Doing Business 2018 Albania Economy Pro le of Albania Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Albania Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Albania Income Category Upper middle income 65 Population 2,876,101 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 4,250 0 100 68.70 City Covered Tirana DB 2018 Distance to Frontier (DTF) 0 100 73.18: Montenegro (Rank: 42) 72.39: Hungary (Rank: 48) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) 68.70: Albania (Rank: 65) Page 3   68.02: Greece (Rank: 67) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Albania Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Albania Income Category Upper middle income 65 Population 2,876,101 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 4,250 0 100 68.70 City Covered Tirana DB 2018 Distance to Frontier (DTF) 0 100 73.18: Montenegro (Rank: 42) 72.39: Hungary (Rank: 48) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) 68.70: Albania (Rank: 65) 68.02: Greece (Rank: 67) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Albania 1 20 24 28 42 41 45 55 82 Rank 106 103 109 120 125 136 157 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Albania 100 96.29 91.49 80 71.67 70.00 66.27 63.94 66.13 59.28 60 53.66 DTF 48.31 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+0.51 Change:+10.00 Investors Change:-0.54 Borders Change:0.00 Change:-0.39 Change:+0.06 Permits Change:0.00 Change:0.00 Change:+0.03 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+0.51 Change:+10.00 Investors Change:-0.54 Borders Change:0.00 Change:-0.39 Change:+0.06 Permits Change:0.00 Change:0.00 Doing Business 2018 Albania Change:+0.03 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Albania Standardized Company Legal form Limited Liability Company (Shpk) Paid-in minimum capital requirement ALL 0 City Covered Tirana Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Procedure – Men (number) 5 5.2 4.9 1.00 (New Zealand) Time – Men (days) 5 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 12.0 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 5 5.2 4.9 1.00 (New Zealand) Time – Women (days) 5 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 12.0 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.30: Greece (Rank: 37) 91.49: Albania (Rank: 45) 90.62: Regional Average (Europe & Central Asia) 90.07: Montenegro (Rank: 60) 87.60: Hungary (Rank: 79) 86.39: Croatia (Rank: 87) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Albania – Procedure, Time and Cost Time Cost 5 12 10 4 ost (% of income per capita) 8 Time (days) 3 6 2 4 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Albania Figure – Starting a Business in Albania – Procedure, Time and Cost Time Cost 5 12 10 4 Cost (% of income per capita) 8 Time (days) 3 6 2 4 1 2 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain the Registration Certi cation and Unique Business 1 day ALL 100 Identi cation Number with National Registration Center, NRC (Qendra Kombëtare për Regjistrim, QRK) 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 insurance, health insurance and labor directorate 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 Employment Regional Directory 1 day no charge Agency : State Labour Inspectorate After the registration with NBC (procedure 1), all the information about new company is available to the State Labor Inspectorate immediately through the online portal e- Albania. In order to complete the Employee registration, the following documents are required: Page 7   1. Registration Certi cate from the NRC and the declaration of the employed (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Albania Details – Starting a Business in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain the Registration Certi cation and Unique Business 1 day ALL 100 Identi cation Number with National Registration Center, NRC (Qendra Kombëtare për Regjistrim, QRK) 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 insurance, health insurance and labor directorate 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 Employment Regional Directory 1 day no charge Agency : State Labour Inspectorate After the registration with NBC (procedure 1), all the information about new company is available to the State Labor Inspectorate immediately through the online portal e- Albania. In order to complete the Employee registration, the following documents are required: 1. Registration Certi cate from the NRC and the declaration of the employed persons 2. Submit the payroll every 3 months by keeping a signed and sealed copy The newly registered company shall download the relative registration form at the State Labour Inspectorate website (http://134.0.34.135/wp- content/uploads/2014/02/formular_deklarimi_2014.doc), and submit it the State Labour Inspectorate o ce. 3 Finalize registration with the Municipality Bureau of Internal Revenue 1 day ALL 30,000 (cleaning and obtain list of applicable local fees and taxes fee) + ALL 27,000 Agency : Municipality Bureau of Internal Revenue (temporary educational tax) The National Business Center, within 24 hours from the registration of the company noti es the Municipality Bureau of Internal Revenue and Tax Authorities. After the business has obtained the registration certi cate 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 nalize the registration with the Municipality Bureau of Internal Revenue the following documents are required: 1) The Application form; 2) The Registration Certi cate form the National Business Center; 3) the Statute and the By Laws of the Company Page 8   4) Rent agreement or proprietorship certi cate of the Headquarters of the content/uploads/2014/02/formular_deklarimi_2014.doc), and submit it the Doing State Labour Business Inspectorate 2018 o ce. Albania 3 Finalize registration with the Municipality Bureau of Internal Revenue 1 day ALL 30,000 (cleaning and obtain list of applicable local fees and taxes fee) + ALL 27,000 Agency : Municipality Bureau of Internal Revenue (temporary educational tax) The National Business Center, within 24 hours from the registration of the company noti es the Municipality Bureau of Internal Revenue and Tax Authorities. After the business has obtained the registration certi cate 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 nalize the registration with the Municipality Bureau of Internal Revenue the following documents are required: 1) The Application form; 2) The Registration Certi cate form the National Business Center; 3) the Statute and the By Laws of the Company 4) Rent agreement or proprietorship certi cate 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 e ectively from March 21, 2016 are as follows: - billboard tax for identi cation 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 Agency : Tax Authority of 50 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). 5 Make a company seal 1 day ALL 3,000 to ALL Agency : Private sealmakers 5,000 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 certi ed true copy). However, in practice authorities continue to request that the documentation is sealed. Page 9   purchasing a batch of pre-printed invoices, with company number on them, Doing at the price of Business 360 ALL 2018 for each batch (50 copies). Albania 5 Make a company seal 1 day ALL 3,000 to ALL Agency : Private sealmakers 5,000 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 certi ed 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 noti cation forms based on the interpretation of speci c agency o cers. Thus, the most companies still prefer to make a company seal. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned Page 10   by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 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 noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 11   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Albania Standardized Warehouse Estimated value of warehouse ALL 25,643,927.20 City Covered Tirana Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Procedures (number) 17 16.0 12.5 7.00 (Denmark) Time (days) 220 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 3.5 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 72.48: Greece (Rank: 58) 69.30: Montenegro (Rank: 78) 68.09: Regional Average (Europe & Central Asia) 67.93: Hungary (Rank: 90) 66.27: Albania (Rank: 106) 63.00: Croatia (Rank: 126) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Albania – Procedure, Time and Cost Time Cost 3.5 200 3 Cost (% of warehouse value) 2.5 150 Time (days) 2 100 1.5 1 50 0.5 0 0 1 *2 *3 *4 *5 *6 *7 *8 9 10 11 12 13 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Albania Figure – Dealing with Construction Permits in Albania – Procedure, Time and Cost Time Cost 3.5 200 3 Cost (% of warehouse value) 2.5 150 Time (days) 2 100 1.5 1 50 0.5 0 0 1 *2 *3 *4 *5 *6 *7 *8 9 10 11 12 13 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Albania and comparator economies – Measure of Quality 13.5 13.0 13.0 13 12.5 Index score 12.0 12.0 12.0 12 11.4 11.5 11 10.5 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Dealing with Construction Permits in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain recent property card 30 days ALL 3,250 Agency : Immovable Properties Registration O ce 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 Extract of Master Plan of the Plot from the Urban 30 days no charge Planning Department Page 13   Agency : Municipal Urban Planning Department Albania Croatia Greece Hungary Montenegro Europe & Central Asia Doing Business 2018 Albania Details – Dealing with Construction Permits in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain recent property card 30 days ALL 3,250 Agency : Immovable Properties Registration O ce 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 Extract of Master Plan of the Plot from the Urban 30 days no charge Planning Department 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. 3 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. 4 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. 5 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. 6 Request and obtain Project Clearance from Environmental Protection 8 days no charge Agency Agency : Environmental Protection Agency A two-story warehouse, such as the one in the case study would fall under Page 14   introduced a new cost for granting a project clearance at the initial stage of Doing designing Business the amount at 2018 of ALL 3,000.00. Albania 6 Request and obtain Project Clearance from Environmental Protection 8 days no charge Agency Agency : Environmental Protection Agency A two-story warehouse, such as the one in the case study would fall under building category C (low risk) and, therefore, does not required an environmental impact assessment. However, it is still mandatory for BuildCo to obtain project clearance from the Environmental Protection Agency through the Natinal Licensing Center. In order to do this, no on-site inspection is conducted. Rather, documentation submitted by BuildCo would be reviewed and approved. 7 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 les, 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 Tari s 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). 8 Request and obtain certi cate from General Directorate of Local Taxes 3 days no charge and Tari s Agency : General Directorate of Local Taxes and Tari s 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 certi cate from the General Directorate of Local Taxes and Tari s (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 construction development permit 45 days ALL 769,318 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 de ned 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. Page 15   Municipality) showing that the developer/constructor does not have any Doing outstanding Business 2018obligation towards the Municipality of Tirana. Albania 9 Request and obtain construction development permit 45 days ALL 769,318 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 de ned 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. 10 Notify Central Technical Inspectorate about the start of construction 1 day no charge works 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." 11 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. 12 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. 13 Request and connect to water and sewage services 20 days ALL 40,000 Agency : Water and Sewerage Agencies 14 Submit Report on the Completion of Works and request on-site 1 day no charge inspection 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. 15 Receive nal inspection from Municipality and obtain compliance report 30 days no charge Agency : Municipal Urban Planning Department The nal on-site inspection is managed by the Municipality, which sends over Page 16   an authorized licensed compliance inspector. The inspector examines the associated costs and requests an inspection of the construction site. Doing Business 2018 Albania 15 Receive nal inspection from Municipality and obtain compliance report 30 days no charge Agency : Municipal Urban Planning Department The nal 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 certi es that the project has been built in compliance with the development and building permit speci cations. 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). 16 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. 17 Register with the Real Estate Registry 60 days ALL 4,320 Agency : Immovable Properties Registration O ce Upon receiving the occupancy permit, BuildCo registers the warehouse with the Real Estate Registry. Takes place simultaneously with previous procedure. 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; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 Page 17   Takes place simultaneously with previous procedure. Doing Business 2018 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; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 2.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the Page 18   supervision; Liability Doing 2018 regimes and insurance Business index (0-2) Albania 2.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover Construction 1.0 possible structural aws or problems in the building once it is in use (Latent Defect company; Liability Insurance or Decennial Insurance)? (0-1) Insurance is commonly taken in practice. Professional certi cations index (0-4) 3.0 What are the quali cation requirements for the professional responsible for verifying Minimum 1.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Page 19   Concluding any necessary supply contract and near a railway. architect or engineer. Doing Business 2018 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 tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 20   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Albania Standardized Connection Price of electricity (US cents per kWh) 9.1 Name of utility Operatori i Shperndarjes se Energjise Elektrike (OSHEE) City Covered Tirana Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Procedures (number) 6 5.4 4.7 2 (United Arab Emirates) Time (days) 134 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 513 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 0 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.26: Croatia (Rank: 75) 75.97: Greece (Rank: 76) 70.35: Regional Average (Europe & Central Asia) 63.26: Hungary (Rank: 110) 59.17: Montenegro (Rank: 127) 48.31: Albania (Rank: 157) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Albania – Procedure, Time and Cost Time Cost 450 120 400 Cost (% of income per capita) 350 100 300 Time (days) 80 250 60 200 150 40 100 20 Page 21   50 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Albania Figure – Getting Electricity in Albania – Procedure, Time and Cost Time Cost 450 120 400 Cost (% of income per capita) 350 100 300 Time (days) 80 250 60 200 150 40 100 20 50 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Albania and comparator economies – Measure of Quality 8 7 7 7 6 5.3 5 5 Index score 5 4 3 2 1 0 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Getting Electricity in Albania – Procedure, Time and Cost No. Procedure 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 14 calendar days ALL 0 site inspection Page 22   Agency : Operatori i Shpërndarjes së Energjisë Elektrike (OSHEE) Albania Croatia Greece Hungary Montenegro Europe & Central Asia Doing Business 2018 Albania Details – Getting Electricity in Albania – Procedure, Time and Cost No. Procedure 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 14 calendar days ALL 0 site inspection 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 sta 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 rm, get design approved and obtain cost 93 calendar days USD 5,503.92 estimate by OSHEE Agency : Electrical design rm/OSHEE The design of the external connection works is done by an electrical design rm. 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 rm 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 5 calendar days ALL 0 utility 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 Page 23   hired by the customer. The cost includes physical work including material, Doing labor, 2018 transportation. equipment, Business Albania 6 Receive internal and external inspection and meter installation by 5 calendar days ALL 0 utility 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. Details – Getting Electricity in Albania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 97.1 System average interruption frequency index (SAIFI) 43.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 10.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.ere.gov.a l/doc/Prices_Approv ed_by_ERE_1january- 31_march_2017.pdf http://oshee.al/tarifa t-e-energjise- elektrike/ Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency Page 24   of tari index. Takes place simultaneously with previous procedure. Doing Business 2018 Albania Details – Getting Electricity in Albania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 97.1 System average interruption frequency index (SAIFI) 43.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 10.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.ere.gov.a l/doc/Prices_Approv ed_by_ERE_1january- 31_march_2017.pdf http://oshee.al/tarifa t-e-energjise- elektrike/ Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of Page 25   infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 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 ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the purchase. Quality of land administration index (0-30) - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value ALL 25,643,927.20 City Covered Tirana Page 26   Europe & OECD high Doing Business 2018 Albania Standard Property Transfer Property value ALL 25,643,927.20 City Covered Tirana Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Procedures (number) 6 5.3 4.6 1.00 (4 Economies) Time (days) 19 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 9.6 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 15.5 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.09: Hungary (Rank: 29) 76.02: Regional Average (Europe & Central Asia) 71.44: Croatia (Rank: 59) 65.76: Montenegro (Rank: 76) 59.28: Albania (Rank: 103) 49.67: Greece (Rank: 145) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Albania – Procedure, Time and Cost Time Cost 10 18 16 8 Cost (% of property value) 14 12 Time (days) 6 10 8 4 6 4 2 2 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. Page 27   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Albania Figure – Registering Property in Albania – Procedure, Time and Cost Time Cost 10 18 16 8 Cost (% of property value) 14 12 Time (days) 6 10 8 4 6 4 2 2 0 0 1 *2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Albania and comparator economies – Measure of Quality 30 26.0 25 22.5 19.8 20 Index score 17.5 15.5 15 10 4.5 5 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Registering Property in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The seller obtains ownership title certi cate 8 calendar days The total fee Agency : ALBRep - Real Estate Electonic Database, administrated by the (simultaneous with applicable for this Immovale Properties Registration O ce Procedures 2) procedure, according to the Instruction no. Seller and Buyer appear before the notary public to draft and sign the 5341/5, dated contract for the transfer of property. At this time, the Seller provides the 09.07.2012 "On notary public with a document that certi es the Seller's ownership. Notary approval of the Real public, in turn, must verify the ownership of the Seller through the real estate electronic database (Immovable Properties Registration O ce and Estate Registration ALBSReP) before permitting the parties to sign the transfer of property Offices services` fees" contract. Once the ownership of Seller is con rmed, the parties may of the Ministry of proceed to sign the transfer of property contract, which must note that the Justice and Ministry of Page 28   notary public has veri ed the legal status of the property to be transferred, Finance and Order no. Albania Croatia Greece Hungary Montenegro Europe & Central Asia Doing Business 2018 Albania Details – Registering Property in Albania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The seller obtains ownership title certi cate 8 calendar days The total fee Agency : ALBRep - Real Estate Electonic Database, administrated by the (simultaneous with applicable for this Immovale Properties Registration O ce Procedures 2) procedure, according to the Instruction no. Seller and Buyer appear before the notary public to draft and sign the 5341/5, dated contract for the transfer of property. At this time, the Seller provides the 09.07.2012 "On notary public with a document that certi es the Seller's ownership. Notary approval of the Real public, in turn, must verify the ownership of the Seller through the real estate electronic database (Immovable Properties Registration O ce and Estate Registration ALBSReP) before permitting the parties to sign the transfer of property Offices services` fees" contract. Once the ownership of Seller is con rmed, the parties may of the Ministry of proceed to sign the transfer of property contract, which must note that the Justice and Ministry of notary public has veri ed the legal status of the property to be transferred, Finance and Order no. and must attach the results of such veri cation. It re ects on any liens, 995, dated 31.10.2014 mortgages, leases or other encumbrances registered over the property. of the Chief Registrar The Property Records are accompanied by the Property Map. would be: i) 1500 ALL for Pursuant to Order No. 606/3, dated 11.02.2016 "On an addition to Order No. certificate/attestation; 279, dated 14.06.2012 of the Minister of Justice "On the approval of the ii) 1000 ALL copy of tari s of the notary services", as amended, the above services can be the property records; obtained also at the notary upon payment of the following additional fees iii) 1000 ALL copy of (in addition to the tari s above to be paid to the Albanian State): the registration map 1. ALL 1,000.00 for property certi cate; fragment; 2. ALL 500.00 for copy of property record; and iv) 150 ALL mailing 3. ALL 500.00 for copy of cadastral map fragment. service; v) 100 ALL Bank The di erence between the three services provided in Instruction No. commission; 5341/5 above and those of Order No. 606/3 is that the former are provided vi) 100 ALL Service fee within 1 day and are printed from the online system by the notary, while the for obtaining the latter are normal documents delivered by the Immovable Property ownership Registration O ce to the Notary and the Notary hands them over to the certificate; client. vii) 50 ALL service fee for the copy of the map and all property records. Total: 3,900 ALL. 2 The Buyer veri es the status of the property at the Real Estate Property 3 calendar days 700 ALL tariff Registry (simultaneous with + 50 ALL service fee Agency : ALBSReP - Real Estate Electronic Database, administered by the Procedures 1) + 100 ALL bank Immovable Properties Registration O ce commission According to Law 33/2012 "On the registration of Immovable Property", article 68, only the owner or a person who has a legitimate interest, has the right to verify the status of the property at the Real Estate Property Registry. The application shall be made at the electronic register on immovable properties. At the moment of the application the applicant shall obtain the user name and password, to be used for future online follow up on the status of the application. Page 29   property records. Doing Business 2018 Albania Total: 3,900 ALL. 2 The Buyer veri es the status of the property at the Real Estate Property 3 calendar days 700 ALL tariff Registry (simultaneous with + 50 ALL service fee Agency : ALBSReP - Real Estate Electronic Database, administered by the Procedures 1) + 100 ALL bank Immovable Properties Registration O ce commission According to Law 33/2012 "On the registration of Immovable Property", article 68, only the owner or a person who has a legitimate interest, has the right to verify the status of the property at the Real Estate Property Registry. The application shall be made at the electronic register on immovable properties. At the moment of the application the applicant shall obtain the user name and password, to be used for future online follow up on the status of the application. 3 Comparison of property map with the real situation and position of the 1 - 3 days Estimated between land 15,000 ALL - 20,000 Agency : Private authorized expert (topographer) ALL While this procedure is not mandatory by law, it is done in practice by the buyer to avoid any dispute with third parties caused by border issues and/or land surface. Veri cation 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. 4 Notarization of sale and purchase contract by the notary public 1 day Pursuant to the Order Agency : Notary O ce Nr. 279, dated 14.6.2012, "For the Order Nr. 279, dated 14.6.2012, "For the approval of tari s for notary approval of tariffs for services", repealed Minister of Justice's Decree Nr. 96/1, dated 23.1.2001, notary services", and went into e ect on 20.6.2012. effective on 20.6.2012, the notary fees are In order to execute the sale-purchase contract, the seller submits to the notary public: calculated as follows: (1) Ownership Certi cate or the Ownership Attestation; (2) The updated Property Records, issued not later than 72 hrs before the For the property with contract signature; the transaction value (3) Property Map" 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 %. 5 Payment of taxes (local and income tax) at a second-tier bank 1 day Local Tax for Tirana Agency : Second-tier bank municipality: 2000ALL per square meter Page 30   Under the law no.9632, dated 30.10 2006 "On local taxes", as amended, in for above 100.000.001 Doing Business 2018 Albania ALL the tariff is 0.23 %. 5 Payment of taxes (local and income tax) at a second-tier bank 1 day Local Tax for Tirana Agency : Second-tier bank municipality: 2000ALL per square meter Under the law no.9632, dated 30.10 2006 "On local taxes", as amended, in Income tax for a case of transfer of ownership over a commercial area located in Tirana is company: 15% as applicable a tax rate of 2000ALL per square meter. Whereas the tax rate for income tax (not transfer of the ownership over the land is 2% of the sale price. included in calculation) Additionally under the Law No. 156/2014 "On certain amendments to law no. 8438", Dated 28.12.1998, The section "Income tax" was amended in the Transfer tax: 2%. article 3 specify that the transfer of the right of ownership on real estate, building land, are taxed at 15 percent of the pro t. 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. 6 Registration at the Real Estate Registry O ce 7 days According to the Agency : Tirana Immovable Properties Registration O ce INSTRUCTION No. 5341/5, dated Pursuant to Law No. 10491, Date 01.03.2012, the notary public registers the 09.07.2012, transferred property at the Immovable Properties Registration O ce. + 3,500 ALL The buyer les the original copy of the contract signed by both parties, registration fee; accompanied by the + 1,500 ALL for the (1) Original copy of the Ownership Certi cate or the Ownership Attestation; Ownership certificate; (2) The updated Property Records issued no later than 72 hours before the contract is signed; + 1,000 ALL for the (3) Property Map, and; property records; (4) The receipt of the payment of the fee for transferring the ownership + 1,000 ALL for the title." map; + 150 ALL for the mailing service; + 100 ALL Bank commission. Total fee is 7,250.00 ALL Takes place simultaneously with previous procedure. Details – Registering Property in Albania – Measure of Quality Answer Score Quality of the land administration index (0-30) 15.5 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Immovable Property Registration O ce Tirana In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Page 31   Takes place simultaneously with previous procedure. Doing Business 2018 Albania Details – Registering Property in Albania – Measure of Quality Answer Score Quality of the land administration index (0-30) 15.5 Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? Immovable Property Registration O ce Tirana In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Immovable Property Registration O ce of Tirana In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Only 0.0 immovable property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://www.zrpp. gov.al/new/? page_id=1143 Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.zrpp. gov.al/sherbime. php? idr=3&lang=1 Page 32   immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Albania Link for online access: http://www.zrpp. gov.al/sherbime. php? idr=3&lang=1 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.zrpp. gov.al/new/? page_id=1143 Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.zrpp. gov.al/new/? page_id=1143 Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: http://www.zrpp. gov.al/new/? page_id=1143 Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 7.0 Page 33   Are all Doing privately held Business 2018 plots in the economy mapped? landAlbania No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 7.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Tirana District property worth 50 times gross national income (GNI) per capita and located in the Court largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: According to the statistics published on the o cial website of Tirana District Court, there were 300 new property disputes in 2016. Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 34   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Albania Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Strength of legal rights index (0-12) 8 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.3 6.6 8.00 (34 Economies) Page 35   Credit registry coverage (% of adults) 51.6 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Albania Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Strength of legal rights index (0-12) 8 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 51.6 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 0.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.00: Montenegro (Rank: 12) 75.00: Hungary (Rank: 29) 70.00: Albania (Rank: 42) 64.58: Regional Average (Europe & Central Asia) 55.00: Croatia (Rank: 77) 50.00: Greece (Rank: 90) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Albania and comparator economies 14 12 12 10 10 Index score 8 8 6.6 6 5 4 3 2 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Legal Rights in Albania Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Page 36   Albania Croatia Greece Hungary Montenegro Europe & Central Asia Doing Business 2018 Albania Details – Legal Rights in Albania Strength of legal rights index (0-12) 8 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Albania and comparator economies 8 7 6.3 6 6 6 5 5 Index score 4 2 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Credit Information in Albania Page 37   0 Albania Doing Business 2018 Croatia Albania Greece Hungary Montenegro Europe & Central Asia Details – Credit Information in Albania Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more No Yes 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? No Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, No Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 6 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 0 964,536 Number of firms 0 57,117 Total 0 1,021,653 Percentage of adult population 0.0 51.6 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 38   transactions; Available legal remedies (damages, Percentage of adult population 0.0 51.6 Doing Business 2018 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 June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 7.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 6.6 6.4 Page 39   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Albania Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 7.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 71.67: Albania (Rank: 20) 68.33: Croatia (Rank: 29) 64.31: Regional Average (Europe & Central Asia) 63.33: Greece (Rank: 43) 61.67: Montenegro (Rank: 51) 50.00: Hungary (Rank: 108) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Albania and comparator economies – Measure of Quality Albania 8 7 9 6 6 7 Croatia 7 6 5 9 8 6 Greece 8 4 7 7 7 5 Hungary 7 4 2 5 6 6 Montenegro 9 8 5 3 6 6 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Albania – Measure of Quality Answer Score Page 40   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Albania Details – Protecting Minority Investors in Albania – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 7.7 Extent of disclosure index (0-10) 9 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 7 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Page 41   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Albania 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.7 Extent of shareholder rights index (0-10) 6 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 Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Page 42   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of Doing their term? Business 2018 Albania Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. Page 43   Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 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 measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Payments (number per year) 35 16.5 10.9 3 (Hong Kong SAR, China) Page 44   return, but within the tax assessment period. Doing Business 2018 Albania Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Payments (number per year) 35 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 261 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 37.3 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 57.61 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.97: Greece (Rank: 65) 76.67: Montenegro (Rank: 70) 75.78: Regional Average (Europe & Central Asia) 71.49: Hungary (Rank: 93) 70.90: Croatia (Rank: 95) 63.94: Albania (Rank: 125) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Albania and comparator economies – Measure of Quality 80 75.70 70.49 70 63.94 65.20 61.20 57.61 60 Index score 50 40 30 20 10 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Paying Taxes in Albania Tax or Total tax and mandatory Payments Notes on Time Statutory contribution rate (% Notes contribution (number) Payments (hours) tax rate Tax base of profit) on TTR Page 45   Social security 12 66 15% gross wages, 16.92 Doing Business 2018 Albania Figure – Paying Taxes in Albania and comparator economies – Measure of Quality 80 75.70 70.49 70 63.94 65.20 61.20 57.61 60 Index score 50 40 30 20 10 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Paying Taxes in Albania Tax or Total tax and mandatory Payments Notes on Time Statutory contribution rate (% Notes contribution (number) Payments (hours) tax rate Tax base of profit) on TTR Social security 12 66 15% gross wages, 16.92 contributions minimum salaries are imposed Corporate 5 105 15% taxable profit 14.01 income tax Health insurance 0 jointly 1.7% gross salaries 1.92 contribution Municipal taxes 1 ALL 360,000 fixed fee varies by type 1.42 of business Property 1 2% sale price 1.21 transfer tax Building tax 1 200 area of building in 1.06 ALL/m2/year square meters Tax on impact on 1 2% value of investment 0.61 infrastructure Land Tax 1 12-20 The surface of the 0.12 ALL/m2 land plot Employee paid - 0 jointly 11.2% gross salaries 0.00 withheld Labor tax Fuel tax 1 included into the fuel 0.00 small price amount Value added tax 12 90 20% value added 0.00 not (VAT) included Totals 35 261 37.3 Page 46   Details – Paying Taxes in Albania – Tax by Type Totals 35 261 37.3 Doing Business 2018 Albania Details – Paying Taxes in Albania – Tax by Type Taxes by type Answer Profit tax (% of profit) 14.0 Labor tax and contributions (% of profit) 18.8 Other taxes (% of profit) 4.4 Details – Paying Taxes in Albania – Measure of Quality Answer Score Post ling index (0-100) 57.61 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 3 months and VAT credit for which the VAT refund is requested must be higher than ALL 400,000 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) 14.0 72 Time to obtain a 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 audit (hours) 18.0 69.72 Time to complete a corporate income tax audit (weeks) 14.7 54.02 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Page 47   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not Doing applicable. Business 2018 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 tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 48   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 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 tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 49   of agriculture or industry, national security agencies and any other Doing Business 2018 Albania government authorities. Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Time to export: Border compliance (hours) 9 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 55 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 6 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 10 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 10 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 77 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 8 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 10 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 96.29: Albania (Rank: 24) 93.72: Greece (Rank: 29) 88.75: Montenegro (Rank: 44) 83.96: Regional Average (Europe & Central Asia) 100.00: Croatia (Rank: 1) 100.00: Hungary (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Albania – Time and Cost Time Cost 12 90 10 77 80 10 9 70 8 8 55 60 Time (hours) Cost (USD) 6 50 6 40 4 30 20 2 10 10 10 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 50   Doing Business 2018 Albania Figure – Trading across Borders in Albania – Time and Cost Time Cost 12 90 10 77 80 10 9 70 8 8 55 60 Time (hours) Cost (USD) 6 50 6 40 4 30 20 2 10 10 10 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Albania Characteristics Export Import Product HS 62 : Articles of apparel and clothing accessories, not HS 8708: Parts and accessories of knitted or crocheted motor vehicles Trade partner Italy Germany Border Durres port Kjafasan border crossing Distance (km) 38 107 Domestic transport time 3 5 (hours) Domestic transport cost 143 336 (USD) Details – Trading across Borders in Albania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.5 54.7 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.0 0.0 Import: Clearance and inspections required by customs authorities 8.5 77.3 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.5 0.0 Details – Trading across Borders in Albania – Trade Documents Export Import Page 51   (USD) Doing Business 2018 Albania Details – Trading across Borders in Albania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.5 54.7 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.0 0.0 Import: Clearance and inspections required by customs authorities 8.5 77.3 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 2.5 0.0 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 Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees Page 52   economies the data are also collected for the second largest business city. CMR Doing Business 2018 Albania Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value ALL 985,165.00 Court name Tirana District Court City Covered Tirana Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Time (days) 525 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 34.9 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 66.75: Montenegro (Rank: 42) Page 53   of judicial processes Quality Business Doing index (0-18) 2018 Albania 6.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 66.75: Montenegro (Rank: 42) 65.38: Regional Average (Europe & Central Asia) 53.66: Albania (Rank: 120) 50.19: Greece (Rank: 131) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Albania – Time and Cost Time Cost 1800 40 34.9 1580 1600 35 Cost (% of claim value) 1400 30 26.2 25.7 1200 Time (days) 21.5 25 1000 20 800 650 15.2 14.4 15.0 605 577.8 15 600 525 489.9 545 400 10 200 5 0 0 Albania Croatia Europe & Greece Hungary Montenegro OECD high income Central Asia Figure – Enforcing Contracts in Albania and comparator economies – Measure of Quality Albania 1.5 1.5 1 2 Croatia 2.5 3.5 2 5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 Montenegro 2 3.5 1 5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 54   16 Albania Croatia Europe & Greece Hungary Montenegro OECD high income Central Asia Doing Business 2018 Albania Figure – Enforcing Contracts in Albania and comparator economies – Measure of Quality Albania 1.5 1.5 1 2 Croatia 2.5 3.5 2 5 Greece 2.5 4.5 2 3 Hungary 3 4 2.5 4.5 Montenegro 2 3.5 1 5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Albania Indicator Time (days) 525 Filing and service 45 Trial and judgment 300 Enforcement of judgment 180 Cost (% of claim value) 34.9 Attorney fees 25 Court fees 5.7 Enforcement fees 4.2 Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.0 Case management (0-6) 1.5 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 1.5 Details – Enforcing Contracts in Albania – Measure of Quality Page 55   Alternative dispute resolution (0-3) 1.5 Doing Business 2018 Albania Details – Enforcing Contracts in Albania – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 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 No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 1.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 56   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Albania 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 1.5 1. Arbitration 0.5 1.a. Is domestic commercial arbitration governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public n.a. order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 57   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 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 for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 41.6 38.0 71.2 93.1 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Page 58   Cost (% of estate) 10.0 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Albania Europe & OECD high Indicator Albania Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 41.6 38.0 71.2 93.1 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 14.0 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Albania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 68.70: Montenegro (Rank: 37) 66.13: Albania (Rank: 41) 55.59: Greece (Rank: 57) 55.11: Croatia (Rank: 60) 54.75: Hungary (Rank: 62) 54.19: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Albania – Time and Cost Time Cost 4 14.5 14.5 16 3.5 3.5 13.1 14 3.1 3 12 10.0 Cost (% of estate) Time (years) 2.5 2.3 9.0 9.1 10 2.0 2.0 8.0 2 1.7 8 1.4 1.5 6 1 4 0.5 2 0 0 Albania Croatia Europe & Greece Hungary Montenegro OECD high income Central Asia Figure – Resolving Insolvency in Albania and comparator economies – Measure of Quality Albania 6 3 2 3 Page 59   Croatia 4 3 2 3 Albania Croatia Europe & Greece Hungary Montenegro OECD high income Central Asia Doing Business 2018 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 3 Hungary 5 2.5 2 0.5 Montenegro 6 2.5 2 3 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Albania and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 60 49.3 50 41.6 43.7 40 38.0 32.7 33.6 30 20 10 0 Albania Croatia Greece Hungary Montenegro Europe & Central Asia Details – Resolving Insolvency in Albania Indicator Answer Explanation 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 Page 60   assets to the amount of unsettled debt, sell them in an auction and use the proceeds for Albania Croatia Greece Hungary Montenegro Europe & Central Asia Doing Business 2018 Albania Details – Resolving Insolvency in Albania Indicator Answer Explanation 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. Cost (% of 10.0 Major expenses include attorney's fees (5%), fees of the bailiff and other professionals estate) involved in the case (4%), and other fees (1%). Recovery rate (cents on the 41.6 dollar) 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 (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Page 61   dollar) Doing Business 2018 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 (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 6.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over 1.0 ordinary 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 a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated Page 62   equally? Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they would obtain in a liquidation? Albania Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request Yes 1.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost Page 63   (i) notice period for redundancy dismissal; (ii) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Albania Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Albania Answer Hiring Page 64   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Albania Details – Labor Market Regulation in Albania Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 182.3 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 Whether nonpregnant and nonnursing women can work the same night hours as men 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 noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 65   Third-party Doing approval Business 2018 if nine workers are dismissed? Albania 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 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 13.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 13.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 10.1 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 10.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 21.4 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 10.7 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 365.0 Receive 100% of wages on maternity leave? No Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Albania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Albania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 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. Labor Market Regulation: 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 Page 66   Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Albania Business Reforms in Albania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Albania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 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. Labor Market Regulation: 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 nal inspection and compliance certi cate. 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 ling and paying taxes. Trading across Borders: Albania made trading across borders more di cult 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 di cult 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 e ective 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 ling for taxes. Page 67   DB2013 Starting Doing a Business: Business 2018 Albania made starting a business easier by making the notarization of incorporation documents optional. Albania Paying Taxes: Albania made paying taxes easier for companies by abolishing the vehicle tax and encouraging electronic ling for taxes. DB2012 Dealing with Construction Permits: In Albania dealing with construction permits became more di cult 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 ling 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 quali cations for insolvency administrators, establishing an agency to regulate the profession of administrators and introducing a simpli ed 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 rst 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 68   DB2008 Paying Doing 2018 made Taxes: Albania Business paying taxes less costly for companies by reducing the corporate income tax rate. Albania Page 69