Doing Business 2020 Russian Federation Economy Profile Russian Federation Page 1 Doing Business 2020 Russian Federation Economy Profile of Russian Federation 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 Russian Federation 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 Russian Federation Ease of Doing Business in DB RANK DB SCORE Region Europe & Central Asia Russian Federation Income Category Upper middle income 28 Population 144,478,050 78.2 City Covered Moscow, Saint Petersburg Rankings on Doing Business topics - Russian Federation 7 12 25 21 26 40 58 57 72 99 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 93.1 78.9 97.5 88.6 80.0 60.0 80.5 71.8 72.2 59.1 Starting a Business (rank) 40 Getting Credit (rank) 25 Trading across Borders (rank) 99 Score of starting a business (0-100) 93.1 Score of getting credit (0-100) 80.0 Score of trading across borders (0-100) 71.8 Procedures (number) 4 Strength of legal rights index (0-12) 9 Time to export Time (days) 10 Depth of credit information index (0-8) 7 Documentary compliance (hours) 25 Cost (number) 1 Credit registry coverage (% of adults) 0.0 Border compliance (hours) 66 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 100.0 Cost to export Documentary compliance (USD) 92 Dealing with Construction Permits (rank) 26 Protecting Minority Investors (rank) 72 Border compliance (USD) 580 Score of dealing with construction permits (0-100) 78.9 Score of protecting minority investors (0-100) 60.0 Time to export Procedures (number) 13 Extent of disclosure index (0-10) 6.0 Documentary compliance (hours) 43 Time (days) 165 Extent of director liability index (0-10) 2.0 Border compliance (hours) 30 Cost (% of warehouse value) 1.1 Ease of shareholder suits index (0-10) 7.0 Cost to export Building quality control index (0-15) 14.0 Extent of shareholder rights index (0-6) 5.0 Documentary compliance (USD) 153 Extent of ownership and control index (0-7) 4.0 Border compliance (USD) 520 Getting Electricity (rank) 7 Extent of corporate transparency index (0-7) 6.0 Score of getting electricity (0-100) 97.5 Enforcing Contracts (rank) 21 Procedures (number) 2 Paying Taxes (rank) 58 Score of enforcing contracts (0-100) 72.2 Time (days) 41 Score of paying taxes (0-100) 80.5 Time (days) 337 Cost (% of income per capita) 5.0 Payments (number per year) 9 Cost (% of claim value) 16.5 Reliability of supply and transparency of tariff index (0-8) 8 Time (hours per year) 159 Quality of judicial processes index (0-18) 9.5 Total tax and contribution rate (% of profit) 46.2 Registering Property (rank) 12 Postfiling index (0-100) 77.8 Resolving Insolvency (rank) 57 Score of registering property (0-100) 88.6 Score of resolving insolvency (0-100) 59.1 Procedures (number) 4 Recovery rate (cents on the dollar) 43.0 Time (days) 14 Time (years) 2.0 Cost (% of property value) 0.1 Cost (% of estate) 9.0 Quality of the land administration index (0-30) 26.0 Outcome (0 as piecemeal sale and 1 as going 0 concern) Strength of insolvency framework index (0-16) 11.5 Page 4 Doing Business 2020 Russian Federation 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 Russian Federation Starting a Business - Moscow Standardized Company Legal form Limited Liability Company (OOO) Paid-in minimum capital requirement No minimum City Covered Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Procedure – Men (number) 4 5.2 4.9 1 (2 Economies) Time – Men (days) 11 11.9 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 0.9 4.0 3.0 0.0 (2 Economies) Procedure – Women (number) 4 5.2 4.9 1 (2 Economies) Time – Women (days) 11 11.9 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 0.9 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 Moscow – Score 82.4 89.4 99.5 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Moscow and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 94.1: China (Rank: 27) 93.6: Saint Petersburg 92.8: Moscow 86.1: Mexico (Rank: 107) 81.6: India (Rank: 136) 81.3: Brazil (Rank: 138) 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 Russian Federation Figure – Starting a Business in Moscow – Procedure, Time and Cost Time (days) Cost (% of income per capita) 0.7 10 0.6 Cost (% of income per capita) 8 0.5 Time (days) 0.4 6 0.3 4 0.2 2 0.1 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 Russian Federation Details – Starting a Business in Moscow – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Notarize founders' signatures for registration application 1 day RUB 200 per signature Agency : Notary Public (stamp duty) + RUB 1,000 Each founder must fill out and sign a standard registration application. Signatures on the (fee for technical work) application must be notarized. There is a stamp duty of RUB 200 per signature for individuals. In addition to the stamp duty, a notary will charge the fee for technical work related to certifying the signatures of individuals in amount of RUB 1,000 in 2019. Starting from May 5, 2014 this procedure became optional. If the founders are able to attend the Unified State Register and file all the documents in person, the application does not have to be notarized and the registration officer can certify the founder’s signature instead. However, this is possible only in case when all the founders are able to visit the Unified State Register in person, otherwise the signatures on application must be notarized. 2 Pay registration fee and register with the unified register at the Federal Tax Service on the 7 days RUB 4,000 local level, obtain state registration number and identification number of taxpayer (INN) Agency : Federal Tax Service Either the company or the notary on behalf of the company must submit the following documents for registration: • Resolution of the founders on the establishment of the company (Minutes of the general meeting of founders); • Charter (2 originals required, one is stamped by the Federal Tax Services and returned to applicants after the registration); • Notarized Registration Application; • Receipt of payment of the state registration fee; • Document Certifying the Physical Address of the New Company (this could be a lease agreement or a letter by the property owner of the leased property, certified with signature and building company’s stamp. If the leasing office space is from an individual owner this document would need notarization.) It is also required to file a notarized power of attorney, if the documents are filed by any person other than founder. The tax authorities sometimes implement a number of additional requirements, and failure to comply may lead to the rejection of the application. At the time of application, the applicant receives a confirmation slip, which specifies the date that the registration will be complete and ready for pick up. Starting from December 29, 2015 the registration term is 3 working days, not including the day of submission of documents and the day of issuance of the registration certificate. The registration fee for applications submitted in person is RUB 4,000, which can be done through a terminal machine at the offices of the Federal Tax Service, a wire transfer or any other means which would allow the founders to provide an evidence of payment to the Federal Tax Service. If application is submitted online, it is free of charge. After submitting the application for registration, it is possible to check the readiness of the documents online, including the results of the decision taken (decision about registration,decision about suspension, refusal of registration). In recent times, there have been more cases of suspension of registration in order to verify the information disclosed in the Unified State Register of Legal Entities (EGRUL). On the day of pick up, the applicant will receive a package of documents, including Abstract of the state registration, abstract of tax registration with a Tax Identification Number (TIN), one of the original company charters (that the applicant submitted) stamped by the government, and proof of business entry in the unified State Register of Legal Entities. Since January 1, 2017, Certificates of state registration of legal entities, which were stamped on the special blanks of the Russian Federal Tax Service, have been cancelled, and the Lists of the record in the Unified State Register of Legal Entities are issued instead. The registration documents can be sent by mail, if an applicant indicated in the application form that he wants the documents to be delivered by mail. Upon the completion of the company's registration, the Registration Authority shall send the information about the new company to the Federal State Statistics Service and the social funds (Pension Fund and Social Insurance Fund) for the purposes of the company's registration with these authorities. The procedure can also be done online https://service.nalog.ru/gosreg/#ul - with electronic signature. However, obtaining online signature is costly and time consuming. In practice, most businesses do not utilize the online services. The online service has been available since 2012. Furthermore, it is possible that the notary submits registration application electronically on behalf of the client. However, in practice, if the registration application is submitted by the notary it takes more time, usually two more days (one day of delay related to online processing of applications at notary office and one day of delay related to delivery of the registration list to the notary in a hard copy). Therefore, most companies prefer to submit application in person. Page 8 Doing Business 2020 Russian Federation 3 Make a company seal 1 day RUB 500 Agency : Seal-making service On 6 April 2015, the President of the Russian Federation signed Federal Law #82 that eliminates requirement for a company seal. However, in practice, majority of the businesses still obtain a company seal as part of the process of starting a business. Often there are several companies with similar names (there is no official name check when the company is registered), so using the seal with the company’s address and other credentials ensures the correct identification of the company. If the new company decides to have a seal it must insert the respective provision to its Articles of Association. A basic company seal typically costs RUB 500. More sophisticated seals can cost RUB 1,000- 1,500. 4 Open the company bank account 2 days free if done at the bank; Agency : Bank RUB 200 (signatures and According to the Central Bank of Russian Federation instruction No. 153-I from May 30, 2014, the bank card) + RUR 1,000 following documents are required in order to open a business bank account: (notary fees) • A list from Unified State Register of Legal Entities; approximately if done with • Founding documents of the legal entity; • Certificate of tax registration; the notary • The license (permit) issued for a legal entity if such licenses (permits) are directly related to the capacity of the legal entity; • Bank signature card; • Documents confirming authorities of the persons defined in bank signature card; • Documents confirming authorities of the sole executive body of the legal entity. The signature of the entrepreneur must be certified and registered by a bank. There is a special form (provided by the government) that must be completed for this procedure. Entrepreneurs have two options. They can either (a) have the signature form notarized and then it can be brought to the bank when opening the bank account, or (b) they can certify the signature of the entrepreneur at the bank, when opening a bank account. According to the Federal law No. 52-FZ on Introduction of Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation, as of May 1, 2014 a company is not obliged to inform the Federal Tax Service on opening, closing or changing details of the company's bank account. Takes place simultaneously with previous procedure. Page 9 Doing Business 2020 Russian Federation Starting a Business - Saint Petersburg Standardized Company Legal form Limited Liability Company (OOO) Paid-in minimum capital requirement No minimum City Covered Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Procedure – Men (number) 4 5.2 4.9 1 (2 Economies) Time – Men (days) 8 11.9 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 1.0 4.0 3.0 0.0 (2 Economies) Procedure – Women (number) 4 5.2 4.9 1 (2 Economies) Time – Women (days) 8 11.9 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 1.0 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 Saint Petersburg – Score 82.4 92.5 99.5 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 94.1: China (Rank: 27) 93.6: Saint Petersburg 92.8: Moscow 86.1: Mexico (Rank: 107) 81.6: India (Rank: 136) 81.3: Brazil (Rank: 138) 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 10 Doing Business 2020 Russian Federation Figure – Starting a Business in Saint Petersburg – Procedure, Time and Cost Time (days) Cost (% of income per capita) 8 0.7 7 0.6 Cost (% of income per capita) 6 0.5 Time (days) 5 0.4 4 0.3 3 0.2 2 1 0.1 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 11 Doing Business 2020 Russian Federation Details – Starting a Business in Saint Petersburg – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Notarize founders' signatures for registration application 1 day RUB 200 per signature Agency : Notary Public (stamp duty) + RUB 850 Each founder must fill out and sign a standard registration application. Signatures on the (fee for technical work) application must be notarized. There is a stamp duty of RUB 200 per signature. In addition to the stamp duty, a notary will charge the fee for technical work related to certifying the signatures in amount of RUB 850 in 2019. Starting from May 5, 2014 this procedure became optional. If the founders are able to attend the Unified State Register and file all the documents in person, the application does not have to be notarized and the registration officer can certify the founder’s signature instead. However, this is possible only in case when all the founders are able to visit the Unified State Register in person, otherwise the signatures on application must be notarized. 2 Pay the registration fee and register with the Unified State Register 5 days RUB 4,000 (in person Agency : Federal Tax Service application) or fee of Either the company or the notary on behalf of the company must submit the following documents charge (online application) for registration: • Resolution of the founders on the establishment of the company (Minutes of the general meeting of founders); • Charter (2 originals required, one is stamped by the Federal Tax Services and returned to applicants after the registration); • Notarized Registration Application; • Receipt of payment of the state registration fee; • Document Certifying the Physical Address of the New Company (this could be a lease agreement or a letter by the property owner of the leased property, certified with signature and building company’s stamp. If the leasing office space is from an individual owner this document would need notarization.) It is also required to file a notarized power of attorney, if the documents are filed by any person other than founder. The tax authorities sometimes implement a number of additional requirements, and failure to comply may lead to the rejection of the application. At the time of application, the applicant receives a confirmation slip, which specifies the date that the registration will be complete and ready for pick up. Starting from December 29, 2015 the registration term is 3 working days, not including the day of submission of documents and the day of issuance of the registration certificate. The registration fee for applications submitted in person is RUB 4,000, which can be done through a terminal machine at the offices of the Federal Tax Service, a wire transfer or any other means which would allow the founders to provide an evidence of payment to the Federal Tax Service. If application is submitted online, it is free of charge. After submitting the application for registration, it is possible to check the readiness of the documents online, including the results of the decision taken (decision about registration,decision about suspension, refusal of registration). In recent times, there have been more cases of suspension of registration in order to verify the information disclosed in the Unified State Register of Legal Entities (EGRUL). On the day of pick up, the applicant will receive a package of documents, including Abstract of the state registration, abstract of tax registration with a Tax Identification Number (TIN), one of the original company charters (that the applicant submitted) stamped by the government, and proof of business entry in the unified State Register of Legal Entities. Since January 1, 2017, Certificates of state registration of legal entities, which were stamped on the special blanks of the Russian Federal Tax Service, have been cancelled, and the Lists of the record in the Unified State Register of Legal Entities are issued instead. The registration documents can be sent by mail, if an applicant indicated in the application form that he wants the documents to be delivered by mail. Upon the completion of the company's registration, the Registration Authority shall send the information about the new company to the Federal State Statistics Service and the social funds (Pension Fund and Social Insurance Fund) for the purposes of the company's registration with these authorities. The procedure can also be done online https://service.nalog.ru/gosreg/#ul - with electronic signature. However, obtaining online signature is costly and time consuming. In practice, most businesses do not utilize the online services. The online service has been available since 2012. Furthermore, it is possible that the notary submits registration application electronically on behalf of the client. However, in practice, if the registration application is submitted by the notary it takes more time, usually two more days (one day of delay related to online processing of applications at notary office and one day of delay related to delivery of the registration list to the notary in a hard copy). Therefore, most companies prefer to submit application in person. Page 12 Doing Business 2020 Russian Federation 3 Make a seal in a private company 1 day RUB 350 Agency : Seal maker On 6 April 2015, the President of the Russian Federation signed Federal Law #82 that eliminates requirement for a company seal. However, in practice, majority of the businesses still obtain a company seal as part of the process of starting a business. Often there are several companies with similar names (there is no official name check when the company is registered), so using the seal with the company’s address and other credentials ensures the correct identification of the company. If the new company decides to have a seal it must insert the respective provision to its Articles of Association. The cost of acquiring a company seal at the average market price is RUB 350. 4 Open a company bank account 1 day RUB 500 Agency : Commercial Bank Fees may vary depending on the bank. According to the Federal law No. 52-FZ on Introduction of Amendments to Parts One and Two of the Tax Code of the Russian Federation and Certain Legislative Acts of the Russian Federation, as of May 1, 2014 a company is not obliged to inform the Federal Tax Service on opening, closing or changing details of the company's bank account. This is done automatically by the bank. Takes place simultaneously with previous procedure. Page 13 Doing Business 2020 Russian Federation Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures The warehouse: that can be fully completed online are an exception to this rule - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) requirements). • Quality of building regulations (0-2) The water and sewerage connections: • Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 14 Doing Business 2020 Russian Federation Dealing with Construction Permits - Moscow Standardized Warehouse Estimated value of warehouse RUB 34,500,658.40 City Covered Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 14 16.2 12.7 None in 2018/19 Time (days) 160 170.1 152.3 None in 2018/19 Cost (% of warehouse value) 1.2 4.0 1.5 None in 2018/19 Building quality control index (0-15) 14.0 12.1 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Moscow – Score 64.0 61.4 94.2 93.3 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Moscow and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 80.5: Saint Petersburg 78.7: India (Rank: 27) 78.2: Moscow 77.3: China (Rank: 33) 68.8: Mexico (Rank: 93) 51.9: Brazil (Rank: 170) 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 15 Doing Business 2020 Russian Federation Figure – Dealing with Construction Permits in Moscow – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 160 0.7 140 0.6 Cost (% of warehouse value) 120 0.5 Time (days) 100 0.4 80 0.3 60 0.2 40 20 0.1 0 0 1 2 *3 4 5 *6 7 8 9 10 11 12 13 14 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 16 Doing Business 2020 Russian Federation Figure – Dealing with Construction Permits in Moscow and comparator economies – Measure of Quality 16 15.0 14.5 14.0 14.0 14 11.7 12.1 Index score 12 10 8.4 8 6 4 2 0 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Details – Dealing with Construction Permits in Moscow – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain the development plan of land plot (GPZU) at the Moscow Architecture 28 days no charge and City Planning Committee Agency : The Moscow Architecture and City Planning Committee The development plan of land plot (GPZU) must be obtained prior to obtaining any studies of the land plot or the technical conditions. It is the first step in the sequence of steps to obtain a building permit. A one-stop shop has been implemented at the Moscow Architecture and City Planning Committee (MoskomArchitektura) in order to deal with all procedures related to land. BuildCo does not have to visit each agency in order to obtain the documents. Rather, BuildCo applies for the copy of the development plan of the land plot at MoskomArchitektura and they take care of all the steps. 2 Request and obtain a topographic, engineering, geological and ecological survey and 45 days RUB 200,000 obtain Act of Moscow Geological - Geodesic Department Agency : Mosgorgeotrest or Private Licensed Companies BuildCo must obtain a land survey at a scale of 1:500/1 by a specialized organization. A report is prepared as a result of the topographic survey with a layout of the building and structure In addition, information about conditions of the land plot (geological, geodesic and ecological) is needed for project design. There are 5 types of mandatory engineering surveys. All or a few of them are requested, depending on the land plot and surrounding territorial conditions. In the Doing Business case, there could be 2 -- 3 types of surveys. Mosgorgeotrest conduct these surveys, but private licensed companies can also conduct these surveys but in that case, the companies are requested to get the results ‘stamped’ by Mosgorgeotrest. 3 Sign an agreement on technological connection with Mosvodokanal 18 days no charge Agency : Moscow Water and Sewage Company - Mosvodokanal Since July 14, 2017 project documentation can be sent to Mosvodokanal together with an application for issuing of connection act (Resolution of Government of the RF No. 645 of July 29, 2013). At this stage, the contract on connection to water and sewage services is signed. After receiving GPZU and conducting engineering surveys BuildCo applies to Mosvodokanal for a contract to connect to water and sewage services. Technical conditions of water and sewage connection are attached as an annex to such contract on the basis of which project design and construction are carried out. 4 Request and obtain permission for construction 9 days no charge Agency : Moscow State Committee of Construction Supervision To obtain the building permit (permission for construction), BuildCo must submit the following documents to the Moscow State Committee of Construction Supervision: • Application form • Documents confirming title to the land • Town (planning) plan of land • Relevant project documentation The application is submitted online through www.stroi.mos.ru. The permit is free of charge. 5 Request and obtain an opening order of production of works from the Union of 7 days no charge Administrative Technical Inspections (UATI) Agency : Union of Administrative Technical Inspections (UATI) The construction company must obtain an order of conducting of construction works and for building the utility networks. It is possible to obtain the order at once or in stages, individually for each network and for each phase of construction. The list of required document to apply for this order are listed on the website oati.mos.ru. The order must be closed after completion of construction works. 6 Receive control-geodesic survey from Mosgorgeotrest 1 day RUB 30,000 Agency : Mosgorgeotrest Prior to beginning the construction, Mosgorgeotrest conducts topographic and geodesic surveys (geodesic base, general construction plan). This is conducted in order to verify the compliance of the project design documentation with the existing schemes of underground infrastructure lines. Page 17 Doing Business 2020 Russian Federation 7 Receive random inspection during construction 1 day no charge Agency : Union of Administrative Technical Inspections (UATI) Construction activities are not interrupted during inspections. 8 Notify Moscow Water and Sewage Company (Mosvodokanal) of completion of construction 0.5 days no charge works Agency : Moscow Water and Sewage Company - Mosvodokanal When construction works are completed, BuildCo notifies Moscow Water and Sewage Company (Mosvodokanal) that the construction site is ready for inspection and water and sewage connection. The notification can be sent online via www.mos.ru 9 Connect to water and sewage services 30 days RUB 109,259 Agency : Moscow Water and Sewage Company - Mosvodokanal An agreement must be concluded between BuildCo and the Moscow Water and Sewage Company. The connection to water service is then installed. 10 Close the order on conducting of construction works from the Union of Administrative 0.5 days no charge Technical Inspections (UATI) Agency : Union of Administrative Technical Inspections (UATI) After the completion of construction works, it is mandatory to close the order on conducting of construction works from the Union of Administrative Technical Inspections (UATI). The request to close the order is submitted online at www.stroi.mos.ru. The documents that are required for the closing of the order are requested by UATI through an online interaction with other agencies, without the involvement of the investor. The closing of the order can take up to 8 business days. However, the investor does not need to wait for for the order to be officially close before beginning other procedures, as submitting the request is sufficient. The requirement to submit the request online was introduced by Resolution of the Government of Moscow № 284-PP on May 19, 2015. 11 Request and receive a final inspection 7 days no charge Agency : Moscow State Committee of Construction Supervision According to the Article 55 of the Urban Development Code dated 29 December 2004, after the completion of construction works, the Moscow State Committee of Construction Supervision sets up a commission, which takes around a week, and conducts a final inspection to verify if the building was built according to the approved design conditions. The occupancy permit may be obtained only if the final inspection certificate is available confirming the compliance of the constructed project with the design documentation and technical regulations based on the building inspection results. 12 Request and receive the technical plans / cadastre passports of the building 14 days RUB 40,000 Agency : Cadastral Engineers/ Federal Agency for Technical Inventory BuildCo has to provide technical and cadastral plans of the building in order to be able to register the building at the Federal Service for State Registration, Cadastre and Cartography. 13 Request and receive the disposition on operation of building (occupancy permit) 9 days no charge Agency : Moscow State Committee of Construction Supervision In order to obtain permission to use the building, it is necessary to apply to the Moscow State Committee of Construction Supervision with the following documents: 1) land ownership documents 2) development plan of the land plot 3) building permit 4) a document confirming that the constructed building meets the requirements of technical regulations signed by the person responsible for conducting the construction works 5) a detailed map showing the location of the construction, location of the utility networks within the boundaries of the land plot and the schematic plan of the land plot. The document should be signed by the person responsible for conducting the construction works. The application is submitted online through www.stroi.mos.ru. 14 Register the building after completion in Rosreestr 9 days RUB 22,000 Agency : Federal Service for State Registration, Cadastre and Cartography (Rosreestr) According to the Russian Federation Civil Code, the right to own and "create" immovable things, including buildings, is subject to state registration at the Unified State Register of rights to immovable assets and associated transactions. To complete the registration, BuildCo must submit an application, the real property plan, and approval of the building, confirming that real property has been built. Takes place simultaneously with previous procedure. Page 18 Doing Business 2020 Russian Federation Details – Dealing with Construction Permits in Moscow – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0 building regulations? (0-1) Licensed engineer. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in- 2.0 house engineer; Risk- based 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. 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) 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 19 Doing Business 2020 Russian Federation Dealing with Construction Permits - Saint Petersburg Standardized Warehouse Estimated value of warehouse RUB 34,500,658.40 City Covered Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 11 16.2 12.7 None in 2018/19 Time (days) 175 170.1 152.3 None in 2018/19 Cost (% of warehouse value) 0.9 4.0 1.5 None in 2018/19 Building quality control index (0-15) 14.0 12.1 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Saint Petersburg – Score 76.0 57.1 95.4 93.3 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 80.5: Saint Petersburg 78.7: India (Rank: 27) 78.2: Moscow 77.3: China (Rank: 33) 68.8: Mexico (Rank: 93) 51.9: Brazil (Rank: 170) 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 20 Doing Business 2020 Russian Federation Figure – Dealing with Construction Permits in Saint Petersburg – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.7 160 0.6 Cost (% of warehouse value) 140 0.5 120 Time (days) 100 0.4 80 0.3 60 0.2 40 0.1 20 0 0 1 2 *3 4 5 6 7 8 9 10 11 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 21 Doing Business 2020 Russian Federation Figure – Dealing with Construction Permits in Saint Petersburg and comparator economies – Measure of Quality 16 15.0 14.5 14.0 14.0 14 11.7 12.1 Index score 12 10 8.4 8 6 4 2 0 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Details – Dealing with Construction Permits in Saint Petersburg – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Request and obtain the development plan of land plot (GPZU) 28 days no charge Agency : Saint-Petersburg Architecture and City Planning Committee The development plan of land plot (GPZU) must be obtained prior to obtaining any studies of the land plot or the technical conditions. It is the first step in the sequence of steps to obtain a building permit. It is also required at the end of the construction in order to obtain the occupancy certificate. 2 Request and obtain a topographic, engineering, geological and ecological survey of the 45 days RUB 200,000 land plot Agency : Licensed Private Company BuildCo must obtain a land survey at a scale of 1:500/1 by a specialized organization. A report is prepared as a result of the topographic survey with a layout of the building and structure. In addition, information about conditions of the land plot (geological, geodesic and ecological) is needed for project design. There are 5 types of mandatory engineering surveys. All or a few of them are requested, depending on the land plot and surrounding territorial conditions. In the Doing Business case, there could be 2 -- 3 types of surveys. Engineering surveys are performed by private companies which belong to self-regulated organizations (SRO). 3 Sign an agreement on technological connection and obtain connection conditions 18 days no charge Agency : Saint-Petersburg Water and Sewage Company (Vodokanal) BuildCo submits the following documents to Vodokanal of Saint-Petersburg in order to request a water and sewage connection: - Copies of constituent documents (registration documents and other supporting documentation verifying the legal status of BuildCo) - Cadastral plan of the land - Technical conditions for water and sewage - Estimated balance of water consumption and wastewater usage - Topographic map of the land on a scale of 1:500 - Urban development plan for the land 4 Request and obtain permission for construction 9 days no charge Agency : State Agency of Construction Supervision and Expertise of Saint-Petersburg To obtain the building permit (permission for construction), BuildCo must submit the following documents to the State Agency of Construction Supervision and Expertise of Saint-Petersburg: • Application form • Documents confirming title to the land • Town (planning) plan of land • Relevant project documentation The permit is free of charge. The application is submitted through http://info.essk.gov.spb.ru/ 5 Request and obtain an opening order of production of works from the State Administrative 14 days no charge Technical Inspectorate Agency : State Administrative Technical Inspectorate The construction company must obtain an order of conducting of construction works and for building the utility networks outside its own land plot. It is possible to obtain the order at once or in stages, individually for each network and for each phase of construction. 6 Receive inspection from the State Agency of Construction Supervision and Expertise to 1 day no charge check working conditions Agency : State Agency of Construction Supervision and Expertise of Saint-Petersburg The State Agency of Construction Supervision and Expertise of Saint-Petersburg will generally perform one inspection during construction to check that the working conditions at the construction site are appropriate for the workers and that there is temporary electricity, running water, and safety mechanisms in place. Page 22 Doing Business 2020 Russian Federation 7 Obtain connection to water and sewage services 30 days RUB 37,161 Agency : Saint-Petersburg Water and Sewage Company (Vodokanal) BuildCo signs the contract prepared by the water and sewage company and requests the date of connection to water and sewage services. The water and sewage company will provide the connection according to the date specified in the contract. 8 Request and receive a final inspection 7 days no charge Agency : State Construction Supervision and Expertise Service According to the Article 55 of the Urban Development Code dated 29 December 2004, after the completion of construction works, the State Agency of Construction Supervision and Expertise of Saint-Petersburg sets up a commission, which takes around a week, and conducts a final inspection to verify if the building was built according to the approved design conditions. The occupancy permit may be obtained only if the final inspection certificate is available confirming the compliance of the constructed project with the design documentation and technical regulations based on the building inspection results. 9 Request and obtain a technical plan of the building 20 days RUB 55,000 Agency : Cadastral Engineers / Bureau of Technical Inventory BuildCo has to provide technical and cadastral plans of the building in order to be able to register the building at the Federal Service for State Registration, Cadastre and Cartography. Preparation of the technical plan of the building can be done by either a licensed cadatstral engineer or the Bureau of Technical Inventory. The preparation of the technical plan can take from 10 to 30 days. 10 Request and receive the disposition on operation of the building (occupancy permit) 9 days no charge Agency : State Agency of Construction Supervision and Expertise of Saint-Petersburg In order to obtain permission to use the building, it is necessary to apply to the State Agency of Construction Supervision and Expertise of Saint-Petersburg with the following documents: 1) land ownership documents 2) development plan of the land plot 3) building permit 4) a document confirming that the constructed building meets the requirements of technical regulations signed by the person responsible for conducting the construction works 5) a detailed map showing the location of the construction, location of the utility networks within the boundaries of the land plot and the schematic plan of the land plot. The document should be signed by the person responsible for conducting the construction works. The application is submitted through http://info.essk.gov.spb.ru/ 11 Register the building at Rosreestr 12 days RUB 22,000 Agency : Federal Service for State Registration, Cadastre and Cartography (Rosreestr) According to the Russian Federation Civil Code, the right to own and "create" immovable things, including buildings, is subject to state registration at the Unified State Register of rights to immovable assets and associated transactions. Takes place simultaneously with previous procedure. Page 23 Doing Business 2020 Russian Federation Details – Dealing with Construction Permits in Saint Petersburg – Measure of Quality Answer Score Building quality control index (0-15) 14.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Licensed architect; 1.0 building regulations? (0-1) Licensed engineer. Quality control during construction index (0-3) 3.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by in- 2.0 house engineer; Risk- based 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. 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) 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 24 Doing Business 2020 Russian Federation 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 25 Doing Business 2020 Russian Federation Getting Electricity - Moscow Standardized Connection Name of utility MOESK Price of electricity (US cents per kWh) 8.1 City Covered Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 2 5.1 4.4 3 (28 Economies) Time (days) 38 99.6 74.8 18 (3 Economies) Cost (% of income per capita) 4.7 271.9 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 Moscow – Score 100.0 91.3 99.9 100.0 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Moscow and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 97.8: Moscow 96.8: Saint Petersburg 95.4: China (Rank: 12) 89.4: India (Rank: 22) 72.8: Brazil (Rank: 98) 71.1: Mexico (Rank: 106) 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 Moscow – Procedure, Time and Cost Time (days) Cost (% of income per capita) 5 35 Cost (% of income per capita) 30 4 25 Time (days) 3 20 15 2 10 1 5 0 0 1 2 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 26 Doing Business 2020 Russian Federation reflected here, see the summary below. Figure – Getting Electricity in Moscow and comparator economies – Measure of Quality 9 8 8 8 7 7 7 6.2 Index score 6 6 6 5 4 3 2 1 0 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Page 27 Doing Business 2020 Russian Federation Details – Getting Electricity in Moscow – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to MOESK and electronically sign contract for connection 7 calendar days RUB 32,477.26 Agency : MOESK The application for electrical connection is submitted electronically through the online personal account on the MOESK website (http://utp.moesk.ru/my/). There is no need to visit the client services office. The application should be supported by the documents required by the utility, including the internal wiring and equipment location plan, justification of the requested capacity, copy of the license of the firm which prepared the plan, and documents certifying the legal status of the customer. MOESK reviews the application and provides the customer with the technical conditions for connection along with a signed connection and supply contracts. All the documents are available online in the customer's personal account on the MOESK website, where those can be signed electronically. The customer is not required to go to the office of MOESK. Upon signing the connection contract the customer makes the payment of the connection cost online. 2 Receive external works and final connection 31 calendar days RUB 0 Agency : MOESK Upon having the connection contract signed electronically by the customer, the utility prepares the project design for building a network for connection. MOESK will also obtain all approvals for construction work (such as the permit for the laying underground or overhead lines), and carry out all the external works according to the contract and the technical conditions. The external works and meter installation do not involve the customer. MOESK performs all the work up to the land boundaries of the applicant. The customer is responsible for having the internal network ready with all the necessary equipment installed, including the metering equipment. Internal wiring can be done by a company engineer, or can be outsourced to a specialized electric company or the utility under a separate contract. Before energizing, the utility checks the readiness of the internal network and equipment of the customer, including the meter and sealing it, to receive electric energy. If there are no any issues on the customer side, the utility energizes the warehouse and provides the customer with the final set of documents - including: Act of assessment, Act of technical connection, Act permitting exploitation of metering equipment (АДПУ). All these documents can be signed by the client online. Takes place simultaneously with previous procedure. Page 28 Doing Business 2020 Russian Federation Details – Getting Electricity in Moscow – 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) 0.2 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://www.mosenergosby t.ru/website/faces/legals/t ariffs-n-prices?_adf.ctrl- state=11iei8idwi_17&_afrL oop=457846438209203& 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 29 Doing Business 2020 Russian Federation Getting Electricity - Saint Petersburg Standardized Connection Name of utility Lenenergo (Ленэнерго) Price of electricity (US cents per kWh) 8.9 City Covered Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 2 5.1 4.4 3 (28 Economies) Time (days) 47 99.6 74.8 18 (3 Economies) Cost (% of income per capita) 5.7 271.9 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 Saint Petersburg – Score 100.0 87.4 99.9 100.0 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 97.8: Moscow 96.8: Saint Petersburg 95.4: China (Rank: 12) 89.4: India (Rank: 22) 72.8: Brazil (Rank: 98) 71.1: Mexico (Rank: 106) 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 Saint Petersburg – Procedure, Time and Cost Time (days) Cost (% of income per capita) 7 45 40 6 Cost (% of income per capita) 35 5 30 Time (days) 4 25 20 3 15 2 10 1 5 0 0 1 2 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 30 Doing Business 2020 Russian Federation reflected here, see the summary below. Figure – Getting Electricity in Saint Petersburg and comparator economies – Measure of Quality 9 8 8 8 7 7 7 6.2 Index score 6 6 6 5 4 3 2 1 0 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Page 31 Doing Business 2020 Russian Federation Details – Getting Electricity in Saint Petersburg – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit application to Lenenergo and sign contract for connection 7 calendar days RUB 39,420 Agency : Lenenergo The application for electrical connection is submitted electronically through the online personal account on the Lenenergo website (https://lkk.lenenergo.ru/SiteAssets/tags.aspx). There is no need to visit the client services office. The application should be supported by the documents required by the utility, including the internal wiring and equipment location plan, justification of the requested capacity, copy of the license of the firm which prepared the plan, and documents certifying the legal status of the customer. After receiving the connection application, Lenenergo reviews it and notifies the customer about the status of the application. Technical conditions for connection along with signed connection and supply contracts are available online in the customer's personal account on the Lenenergo website, where those can be signed electronically. The customer is not required to go to the office of Lenenergo. Upon signing the connection contract the customer makes the payment of the connection cost online. 2 Receive external works and final connection 40 calendar days RUB 0 Agency : Lenenergo Upon having the connection contract signed electronically by the customer, the utility prepares the project design for building a network for connection. Lenenergo will also obtain all approvals for construction work (such as the permit for the laying underground or overhead lines), and carry out all the external works according to the contract and the technical conditions. The external works and meter installation do not involve the customer. Lenenergo performs all the work up to the land boundaries of the applicant. The customer is responsible for having the internal network ready with all the necessary equipment installed, including the metering equipment. Internal wiring can be done by a company engineer, or can be outsourced to a specialized electric company or the utility under a separate contract. Before energizing, the utility checks the readiness of the internal network and equipment of the customer, including the meter and sealing it, to receive electric energy, at the same time utility inspector checks the quality of external works. If there are no issues on the customer side, the utility energizes the warehouse and provides the customer with the final set of documents - including the inspection certificate, the certificate of fulfillment of the obligations mentioned in the technical conditions, the balance separation certificate (акт разграничения балансовой принадлежности), and certificate of responsibilities. The documents are also made available at the customer's personal account. Takes place simultaneously with previous procedure. Page 32 Doing Business 2020 Russian Federation Details – Getting Electricity in Saint Petersburg – 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) 0.2 System average interruption frequency index (SAIFI) 0.1 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://www.pesc.ru/for_clie nts/disclosure_of_informat ion/St_Petersburg/ http://www.pesc.ru/for_clie nts/disclosure_of_informat ion/len_obl/ 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 33 Doing Business 2020 Russian Federation 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 34 Doing Business 2020 Russian Federation Registering Property - Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 4 5.5 4.7 1 (5 Economies) Time (days) 14 20.8 23.6 1 (2 Economies) Cost (% of property value) 0.1 2.7 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 26.0 20.4 23.2 None in 2018/19 Figure – Registering Property in Moscow – Score 75.0 93.8 99.1 86.7 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Moscow and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 88.6: Moscow 88.6: Saint Petersburg 81.0: China (Rank: 28) 60.2: Mexico (Rank: 105) 54.1: Brazil (Rank: 133) 47.6: India (Rank: 154) 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 35 Doing Business 2020 Russian Federation Figure – Registering Property in Moscow – Procedure, Time and Cost Time (days) Cost (% of property value) 14 0.14 12 0.12 Cost (% of property value) 10 0.1 Time (days) 8 0.08 6 0.06 4 0.04 2 0.02 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 36 Doing Business 2020 Russian Federation Figure – Registering Property in Moscow and comparator economies – Measure of Quality 30 26.0 26.0 25 24.0 20.4 Index score 20 16.3 16.3 15 10.8 10 5 0 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Details – Registering Property in Moscow – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Buyer checks for encumbrances on property at the Federal Service for State Registration, 3 days RUB 600; (RUB 600 Cadastre and Cartography (electronic document), Agency : Federal Service of State Registration, Cadastre and Cartography (Rosreestr) RUB 2200 (for a hard Even though not mandatory by law, in practice most buyers do check for non-encumbrances on copy)) the property to prove the validity of the seller's title. The complete information on the property (ownership rights, encumbrances) can be obtained by the Buyer in two ways with equal legal power of each. In a form of the official physical document and in electronic format (e-extract). The official, signed E-Extract is ordered online, payment is made the E-extract is received electronically in 3 days. According to the Federal Law No.218 - upon the official request for information the registration authority shall provide an official document with all information available in the Unified State Register of Real Estate Property within three working days. The Buyer can also obtain a paper copy of the extract from Real Estate Property Register by making an application as individual (not the legal entity) with the cost being RUB 750 (RUB 300 e- document). There is also an option to access the information resource of Rosreestr: any individual or legal entity may obtain an electronic extract from the Property Register and verify ownership title to any real estate facility and existence of encumbrances, if any. The procedure includes the following steps: 1) obtaining an electronic access key (free of charge); 2) refilling one's account with the help of a credit card for a minimum sum of RUB 400; 3) receiving the electronic extract from the Property Register with the charge being RUB 1 for one query. 2 Seller obtains a “reconciliation report” from the local utility 1 day no charge Agency : Local Utility Company At the request of the buyer, the seller obtains a signed “reconciliation report” from the local utility, showing that no outstanding debts are owed to the utility company. Usually, the seller can obtain this report within a day by requesting it directly from the local utility. Although not a legal requirement, the reconciliation report is commonly obtained in transactions involving commercial real estate, so the buyer can rest assured that the property is free from any possible creditors and to avoid problems with future utility hook up. The process of registering a new contract in the buyer’s name may take much longer if there are any outstanding bills (up to one month) and the service will be interrupted, which is not desirable for the commercial property. 3 Check for legal status and current conditions of the buyer at the Unified State Register of Less than one day, Electronic document - no Legal Entities online charge. Agency : Unified State Register of Legal Entities (Officially managed and maintained by the Federal Tax Service (FNS)) Official documents in hard Legal entities will obtain extracts from the Unified State Register of Legal Entities, officially copy - RUB 200 (regular managed and maintained by the Federal Tax Service (FNS) (http://egrul.nalog.ru/#). Although procedure - 5 working Russian legislation does not establish the term of validity for the extracts, in practice most state authorities accept the extracts issued not earlier than 30 days before their submission to the days) or RUB 400 respective state authority. (expedited procedure - 1 working day) Since 2015 the official information on the legal status of a legal entity became available in a form of the official electronic extract with encrypted digital signature of FNS on its official website: https://service.nalog.ru/vyp/. The statutory term for obtaining the official electronic extract is the same as for the official hard copy extract (not more than 5 days). Page 37 Doing Business 2020 Russian Federation 4 Apply for state registration of title transfer in the Unified State Register of Rights to Real 11 days RUB 44,000; (RUB Estate 44,000: RUB 22,000 Agency : Multifunctional Center (MFC) (building) + RUR 22,000 The most common way to apply for state registration of title transfer is completed within 9 (land plot transfer)) business days. An application and relevant documents are submitted at the Multifunctional Centers (MFCs), which provide services on federal, regional and municipal levels, using a "One- Stop-Shop" principle and are widely spread across all regions of the country. MFC accepts the application and documents, sends them to Rosreestr internally, and receives them back (all electronically). It is also possible to apply for state registration of title transfer directly at the Roseester, which is completed within 7 business days. However, the option is less popular since Roseester centers are more scarce. Additionally, the application together with all relevant documents can also be submitted in an electronic format, using the following link: https://rosreestr.ru/wps/portal/p/cc_present/reg_rights#/ However, the online application for the registration of the property transfer is subject to the special requirements listed in Order No. 883 of November 26, 2015. For example, all documents submitted online be signed by the encrypted digital signature of a relevant person. In practice, submission of documents in electronic format is not frequently done, since there are only a few legal entities/individuals who have the encrypted digital signature software necessary for the transaction. Takes place simultaneously with previous procedure. Page 38 Doing Business 2020 Russian Federation Details – Registering Property in Moscow – Measure of Quality Answer Score Quality of the land administration index (0-30) 26.0 Reliability of infrastructure index (0-8) 8.0 Type of land registration system in the economy: Dual system (Title & Deed) What is the institution in charge of immovable property registration? Directorate General of the Federal Service of State Registration, Cadastre and Cartography in Moscow (Directorate General of Rosreestr in Moscow) In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Fully digital 2.0 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: Federal State Budgetary Enterprise Federal Cadastral Chamber of Rosreestr 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) 6.0 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Freely accessible by 1.0 in the largest business city? anyone 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: https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/predst avlenie-dokumentov- na- gosudarstvennuyu- registraciyu-prav/ https://www.gosuslugi .ru/pgu/ 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: https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/stoimo st-uslugi/ 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? Page 39 Doing Business 2020 Russian Federation Link for online access: https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/sroki- polucheniya-uslugi/ https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/ Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency Yes 1.0 in charge of immovable property registration? Contact information: https://rosreestr.ru/wp s/portal/cc_ib_referen ces_citizens https://rosreestr.ru/sit e/feedback/poryadok- rassmotreniya/ Are there publicly available official statistics tracking the number of transactions at the immovable property Yes 0.5 registration agency? Number of property transfers in the largest business city in 2018: 616207.0 Who is able to consult maps of land plots in the largest business city? Freely accessible by 0.5 anyone Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Link for online access: https://rosreestr.ru/sit e/ur/poluchit- svedeniya-iz-egrn/ 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: https://rosreestr.ru/sit e/ur/poluchit- svedeniya-iz-egrn/ Is there a specific and independent mechanism for filing complaints about a problem that occurred at the Yes 0.5 cadastral or mapping agency? Contact information: https://rosreestr.ru/wp s/portal/cc_ib_referen ces_citizens https://rosreestr.ru/sit e/feedback/poryadok- rassmotreniya/ Geographic coverage index (0–8) 4.0 Are all privately held land plots in the largest business city formally registered at the immovable property Yes 2.0 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? No 0.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Page 40 Doing Business 2020 Russian Federation Legal basis: Pursuant to the clause 1 of the Articles 130, 131, 132 and 164 of the Civil code of Russian Federation Part One No. 51-FZ of November 30, 1994 and the Article 4 of the Federal Law No. 122-FZ dated 21 July 1997 "On state registration of rights to immovable property and transactions therewith" the registration of the rights to immovable property and transactions with it is mandatory. Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Clause 1 of article 2 of the federal law No. 122-FZ "On state registration of rights to real estate and transactions therewith" dated 21 July 1997 established that State registration of a right is the sole evidence of the registration right. mOreover Government Resolution of the RF No. 903 "On the Federal Target Program "Development of a unified state system of registration of rights and cadastre of real estate (2014 - 2019)" dated 10 October 2013 established that the Public policy of the Russian Federation in the field of a land and property relations aimed at providing government guarantees of property rights and other in immovable property. Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Page 41 Doing Business 2020 Russian Federation Legal basis: In accordance with Art. 67 of Federal Law N 218 of 13.07.2015 - "On state registration of real estate" the State Registrar of Rights is responsible for the inconsistency of information it submitted to the EGRN, submitted for state cadastral registration and/or state registration of rights to documents, information (excl. information entered in EGRN from other governmental sources). Likewise, it is responsibility for the baseless (not corresponding to the grounds specified in Article 26 of Federal Law No. 218) suspension of state cadastral registration and/or state registration of rights and unreasonable refusal (not corresponding to the grounds specified in Article 27 of this Federal Law) in the state cadastral registration and/or state registration of rights or deviation from the state cadastral registration and state registration of rights. The State Registrar of Rights is obliged to compensate losses caused to the registration authority by illegal actions (inaction). In case of intentional damage, losses are compensated in full. Part 3 of Art. 68 provides for the maximum amount of compensation for the loss of rights made in EGRN - no more than 1 million rubles. 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; 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; 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 Arbitration Court of businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located the Moscow 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)? Page 42 Doing Business 2020 Russian Federation 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: 26582.0 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 43 Doing Business 2020 Russian Federation Registering Property - Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Procedures (number) 4 5.5 4.7 1 (5 Economies) Time (days) 14 20.8 23.6 1 (2 Economies) Cost (% of property value) 0.1 2.7 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 26.0 20.4 23.2 None in 2018/19 Figure – Registering Property in Saint Petersburg – Score 75.0 93.8 99.1 86.7 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 88.6: Moscow 88.6: Saint Petersburg 81.0: China (Rank: 28) 60.2: Mexico (Rank: 105) 54.1: Brazil (Rank: 133) 47.6: India (Rank: 154) 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 44 Doing Business 2020 Russian Federation Figure – Registering Property in Saint Petersburg – Procedure, Time and Cost Time (days) Cost (% of property value) 14 0.14 12 0.12 Cost (% of property value) 10 0.1 Time (days) 8 0.08 6 0.06 4 0.04 2 0.02 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 45 Doing Business 2020 Russian Federation Figure – Registering Property in Saint Petersburg and comparator economies – Measure of Quality 30 26.0 26.0 25 24.0 20.4 Index score 20 16.3 16.3 15 10.8 10 5 0 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Details – Registering Property in Saint Petersburg – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Buyer checks for encumbrances on property at the Federal Service for State Registration, 3 days RUB 600; (RUB 2200 (for Cadastre and Cartography a hard copy) and RUB 600 Agency : Federal Service of State Registration, Cadastre and Cartography (Rosreestr) (electronic document)) Even though not mandatory by law, in practice most buyers do check for non-encumbrances on the property to prove the validity of the seller's title. The complete information on the property (ownership rights, encumbrances) can be obtained by the Buyer in two ways with equal legal power of each. In a form of the official physical document and in electronic format (e-extract). The official, signed E-Extract is ordered online, payment is made the E-extract is received electronically in 3 days. According to the Federal Law No.218 - upon the official request for information the registration authority shall provide an official document with all information available in the Unified State Register of Real Estate Property within three working days. The Buyer can also obtain a paper copy of the extract from Real Estate Property Register by making an application as individual (not the legal entity) with the cost being RUB 750 (RUB 300 e- document). There is also an option to access the information resource of Rosreestr: any individual or legal entity may obtain an electronic extract from the Property Register and verify ownership title to any real estate facility and existence of encumbrances, if any. The procedure includes the following steps: 1) obtaining an electronic access key (free of charge); 2) refilling one's account with the help of a credit card for a minimum sum of RUB 400; 3) receiving the electronic extract from the Property Register with the charge being RUB 1 for one query. 2 Seller obtains a “reconciliation report” from the local utility 1 day no charge Agency : Local Utility Company At the request of the buyer, the seller obtains a “reconciliation report” from the local utility, showing that no outstanding debts are owed to the utility company. Usually, the seller can obtain this report within a day by requesting it directly from the local utility. Although not a legal requirement, the reconciliation report is commonly obtained in transactions involving commercial real estate, so the buyer can rest assured that the property is free from any possible creditors and to avoid problems with future utility hook up. The process of registering a new contract in the buyer’s name may take much longer if there are any outstanding bills (up to one month) and the service will be interrupted, which is not desirable for the commercial property. 3 Check for legal status and current conditions of the buyer at the Unified State Register of Less than one day, Electronic document - no Legal Entities online charge. Agency : Unified State Register of Legal Entities (Officially managed and maintained by the Federal Tax Service (FNS)) Official documents in hard Legal entities will obtain extracts from the Unified State Register of Legal Entities, officially copy - RUB 200 (regular managed and maintained by the Federal Tax Service (FNS) (http://egrul.nalog.ru/#). Although procedure - 5 working Russian legislation does not establish the term of validity for the extracts, in practice most state authorities accept the extracts issued not earlier than 30 days before their submission to the days) or RUB 400 respective state authority. (expedited procedure - 1 working day) Since 2015 the official information on the legal status of a legal entity became available in a form of the official electronic extract with encrypted digital signature of FNS on its official website: https://service.nalog.ru/vyp/. The statutory term for obtaining the official electronic extract is the same as for the official hard copy extract (not more than 5 days). Page 46 Doing Business 2020 Russian Federation 4 Apply for state registration of title transfer in the Unified State Register of Rights to Real 11 days RUB 44,000; (RUB 22,000 Estate (building) + RUR 22,000 Agency : Multifunctional Center (MFC) (land plot transfer)) The most common way to apply for state registration of title transfer is completed within 9 business days. An application and relevant documents are submitted at the Multifunctional Centers (MFCs), which provide services on federal, regional and municipal levels, using a "One- Stop-Shop" principle and are widely spread across all regions of the country. MFC accepts the application and documents, sends them to Rosreestr internally, and receives them back (all electronically). It is also possible to apply for state registration of title transfer directly at the Roseester, which is completed within 7 business days. However, the option is less popular since Roseester centers are more scarce. Additionally, since 2013 the application together with all relevant documents can also be submitted in an electronic format, using the following link: https://rosreestr.ru/wps/portal/p/cc_present/reg_rights#/ However, the online application for the registration of the property transfer is subject to the special requirements set forth by the Order No. 883 of November 26, 2015. For example, all documents submitted online be signed by the encrypted digital signature of a relevant person. In practice, submission of documents in electronic format is not frequently done, since there are only a few legal entities/individuals who have the encrypted digital signature software necessary for the transaction. Takes place simultaneously with previous procedure. Page 47 Doing Business 2020 Russian Federation Details – Registering Property in Saint Petersburg – Measure of Quality Answer Score Quality of the land administration index (0-30) 26.0 Reliability of infrastructure index (0-8) 8.0 Type of land registration system in the economy: Dual system (Title & Deed) What is the institution in charge of immovable property registration? Department of Federal Service of State Registration, Cadastre and Cartography in St. Petersburg In what format are past and newly issued land records kept at the immovable property registry of the largest Computer/Fully digital 2.0 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: Department of Federal Service of State Registration, Cadastre and Cartography in St. Petersburg 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) 6.0 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Freely accessible by 1.0 in the largest business city? anyone 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: https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/predst avlenie-dokumentov- na- gosudarstvennuyu- registraciyu-prav/ 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: https://rosreestr.ru/sit e/ur/poluchit- svedeniya-iz-egrn/? price 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: https://rosreestr.ru/sit e/fiz/zaregistrirovat- nedvizhimoe- imushchestvo-/sroki- polucheniya-uslugi/ Page 48 Doing Business 2020 Russian Federation Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency Yes 1.0 in charge of immovable property registration? Contact information: https://rosreestr.ru/wp s/portal/cc_ib_referen ces_citizens https://rosreestr.ru/sit e/feedback/poryadok- rassmotreniya/ Are there publicly available official statistics tracking the number of transactions at the immovable property Yes 0.5 registration agency? Number of property transfers in the largest business city in 2018: 708062.0 Who is able to consult maps of land plots in the largest business city? Freely accessible by 0.5 anyone Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Link for online access: https://rosreestr.ru/sit e/ur/poluchit- svedeniya-iz-egrn/? price 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: https://rosreestr.ru/sit e/fiz/poluchit- svedeniya-iz- egrn/sroki- polucheniya-egrn/? lang=ru Is there a specific and independent mechanism for filing complaints about a problem that occurred at the Yes 0.5 cadastral or mapping agency? Contact information: https://rosreestr.ru/wp s/portal/cc_ib_referen ces_citizens https://rosreestr.ru/sit e/feedback/poryadok- rassmotreniya/ Geographic coverage index (0–8) 4.0 Are all privately held land plots in the largest business city formally registered at the immovable property Yes 2.0 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? No 0.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Page 49 Doing Business 2020 Russian Federation Legal basis: Pursuant to the clause 1 of the Articles 8.1, 130, 131, 132, 164 of the Civil Code of the Russian Federation Part One No 51-FZ of November 30, 1994 and the Article 4 of the Federal Law No 122-FZ dated 21 July 1997 "On state registration of rights to immovable property and transactions therewith" the registration of the rights to immovable property is mandatory and the all property sale transactions is opposable to third parties only in case of their registration Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Pursuant to the clause 1 of the Articles 130, 131, 132 and 164 of the Civil code of Russian Federation Part One No. 51-FZ of November 30, 1994 and the Article 4 of the Federal Law No. 122-FZ dated 21 July 1997 "On state registration of rights to immovable property and transactions therewith" the registration of the rights to immovable property and transactions with it is mandatory. Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Page 50 Doing Business 2020 Russian Federation Legal basis: In accordance with Art. 67 of Federal Law N 218 of 13.07.2015 - "On state registration of real estate" the State Registrar of Rights is responsible for the inconsistency of information it submitted to the EGRN, submitted for state cadastral registration and/or state registration of rights to documents, information (excl. information entered in EGRN from other governmental sources). Likewise, it is responsibility for the baseless (not corresponding to the grounds specified in Article 26 of Federal Law No. 218) suspension of state cadastral registration and/or state registration of rights and unreasonable refusal (not corresponding to the grounds specified in Article 27 of this Federal Law) in the state cadastral registration and/or state registration of rights or deviation from the state cadastral registration and state registration of rights. The State Registrar of Rights is obliged to compensate losses caused to the registration authority by illegal actions (inaction). In case of intentional damage, losses are compensated in full. Part 3 of Art. 68 provides for the maximum amount of compensation for the loss of rights made in EGRN - no more than 1 million rubles. 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 State Commercial businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located ('Arbitrazhny") Court in the largest business city? for St. Petersburg and Leningrad Region) Page 51 Doing Business 2020 Russian Federation 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: 26, 582 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 52 Doing Business 2020 Russian Federation 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 53 Doing Business 2020 Russian Federation Getting Credit - Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Strength of legal rights index (0-12) 9 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) 0.0 24.0 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 100.0 41.7 66.7 100.0 (14 Economies) Figure – Getting Credit in Moscow – Score 80.0 Score - Getting Credit Figure – Getting Credit in Moscow and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 90.0: Mexico (Rank: 11) 80.0: India (Rank: 25) 80.0: Moscow 80.0: Saint Petersburg 60.0: China (Rank: 80) 50.0: Brazil (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 54 Doing Business 2020 Russian Federation Figure – Legal Rights in Moscow and comparator economies 12 10 10 9 9 9 Index Score 7.8 8 6 4 4 2 2 0 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Page 55 Doing Business 2020 Russian Federation Details – Legal Rights in Moscow Strength of legal rights index (0-12) 9 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 Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law Yes 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 Moscow and comparator economies 8.5 8 8 8 8 Index Score 7.5 7 7 7 7 6.7 6.5 6 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Page 56 Doing Business 2020 Russian Federation Details – Credit Information in Moscow Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 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 Yes No 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? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 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 Yes No 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 96,000,000 0 Number of firms 2,300,000 0 Total 98,300,000 0 Percentage of adult population 100.0 0.0 Page 57 Doing Business 2020 Russian Federation Getting Credit - Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Strength of legal rights index (0-12) 9 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) 0.0 24.0 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 100.0 41.7 66.7 100.0 (14 Economies) Figure – Getting Credit in Saint Petersburg – Score 80.0 Score - Getting Credit Figure – Getting Credit in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 90.0: Mexico (Rank: 11) 80.0: India (Rank: 25) 80.0: Moscow 80.0: Saint Petersburg 60.0: China (Rank: 80) 50.0: Brazil (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 58 Doing Business 2020 Russian Federation Figure – Legal Rights in Saint Petersburg and comparator economies 12 10 10 9 9 9 Index Score 7.8 8 6 4 4 2 2 0 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Page 59 Doing Business 2020 Russian Federation Details – Legal Rights in Saint Petersburg Strength of legal rights index (0-12) 9 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 Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law Yes 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 Saint Petersburg and comparator economies 8.5 8 8 8 8 Index Score 7.5 7 7 7 7 6.7 6.5 6 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Page 60 Doing Business 2020 Russian Federation Details – Credit Information in Saint Petersburg Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 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 Yes No 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? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or Yes No 1 credit registry? Can banks and financial institutions access borrowers’ credit information online Yes No 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 Yes No 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 96,000,000 0 Number of firms 2,300,000 0 Total 98,300,000 0 Percentage of adult population 100.0 0.0 Page 61 Doing Business 2020 Russian Federation 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 62 Doing Business 2020 Russian Federation Protecting Minority Investors - Moscow Stock exchange information Stock exchange Moscow Exchange Stock exchange URL http://www.moex.com Listed firms with equity securities 600 City Covered Moscow Indicator Moscow 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) 7.0 6.8 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 5.0 3.4 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 4.0 3.7 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 6.0 4.1 5.7 7 (13 Economies) Figure – Protecting Minority in Moscow – Score 60.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Moscow and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 80.0: India (Rank: 13) 72.0: China (Rank: 28) 62.0: Brazil (Rank: 61) 62.0: Mexico (Rank: 61) 60.0: Moscow 60.0: Saint Petersburg 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 63 Doing Business 2020 Russian Federation Figure – Protecting Minority Investors in Moscow and comparator economies – Measure of Quality Moscow 6 2 6 4 5 7 Brazil 6 8 5 4 4 4 China 6 4 10 6 5 5 India 6 7 8 6 6 7 Mexico 3 5 8 5 5 5 Saint Petersburg 6 2 6 4 5 7 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 64 Doing Business 2020 Russian Federation Details – Protecting Minority Investors in Moscow – 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) CEO alone 0.0 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 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Extent of director liability index (0-10) 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) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) No 0.0 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) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? No 0.0 (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) 5.0 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? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 4.0 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 65 Doing Business 2020 Russian Federation 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? No 0.0 Extent of corporate transparency index (0-7) 6.0 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 Yes 1.0 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 66 Doing Business 2020 Russian Federation Protecting Minority Investors - Saint Petersburg Stock exchange information Stock exchange Moscow Exchange Stock exchange URL http://www.moex.com Listed firms with equity securities 600 City Covered Saint Petersburg Indicator Saint Petersburg 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) 7.0 6.8 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 5.0 3.4 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 4.0 3.7 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 6.0 4.1 5.7 7 (13 Economies) Figure – Protecting Minority in Saint Petersburg – Score 60.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 80.0: India (Rank: 13) 72.0: China (Rank: 28) 62.0: Brazil (Rank: 61) 62.0: Mexico (Rank: 61) 60.0: Moscow 60.0: Saint Petersburg 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 67 Doing Business 2020 Russian Federation Figure – Protecting Minority Investors in Saint Petersburg and comparator economies – Measure of Quality Saint Petersburg 6 2 6 4 5 7 Brazil 6 8 5 4 4 4 China 6 4 10 6 5 5 India 6 7 8 6 6 7 Mexico 3 5 8 5 5 5 Moscow 6 2 6 4 5 7 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 68 Doing Business 2020 Russian Federation Details – Protecting Minority Investors in Saint Petersburg – 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) CEO alone 0.0 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 2.0 transaction and on the conflict of interest Must Buyer immediately disclose the transaction to the public? (0-2) Disclosure on the 2.0 transaction and on the conflict of interest Extent of director liability index (0-10) 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) Liable if negligent 1.0 Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) No 0.0 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) 7.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? No 0.0 (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) 5.0 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? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 4.0 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 69 Doing Business 2020 Russian Federation 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? No 0.0 Extent of corporate transparency index (0-7) 6.0 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 Yes 1.0 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 70 Doing Business 2020 Russian Federation 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 71 Doing Business 2020 Russian Federation Paying Taxes - Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Payments (number per year) 9 14.4 10.3 3 (2 Economies) Time (hours per year) 159 213.1 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 46.2 31.7 39.9 26.1 (33 Economies) Postfiling index (0-100) 73.3 68.2 86.7 None in 2018/19 Figure – Paying Taxes in Moscow – Score 90.0 83.0 71.1 73.3 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Moscow and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 83.0: Saint Petersburg 79.4: Moscow 70.1: China (Rank: 105) 67.6: India (Rank: 115) 65.8: Mexico (Rank: 120) 34.4: Brazil (Rank: 184) 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 72 Doing Business 2020 Russian Federation Figure – Paying Taxes in Moscow and comparator economies – Measure of Quality 100 88.1 90 80 73.3 68.2 Index score 70 60 50.0 49.3 50 40.5 40 30 20 7.8 10 0 Moscow Brazil China India Mexico Saint Europe Petersburg & Central Asia Page 73 Doing Business 2020 Russian Federation Details – Paying Taxes in Moscow 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) Pension fund 1.0 online 22% gross salaries 24.82 contribution Corporate 1.0 online 50.0 20% taxable profits 7.38 income tax Federal 1.0 online 5.1% gross salaries 5.75 obligatory medical insurance fund contributions Social security 1.0 online 70.0 2.9% gross salaries 3.21 insurance Accidents tax 1.0 online 2.5% gross salaries 2.82 Property tax 1.0 online 2.2% book value of 2.08 property Land tax 1.0 online 0.3%-1.5% cadastral value of 0.07 the land plot Transport tax 1.0 online various rates engine capacity 0.05 of vehicles Value Added Tax 1.0 online 39.0 18% value added 0.00 not included Totals 9 159 46.2 Page 74 Doing Business 2020 Russian Federation Details – Paying Taxes in Moscow – Tax by Type Taxes by type Answer Profit tax (% of profit) 7.3 Labor tax and contributions (% of profit) 36.7 Other taxes (% of profit) 2.6 Page 75 Doing Business 2020 Russian Federation Details – Paying Taxes in Moscow – Measure of Quality Answer Score Postfiling index (0-100) 73.3 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process none Percentage of cases exposed to a VAT audit (%) 75% - 100% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 7.0 85.6 Time to obtain VAT refund (weeks) 19.0 68.8 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 75% - 100% Time to comply with a corporate income tax correction (hours) 7.5 89.0 Time to complete a corporate income tax correction (weeks) 16.0 50.0 Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 76 Doing Business 2020 Russian Federation Paying Taxes - Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Payments (number per year) 9 14.4 10.3 3 (2 Economies) Time (hours per year) 159 213.1 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 46.2 31.7 39.9 26.1 (33 Economies) Postfiling index (0-100) 88.1 68.2 86.7 None in 2018/19 Figure – Paying Taxes in Saint Petersburg – Score 90.0 83.0 71.0 88.1 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 83.0: Saint Petersburg 79.4: Moscow 70.1: China (Rank: 105) 67.6: India (Rank: 115) 65.8: Mexico (Rank: 120) 34.4: Brazil (Rank: 184) 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 77 Doing Business 2020 Russian Federation Figure – Paying Taxes in Saint Petersburg and comparator economies – Measure of Quality 100 88.1 90 80 73.3 68.2 Index score 70 60 50.0 49.3 50 40.5 40 30 20 7.8 10 0 Saint Brazil China India Mexico Moscow Europe Petersburg & Central Asia Page 78 Doing Business 2020 Russian Federation Details – Paying Taxes in Saint Petersburg 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) Pension fund 1.0 online 22% gross salaries 24.82 contribution Corporate 1.0 online 50.0 20% taxable profits 7.36 income tax Federal 1.0 online 5.1% gross salaries 5.75 obligatory medical insurance fund contributions Social security 1.0 online 70.0 2.9% gross salaries 3.21 insurance Accidents tax 1.0 online 2.5% gross salaries 2.82 Property tax 1.0 online 2.2% book value of 2.08 property Land tax 1.0 online 0.3%-1.5% cadastral value of 0.14 the land plot Transport tax 1.0 online various rates engine capacity 0.05 of vehicles Value Added Tax 1.0 online 39.0 18% value added 0.00 not included Totals 9 159 46.2 Page 79 Doing Business 2020 Russian Federation Details – Paying Taxes in Saint Petersburg – Tax by Type Taxes by type Answer Profit tax (% of profit) 7.3 Labor tax and contributions (% of profit) 36.7 Other taxes (% of profit) 2.3 Page 80 Doing Business 2020 Russian Federation Details – Paying Taxes in Saint Petersburg – Measure of Quality Answer Score Postfiling index (0-100) 88.1 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process none Percentage of cases exposed to a VAT audit (%) 75% - 100% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 7.0 85.6 Time to obtain VAT refund (weeks) 19.0 68.8 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) 2.5 98.2 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 81 Doing Business 2020 Russian Federation 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 82 Doing Business 2020 Russian Federation Trading across Borders - Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Time to export: Border compliance (hours) 66 16.1 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 580 150.0 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 26 25.1 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 80 87.6 33.4 0 (20 Economies) Time to import: Border compliance (hours) 12 20.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 400 158.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 43 23.4 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 160 85.9 23.5 0 (30 Economies) Figure – Trading across Borders in Moscow – Score 59.1 45.3 85.2 80.0 96.1 66.7 82.6 77.1 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 Moscow and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 86.5: China (Rank: 56) 82.5: India (Rank: 68) 82.1: Mexico (Rank: 69) 74.0: Moscow 69.9: Brazil (Rank: 108) 66.5: Saint Petersburg 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 83 Doing Business 2020 Russian Federation Figure – Trading across Borders in Moscow – Time and Cost Time (hours) Cost (USD) 70 66 700 60 580 600 Time (hours) 50 500 Cost (USD) 43 400 40 400 30 26 300 20 160 200 12 10 80 100 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 84 Doing Business 2020 Russian Federation Details – Trading across Borders in Moscow Characteristics Export Import Product HS 72 : Iron and steel HS 8708: Parts and accessories of motor vehicles Trade partner Italy Germany Border St Petersburg Port Krasnaya gorka, Smolenskaya oblast. Distance (km) 724 500 Domestic transport time (hours) 20 10 Domestic transport cost (USD) 958 650 Details – Trading across Borders in Moscow – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 4.0 215.0 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 62.0 365.0 Import: Clearance and inspections required by 10.0 400.0 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 2.0 0.0 Page 85 Doing Business 2020 Russian Federation Details – Trading across Borders in Moscow – Trade Documents Export Import Acceptance order Acceptance order Bill of lading Certificate of conformity Consignment note/ CMR waybill Commercial invoice Commercial invoice Consignment note/ CMR waybill Customs Export Declaration Customs Import Declaration Declaration of origin/ Certificate of origin Transit declaration Export/loading order Letter from the bank certifying opening of letter of credit Packing list Packing list Sales purchase contract Sales purchase contract SOLAS certificate Page 86 Doing Business 2020 Russian Federation Trading across Borders - Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Time to export: Border compliance (hours) 66 16.1 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 580 150.0 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 24 25.1 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 120 87.6 33.4 0 (20 Economies) Time to import: Border compliance (hours) 72 20.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 800 158.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 43 23.4 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 135 85.9 23.5 0 (30 Economies) Figure – Trading across Borders in Saint Petersburg – Score 59.1 45.3 86.4 70.0 74.6 33.3 82.6 80.7 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 Saint Petersburg and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 86.5: China (Rank: 56) 82.5: India (Rank: 68) 82.1: Mexico (Rank: 69) 74.0: Moscow 69.9: Brazil (Rank: 108) 66.5: Saint Petersburg 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 87 Doing Business 2020 Russian Federation Figure – Trading across Borders in Saint Petersburg – Time and Cost Time (hours) Cost (USD) 80 72 900 800 70 66 800 700 Time (hours) 60 580 Cost (USD) 600 50 43 500 40 400 30 24 300 20 135 200 120 10 100 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 88 Doing Business 2020 Russian Federation Details – Trading across Borders in Saint Petersburg Characteristics Export Import Product HS 72 : Iron and steel HS 8708: Parts and accessories of motor vehicles Trade partner Italy Germany Border St Petersburg Port Saint Petersburg port Distance (km) 8 8 Domestic transport time (hours) 4 4 Domestic transport cost (USD) 246 246 Details – Trading across Borders in Saint Petersburg – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 4.0 215.0 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 62.0 365.0 Import: Clearance and inspections required by 8.0 300.0 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 72.0 500.0 Page 89 Doing Business 2020 Russian Federation Details – Trading across Borders in Saint Petersburg – Trade Documents Export Import Acceptance order Acceptance order Bill of lading Bill of lading Consignment note/ CMR Waybill Certificate of conformity Commercial invoice Commercial invoice Customs Export Declaration Consignment note/ CMR Waybill Declaration of origin/ Certificate of origin Customs import declaration Export/loading order Document of warehouse Packing list Letter from the bank certifying opening of letter of credit Sales purchase contract Packing list SOLAS certificate Sales purchase contract SOLAS certificate Page 90 Doing Business 2020 Russian Federation Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local currency of • Court costs USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 91 Doing Business 2020 Russian Federation Enforcing Contracts - Moscow Standardized Case Claim value RUB 1,222,161 Court name Moscow Arbitrazh Court City Covered Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Time (days) 340 496.4 589.6 120 (Singapore) Cost (% of claim value) 15.0 26.6 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 9.5 10.3 11.7 None in 2018/19 Figure – Enforcing Contracts in Moscow – Score 82.0 83.2 52.8 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Moscow and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 80.9: China (Rank: 5) 72.7: Moscow 71.1: Saint Petersburg 67.0: Mexico (Rank: 43) 64.1: Brazil (Rank: 58) 41.2: India (Rank: 163) 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 92 Doing Business 2020 Russian Federation Figure – Enforcing Contracts in Moscow – Time and Cost Time (days) Cost (% of claim value) 1600 33.0 35 Cost (% of claim value) 1445 31.0 1400 30 26.6 1200 Time (days) 22.0 21.5 25 1000 20.0 801 20 800 16.2 15.0 589.6 15 600 496 496.4 400 341 340 330 10 200 5 0 0 Brazil China Europe India Mexico Moscow OECD Saint & high Petersburg Central income Asia Page 93 Doing Business 2020 Russian Federation Figure – Enforcing Contracts in Moscow and comparator economies – Measure of Quality Moscow 2.5 4 0 3 Brazil 3 3 3 4.1 China 3 5.5 3 5 India 2.5 1.5 2 4.5 Mexico 2.5 3.3 0.5 3.8 Saint Petersburg 2.5 4 0 3 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 18 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 Moscow Indicator Time (days) 340 Filing and service 60 Trial and judgment 160 Enforcement of judgment 120 Cost (% of claim value) 15.0 Attorney fees 10 Court fees 5 Enforcement fees 0 Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 4.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Page 94 Doing Business 2020 Russian Federation Details – Enforcing Contracts in Moscow – Measure of Quality Answer Score Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 3.0 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? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 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? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) Yes 1.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? Yes 1.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? Yes 1.0 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 95 Doing Business 2020 Russian Federation 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 96 Doing Business 2020 Russian Federation Enforcing Contracts - Saint Petersburg Standardized Case Claim value RUB 1,222,161 Court name Commercial (Arbitrazh) Court of St. Petersburg and Leningrad Region City Covered Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Time (days) 330 496.4 589.6 120 (Singapore) Cost (% of claim value) 20.0 26.6 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 9.5 10.3 11.7 None in 2018/19 Figure – Enforcing Contracts in Saint Petersburg – Score 82.8 77.6 52.8 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 80.9: China (Rank: 5) 72.7: Moscow 71.1: Saint Petersburg 67.0: Mexico (Rank: 43) 64.1: Brazil (Rank: 58) 41.2: India (Rank: 163) 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 97 Doing Business 2020 Russian Federation Figure – Enforcing Contracts in Saint Petersburg – Time and Cost Time (days) Cost (% of claim value) 1600 33.0 35 Cost (% of claim value) 1445 31.0 1400 30 26.6 1200 Time (days) 22.0 21.5 25 1000 20.0 801 20 800 16.2 15.0 589.6 15 600 496 496.4 400 341 340 330 10 200 5 0 0 Brazil China Europe India Mexico Moscow OECD Saint & high Petersburg Central income Asia Page 98 Doing Business 2020 Russian Federation Figure – Enforcing Contracts in Saint Petersburg and comparator economies – Measure of Quality Saint Petersburg 2.5 4 0 3 Brazil 3 3 3 4.1 China 3 5.5 3 5 India 2.5 1.5 2 4.5 Mexico 2.5 3.3 0.5 3.8 Moscow 2.5 4 0 3 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 18 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 Saint Petersburg Indicator Time (days) 330 Filing and service 60 Trial and judgment 150 Enforcement of judgment 120 Cost (% of claim value) 20.0 Attorney fees 15 Court fees 5 Enforcement fees 0 Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 4.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Page 99 Doing Business 2020 Russian Federation Details – Enforcing Contracts in Saint Petersburg – Measure of Quality Answer Score Quality of judicial processes index (0-18) 9.5 Court structure and proceedings (-1-5) 3.0 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? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 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? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) Yes 1.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? Yes 1.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? Yes 1.0 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 100 Doing Business 2020 Russian Federation 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 101 Doing Business 2020 Russian Federation 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 102 Doing Business 2020 Russian Federation Resolving Insolvency - Moscow Indicator Moscow Europe & Central OECD high Best Regulatory Asia income Performance Recovery rate (cents on the dollar) 43.0 38.5 70.2 92.9 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 9.0 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) 11.5 11.2 11.9 None in 2018/19 Figure – Resolving Insolvency in Moscow – Score 46.3 71.9 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Moscow and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 70.3: Mexico (Rank: 33) 62.1: China (Rank: 51) 62.0: India (Rank: 52) 59.1: Moscow 59.1: Saint Petersburg 50.4: Brazil (Rank: 77) 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 103 Doing Business 2020 Russian Federation Figure – Resolving Insolvency in Moscow – Time and Cost Time (years) Cost (% of estate) 4.5 25 4.0 22.0 4 Cost (% of estate) 3.5 18.0 20 Time (years) 3 2.3 13.3 15 2.5 12.0 2.0 2.0 2 1.7 1.8 1.7 9.3 1.6 9.0 9.0 9.0 10 1.5 1 5 0.5 0 0 Brazil China Europe India Mexico Moscow OECD Saint & high Petersburg Central income Asia Page 104 Doing Business 2020 Russian Federation Figure – Resolving Insolvency in Moscow and comparator economies – Measure of Quality Moscow 5 2.5 3 1 Brazil 5.5 2.5 3 2 China 6 3 2 2.5 India 4.5 2 1 0 Mexico 5.5 2.5 2 1.5 Saint Petersburg 5 2.5 3 1 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 Moscow and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 80 71.6 70 63.9 60 50 43.0 43.0 36.9 38.5 40 30 18.2 20 10 0 Moscow Brazil China India Mexico Saint Petersburg Europe & Central Asia Page 105 Doing Business 2020 Russian Federation Details – Resolving Insolvency in Moscow Indicator Answer Score Proceeding liquidation In accordance with Art. 9 of the Law on Insolvency (Bankruptcy), the management of Mirage must petition the court to declare the company bankrupt within 1 month of failing to pay the Bank’s claims. If the debtor does not resort to the court, this will be done by the creditor. The court will institute a supervisory procedure and will appoint a temporary administrator. Temporary administrator will convene the first creditors’ meeting, where the creditors will decide whether to petition the court for liquidation or reorganization. Under the case study assumptions, creditors will likely choose the liquidation procedure, because the bank, as a major creditor, would be interested in receiving its money as soon as possible. Outcome piecemeal sale In practice, most companies similar to one indicated in the case study are sold piecemeal because it lowers the price and eases finding the buyers. Time (in years) 2.0 In accordance with Article 51 of the Law on Insolvency (Bankruptcy), a bankruptcy case must be considered within 7 months of the day the petition was received by the arbitrazh court. Liquidation proceedings by law are limited to 6 months and can be extended by 6 more months (art. 124 of the Law on Insolvency (Bankruptcy)). Therefore, the time dictated by law is 19 months. However, in practice, liquidation proceedings are extended several times and for longer periods. Main reasons for delaying include the need to spend additional time on collecting debtor's assets and addressing appeals. This being said, the hotel will be sold quickly enough. Cost (% of estate) 9.0 The total cost of the insolvency proceedings will be around 9% of the value of the estate. The main expenses will include: attorneys' fees - around 2.5%, fees of the insolvency representative - around 4.5%, fees of accountants and assessors - around 1.5%, auctioneer's fees - no more than 1%, and other fees (court fees, mailing fees, etc.) - 0.1%. Recovery rate 43.0 (cents on the dollar) Page 106 Doing Business 2020 Russian Federation Details – Resolving Insolvency in Moscow – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (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) 5.0 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the No 0.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary 1.0 unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 1.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are affected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as 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) 3.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency Yes 1.0 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 107 Doing Business 2020 Russian Federation Resolving Insolvency - Saint Petersburg Indicator Saint Petersburg Europe & Central OECD high Best Regulatory Asia income Performance Recovery rate (cents on the dollar) 43.0 38.5 70.2 92.9 (Norway) Time (years) 2.0 2.3 1.7 0.4 (Ireland) Cost (% of estate) 9.0 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) 11.5 11.2 11.9 None in 2018/19 Figure – Resolving Insolvency in Saint Petersburg – Score 46.3 71.9 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Saint Petersburg and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 70.3: Mexico (Rank: 33) 62.1: China (Rank: 51) 62.0: India (Rank: 52) 59.1: Moscow 59.1: Saint Petersburg 50.4: Brazil (Rank: 77) 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 108 Doing Business 2020 Russian Federation Figure – Resolving Insolvency in Saint Petersburg – Time and Cost Time (years) Cost (% of estate) 4.5 25 4.0 22.0 4 Cost (% of estate) 3.5 18.0 20 Time (years) 3 2.3 13.3 15 2.5 12.0 2.0 2.0 2 1.7 1.8 1.7 9.3 1.6 9.0 9.0 9.0 10 1.5 1 5 0.5 0 0 Brazil China Europe India Mexico Moscow OECD Saint & high Petersburg Central income Asia Page 109 Doing Business 2020 Russian Federation Figure – Resolving Insolvency in Saint Petersburg and comparator economies – Measure of Quality Saint Petersburg 5 2.5 3 1 Brazil 5.5 2.5 3 2 China 6 3 2 2.5 India 4.5 2 1 0 Mexico 5.5 2.5 2 1.5 Moscow 5 2.5 3 1 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 Saint Petersburg and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 80 71.6 70 63.9 60 50 43.0 43.0 36.9 38.5 40 30 18.2 20 10 0 Saint Petersburg Brazil China India Mexico Moscow Europe & Central Asia Page 110 Doing Business 2020 Russian Federation Details – Resolving Insolvency in Saint Petersburg Indicator Answer Score Proceeding liquidation In accordance with Art. 9 of the Law on Insolvency (Bankruptcy), the management of the debtor (hotel) must petition the court to declare the company bankrupt within 1 month of failing to pay the creditor's (bank’s) claims. If the debtor does not resort to the court, this will be done by the creditor. The court will institute a supervisory procedure and will appoint a temporary administrator. Temporary administrator will convene the first creditors’ meeting, where the creditors will decide whether to petition the court for liquidation or reorganization. Under the case study assumptions, creditors will likely choose the liquidation procedure, because the bank, as a major creditor, would be interested in receiving its money as soon as possible. Furthermore, reorganization is generally a more expensive procedure. Outcome piecemeal sale The hotel's assets will be sold piecemeal to save time on finding buyers. Time (in years) 2.0 According to current practice, in Saint Petersburg it will take around 1 month for the court to review the application and institute supervision proceedings. Then, it will take around 6 months to finish supervision and enter into liquidation. As for liquidation, because there is one major secured creditor in the case (bank), the arbitrazh court will likely decide on creditors’ claims within 9 months, which includes potential appeals. Then, it will take 8 more months to arrange public auctions (several ones are possible), find buyers, execute the sale and remit the proceeds to the bank. Cost (% of estate) 9.0 The total cost of the insolvency proceedings will be around 9% of the value of the estate. The main expenses will include: attorneys' fees - 2%, fees of the insolvency representative - up to 5.5%, fees of accountants and other experts - around 1%, auctioneer's fees - 1%, and other fees (court fees, mailing fees, etc.) - 0.1%. Recovery rate 43.0 (cents on the dollar) Page 111 Doing Business 2020 Russian Federation Details – Resolving Insolvency in Saint Petersburg – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 11.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (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) 5.0 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the No 0.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary 1.0 unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 1.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are affected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as 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) 3.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency Yes 1.0 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 112 Doing Business 2020 Russian Federation 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 113 Doing Business 2020 Russian Federation Employing Workers - Moscow Details – Employing Workers in Moscow Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) 60.0 Maximum length of fixed-term contracts, including renewals (months) 60.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 278.4 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) 50.0 Restrictions on night work? No Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 22.0 Paid annual leave for a worker with 5 years of tenure (working days) 22.0 Paid annual leave for a worker with 10 years of tenure (working days) 22.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 22.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes 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) 8.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7 Page 114 Doing Business 2020 Russian Federation Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.7 Unemployment protection after one year of employment? Yes Page 115 Doing Business 2020 Russian Federation Employing Workers - Saint Petersburg Details – Employing Workers in Saint Petersburg Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) 60.0 Maximum length of fixed-term contracts, including renewals (months) 60.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 266.9 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) 50.0 Restrictions on night work? No Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 22.0 Paid annual leave for a worker with 5 years of tenure (working days) 22.0 Paid annual leave for a worker with 10 years of tenure (working days) 22.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 22.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? Yes 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) 8.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.7 Page 116 Doing Business 2020 Russian Federation Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.7 Unemployment protection after one year of employment? Yes Page 117 Doing Business 2020 Russian Federation Business Reforms in Russian Federation From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Getting Electricity: The Russian Federation made getting electricity faster by setting new deadlines and establishing specialized departments for connection works within the utilities of Moscow and St. Petersburg. Protecting Minority Investors: The Russian Federation strengthened minority investor protections by requiring greater corporate transparency. This reform applies to both Moscow and St. Petersburg. Paying Taxes: Russia made paying taxes easier by reducing the tax authority review period of taxpayer applications for value added tax cash refunds and by further enhancing the 1C software used for tax and payroll preparation. This reform applies to both Moscow and St. Petersburg. DB2019 Dealing with Construction Permits: Russia made the process of obtaining a building permit faster by reducing the time needed to obtain construction and occupancy permits. Russia also increased quality control during construction by introducing risk-based inspections. This reform applies to both Moscow and St. Petersburg. Getting Electricity: Russia made getting electricity faster by imposing new deadlines for connection procedures and by upgrading the utility’s single window as well as its internal processes. Getting electricity was also made cheaper by reducing the costs to obtain a connection to the electric network. This reform applies to both Moscow and St. Petersburg. Paying Taxes: Russia made paying taxes less costly by allowing a higher tax depreciation rate for fixed assets. This reform applies to both Moscow and St. Petersburg. Trading across Borders: Russia made trading across borders easier by prioritizing online customs clearance and introducing shortened time limits for its automated completion. This reform applies to both Moscow and St. Petersburg. DB2018 Registering Property: The Russian Federation made it easier to transfer property by decreasing the time necessary to apply for state registration of title transfer. This reform applies to both Moscow and Saint Petersburg Getting Credit: The Russian Federation strengthened access to credit by establishing a modern collateral registry, and providing clear grounds for relief from the automatic stay for secured creditors during reorganization procedures. Trading across Borders: Russia made exporting and importing easier by opening a new deep water port on the coast of the Gulf of Finland, increasing competition and reducing the cost of border compliance at the Port of St. Petersburg. This reform applies to both Moscow and St. Petersburg. DB2017 Dealing with Construction Permits: Russian Federation Saint Petersburg made dealing with construction permits easier by removing the requirement to obtain permission to fence the construction site. Protecting Minority Investors: The Russian Federation strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions. Enforcing Contracts: The Russian Federation made enforcing contracts more difficult by mandating pre-trial resolution before filing a claim, thereby lengthening the initial phase of judicial proceedings. This reform applies to both Moscow and St. Petersburg. DB2016 Starting a Business: The Russian Federation made starting a business in Moscow easier by reducing the number of days required to open a corporate bank account. Getting Electricity: Russia made the process of obtaining an electricity connection simpler, faster and less costly by eliminating a meter inspection by electricity providers and revising connection tariffs. This reform applies to both Moscow and St. Petersburg. Registering Property: Russia made transferring property easier by reducing the time required for property registration. This reform applies to both Moscow and St. Petersburg. Getting Credit: Russia improved access to credit by adopting a new law on secured transactions that established a centralized collateral registry and allows a general description of a combined category of assets granted as collateral. This reform applies to both Moscow and St. Petersburg. Paying Taxes: Russia made paying taxes less costly for companies by excluding movable property from the corporate property tax base—though it also raised the wage ceiling used in calculating social contributions. These changes apply to both Moscow and St. Petersburg. In addition, the cadastral value of land in Moscow was updated. DB2015 Starting a Business: The Russian Federation made starting a business easier by eliminating the requirement to deposit the charter capital before company registration as well as the requirement to notify tax authorities of the opening of a bank account. This reform applies to both Moscow and St. Petersburg. Page 118 Doing Business 2020 Russian Federation DB2014 Starting a Business: Russia made starting a business easier by abolishing the requirement to have the bank signature card notarized before opening a company bank account. Dealing with Construction Permits: Russia made dealing with construction permits easier by eliminating several requirements for project approvals from government agencies and by reducing the time required to register a new building. Getting Electricity: Russia made getting electricity simpler and less costly by setting standard connection tariffs and eliminating many procedures previously required. Registering Property: Russia made transferring property easier by streamlining procedures and implementing effective time limits for processing transfer applications. Trading across Borders: Russia made trading across borders easier by implementing an electronic system for submitting export and import documents and by reducing the number of physical inspections. DB2013 Dealing with Construction Permits: Russia made obtaining a construction permit simpler by eliminating requirements for several preconstruction approvals. Paying Taxes: Russia eased the administrative burden of taxes for firms by simplifying compliance procedures for value added tax and by promoting the use of tax accounting software and electronic services. DB2012 Getting Electricity: Russian Federation made getting electricity less costly by revising the tariffs for connection. Registering Property: Russia made registering property transfers easier by eliminating the requirement to obtain cadastral passports on land plots. Paying Taxes: Russia increased the social security contribution rate for employers. Trading across Borders: Russia made trading across borders easier by reducing the number of documents needed for each export or import transaction and lowering the associated cost. DB2011 Dealing with Construction Permits: Russia eased construction permitting by implementing a single window for all procedures related to land use. Resolving Insolvency: Russia introduced a series of legislative measures in 2009 to improve creditor rights and the insolvency system. DB2010 Registering Property: Russia reduced the time required to register property by introducing cadastral passports in place of the previously required inventory documents and cadastral maps. Paying Taxes: Russia made paying taxes less costly for companies by reducing the corporate income tax rate. Resolving Insolvency: Russia enhanced its insolvency process by introducing several changes to its insolvency law to speed up the liquidation procedure and strengthen the legal status of secured creditors. DB2008 Dealing with Construction Permits: Russia made dealing with construction permits more expensive by increasing the cost—though at the same time it implemented several laws reducing the time and number of procedures required. The Russian Federation made dealing with construction permits more expensive by increasing the cost, and at the same time implemented several laws that reduces steps and time to obtain a construction permit. Getting Credit: In Russia access to credit information was improved by the launch of a private credit bureau, the National Bureau of Credit Histories (NBKI), and by a requirement that banks submit credit data to the credit bureau. Page 119 Doing Business 2020 Russian Federation Page 120