A copublication of The World Bank and the International Finance Corporation.

Transcription

1 Bolivia

2 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC Telephone Internet All rights reserved A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone ; fax ; Internet All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax ; pubrights@worldbank.org. Additional copies of Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004:Understanding Regulations may be purchased at ISBN: E-ISBN: DOI: / ISSN: Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States

3 Current features News on the Doing Business project Rankings How economies rank-from 1 to Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 and a ranking simulation tool Historical data Customized data sets since DB Methodology and research The methodologies and research papers underlying Doing Business Download reports Access to Doing Business reports as well as subnational and regional reports, reform case studies and customized country and regional profiles Subnational and regional projects Differences in business regulations at the subnational and regional level Law Library Online collection of business laws and regulations relating to business and gender issues Contents Introduction and Aggregate Rankings 5 - Year Measure of Cumulative Change Starting a Business Dealing with Construction Permits Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Closing a Business Doing Business 2011 Business Reforms Local partners More than 8,200 specialists in 183 economies who participate in Doing Business Business Planet Interactive map on the ease of doing business

4 Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business s life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Bolivia. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the good practice economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good-practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website ( * Except for the Paying Taxes indicator that refers to the period January to December of Note: Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1

5 Economy Rankings - Ease of Doing Business Bolivia is ranked 149 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Bolivia - Compared to global good practice economy as well as selected economies: Bolivia's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 149 Starting a Business 166 Dealing with Construction Permits 98 Registering Property 139 Getting Credit 116 Protecting Investors 132 Paying Taxes 177 Trading Across Borders 125 Enforcing Contracts 136 Closing a Business 58 2

6 Summary of Indicators - Bolivia Starting a Business s (number) 15 Time (days) 50 Cost (% of income per capita) Min. capital (% of income per capita) 2.5 Dealing with Construction Permits s (number) 17 Time (days) 249 Cost (% of income per capita) Registering Property s (number) 7 Time (days) 92 Cost (% of property value) 4.8 Getting Credit Strength of legal rights index (0-10) 1 Depth of credit information index (0-6) 6 Public registry coverage (% of adults) 11.3 Private bureau coverage (% of adults) 31.4 Protecting Investors Extent of disclosure index (0-10) 1 Extent of director liability index (0-10) 5 Ease of shareholder suits index (0-10) 6 Strength of investor protection index (0-10) 4.0 Paying Taxes Payments (number per year) 42 Time (hours per year) 1080 Profit tax (%) 0.0 Labor tax and contributions (%) 15.5 Other taxes (%) 64.6 Total tax rate (% profit) 80.0 Trading Across Borders Documents to export (number) 8 Time to export (days) 19 Cost to export (US$ per container) 1425 Documents to import (number) 7 Time to import (days) 23 Cost to import (US$ per container)

7 Enforcing Contracts s (number) 40 Time (days) 591 Cost (% of claim) 33.2 Closing a Business Recovery rate (cents on the dollar) 39.3 Time (years) 1.8 Cost (% of estate) 15

8 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy s regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy s business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related-party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business Doing business has become easier (DB change score) Doing business has become more difficult or more costly Peru Brazil Ecuador Bolivia Chile Argentina

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10 1. Benchmarking Starting a Business Regulations: Bolivia is ranked 166 overall for Starting a Business. Ranking of Bolivia in Starting a Business - Compared to good practice and selected economies: 7

11 The following table shows Starting a Business data for Bolivia compared to good practice and comparator economies: Good Practice Economies s (number) Time (days) Cost (% of income per capita) Min. capital (% of income per capita) Denmark* 0.0 New Zealand* Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : s (number): Canada Cost (% of income per capita): Slovenia 8

12 2. Historical data: Starting a Business in Bolivia Starting a Business data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank s (number) Time (days) Cost (% of income per capita) Min. capital (% of income per capita) The following graphs illustrate the Starting a Business sub indicators in Bolivia over the past 4 years: 9

13 Starting a Business Summary - Bolivia This table summarizes the procedures and costs associated with setting up a business in Bolivia. STANDARDIZED COMPANY Legal Form: Sociedad Anónima City: La Paz Registration Requirements: No: Time to complete Cost to complete 1 Check uniqueness of name at the Registry of Commerce in 1 BOB 175 FUNDEMPRESA 2 An attorney draws the articles of incorporation, bylaws and 1 BOB 7,800 constitution act, which includes the appointment of the provisory board. 3 Notarize the articles of incorporation escritura de constitución 1 BOB 1,240 4 Publish company deed titulo de constitución in a national newspaper 2 BOB An accredited accountant prepares the opening balance sheet Balance 1 BOB 700 de apertura 6 The opening balance sheet is administered by the seal of the Colegio 1 BOB 54 de Contadores 7 Register at the National Tax Service to obtain the tax identification 1 no charge number (Número de Identificación Tributaria, NIT) 10

14 8 Obtain a municipal business license and a municipal registration card 12 no charge (Padrón Municipal) from the municipality where the business is located 9 * Municipal Government inspects the technical and environmental 1 no charge characteristics of the venue 10 Obtain evidence of a bank deposit equivalent to at least 25% of 1 no charge subscribed and no less than 50% of authorized capital 11 Register company deed Matricula de comercio with the Fundación 9 BOB 585 para el Desarrollo Empresarial FUNDEMPRESA and obtain legal capacity 12 Register at the appropriate Chamber of Commerce or Industry 1 BOB Register for national health insurance and short-term disability 15 BOB 45 coverage 14 Register at the Ministry of Labor, enroll in the Caja Nacional de 1 BOB 80 Establecimientos 15 Register employees with the pension fund managers (AFPs) 3 no charge * Takes place simultaneously with another procedure. 11

15 Starting a Business Details - Bolivia 1 Check uniqueness of name at the Registry of Commerce in FUNDEMPRESA Time to complete: 1 Cost to complete: BOB 175 Comment: 2 The existence of the company name can be verified though the web or by telephone at no cost. However, if a name reservation certificate is obtained, the fee is BOB 175. An attorney draws the articles of incorporation, bylaws and constitution act, which includes the appointment of the provisory board. Time to complete: 1 Cost to complete: BOB 7,800 Comment: 3 Professional fees may vary. The lawyers association s fee schedule (Colegio de Abogados) establishes that the minimum fee for the company incorporation should be BOB 3,000 plus 2% of the company s capital. The fee for processing the formalities at the registry may also vary. Notarize the articles of incorporation escritura de constitución Time to complete: 1 Cost to complete: BOB 1,240 Comment: 4 Several notarized copies of public deeds are required for filing according to the procedures discussed here. Most other documents required for registration must also be notarized. The notary cost is BOB 480 1,500 a copy. Publish company deed titulo de constitución in a national newspaper Time to complete: 2 Cost to complete: BOB 800 Comment: According to Administrative Resolution SNRC DN No. 254/2003 (issued by the National Service of Registry of Commerce, SENAREC, on May 30, 2003), the published announcement of a public deed of incorporation must contain a summary of the following shareholder characteristics, whether shareholders are natural persons or companies: - For natural persons: age, name, profession, nationality, and marital status. - For companies: bylaws; proof of incorporation; power of attorney; tax identification number (TIN); new company s denomination; corporate object or purpose; the amount of authorized, subscribed, and paid-in capital; the number, value, and nature of shares; and term. 5 The firm must wait until the documents are actually published before filing the request to obtain legal capacity with the Registry of Commerce. The cost of publication ranges from is BOB 60 to BOB 120.According to article 132 of the code of Commerce, (in theory,) the publication must be made in a national newspaper (with main domicile in the same area as the address of the company to be incorporated). An accredited accountant prepares the opening balance sheet Balance de apertura 12

16 Time to complete: 1 Cost to complete: BOB 700 Comment: The accountant must be accredited at the Colegio de contadores. 6 The opening balance sheet is administered by the seal of the Colegio de Contadores Time to complete: 1 Cost to complete: BOB 54 Comment: The Colegio de Contadores must certify that the accountant is a registered one. 7 Register at the National Tax Service to obtain the tax identification number (Número de Identificación Tributaria, NIT) Time to complete: 1 Cost to complete: Comment: 8 no charge Board Regulation Resolution No (dated November 19, 2004) details the requirements and the procedures to obtain the tax identification number (TIN), which is mandatory for all commercial entities. The required documents for such procedure are: (a) notarized copy of the company s articles of incorporation, (b) a utility (electricity or water) bill to evidence the venue, (c) and a notarized copy of (i) the power of attorney in favor of the company s legal representative; and (ii) that representative s identification document. Obtain a municipal business license and a municipal registration card (Padrón Municipal) from the municipality where the business is located Time to complete: 12 Cost to complete: Comment: 9 no charge This procedure requires that the respective form be filed at the sole municipal window along with the TIN document (photocopy), the last utility bill and a floor map of the venue, the power of attorney (photocopy), the legal representatives identification cards, and the constitution deed (photocopy). For granting business licenses, the municipal government performs an onsite inspection to verify the venue s technical and environmental characteristics. Municipal Government inspects the technical and environmental characteristics of the venue Time to complete: 1 Cost to complete: no charge Comment: 10 Obtain evidence of a bank deposit equivalent to at least 25% of subscribed and no less than 50% of authorized capital Time to complete: 1 Cost to complete: no charge Comment: 11 Of the authorized capital for a limited liability company (sociedad anónima), at least 50% of shares must be subscribed. At least 25% of all subscribed shares must be effectively paid in at incorporation, and the balance must be effectively paid within 2 years. Register company deed Matricula de comercio with the Fundación para el Desarrollo Empresarial FUNDEMPRESA and obtain legal capacity 13

17 Time to complete: 9 Cost to complete: BOB 585 Comment: Since 2002 a concession for the Registry of Commerce has been granted to a private operator (Fundación para el Desarrollo Empresarial, FUNDEMPRESA). 12 Registering the company deed requires filing the following documents:(a) application for new registration (Form 0020/03), (b) public deed of incorporation, comprising the charter documents, by-laws and the deed whereby the provisional board of directors is appointed, (c) power of attorney granted to the legal representative, (d) opening balance sheet certified by the Colegio de Contadores, (e) bank certificate or deposit stub, certifying the deposit of the paid-in capital, (f) newspaper publication of the incorporation deed. Register at the appropriate Chamber of Commerce or Industry Time to complete: 1 Cost to complete: BOB 493 Comment: 13 Pursuant to Article 54 of Supreme Decree (dated July 19, 1979) and to Supreme Decree (dated March 3, 1980), all companies must be registered at their respective chambers of commerce, however, in practice it is not done and there are no penalties. Register for national health insurance and short-term disability coverage Time to complete: 15 Cost to complete: BOB 45 Comment: 14 The employer may register with any health insurance institution (Caja Nacional de Salud, Caja Petrolera de Salud, Caja de Salud de la Banca Privada, etc.). The employer fills and submits the required forms, attaching copies of the proof of identification for the company s legal representative, the articles of incorporation, the commercial registry certificate, the tax identification number (TIN), the opening balance sheet (duly registered) and payroll, and employees civil status (along with names, proof of identity, and names of dependents). Three forms must be completed for the employer and two for each employee. Register at the Ministry of Labor, enroll in the Caja Nacional de Establecimientos Time to complete: 1 Cost to complete: BOB 80 Comment: According to Resolution No. 002/04, issued by the Ministry of Labor on January 13, 2004, the employer registration process was simplified, requiring the filing of the following: - Unified employers registry form. - Presentation of first monthly payroll. - Bank deposit of BOB The employer must complete this procedure within 3 months from the date of employee hire. Register employees with the pension fund managers (AFPs) Time to complete: 3 Cost to complete: Comment: no charge New employees must register within 10 days of entry into duty. If the employee refuses to register during this time, the employer must fulfill the requirement. 14

18 Actual contributions are 1.71% for employers and 12 21% for employees. Fill out the employer registration form, the TIN document (photocopy), proof of identification for the legal representative (photocopy), and documents attesting the initiation of company activities (photocopy) (for example, the go-ahead given by the social security, labor contracts of its employees with a photocopy of the identification of each, a signed document whereby the employees state their first contribution; note that one of these documents will suffice). 15

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20 1. Benchmarking Dealing with Construction Permits Regulations: Bolivia is ranked 98 overall for Dealing with Construction Permits. Ranking of Bolivia in Dealing with Construction Permits - Compared to good practice and selected economies: 17

21 The following table shows Dealing with Construction Permits data for Bolivia compared to good practice and comparator economies: Good Practice Economies s (number) Time (days) Cost (% of income per capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru

22 2. Historical data: Dealing with Construction Permits in Bolivia Dealing with Construction Permits data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank s (number) Time (days) Cost (% of income per capita) The following graphs illustrate the Dealing with Construction Permits sub indicators in Bolivia over the past 4 years: 19

23 Dealing with Construction Permits in Bolivia The table below summarizes the procedures, time, and costs to build a warehouse in Bolivia. BUILDING A WAREHOUSE City: La Paz Registration Requirements: No: Time to complete Cost to complete 1 Request and obtain a form from the Municipality (can be obtained online) 1 day BOB 70 2 Request and obtain Cadastre Certificate 60 days BOB 1,690 3 Request and obtain Royal Folio (Folio Real en Oficina de Derechos Reales) 20 days BOB 53 4 Request and obtain a "Traso Vial" from Municipality 45 days BOB 96 5 Submit and obtain approval of plans by Architects' Association 30 days BOB 1,522 6 Request construction permit 1 day no charge 7 Receive inspection by the Municipality 1 day no charge 8 Obtain the construction permit at the Municipality 43 days BOB 1,951 20

24 9 Request water and sewage connection 1 day no charge 10 * Receive a technical inspection (water connection feasibility study) 1 day no charge 11 * Connect to water and sewage services 46 days BOB 4, * Request electricity connection from ELECTROPAZ 1 day no charge 13 * Receive inspection by electricity provider 1 day no charge 14 * Receive connection to electricity services by ELECTROPAZ 6 days BOB 2, * Request telephone line services from COTEL 1 day no charge 16 * Receive telephone line inspection 1 day no charge 17 * Connect to telephone line 8 days BOB 300 * Takes place simultaneously with another procedure. 21

25 Dealing with Construction Permits Details - Bolivia 1 Request and obtain a form from the Municipality (can be obtained online) Time to complete: 1 day Cost to complete: BOB 70 Agency: Comment: 2 Cadastre (Municipality) The relevant application form may be downloaded from the municipality s Web site ( (see 2 comment). Request and obtain Cadastre Certificate Time to complete: 60 days Cost to complete: BOB 1,690 Agency: Comment: Cadastre (Municipality) To request the cadastre certificate, a form must be picked up at the municipality (where stamps must be purchased) for a fee of BOB 70). The form must be completed by an architect recognized by the municipality (the architect is assumed to be a BuildCo employee). Typically, such an architect would charge about BOB 200 to BOB 500. Finally, a topographic plot plan must be acquired and attached to the form. Such plan costs about BOB 1,620. Fees are paid at the municipality and amount to BOB 1,620 + BOB 70 = BOB 1, Fee schedule for cadastre certificate request: - Form: BOB Topographic plot plan: BOB 1, Architect fee: BOB 200 to BOB 500. Request and obtain Royal Folio (Folio Real en Oficina de Derechos Reales) Time to complete: 20 days Cost to complete: BOB 53 Agency: Comment: 4 Property Registry Office The royal folio indicates the land s location, surface and limits, and ownership history. To obtain this folio, BuildCo must present an application letter, attaching two copies of the testimony of property from the real estate office and two copies of the owner s identity card. Request and obtain a "Traso Vial" from Municipality Time to complete: 45 days Cost to complete: BOB 96 Agency: Municipality 22

26 Comment: To obtain a zoning permit (Traso Vial) a special form must be completed by a professional licensed by the College of Architects of La Paz. The professional may be a BuildCo staff member. La Paz does not have updated, comprehensive maps of some zones (particularly industrial zones). The current maps date back to This document defines construction impact on adjacent zones. 5 Owing to the backlog created by newly hired professionals, the procedure takes on average days. Submit and obtain approval of plans by Architects' Association Time to complete: 30 days Cost to complete: BOB 1,522 Agency: Comment: 6 Architects Association (Colegio de Arquitectos) The actual cost is based on a table of fees determined by the Architects Association. Given the characteristics of the warehouse, the following cost formula applies: A * B * C = R, where A = Area of the terrain (expressed in square meters). B = USD 2.76 (may vary, depending on the actual area of the terrain). C = (a percentage given by the Architects Association). R = The real cost (assumed to be USD or its equivalent in BOB). Request construction permit Time to complete: Cost to complete: Agency: Comment: 1 day no charge Municipality (Dirección de Administración Predial) To request a construction permit, BuildCo must submit the following documentation: - Written letter to the municipality. - Single registration form (formulario único de administración predial) (download at the municipality Web site). - Cadastre certificate ( 3). - Property title (copy). - Royal folio ( 5). - Receipt of last five property tax payments. - Identification card (copy). - Plans (original and copy). Cost is calculated by the square meter (about BS 0.85/ sq. m.). 7 The municipality reviews the documents and enters the application data into the electronic system SITR@M. After 5 business days, the architect in charge returns to the Municipality to arrange a date for the on-site inspection (preferably scheduled more than 2 business days later). In case of objections or observations, all documents are returned to the architect, and the rejection is documented on the single form (FUAP). After the inspection, the municipality informs BuildCo of the fee assessed and fills out the single municipal form (formulario unico municipal). After the inspection, GENISIS (the computerized system) calculates the overall fees and produces the single municipal form (formulario unico municipal). Receive inspection by the Municipality 23

27 Time to complete: Cost to complete: Agency: Comment: 1 day no charge Municipality The inspectors confirm that the plans and the site fulfill all regulatory requirements. 8 Obtain the construction permit at the Municipality Time to complete: 43 days Cost to complete: BOB 1,951 Agency: Comment: Municipality Fees are paid at the municipality after the plans have been approved. Owing to backlogs at the municipality, the total time is 45 days (from date of request to receipt of permit). 9 Request water and sewage connection Time to complete: Cost to complete: Agency: Comment: 1 day no charge Empresa Pública de Agua y Saneamiento To request a water and sewage connection, BuildCo must submit the following required documents: - Royal folio (folio real en derechos reales). - Identification. - Location plan. - Sanitary plan (if the building has two or more floors). 10 Receive a technical inspection (water connection feasibility study) Time to complete: Cost to complete: Agency: Comment: 1 day no charge Empresa Pública de Agua y Saneamiento Once the application form has been received, the technical inspection determines the feasibility of service. Following the the water utility provider, Aguas de Illimani, calculates the water and sewage connection fee. 11 Connect to water and sewage services Time to complete: 46 days Cost to complete: BOB 4,581 Agency: Empresa Pública de Agua y Saneamiento 24

28 Comment: 12 Request electricity connection from ELECTROPAZ Time to complete: Cost to complete: Agency: Comment: 1 day no charge ELECTROPAZ To request an electrical connection, BuildCo must submit the following: - Identification. - Proof of ownership. - Attestation of no pending debts for electricity services. 13 Receive inspection by electricity provider Time to complete: Cost to complete: Agency: Comment: 1 day no charge ELECTROPAZ Once the application form has been received, ELECTROPAZ visits the site the next business day. 14 Receive connection to electricity services by ELECTROPAZ Time to complete: 6 days Cost to complete: BOB 2,689 Agency: Comment: ELECTROPAZ The cost depends on which of the two types of meters (monophasic or triphasic), as follows: 1. Monophasic meters, used for buildings with a relatively low rate of electricity consumption. The cost of installation varies with the zone where the building is located. In this example, the fee would be BOB 450, in addition to a special fee, paid only once and added to the first bill, of BOB Triphasic meters, used for buildings with a relatively high rate of electricity consumption. Because the warehouse will have air conditioning and electrical heat systems, this type of meter would probably be required. The installation cost is BOB 600 plus the special fee, paid only once and added to the first bill, of BOB When a triphasic meter is required, BuildCo must purchase its own meter, the cost of which depends on specific technical conditions and varies between BOB 2,000 and BOB 3,000. The cost is thus BOB 2,000+ BOB 689 = BOB 2,689. Request telephone line services from COTEL Time to complete: Cost to complete: 1 day no charge 25

29 Agency: Comment: 16 Co-operativa de Teléfonos Automáticos La Paz (COTEL) The telephone line should be requested at COTEL, where a technician conducts an inspection and decides on the availability of a connection. If available, the line would be installed in 7 working days. Otherwise, it might take up to 2 months until a connection is available. In this case, it is assumed that a connection is available. Receive telephone line inspection Time to complete: Cost to complete: Agency: 1 day no charge Co-operativa de Teléfonos Automáticos La Paz (COTEL) Comment: 17 Connect to telephone line Time to complete: 8 days Cost to complete: BOB 300 Agency: Co-operativa de Teléfonos Automáticos La Paz (COTEL) Comment: 26

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31 1. Benchmarking Registering Property Regulations: Bolivia is ranked 139 overall for Registering Property. Ranking of Bolivia in Registering Property - Compared to good practice and selected economies: 28

32 The following table shows Registering Property data for Bolivia compared to good practice and comparator economies: Good Practice Economies s (number) Time (days) Cost (% of property value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : s (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 29

33 2. Historical data: Registering Property in Bolivia Registering Property data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank s (number) Time (days) Cost (% of property value) The following graphs illustrate the Registering Property sub indicators in Bolivia over the past 4 years: 30

34 Registering Property in Bolivia This topic examines the steps, time, and cost involved in registering property in Bolivia. STANDARDIZED PROPERTY Property Value: 593, City: La Paz Registration Requirements: No: Time to complete Cost to complete 1 * Obtain a non-encumbrance certificate ( Folio real ) that includes the Certificado Alodial and a 10-year certificate of the property ( Certificado Decenal ) at the Real Estate Office 7 days (simultaneous with procedures 2 and 3) BOB 165 each certificate 2 * An architect of the Municipality inspects the property and prepares the cadastral plan 60 days (simultaneous with procedures 1 and 3) BOB 800 (architect s fees) 3 * The seller must obtain the Cadastral Unified Form at the Municipality including the cadastral value of the property 1 day (simultaneous with procedures 1 and 2) no cost 4 Lawyer prepares the sale agreement ( minuta ) 2 days BOB % of the price of the transaction 5 The minuta is delivered to the Municipality for payment of transfer taxes and the name of buyer is recorded 2 days 3% transfer tax levied on the cadastral value of the property or purchase price, whichever is higher 31

35 6 The notary notarizes the minuta and prepares the public deed 2 days BOB 30 for each page of the minuta (assuming 4 pages) 7 The public deed is delivered to the Real Estate Office for its recording under the name of the buyer 25 days BOB % on the cadastral value of the property or purchase price, whichever is higher (registration fee) * Takes place simultaneously with another procedure. 32

36 Registering Property Details - Bolivia 1 Obtain a non-encumbrance certificate ( Folio real ) that includes the Certificado Alodial and a 10-year certificate of the property ( Certificado Decenal ) at the Real Estate Office Time to complete: 7 days (simultaneous with procedures 2 and 3) Cost to complete: BOB 165 each certificate Agency: Real Estate Office (Registro de derechos reales) Comment: 2 Both certificates must be obtained by the seller before starting the transaction formally. The 10-year certificate shows all the owners of the property in the last 10 years. The documentation shall include application forms. An architect of the Municipality inspects the property and prepares the cadastral plan Time to complete: 60 days (simultaneous with procedures 1 and 3) Cost to complete: BOB 800 (architect s fees) Agency: Municipality Comment: 3 An architect of the Municipality must go and verify the property to determine its cadastral value and prepare a cadastral plan. This plan is required to obtain the Cadastral Unified Form in the Municipality. The seller must obtain the Cadastral Unified Form at the Municipality including the cadastral value of the property Time to complete: 1 day (simultaneous with procedures 1 and 2) Cost to complete: no cost Agency: Municipality Comment: The seller picks up the map prepared by the architect at the Municipality, and at the same time obtains Cadastral Unified Form, including the cadastral value of the property. This form is usually not in possession of the seller or it is not up to date due to modifications on the property. The documentation shall include: Public Deed of the purchase of the property Public Deed of the purchase by the previous owner Property Title issued by the Real Estate Office Yearly property taxes for the last 5 years ID of the seller Proof of payments of electricity services Cadastral map/plan of the property prepared by an architect (obtained in 2) 4 Lawyer prepares the sale agreement ( minuta ) Time to complete: 2 days 33

37 Cost to complete: BOB % of the price of the transaction Comment: The seller is responsible for gathering all the documentation, which includes: Property title issued by the Real Estate Office Non-encumbrance and 10 years certificate of the property (obtained in 1) Yearly property taxes proof of payment for the last 5 years Public deed of the purchase of the property Legal representative power Cadastral Unified Form issued by the Municipality (obtained in 3) 5 The minuta is delivered to the Municipality for payment of transfer taxes and the name of buyer is recorded Time to complete: Cost to complete: Agency: 2 days 3% transfer tax levied on the cadastral value of the property or purchase price, whichever is higher Municipality Comment: A sales tax certificate is obtained, and the name of the buyer is registered at the Municipality. The documentation shall include the sale agreement or minuta. The payment is made at a commercial bank; the payment receipt will have to be shown to the notary later. 6 The notary notarizes the minuta and prepares the public deed Time to complete: Cost to complete: 2 days BOB 30 for each page of the minuta (assuming 4 pages) Comment: The minuta is executed by a Public Notary, who prepares the public deed. The number of pages of the minuta or sale agreement depends on the lawyer and the clauses in the contract between the buyer and the seller. The documentation shall include: Sales tax certificate Certificate that buyer is registered at the Municipality 7 The public deed is delivered to the Real Estate Office for its recording under the name of the buyer Time to complete: Cost to complete: Agency: 25 days BOB % on the cadastral value of the property or purchase price, whichever is higher (registration fee) Real Estate Office (Registro de derechos reales) Comment: Even though the Real Estate Office has been computerized recently ( most of the information on previous titles is not in the system, requiring large amounts of time to search physically for old titles. This step would require a considerable less amount of time when all the information is included on the system. The documentation shall include: The minuta notarized Public deed 34

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39 1. Benchmarking Getting Credit Regulations: Bolivia is ranked 116 overall for Getting Credit. Ranking of Bolivia in Getting Credit - Compared to good practice and selected economies: 36

40 The following table shows Getting Credit data for Bolivia compared to good practice and comparator economies: Good Practice Economies Strength of legal rights index (0-10) Depth of credit information index (0-6) Public registry coverage (% of adults) Private bureau coverage (% of adults) New Zealand* Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 37

41 2. Historical data: Getting Credit in Bolivia Getting Credit data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank Strength of legal rights index (0-10) Depth of credit information index (0-6) Private bureau coverage (% of adults) Public registry coverage (% of adults) The following graphs illustrate the Getting Credit sub indicators in Bolivia over the past 4 years: 38

42 Getting Credit in Bolivia The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Bolivia. Getting Credit Indicators (2010) Indicator Private bureau coverage (% of adults) Private credit bureau Public credit registry 6 Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative data distributed? Yes Yes 1 Does the registry distribute credit information from retailers, trade creditors or utility companies as well as financial institutions? Yes No 1 Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes Yes 1 Is it guaranteed by law that borrowers can inspect their data in the largest credit registry? Yes No 1 Coverage Number of individuals 1,952, ,103 Number of firms 7,732 4,087 39

43 Strength of legal rights index (0-10) Can any business use movable assets as collateral while keeping possession of the assets; and any financial institution accept such assets as collateral? 1 No Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description of collateral? No Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral? No May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the original assets? Yes Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations and debts can be secured by stating a maximum amount rather than a specific amount between the parties? No Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the grantor's name of a security right? No Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? No Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? No 40

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45 1. Benchmarking Protecting Investors Regulations: Bolivia is ranked 132 overall for Protecting Investors. Ranking of Bolivia in Protecting Investors - Compared to good practice and selected economies: 42

46 The following table shows Protecting Investors data for Bolivia compared to good practice and comparator economies: Good Practice Economies Strength of investor protection index (0-10) New Zealand 9.7 Selected Economy Bolivia 4.0 Comparator Economies Argentina 4.7 Brazil 5.3 Chile 6.3 Ecuador 4.0 Peru

47 2. Historical data: Protecting Investors in Bolivia Protecting Investors data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank Strength of investor protection index (0-10) The following graph illustrates the Protecting Investors index in Bolivia compared to best practice and selected Economies: New Zealand Peru Chile Brazil Argentina Ecuador Bolivia Note: The higher the score, the greater the investor protection. 44

48 Protecting Investors in Bolivia The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Bolivia. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 1 What corporate body provides legally sufficient approval for the transaction? Whether immediate disclosure of the transaction to the public and/or shareholders is required? Whether disclosure of the transaction in published periodic filings (annual reports) is required? Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff?

49 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? Whether fines and imprisonment can be applied against Mr. James? Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 6 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? Whether the plaintiff can directly question the defendant and witnesses during trial? Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? Whether the level of proof required for civil suits is lower than that of criminal cases? Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10)

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51 1. Benchmarking Paying Taxes Regulations: Bolivia is ranked 177 overall for Paying Taxes. Ranking of Bolivia in Paying Taxes - Compared to good practice and selected economies: 48

52 The following table shows Paying Taxes data for Bolivia compared to good practice and comparator economies: Good Practice Economies Payments (number per year) Time (hours per year) Total tax rate (% profit) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : Payments (number per year): Qatar 49

53 2. Historical data: Paying Taxes in Bolivia Paying Taxes data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank Total tax rate (% profit) Payments (number per year) Time (hours per year) The following graphs illustrate the Paying Taxes sub indicators in Bolivia over the past 4 years: 50

54 Paying Taxes in Bolivia The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Bolivia, as well as measures of administrative burden in paying taxes. Tax or mandatory contribution Payments (number) Notes on Payments Time (hours) Statutory tax rate Tax base Totaltax rate (% profit) Notes on TTR Value added tax (VAT) % (effective rate 14.94%) value added Tax on bank transactions 1 0.0% bank transactions 0.00 Vehicle tax 1 varies according to the value of the asset vehicle value 0.10 Municipal license tax 1 varies according to the place where the activity is developed, based on the area occupied for the activity

55 Property tax 1 varies according to the value of the asset property value 1.10 Property transfer tax 1 3.0% sale price 1.80 Social security contributions % gross salaries Corporate income tax % taxable profit Transactions tax % sales including VAT Totals

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57 1. Benchmarking Trading Across Borders Regulations: Bolivia is ranked 125 overall for Trading Across Borders. Ranking of Bolivia in Trading Across Borders - Compared to good practice and selected economies: 54

58 The following table shows Trading Across Borders data for Bolivia compared to good practice and comparator economies: Good Practice Economies Documents to export (number) Time to export (days) Cost to export (US$ per container) Documents to import (number) Time to import (days) Cost to import (US$ per container) Denmark* 5 France 2 2 Malaysia 450 Singapore Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : Time to export (days): Estonia 55

59 2. Historical data: Trading Across Borders in Bolivia Trading Across Borders data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank Cost to export (US$ per container) Cost to import (US$ per container) Documents to export (number) Documents to import (number) Time to export (days) Time to import (days) The following graphs illustrate the Trading Across Borders sub indicators in Bolivia over the past 4 years: 56

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61 Trading Across Borders in Bolivia These tables list the procedures necessary to import and export a standardized cargo of goods in Bolivia. The documents required to export and import the goods are also shown. Nature of Export s (2010) Duration (days) US$ Cost Documents preparation Customs clearance and technical control 2 50 Ports and terminal handling Inland transportation and handling Totals Nature of Import s (2010) Duration (days) US$ Cost Documents preparation Customs clearance and technical control Ports and terminal handling Inland transportation and handling Totals

62 Documents for Export and Import Bill of Lading Certificate of origin Collection order Commercial invoice Customs export declaration Export Inspection Report from Fuerza Especial de Lucha Contra el Narcotráfico Packing list Technical standard/health certificate Import Bill of lading Certificate of origin Commercial invoice Customs import declaration Customs transit document Import license Packing list 59

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64 1. Benchmarking Enforcing Contracts Regulations: Bolivia is ranked 136 overall for Enforcing Contracts. Ranking of Bolivia in Enforcing Contracts - Compared to good practice and selected economies: 61

65 The following table shows Enforcing Contracts data for Bolivia compared to good practice and comparator economies: Good Practice Economies s (number) Time (days) Cost (% of claim) Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru

66 2. Historical data: Enforcing Contracts in Bolivia Enforcing Contracts data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank s (number) Time (days) Cost (% of claim) The following graphs illustrate the Enforcing Contracts sub indicators in Bolivia over the past 4 years: 63

67 Enforcing Contracts in Bolivia This topic looks at the efficiency of contract enforcement in Bolivia. Nature of (2010) Indicator s (number) 40 Time (days) 591 Filing and service 40.0 Trial and judgment Enforcement of judgment Cost (% of claim)* Attorney cost (% of claim) 10.0 Court cost (% of claim) 20.4 Enforcement Cost (% of claim)

68 Court information: La Paz Civil Court ("Juzgado de Instrucción") * Claim assumed to be equivalent to 200% of income per capita. 65

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70 1. Benchmarking Closing Business Regulations: Bolivia is ranked 58 overall for Closing a Business. Ranking of Bolivia in Closing Business - Compared to good practice and selected economies: 67

71 The following table shows Closing Business data for Bolivia compared to good practice and comparator economies: Good Practice Economies Recovery rate (cents on the dollar) Time (years) Cost (% of estate) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Bolivia Comparator Economies Argentina Brazil Chile Ecuador Peru * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 68

72 2. Historical data: Closing Business in Bolivia Closing a Business data Doing Business 2008 Doing Business 2009 Doing Business 2010 Doing Business 2011 Rank Time (years) Cost (% of estate) Recovery rate (cents on the dollar) The following graphs illustrate the Closing Business sub indicators in Bolivia over the past 4 years: 69

73 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets. * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Economy Positive Change Negative Change Starting a Business Dealing with Construction Permits Registering Property Getting Credit Protecting Investors Paying Taxes Trading Across Borders Enforcing Contracts Closing a Business Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 70

74 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Brazil Brunei Darussalam Cape Verde Chile Ecuador Brazil eased business start-up by further enhancing the electronic synchronization between federal and state tax authorities. Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Chile made business start-up easier by introducing an online system for registration and for filing the request for publication. An amendment to Chile s securities law strengthened investor protections by requiring greater corporate disclosure and regulating the approval of transactions between interested parties. Ecuador made starting a business easier by introducing an online registration system for social security. Grenada Hungary Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada s customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary s bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Rwanda Tajikistan Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank s public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 71

75 Vietnam Zambia Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 72

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