Doing Business 2020 Belarus Economy Profile Belarus Page 1 Doing Business 2020 Belarus Economy Profile of Belarus Doing Business 2020 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Belarus About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Belarus Ease of Doing Business in DB RANK DB SCORE Region Europe & Central Asia Belarus Income Category Upper middle income 49 Population 9,485,386 74.3 City Covered Minsk Rankings on Doing Business topics - Belarus 14 20 24 30 40 48 74 79 99 104 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Topic Scores 93.5 75.2 90.3 87.8 50.0 58.0 71.2 96.5 67.6 52.9 Starting a Business (rank) 30 Getting Credit (rank) 104 Trading across Borders (rank) 24 Score of starting a business (0-100) 93.5 Score of getting credit (0-100) 50.0 Score of trading across borders (0-100) 96.5 Procedures (number) 4 Strength of legal rights index (0-12) 3 Time to export Time (days) 8.5 Depth of credit information index (0-8) 7 Documentary compliance (hours) 4 Cost (number) 0.5 Credit registry coverage (% of adults) 53.0 Border compliance (hours) 7 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 0.0 Cost to export Documentary compliance (USD) 60 Dealing with Construction Permits (rank) 48 Protecting Minority Investors (rank) 79 Border compliance (USD) 65 Score of dealing with construction permits (0-100) 75.2 Score of protecting minority investors (0-100) 58.0 Time to export Procedures (number) 15 Extent of disclosure index (0-10) 6.0 Documentary compliance (hours) 4 Time (days) 158 Extent of director liability index (0-10) 2.0 Border compliance (hours) 0 Cost (% of warehouse value) 1.6 Ease of shareholder suits index (0-10) 8.0 Cost to export Building quality control index (0-15) 13.0 Extent of shareholder rights index (0-6) 3.0 Documentary compliance (USD) 0 Extent of ownership and control index (0-7) 5.0 Border compliance (USD) 0 Getting Electricity (rank) 20 Extent of corporate transparency index (0-7) 5.0 Score of getting electricity (0-100) 90.3 Enforcing Contracts (rank) 40 Procedures (number) 3 Paying Taxes (rank) 99 Score of enforcing contracts (0-100) 67.6 Time (days) 105 Score of paying taxes (0-100) 71.2 Time (days) 275 Cost (% of income per capita) 84.4 Payments (number per year) 7 Cost (% of claim value) 23.4 Reliability of supply and transparency of tariff index (0-8) 8 Time (hours per year) 170 Quality of judicial processes index (0-18) 7.5 Total tax and contribution rate (% of profit) 53.3 Registering Property (rank) 14 Postfiling index (0-100) 50.0 Resolving Insolvency (rank) 74 Score of registering property (0-100) 87.8 Score of resolving insolvency (0-100) 52.9 Procedures (number) 4 Recovery rate (cents on the dollar) 40.2 Time (days) 5 Time (years) 1.5 Cost (% of property value) 0.0 Cost (% of estate) 17.0 Quality of the land administration index (0-30) 23.5 Outcome (0 as piecemeal sale and 1 as going 0 concern) Strength of insolvency framework index (0-16) 10.0 Page 4 Doing Business 2020 Belarus Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are in good health and have no criminal record. -Are married, the marriage is monogamous and registered with the authorities. -Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Page 5 Doing Business 2020 Belarus Starting a Business - Belarus Standardized Company Legal form Private Limited Company Paid-in minimum capital requirement No minimum City Covered Minsk Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Procedure – Men (number) 4 5.2 4.9 1 (2 Economies) Time – Men (days) 8.5 11.9 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 0.5 4.0 3.0 0.0 (2 Economies) Procedure – Women (number) 4 5.2 4.9 1 (2 Economies) Time – Women (days) 8.5 11.9 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 0.5 4.0 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 0.7 7.6 0.0 (120 Economies) Figure – Starting a Business in Belarus – Score 82.4 92.0 99.8 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Belarus and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 99.6: Georgia (Rank: 2) 93.5: Belarus (Rank: 30) 93.3: Lithuania (Rank: 34) 91.1: Ukraine (Rank: 61) 90.5: Regional Average (Europe & Central Asia) 82.9: Poland (Rank: 128) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Belarus Figure – Starting a Business in Belarus – Procedure, Time and Cost Time (days) Cost (% of income per capita) 0.3 8 Cost (% of income per capita) 7 0.25 6 0.2 Time (days) 5 0.15 4 3 0.1 2 0.05 1 0 0 1 2 3 *4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Belarus Details – Starting a Business in Belarus – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Pay state registration fee via ERIP payment system Less than one day no charge Agency : ERIP payment system (online procedure) Before submitting a company registration application with all the required documents to the State Registry, entrepreneurs must make a registration payment equal to one base unit. Payment can be done electronically using the online payment system ERIP either through a mobile app or online at https://www.raschet.by/. Once the payment is made, the registrar can see the payment information through their system using a confirmation number. 2 Obtain an approval of the company name with the Registry Administration ("Gorispolkom") 1 day no charge Agency : Registry Administration ("Gorispolkom") Entrepreneurs must obtain a clearance of proposed company name. Up to three suggested company names can be submitted in one request. This can be done online at http://egr.gov.by/ or in person at the Registry Administration. When the name is requested to be verified online, it usually takes 1 business for the decision (approval or rejection) to be made, but it can be delayed in case of rejection. When the name is verified in person, the officer at the Registry Administration notifies the entrepreneur about the decision immediately. Entrepreneurs prefer to verify the name in person to avoid potential delays in case of rejection of the suggested names. The number and the date of clearance certificate are required to be provided in the application form for registration in the following procedure. Obtaining clearance of proposed company name can take as little as a few minutes if the name is not already taken and is not controversial. 3 Business registration with the State Registry 1 week BYN 25.5 Agency : State Registry In order to register a new business entity it is necessary to apply to State Registration Authority with an application form and Articles of Association. The application form includes biographical data on company directors and other company particulars. A Private Limited Company is no longer required to have a Memorandum of Association. The registration may be submitted either in person or electronically. Since September 2017, documents for state registration can be submitted to a notary who will send them to the registering authority. Online business registration is free of charge, but in order to submit a registration application via web portal, it is necessary for the applicant to have a pre-approved electronic signature, which carries an additional expense. As such, many companies chose to register in person. In person registration costs 1 base unit. Since January 2019 ,the amount of the base unit is BYN 25.5. Registration certificate is provided on the next business day from the day of application. The State Registration Authority automatically informs state agencies - tax agencies, state insurance agency RUP "Belgosstrakh", statistics agency, Social Security Fund - of new company's registration. The certificate confirming registration with all aforementioned authorities is provided to the company within 5 working days (7 calendar days). 4 Make a company seal 1 day BYN 20-40 Agency : Seal maker There are no laws requiring a business to purchase company seal. Since February 26, 2018, companies are entitled not to use corporate seals according to Presidential Decree No 7 of November 23, 2017. However, the practice of using the corporate seals has not yet changed, and most limited liability companies would purchase a seal in practice (e.g. the company seal may substitute the notary verification in certain cases; it is used to verify the legitimacy of signed documents according to business practice). Takes place simultaneously with previous procedure. Page 8 Doing Business 2020 Belarus Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule The warehouse: - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) requirements). • Quality of building regulations (0-2) The water and sewerage connections: • Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 9 Doing Business 2020 Belarus Dealing with Construction Permits - Belarus Standardized Warehouse Estimated value of warehouse BYN 616,107.50 City Covered Minsk Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 15 16.2 12.7 None in 2018/19 Time (days) 158 170.1 152.3 None in 2018/19 Cost (% of warehouse value) 1.6 4.0 1.5 None in 2018/19 Building quality control index (0-15) 13.0 12.1 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Belarus – Score 60.0 62.0 92.1 86.7 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Belarus and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 84.9: Lithuania (Rank: 10) 81.1: Ukraine (Rank: 20) 81.0: Georgia (Rank: 21) 76.4: Poland (Rank: 39) 75.2: Belarus (Rank: 48) 69.0: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 10 Doing Business 2020 Belarus Figure – Dealing with Construction Permits in Belarus – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.6 140 0.5 Cost (% of warehouse value) 120 0.4 100 Time (days) 80 0.3 60 0.2 40 0.1 20 0 0 1 *2 *3 *4 5 6 7 8 9 10 11 12 13 14 15 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2020 Belarus Figure – Dealing with Construction Permits in Belarus and comparator economies – Measure of Quality 14 13.0 13.0 12.0 12.1 12 10.0 Index score 10 9.0 8 6 4 2 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Details – Dealing with Construction Permits in Belarus – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain a decision of the Minsk City Executive Committee permitting project design and 30 days no charge construction works on a given land plot Agency : Minsk City Executive Committee To start construction, BuildCo must receive the Minsk City Executive Committee’s decision to elaborate on design documentation. The permission letter states the main requirements for the intended building and lists the agencies and the institutions where additional technical requirements must be obtained. The request form must contain a brief description of the intended building project and company documents. 2 Obtain technical conditions through one-stop shop center 30 days BYN 1,000 Agency : Minsk City Center for Engineering Services On April 26, 2007, the Minsk City Municipality passed Decision # 859 according to which applicants can choose to obtain technical conditions or request the Centre of Engineering Services to obtain them on behalf of the applicant. Prior to this reform, the Centre used to be under the Department of Technical Conditions of the Committee of Architecture and City Construction. Now the Centre operates as a semi-private entity and if the workload increases, it can recruit additional human resources. After the documents are submitted to the Reception Desk they are forwarded to the respective departments, and if the applicant wishes to obtain the technical conditions through the Centre, the documents are directed internally to the Centre. All service providers that issue technical conditions have a legal time limit of 7 working days during which the approvals must be granted. However, in practice, it takes up to 30 days. The services that are involved and would be required for BuildCo’s case are: water/sewage, telephone, sanitary-epidemiological authority, ecological department and fire safety. By law, all technical conditions are granted free of charge. However, if it is done through the Centre for Engineering Services there is a fee -- for BuildCo's case, it would be approximately BYN 1,000. 3 Obtain a geological survey of the land plot 14 days BYN 3,000 Agency : Private licensed company A geological survey of the land plot must be obtained prior to developing the architectural plans of the warehouse. 4 Obtain a topographic survey of the land plot 14 days BYN 700 Agency : Private licensed company A topographic survey of the land plot must be obtained prior to developing the architectural plans of the warehouse. 5 Obtain the approval of project documentation from the Committee of Architecture and 30 days no charge Urban Planning Agency : Committee of Architecture and Urban Planning (Minsk City Executive Authority) According to the Resolution 223 of the Cabinet of Ministers, BuildCo needs to approve the project documentation with the Committee of Architecture and Urban Planning of the Minsk City Executive Authority. 6 Obtain the approval of architectural project from the authorities that issued technical 14 days BYN 200 conditions Agency : Minsk City Center for Engineering Services Designing a warehouse is done in two stages: Architectural project and construction project. The architectural project must be approved by all institutions which provided the technical conditions. Page 12 Doing Business 2020 Belarus 7 Obtain state expertise of design documentation 30 days BYN 2,449 Agency : Minsk City State Expertise Authority Upon developing its design documentation, BuildCo submits it to the Minsk City State Expertise Authority for state approval. The state expertise can be conducted in parallel with the ecological expertise. The State Expertise Authority does not look at ecological aspects of construction documents. According to the Table 1.3 of the Decree No 56 dated 1 March 2018, the rate for a building with a total cost of BYN 473,038.00 would be 87.5. This is then used to calculate the applicable expertise rate of 13.25 in accordance with the Decree No 32 from 6 November 2015. BuildCo must pay BYN 161.42, which is the rate of labor costs per one person/ day, as per the Decree No 280 from 29 December 2017. The total amount needs to be multiplied by 1.145, which is the tariff factor for recalculation of the cost of works per person-day of work of a specialist of the 14th level (average grade of design work). 8 Submit a notice about the start of construction works 1 day BYN 863 Agency : Minsk City Inspectorate of the Department of Construction Control and Supervision According to the Decre No 7 from 23.11.2017, the necessity to obtain a building permit was eliminated. Instead of getting the building permit, BuildCo must submit a notice and may start construction works immediately after such submission. There are three ways of submission: (1) electronically through the following web site https://gosstandart.gov.by/form-for-electronic-appeals- of-citizens (2) by post or (3) personally by visiting the agency. The last option is the most popular for the private sector so far. The application has to include information about: 1. Project owner 2. Construction company 3. Author of the project 4. Approval of the state expertise 5. Construction object According to the Regulations on the financing of the Department of Inspection of Control and Supervision of the Construction of the State Committee for Standardization, approved by the Council of Ministers of the Republic of Belarus of 01.09.2015 № 737, the fee to obtain the building permit is 0.28% of the value of the construction and engineering works for projects with private sector financing. For construction projects with an estimated duration of 12 months or less, an advance payment of 50% of the total estimated amount of the payment must be paid during the application for construction permit. The remaining 50% of the fees is paid before obtaining the occupancy permit. The payment is done at the bank, and a receipt is submitted to the Inspection. The duration of the construction works for the case study warehouse is assumed to be 30 weeks; therefore, 50% of the construction and installation costs have to be paid at the time of applying for the building permit. 9 Receive inspection by the Department of Supervision and Control of Construction 1 day no charge Agency : Department of supervision and control of construction The Department of supervision and control of construction carries out a random inspection to assess the construction process and to control the compliance of the construction with the approved projects and cost estimate documentations. 10 Apply for water and sewerage connection 1 day BYN 28 Agency : Unitary enterprise "Minskvodokanal" Water and sewerage connections are obtained towards the end of construction, after the unscheduled inspection has taken place. First step for BuildCo is to apply to Minskvodokanal requesting a signing of a contract and connection to the water and sewage network. 11 Receive on-site inspection for water and sewerage connection 1 day no charge Agency : Unitary enterprise "Minskvodokanal" After receiving the application for water and sewage connection, Minskvodokanal conducts an inspection of the construction. 12 Obtain connection of water and sewerage 5 days no charge Agency : Unitary enterprise "Minskvodokanal" Based on the results of the inspection, connection to water and sewerage can be obtained. 13 Request and receive inspection by the Acceptance Committee and signature of acceptance 21 days BYN 863 act Agency : Acceptance Commission After water and sewerage have been connected, BuildCo requests an inspection by the Acceptance Commission. The Acceptance Commission represents the contractor and building owner as well as someone from the Municipality's Architecture and Construction department. Upon agreement of these parties, officials of other state agencies can be included in this committee. According to the law the occupancy certificate must be issued within 15 days, but in practice it takes 3 weeks (depending on size of construction and the presence or absence of defects). The Acceptance Commission may come and inspect in one day if BuildCo organizes it in such way. At this point the Builder has to pay the remaining 50% of the fee for the construction permit. Page 13 Doing Business 2020 Belarus 14 Request and obtain an inventory inspection and technical passport 21 days BYN 520 Agency : RUE Minsk City Agency for State Registration and Land Cadastre (BRTI) After receiving an inspection by the Acceptance Commission, BuildCo may request an inspection from a technical inventory specialist. New buildings cannot be registered without first receiving an inspection from a technical inventory specialist who completes a technical passport. There are approximately 120 technical inventory specialists in the city of Minsk. The maximum term of technical inspection prior to the registration of a new building was reduced up to 15 working days (21 calendar days) according to the Decision of the Committee on Land Resources, Geodesy and Cartography #39 dated July 28, 2004 amended as of February 25, 2010 (Art. 12). 15 Register the building with the State Registration and Land Cadastre 2 days BYN 137 Agency : RUE Minsk City Agency for State Registration and Land Cadastre (BRTI) After receiving an inspection from a technical inventory specialist, who completes the technical passport, BuildCo can register the building. In order to register the building, BuildCo must apply to the Registrar's Office. The Registrar authenticates the documents and issues a decision. The registration of the warehouse and the title on the warehouse are governed by the Resolution of the Council of Ministers of the Republic of Belarus of 17.02.2012 № 156 "On Approval of the unified list of administrative procedures carried out by public bodies and other organizations in relation to legal entities and individual entrepreneurs" (as amended on 02.23.2015). Takes place simultaneously with previous procedure. Page 14 Doing Business 2020 Belarus Details – Dealing with Construction Permits in Belarus – 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; They 1.0 must be purchased. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0 building regulations? (0-1) Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in- 1.0 house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0 plans and regulations? (0-2) is done by government agency; Yes, in-house engineer submits report for final inspection. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use Architect or engineer; 1.0 (Latent Defect Liability or Decennial Liability)? (0-1) Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 2.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering; Passing a certification exam. What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Passing a certification exam. Page 15 Doing Business 2020 Belarus Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 16 Doing Business 2020 Belarus Getting Electricity - Belarus Standardized Connection Name of utility Minsk Cable Grid Company Price of electricity (US cents per kWh) 14.7 City Covered Minsk Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 3 5.1 4.4 3 (28 Economies) Time (days) 105 99.6 74.8 18 (3 Economies) Cost (% of income per capita) 84.4 271.9 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 8 6.2 7.4 8 (26 Economies) Figure – Getting Electricity in Belarus – Score 100.0 62.2 99.0 100.0 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Belarus and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 92.9: Lithuania (Rank: 15) 90.3: Belarus (Rank: 20) 84.4: Georgia (Rank: 42) 82.3: Poland (Rank: 60) 75.6: Regional Average (Europe & Central Asia) 62.5: Ukraine (Rank: 128) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Belarus – Procedure, Time and Cost Time (days) Cost (% of income per capita) 90 100 80 Cost (% of income per capita) 80 70 60 Time (days) 60 50 40 40 30 20 20 10 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 17 Doing Business 2020 Belarus reflected here, see the summary below. Figure – Getting Electricity in Belarus and comparator economies – Measure of Quality 9 8 8 8 7 7 7 6.2 Index score 6 5 5 4 3 2 1 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Page 18 Doing Business 2020 Belarus Details – Getting Electricity in Belarus – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application and await technical connection contract 15 calendar days BYN 0 Agency : Minsk Cable Grid Company The customer submits an application for connection contract to the Service center of Minsk Cable Grid Company, along with all necessary documents (copy of the building permit, an estimate of the required capacity for connection and a location map of the location of the warehouse). The application can be submitted in person, mailed by post or emailed. The application form is available on the company's website: http://www.belenergo.by/tp/service-one-docs.html 2 Sign connection agreement and receive external works 89 calendar days BYN 10,404 Agency : Minsk Cable Grid Company The Utility implements the external connection works after the contract is signed. The works include the design of project documentation, construction of distribution line and connection of the customer's electric equipment to the grid, along with the preparation of all necessary documents (e.g. electric equipment inspection certificate, certificate of ownership of networks). The excavation permit for conducting the external connection works is obtained by the utility and the time of procedure includes also the time required for obtaining it (i.e. 5 days). 3 Sign the supply contract and energizing 1 calendar day BYN 0 Agency : Minsk Cable Grid Company The Utility provides the supply contract to the customer and the energizing takes place in no more than 1 business day after signing (provided that the connection cost was fully paid). Takes place simultaneously with previous procedure. Page 19 Doing Business 2020 Belarus Details – Getting Electricity in Belarus – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.5 System average interruption frequency index (SAIFI) 0.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 0.5 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://minenergo.gov.by/w p-content/uploads/tarif- elektro180219.pdf Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 20 Doing Business 2020 Belarus Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 21 Doing Business 2020 Belarus Registering Property - Belarus Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 4 5.5 4.7 1 (5 Economies) Time (days) 5 20.8 23.6 1 (2 Economies) Cost (% of property value) 0.0 2.7 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 23.5 20.4 23.2 None in 2018/19 Figure – Registering Property in Belarus – Score 75.0 98.1 99.7 78.3 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Belarus and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 93.0: Lithuania (Rank: 4) 92.9: Georgia (Rank: 5) 87.8: Belarus (Rank: 14) 75.8: Regional Average (Europe & Central Asia) 71.3: Ukraine (Rank: 61) 63.9: Poland (Rank: 92) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 22 Doing Business 2020 Belarus Figure – Registering Property in Belarus – Procedure, Time and Cost Time (days) Cost (% of property value) 5 0.045 0.04 Cost (% of property value) 4 0.035 0.03 Time (days) 3 0.025 0.02 2 0.015 0.01 1 0.005 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2020 Belarus Figure – Registering Property in Belarus and comparator economies – Measure of Quality 35 30 28.5 Index score 25 23.5 21.5 20.4 19.0 20 16.0 15 10 5 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Details – Registering Property in Belarus – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain the non-encumbrance certificate 1 day BYN 12.75; (0.5 of base Agency : Minsk City Agency on State Registration and Land Cadastre amount (BYN 25.5)) Under the legislation of the Republic of Belarus in the described scenario obtaining a non- encumbrance certificate is not mandatory for the registration of a sale-purchase agreement and registration of transfer of title, but is commonly done in practice. There is possibility to obtain information on rights and encumbrances over the immovable property online but it is allowed only for persons having an agreement with the National Cadastre Agency for paid access to online version of the Unified State Register of Real Estate, Rights Thereto and Transactions Therewith (http://gzk.nca.by/). However, obtaining paper certificate is recommended, since the information printed out from the online register is not the official document, which cannot be provided to third parties, e.g. as an evidence to the court. Resolution of the Council of Ministers of the Republic of Belarus No.156 of February 17, 2012 "On Approval of the Unified List of Administrative Procedures Performed by State Authorities and Other Organizations in Relation to Legal Entities and Individual Entrepreneurs and Amending the Resolution of the Council of Ministers No. 193 of February 14, 2009 and Cancellation of Some Resolutions of the Council of Ministers" sets up three day time limit for issuance of non- encumbrance certificate. However, in practice, it is possible to obtain the non-encumbrance certificate in one day. The cost for obtaining the non-encumbrance certificate is 0.5 of the base amount or BYN 11.5. As of January 1, 2017, the new base amount constitutes BYN 23 according to the Resolution of the Council of Ministers of the Republic of Belarus No. 974 dated November 28, 2016. 2 The buyer applies to the Registry for the registration of a sale-purchase agreement and 2 days property title Agency : Minsk City Agency on State Registration and Land Cadastre The Resolution No. 156 on February 17, 2012 describes the procedure for the state registration of the sale-purchase agreement. The list of the documents to be submitted to the Minsk City Agency on State Registration and Land Cadastre for the registration of a property transfer includes: 1. Application in the established form. Application is prepared by the Registration Clerk after verification of all submitted documents. Completed application is signed by the authorized representatives of both parties. 2. Certificate of the state registration of the buyer. 3. Passport or other identification documents for authorized representative. 4. Sale-purchase agreement signed by the Seller and the Buyer (three copies). In accordance with the Resolution of the Committee on Land Resources, Land Surveying and Cartography of the Republic of Belarus No.17 of April 23, 2004 "On Approval of the Instruction on the Order of Filling in and Signing the Application on State Registration" the parties may define in the sale purchase agreement that one of them is solely authorized to file the application on state registration. 5. Deed of assignment or another document, signed by the parties to confirm that transfer of a property from seller to buyer. 6. Document, confirming registration fee payment to the Registry. Within specified time-frame, the authorized representative will obtain following documents: 1. Sale-purchase agreement with the note of the local agency of state registration and land Cadastre in two copies (one for seller and one for buyer) 2. Certificate confirming transfer of a title for a warehouse and the land plot to buyer. Page 24 Doing Business 2020 Belarus 3 Buyer makes payment at local bank 1 day BYN 226.95; (For the Agency : Commercial Bank regular procedure (5 The buyer makes the payment for registration fee through a bank order at a commercial bank and business days): brings the receipt confirming the payment to the Registry. Although, this can be done through - 3 Base Amounts for the ERIP (which is the electronic platform for payments of different state fees and utilities), the buyer state registration of a sale still needs to bring a receipt in person to the Registry, thus in practice, majority of people do the payment at a bank in person. and purchase agreement; - 0.2 Base Amounts for the state registration of property title to the warehouse building; - 0.2 Base Amounts for the state registration of property title to the land plot + 0.6 Base Amounts for transfer of encumbrances to the land plot (in case if the land plot has any encumbrances); - 0.5 Base Amounts for preparation and issuance of the land cadastral plan of the land plot; - 2 Base Amounts for issuance of the certificate confirming title to the land plot to the Buyer. For the expedited procedure (2 business days): Additional fee: 1.5 Base Amounts For the urgent procedure (1 business day, provided that the application for the state registration has been filed to the registry before 16:00)(most common method for commercial property transfers): Additional fee: 3 Base Amounts From January 1, 2019 the Base Amount constitutes BYN 25,5 according to the Resolution of the Council of Ministers of the Republic of Belarus Resolution No. 956 of 2018 (Effective January 1, 2019).) 4 Payment receipt is presented at Minsk City Agency on State Registration and Land 1 day Nominal cost (charges Cadastre and certificate confirming transfer of title is received differ depending on bank) Agency : Minsk City Agency on State Registration and Land Cadastre Applicant provides a copy of bank payment receipt to the registrar and receives the certificate confirming transfer of title. Takes place simultaneously with previous procedure. Page 25 Doing Business 2020 Belarus Details – Registering Property in Belarus – Measure of Quality Answer Score Quality of the land administration index (0-30) 23.5 Reliability of infrastructure index (0-8) 7.0 Type of land registration system in the economy: Dual system (Title & Deed) What is the institution in charge of immovable property registration? Minsk City Agency on State Registration and Land Cadastre In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Scanned 1.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Two agencies are in charge: "Minsk City Agency on State Registration and Land Cadastre" and "State Unitary Enterprise 'National Cadastre Agency'" In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Computer/Fully digital 2.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information Yes 1.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Single database 1.0 kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the same identification Yes 1.0 number for properties? Transparency of information index (0–6) 4.5 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Anyone who pays the 1.0 in the largest business city? official fee Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Link for online access: http://mga.by/property _registration_and_lic ense_agreements/for _yur/ Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Link for online access: http://mga.by/property _registration_and_lic ense_agreements/co st_of_services_and_c ertificates/ Does the agency in charge of immovable property registration agency formally commit to deliver a legally Yes, online 0.5 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Link for online access: http://nca.by/rus/formi r/service/gos_reg/ Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property Yes 0.5 registration agency? Page 26 Doing Business 2020 Belarus Number of property transfers in the largest business city in 2018: 19586.0 Who is able to consult maps of land plots in the largest business city? Anyone who pays the 0.5 official fee Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? No cost 0.5 Link for online access: http://map.nca.by Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and Yes, online 0.5 if so, how does it communicate the service standard? Link for online access: http://mga.by/release _of_information/index .php Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the largest business city formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Are all privately held land plots in the economy mapped? Yes 2.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Legal basis: Articles 403, 521, 522 of the Civil Code of the Republic of Belarus. Articles 7-9 of the Law of the Republic of Belarus No. 133-Z of July 22, 2002 "On State Registration of Real Estate Property, Rights Thereto and Transactions Therewith" Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Articles 69 and 70 of the Law of the Republic of Belarus No. 133-Z of July 22, 2002 "On State Registration of Real Estate Property, Rights Thereto and Transactions Therewith" Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Legal basis: Articles 69 of the Law of the Republic of Belarus No. 133-Z of July 22, 2002 "On State Registration of Real Estate Property, Rights Thereto and Transactions Therewith" Page 27 Doing Business 2020 Belarus Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., Yes 0.5 checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Is there a national database to verify the accuracy of government issued identity documents? Yes 1.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local Economic Court of businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located Minsk City in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without Less than a year 3.0 appeal)? Are there publicly available statistics on the number of land disputes at the economy level in the first instance Yes 0.5 court? Number of land disputes in the economy in 2018: 1061 Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 28 Doing Business 2020 Belarus Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 29 Doing Business 2020 Belarus Getting Credit - Belarus Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Strength of legal rights index (0-12) 3 7.8 6.1 12 (5 Economies) Depth of credit information index (0-8) 7 6.7 6.8 8 (53 Economies) Credit registry coverage (% of adults) 53.0 24.0 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 0.0 41.7 66.7 100.0 (14 Economies) Figure – Getting Credit in Belarus – Score 50.0 Score - Getting Credit Figure – Getting Credit in Belarus and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 85.0: Georgia (Rank: 15) 75.0: Poland (Rank: 37) 75.0: Ukraine (Rank: 37) 72.2: Regional Average (Europe & Central Asia) 70.0: Lithuania (Rank: 48) 50.0: Belarus (Rank: 104) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 30 Doing Business 2020 Belarus Figure – Legal Rights in Belarus and comparator economies 10 9 9 8 7.8 8 7 Index Score 7 6 6 5 4 3 3 2 1 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Page 31 Doing Business 2020 Belarus Details – Legal Rights in Belarus Strength of legal rights index (0-12) 3 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents No to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description No of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of No collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the No original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; No and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? No Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law No protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Belarus and comparator economies 8.5 8 8 8 8 Index Score 7.5 7 7 7 6.7 6.5 6 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Page 32 Doing Business 2020 Belarus Details – Credit Information in Belarus Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries No Yes 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or No Yes 1 credit registry? Can banks and financial institutions access borrowers’ credit information online No Yes 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help No Yes 1 banks and financial institutions assess the creditworthiness of borrowers? Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 3,384,361 Number of firms 0 33,290 Total 0 3,417,651 Percentage of adult population 0.0 53.0 Page 33 Doing Business 2020 Belarus Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal - Has not adopted bylaws or articles of association that go beyond the minimum requirements. corporate documents; Evidence obtainable during trial and allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 34 Doing Business 2020 Belarus Protecting Minority Investors - Belarus Stock exchange information Stock exchange Belarus Currency and Stock Exchange Stock exchange URL http://www.bcse.by Listed firms with equity securities 69 City Covered Minsk Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Extent of disclosure index (0-10) 6.0 7.5 6.5 10 (13 Economies) Extent of director liability index (0-10) 2.0 5.0 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 8.0 6.8 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 3.0 3.4 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 5.0 3.7 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 5.0 4.1 5.7 7 (13 Economies) Figure – Protecting Minority in Belarus – Score 58.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Belarus and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 84.0: Georgia (Rank: 7) 70.0: Lithuania (Rank: 37) 68.0: Ukraine (Rank: 45) 66.0: Poland (Rank: 51) 61.0: Regional Average (Europe & Central Asia) 58.0: Belarus (Rank: 79) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 35 Doing Business 2020 Belarus Figure – Protecting Minority Investors in Belarus and comparator economies – Measure of Quality Belarus 5 2 6 5 3 8 Georgia 6 6 9 7 5 9 Lithuania 7 4 7 6 4 7 Poland 6 2 7 4 5 9 Ukraine 7 2 9 6 4 6 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 Europe & Central Asia 4.1 4.8 7.2 3.6 3.4 6.8 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 36 Doing Business 2020 Belarus Details – Protecting Minority Investors in Belarus – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 6.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Full disclosure of all 2.0 material facts Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 1.0 transaction only Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 2.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Not liable 0.0 Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Not liable 0.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) Yes 1.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) No 0.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of fraud 0.0 or bad faith Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? Yes 1.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) No 0.0 Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 3.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders? Yes 1.0 Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? No 0.0 Do shareholders elect and dismiss the external auditor? No 0.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? No 0.0 Extent of ownership and control index (0-7) 5.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? Yes 1.0 Must the board of directors include independent and nonexecutive board members? No 0.0 Page 37 Doing Business 2020 Belarus Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? No 0.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? Yes 1.0 Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Extent of corporate transparency index (0-7) 5.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and directorships in other No 0.0 companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? Yes 1.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Page 38 Doing Business 2020 Belarus Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 39 Doing Business 2020 Belarus Paying Taxes - Belarus Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Payments (number per year) 7 14.4 10.3 3 (2 Economies) Time (hours per year) 170 213.1 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 53.3 31.7 39.9 26.1 (33 Economies) Postfiling index (0-100) 50.0 68.2 86.7 None in 2018/19 Figure – Paying Taxes in Belarus – Score 93.3 81.3 60.1 50.0 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Belarus and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 89.2: Georgia (Rank: 14) 88.8: Lithuania (Rank: 18) 78.1: Ukraine (Rank: 65) 77.9: Regional Average (Europe & Central Asia) 76.4: Poland (Rank: 77) 71.2: Belarus (Rank: 99) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Page 40 Doing Business 2020 Belarus Figure – Paying Taxes in Belarus and comparator economies – Measure of Quality 120 97.5 100 85.9 86.0 Index score 77.4 80 68.2 60 50.0 40 20 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Page 41 Doing Business 2020 Belarus Details – Paying Taxes in Belarus Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Social security 1.0 online 59.0 34% gross salaries 38.35 contributions Corporate 1.0 online 64.0 18% taxable profit 11.09 Income Tax Immovable 1.0 online 1% residual value of 2.25 Property Tax immovable property Land tax 1.0 online varies cadastral value of 0.94 land plot estimated by authorities Obligatory 1.0 online 0.6% gross salaries 0.68 insurance for work accidents Ecological tax 1.0 online varies 1 ton of waste 0.04 Employee paid - 0.0 jointly 1% gross salaries 0.00 withheld Social security contributions Value Added Tax 1.0 online 47.0 20% value added 0.00 not included (VAT) Totals 7 170 53.3 Page 42 Doing Business 2020 Belarus Details – Paying Taxes in Belarus – Tax by Type Taxes by type Answer Profit tax (% of profit) 11.1 Labor tax and contributions (% of profit) 39.0 Other taxes (% of profit) 3.2 Page 43 Doing Business 2020 Belarus Details – Paying Taxes in Belarus – Measure of Quality Answer Score Postfiling index (0-100) 50.0 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? No Restrictions on VAT refund process All companies paying VAT are entitled to apply for VAT refund. However, VAT refund applies only in the exclusive list of cases set forth by the Tax Code. Input VAT refund is allowed only with regard to the following operations: - export of goods at 0%; - export of transport services; - sale of goods taxable at the rate of 10%; - the amount of open balance of input VAT related to acquired fixed and intangible assets (in the year following the year of purchase); - liquidation of company; - certain other operations. Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT refund per 0.0 case study scenario Time to obtain VAT refund (weeks) No VAT refund per 0.0 case study scenario Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax correction (hours) 1.0 100 Time to complete a corporate income tax correction (weeks) No tax audit per case 100 study scenario Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 44 Doing Business 2020 Belarus Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 45 Doing Business 2020 Belarus Trading across Borders - Belarus Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Time to export: Border compliance (hours) 7 16.1 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 65 150.0 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 4 25.1 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 60 87.6 33.4 0 (20 Economies) Time to import: Border compliance (hours) 0 20.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 0 158.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 4 23.4 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 0 85.9 23.5 0 (30 Economies) Figure – Trading across Borders in Belarus – Score 96.0 93.9 98.2 85.0 100.0 100.0 99.0 100.0 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Belarus and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 97.8: Lithuania (Rank: 19) 96.5: Belarus (Rank: 24) 90.1: Georgia (Rank: 45) 87.3: Regional Average (Europe & Central Asia) 80.1: Ukraine (Rank: 74) 100: Poland (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 46 Doing Business 2020 Belarus Figure – Trading across Borders in Belarus – Time and Cost Time (hours) Cost (USD) 8 65 70 7 60 7 60 Time (hours) 6 50 Cost (USD) 5 4 4 40 4 30 3 2 20 1 10 0 0 0 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 47 Doing Business 2020 Belarus Details – Trading across Borders in Belarus Characteristics Export Import Product HS 31 : Fertilisers HS 8708: Parts and accessories of motor vehicles Trade partner Brazil Russian Federation Border Kamenny Log-Medininkai border crossing Russian Federation-Belarus border crossing Distance (km) 156 260 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 175 229 Details – Trading across Borders in Belarus – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 2.8 65.0 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 4.5 0.0 Import: Clearance and inspections required by 0.0 0.0 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 0.0 0.0 Page 48 Doing Business 2020 Belarus Details – Trading across Borders in Belarus – Trade Documents Export Import Bill of Lading Contract CMR waybill Statistical Declaration Customs Export Declaration Commercial invoice Contract Packing list Commercial invoice CMR waybill Packing List SOLAS certificate Page 49 Doing Business 2020 Belarus Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. • Court costs - The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 50 Doing Business 2020 Belarus Enforcing Contracts - Belarus Standardized Case Claim value BYN 21,284 Court name Minsk Economic Court City Covered Minsk Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Time (days) 275 496.4 589.6 120 (Singapore) Cost (% of claim value) 23.4 26.6 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 7.5 10.3 11.7 None in 2018/19 Figure – Enforcing Contracts in Belarus – Score 87.3 73.8 41.7 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Belarus and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 78.8: Lithuania (Rank: 7) 75.0: Georgia (Rank: 12) 67.6: Belarus (Rank: 40) 65.5: Regional Average (Europe & Central Asia) 64.4: Poland (Rank: 55) 63.6: Ukraine (Rank: 63) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 51 Doing Business 2020 Belarus Figure – Enforcing Contracts in Belarus – Time and Cost Time (days) Cost (% of claim value) 800 46.3 50 Cost (% of claim value) 685 700 589.6 40 600 Time (days) 496.4 500 26.6 30 23.4 25.0 370 23.6 378 400 21.5 285 19.4 300 275 20 200 10 100 0 0 Belarus Europe Georgia Lithuania OECD Poland Ukraine & high Central income Asia Page 52 Doing Business 2020 Belarus Figure – Enforcing Contracts in Belarus and comparator economies – Measure of Quality Belarus 2.5 2.5 0 2.5 Georgia 2.5 3.5 2.5 3.5 Lithuania 3 4.5 4 3.5 Poland 3 1.5 1.5 5 Ukraine 1.5 3 2 5 OECD high income 2.5 3.2 2.4 3.6 Europe & Central Asia 2.3 2.8 1.3 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Belarus Indicator Time (days) 275 Filing and service 50 Trial and judgment 135 Enforcement of judgment 90 Cost (% of claim value) 23.4 Attorney fees 12 Court fees 11.4 Enforcement fees 0 Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 2.5 Case management (0-6) 2.5 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Page 53 Doing Business 2020 Belarus Details – Enforcing Contracts in Belarus – Measure of Quality Answer Score Quality of judicial processes index (0-18) 7.5 Court structure and proceedings (-1-5) 2.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? No 0.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 2.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be granted? No 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) No 0.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? No 0.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? No 0.0 Court automation (0-4) 0.0 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? No 0.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the general public No through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made No available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.0 1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— Yes that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 54 Doing Business 2020 Belarus 2. Mediation/Conciliation 1.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or Yes conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 55 Doing Business 2020 Belarus Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered. • Assessors’ and auctioneers’ fees • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 56 Doing Business 2020 Belarus Resolving Insolvency - Belarus Indicator Belarus Europe & Central OECD high Best Regulatory Asia income Performance Recovery rate (cents on the dollar) 40.2 38.5 70.2 92.9 (Norway) Time (years) 1.5 2.3 1.7 0.4 (Ireland) Cost (% of estate) 17.0 13.3 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 0 .. .. .. Strength of insolvency framework index (0-16) 10.0 11.2 11.9 None in 2018/19 Figure – Resolving Insolvency in Belarus – Score 43.2 62.5 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Belarus and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 76.5: Poland (Rank: 25) 56.2: Georgia (Rank: 64) 55.7: Regional Average (Europe & Central Asia) 52.9: Belarus (Rank: 74) 46.7: Lithuania (Rank: 89) 31.4: Ukraine (Rank: 146) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 57 Doing Business 2020 Belarus Figure – Resolving Insolvency in Belarus – Time and Cost Time (years) Cost (% of estate) 3.5 40.5 45 3.0 2.9 40 Cost (% of estate) 3 35 Time (years) 2.5 2.3 2.3 2.0 30 2 1.7 25 1.5 1.5 17.0 20 13.3 15.0 15.0 15 1 10.0 9.3 10 0.5 5 0 0 Belarus Europe Georgia Lithuania OECD Poland Ukraine & high Central income Asia Page 58 Doing Business 2020 Belarus Figure – Resolving Insolvency in Belarus and comparator economies – Measure of Quality Belarus 5.5 2 2 0.5 Georgia 5.5 2.5 3 0 Lithuania 4 2.5 1 0.5 Poland 6 3 2 3 Ukraine 4 2 2 0.5 OECD high income 5.3 2.8 2.1 1.9 Europe & Central Asia 4.5 2.5 2.3 1.7 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Belarus and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 70 60.9 60 50 40.2 40.5 40.3 38.5 40 30 20 9.0 10 0 Belarus Georgia Lithuania Poland Ukraine Europe & Central Asia Page 59 Doing Business 2020 Belarus Details – Resolving Insolvency in Belarus Indicator Answer Score Proceeding liquidation The most likely procedure in this case will be liquidation. This is because BizBank, the major creditor, would prioritize this option to receive its money as soon as possibly, while courts generally are reluctant to proceed with sanation (reorganization) unless there are very firm grounds to do so. Outcome piecemeal sale In practice, the majority of such enterprises end up being sold piecemeal. This is because the piecemeal sale usually fetches more money, while selling as a going concern involves additional costs related to registration, evaluation, etc. Time (in years) 1.5 It takes around 1.5 years to complete liquidation proceedings in Belarus. Debtor will file a petition for the opening of insolvency proceedings and after the petition is accepted, the debtor will go into the protection period of up to 3 months. At the end of the protection period, the court will initiate insolvency proceedings and appoint an administrator. The administrator will take control over the assets of the hotel and propose undertaking liquidation or reorganization. This issue will be decided at the creditors' meeting and will be endorsed by the court. The sale of the assets will likely involve significant delays due to additional formalities (notification, price negotiation, approval from court and creditors). Cost (% of estate) 17.0 The cost of the entire procedure would amount to approximately 17% of the value of the debtor's assets. Main expenses would include court fees (0.5%), attorney fees (3%), remuneration of the insolvency representative (6%), auctioneer fees (2.5%), fees of accountants and assessors involved (3%) and other expenses (2%). Recovery rate 40.2 (cents on the dollar) Page 60 Doing Business 2020 Belarus Details – Resolving Insolvency in Belarus – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 10.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (b) Debtor may file for 0.5 liquidation only Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a creditor 0.5 may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (c) Both (a) and (b) 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value options are available, of its assets but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.5 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the Yes 1.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (a) Yes over all pre- 0.5 commencement creditors, secured or unsecured Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as No 0.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote No 0.0 separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency No 0.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? Yes 1.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency No 0.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 61 Doing Business 2020 Belarus Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 62 Doing Business 2020 Belarus Employing Workers - Belarus Details – Employing Workers in Belarus Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) 60.0 Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 151.8 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 20.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 100.0 Restrictions on night work? No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 18.0 Paid annual leave for a worker with 5 years of tenure (working days) 18.0 Paid annual leave for a worker with 10 years of tenure (working days) 18.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 18.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 8.7 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 13.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 13.0 Page 63 Doing Business 2020 Belarus Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 13.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 13.0 Unemployment protection after one year of employment? Yes Page 64 Doing Business 2020 Belarus Business Reforms in Belarus From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Protecting Minority Investors: Belarus weakened minority investor protections by increasing the time for a joint-stock company to disclose a related party transaction to the public, the regulator or the stock exchange. DB2019 Starting a Business: Belarus made starting a business easier by abolishing the requirement to register the book of Registry of Inspections, and allowing its purchase within six months of incorporation. Dealing with Construction Permits: Belarus made dealing with construction permits easier by streamlining the process at the one-stop shop. DB2018 Getting Credit: Belarus strengthened access to credit by adopting two new decrees that establish a unified and modern collateral registry. DB2017 Getting Electricity: Belarus streamlined the process of obtaining an electricity connection by establishing a one-stop shop at the utility that fulfills all connection- related services, including the design and construction of the distribution line. Registering Property: Belarus made it easier to transfer a property by improving the transparency and reliability of the land administration system. Getting Credit: In Belarus the credit bureau started to provide credit scores, strengthening the credit reporting system. Protecting Minority Investors: Belarus strengthened minority investor protections by introducing remedies in cases where related-party transactions are harmful to the company and requiring greater corporate transparency. DB2016 Starting a Business: Belarus made starting a business simpler by expanding the geographic coverage of online registration and improving online services. Registering Property: Belarus made transferring property easier by introducing a new expedited procedure. Employing Workers: - Belarus amended the provisions of its Labor Code relating to wage regulation, labor arbitration, calculation of overtime pay and grounds for termination of employment. It also lifted prohibitions on concurrent employment. - Belarus increased the minimum wage from 1,600,000 Belarussian Rubles per month to 2,100 000 Belarussian Rubles per month, in accordance with the ‘Determination of minimum wage’ Resolution of the Council of Ministers of the Republic of Belarus, dated 12/9/2014 No. 1151 DB2015 Paying Taxes: Belarus made paying taxes easier for companies by introducing an electronic system for filing and paying contributions for the obligatory insurance for work accidents—and by simplifying the filing requirements for corporate income tax and VAT. On the other hand, it increased the ecological tax rate and made bad debt provisions nondeductible for purposes of the corporate income tax. DB2014 Starting a Business: Belarus made starting a business easier by reducing the registration fees and eliminating the requirement for an initial capital deposit at a bank before registration. Getting Electricity: Belarus made getting electricity easier by speeding up the process of issuing technical specifications and excavation permits and by reducing the time needed to connect to the electricity network. Registering Property: Belarus made transferring property easier by introducing a fast-track procedure for property registration. Resolving Insolvency: Belarus improved its insolvency process through a new insolvency law that, among other things, changes the appointment process for insolvency administrators and encourages the sale of assets in insolvency. The law also regulates the liability of shareholders and directors of the insolvent company. DB2013 Starting a Business: Belarus made starting a business more difficult by increasing the cost of business registration and the cost to obtain a company seal. Paying Taxes: Belarus made paying taxes easier and less costly for companies by reducing the profit tax rate and encouraging the use of electronic filing and payment systems. Resolving Insolvency: Belarus enhanced its insolvency process by exempting the previously state-owned property of a privatized company from the bankruptcy Page 65 proceeding, requiring that immovable property not sold in the auction be offered to creditors for purchase and allowing immovable property to be sold without proof of Doing Business 2020 Belarus DB2012 Registering Property: Belarus simplified property transfer by doing away with the requirement to obtain the municipality’s approval for transfers of most commercial buildings in Minsk. Protecting Minority Investors: Belarus strengthened investor protections by introducing requirements for greater corporate disclosure to the board of directors and to the public. Paying Taxes: Belarus abolished several taxes, including turnover and sales taxes, and simplified compliance with corporate income, value added and other taxes by reducing the frequency of filings and payments and facilitating electronic filing and payment. Enforcing Contracts: Belarus modified its code of economic procedure, altering the time frames for commercial dispute resolution. DB2011 Getting Credit: Belarus enhanced access to credit by facilitating the use of the pledge as a security arrangement and providing for out-of-court enforcement of the pledge on default. Paying Taxes: Reductions in the turnover tax, social security contributions and the base for property taxes along with continued efforts to encourage electronic filing made it easier and less costly for companies in Belarus to pay taxes. Trading across Borders: Belarus reduced the time to trade by introducing electronic declaration of exports and imports. Resolving Insolvency: Belarus amended regulations governing the activities of insolvency administrators and strengthened the protection of creditor rights in bankruptcy. DB2010 Starting a Business: Belarus made starting a business easier by simplifying registration formalities, abolishing the minimum capital requirement, limiting the role of notaries and eliminating the need for approval of the company seal. Dealing with Construction Permits: Belarus made dealing with construction permits easier by simplifying the environmental and project design approval processes. Registering Property: Belarus continued to improve the property registration process by increasing efficiency at the land registry in Minsk, which reduced the time required to verify ownership, and by eliminating the requirement to have incorporation documents notarized during property transfers. Paying Taxes: Belarus made paying taxes easier and less costly for companies by encouraging the use of electronic systems, reducing the number of payments for the property tax, adjusting the ecological tax rates and lowering turnover tax rates. Trading across Borders: Belarus reduced the transit time for trade by implementing a risk-based inspection system and improving operations at the border crossing. Employing Workers: Belarus eliminated the requirement for third-party notification for redundancy dismissals. DB2009 Starting a Business: Belarus made starting a business easier by creating a unified registry database, setting a time limit for the registration process and cutting the minimum capital requirement by half. Dealing with Construction Permits: Belarus made dealing with construction permits easier by revising the statutory time limits for issuance of preapproval clearances and building permits and by eliminating the building permit fees. Registering Property: Belarus speeded up property registration by creating a unified registry, introducing strict time limits at the registry and computerizing its property records. Getting Credit: Belarus improved access to credit information by eliminating the minimum threshold for credits reported to the public credit registry’s database and guaranteeing borrowers’ right to inspect their own data in the credit registry. Paying Taxes: Belarus made paying taxes easier and less costly for companies by amending the simplified tax system for small businesses and by abolishing certain taxes paid by employers. Trading across Borders: Belarus reduced the time for exporting and importing through new regulations tightening the time limit for customs clearance and clarifying procedures for issuing a letter of credit. DB2008 Starting a Business: Belarus made starting a business easier by implementing a one-stop shop that combines company registration, approval of the draft company seal and registrations with the state insurance company and tax, statistical and social security authorities. Protecting Minority Investors: Belarus strengthened investor protections by introducing provisions on the approval of related-party transactions and increasing disclosure requirements for such transactions. Page 66 Doing Business 2020 Belarus Page 67