social security contributions and introducing electronic filing and payment. DB2010 Starting a Business: Albania made business start-up easier by making registration electronic and enhancing capacity at the registry, reducing the minimum capital requirement and eliminating the requirement to register at the chamber of commerce. Trading across Borders: Albania reduced the time needed for customs clearance of imports by implementing the ASYCUDA World electronic data interchange system and by purchasing scanners. Resolving Insolvency: Albania improved its insolvency process through a new insolvency law introducing statutory time limits during the insolvency procedure, specifying professional qualifications for insolvency administrators, establishing an agency to regulate the profession of administrators and introducing a simplified insolvency procedure for small businesses DB2009 Starting a Business: Albania made starting a business easier by consolidating tax, health insurance and labor registration into a single application, allowing online publication of the incorporation notice and reducing the registration cost. Getting Credit: Albania improved access to credit information by establishing its first credit bureau. Protecting Minority Investors: Albania strengthened investor protections by introducing approval and disclosure requirements for related-party transactions and by reinforcing directors’ duties and available remedies in cases where related-party transactions are harmful to the company. Paying Taxes: Albania made paying taxes less costly for companies by reducing the corporate income tax rate. DB2008 Paying Taxes: Albania made paying taxes less costly for companies by reducing the corporate income tax rate. Page 67 Doing Business 2020 Albania Page 68