58959 Norway © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Norway. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Norway is ranked 8 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Norway - Compared to global good practice economy as well as selected economies: Norway's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 8 Starting a Business 33 Dealing with Construction Permits 65 Registering Property 8 Getting Credit 46 Protecting Investors 20 Paying Taxes 18 Trading Across Borders 9 Enforcing Contracts 4 Closing a Business 4 2 Summary of Indicators - Norway Starting a Business Procedures (number) 5 Time (days) 7 Cost (% of income per capita) 1.8 Min. capital (% of income per capita) 20.0 Dealing with Construction Permits Procedures (number) 14 Time (days) 252 Cost (% of income per capita) 43.8 Registering Property Procedures (number) 1 Time (days) 3 Cost (% of property value) 2.5 Getting Credit Strength of legal rights index (0-10) 7 Depth of credit information index (0-6) 4 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 100.0 Protecting Investors Extent of disclosure index (0-10) 7 Extent of director liability index (0-10) 6 Ease of shareholder suits index (0-10) 7 Strength of investor protection index (0-10) 6.7 Paying Taxes Payments (number per year) 4 Time (hours per year) 87 Profit tax (%) 24.4 Labor tax and contributions (%) 15.9 Other taxes (%) 1.3 Total tax rate (% profit) 41.6 Trading Across Borders Documents to export (number) 4 Time to export (days) 7 Cost to export (US$ per container) 830 Documents to import (number) 4 Time to import (days) 7 Cost to import (US$ per container) 729 3 Enforcing Contracts Procedures (number) 33 Time (days) 280 Cost (% of claim) 9.9 Closing a Business Recovery rate (cents on the dollar) 90.9 Time (years) 0.9 Cost (% of estate) 1 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.14 0.12 0.10 Doing business has 0.08 become easier (DB 0.06 change score) 0.04 0.02 0.00 Doing business has -0.02 become more difficult or more -0.04 France Denmark Germany Finland Norway Iceland costly 6 1. Benchmarking Starting a Business Regulations: Norway is ranked 33 overall for Starting a Business. Ranking of Norway in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Norway compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Norway 5 7 1.8 20.0 Comparator Economies Denmark 4 6 0.0 26.0 Finland 3 14 1.1 7.9 France 5 7 0.9 0.0 Germany 9 15 4.8 0.0 Iceland 5 5 2.3 12.0 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Norway Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 34 33 Procedures (number) 5 5 5 5 Time (days) 7 7 7 7 Cost (% of income per capita) 2.3 2.1 1.9 1.8 Min. capital (% of income per capita) 23.4 21.0 18.7 20.0 3. The following graphs illustrate the Starting a Business sub indicators in Norway over the past 4 years: 9 Starting a Business Summary - Norway This table summarizes the procedures and costs associated with setting up a business in Norway. STANDARDIZED COMPANY Legal Form: Alksjeselskap (AS) - Private joint stock company City: Oslo Registration Requirements: No: Procedure Time to complete Cost to complete 1 Deposit initial capital 1 no charge 2 Have the balance sheet examined by a certified outside auditor 1 NOK 4,000 3 Register with the Register of Business Enterprises and file for VAT 3 NOK 5,160 registration. 4 * The employer enrolls in the mandatory workers' injury insurance 1 no charge 5 * Arrange for mandatory occupational pension plan for employees 3 no charge * Takes place simultaneously with another procedure. 10 Starting a Business Details - Norway Procedure 1 Deposit initial capital Time to complete: 1 Cost to complete: no charge Comment: Procedure 2 Have the balance sheet examined by a certified outside auditor Time to complete: 1 Cost to complete: NOK 4,000 Comment: The auditor must issue three statements confirming (a) the opening balance; (b) the share deposit as being fully paid up, and (c) the company's acceptance of the auditor appointment. Statement fees are NOK 3,000­5,000. Procedure 3 Register with the Register of Business Enterprises and file for VAT registration. Time to complete: 3 Cost to complete: NOK 5,160 Comment: In January 2007 the Norwegian Company Registry launched an improved version of their Web-based registration. The old registration system was upgraded from a semielectronic system to a fully electronic one. In 2006, only the registration form (a standard form that always must be filed for registration purposes) could be filed over the Internet in an unsigned version, whereas the rest of the required documents, such as the memorandum and articles of association, the auditor statements, and the originally signed registration form, had to be sent by regular mail. The new version of the web-based filing system allows for electronic signature of the registration form and for the possibility to upload all attachments (copies of signed versions of the memorandum, auditor statements, and the rest) as Adobe Acrobat files. It will still possible to file all documents manually by regular mail. Some registration enquiries cannot be filed over the Internet (mergers, some cases of increase of share capital, and so on) and must be filed by mail. Registration also protects the firm name. VAT registration is required when the company's turnover has exceeded NOK 50,000. VAT cannot be charged on goods and other items before VAT registration is completed. However, in certain cases the company may register for VAT before starting business operations. The VAT registration form can be submitted at the same time as filing for company registration. Procedure 4 The employer enrolls in the mandatory workers' injury insurance Time to complete: 1 Cost to complete: no charge Comment: 11 Procedure 5 Arrange for mandatory occupational pension plan for employees Time to complete: 3 Cost to complete: no charge Comment: As of July 1, 2006, a new law was adopted requiring the employer to arrange for a mandatory occupational pension plan for its employees. The fees vary with the benefits and level of coverage in the pension plan. The minimum requirement is 2% of each employee's salary (within average levels of salaries). 12 13 1. Benchmarking Dealing with Construction Permits Regulations: Norway is ranked 65 overall for Dealing with Construction Permits. Ranking of Norway in Dealing with Construction Permits - Compared to good practice and selected economies: 14 The following table shows Dealing with Construction Permits data for Norway compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Norway 14 252 43.8 Comparator Economies Denmark 6 69 61.7 Finland 18 66 134.2 France 13 137 23.6 Germany 12 100 61.8 Iceland 18 75 19.6 15 2. Historical data: Dealing with Construction Permits in Norway Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 65 65 Procedures (number) 14 14 14 14 Time (days) 252 252 252 252 Cost (% of income per capita) 46.2 46.6 41.4 43.8 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Norway over the past 4 years: 16 Dealing with Construction Permits in Norway The table below summarizes the procedures, time, and costs to build a warehouse in Norway. BUILDING A WAREHOUSE City: Oslo Registration Requirements: No: Procedure Time to complete Cost to complete 1 Arrange an advance conference with the municipal building authorities 14 days no charge 2 Obtain the consent of the health authorities 10 days no charge 3 * Obtain the approval of the environmental authorities 10 days no charge 4 * Obtain the approval of the road authorities 10 days no charge 5 * Obtain approval from the water company prior to building 10 days no charge 6 * Obtain approval from the sewage company prior to building 10 days no charge 7 Obtain the frame permit (first step of the building permit) 210 days NOK 80,400 8 * Obtain the start-up permit and present a control registration form 21 days no charge 17 9 Obtain an approval from the municipal building authorities upon 10 days no charge completion of the project 10 Request power connection 1 day no charge 11 Receive electricity inspection 1 day no charge 12 Obtain electricity connection 4 days NOK 50,000 13 Obtain water and sewage connection 1 day NOK 87,856 14 Obtain telephone connection 1 day NOK 990 * Takes place simultaneously with another procedure. 18 Dealing with Construction Permits Details - Norway Procedure 1 Arrange an advance conference with the municipal building authorities Time to complete: 14 days Cost to complete: no charge Agency: Municipal Building Authorities Comment: The advance conference is optional, but often necessary to clarify the prerequisites for the project, such as infrastructure, various laws and regulations, and coordination and the approvals from other authorities. The time to complete this procedure may vary. In Oslo, the normal waiting time is approximately 3 weeks. These conferences are not binding for the final result of the approval process. Procedure 2 Obtain the consent of the health authorities Time to complete: 10 days Cost to complete: no charge Agency: Health Authorities Comment: Generally, the building permit is not issued if the applicant has not obtained all necessary approvals. In such cases, the municipal building authority points out the missing approvals and orders the applicant to submit them before further progress can be made. Procedure 3 Obtain the approval of the environmental authorities Time to complete: 10 days Cost to complete: no charge Agency: Environmental Authorities Comment: Procedure 4 Obtain the approval of the road authorities Time to complete: 10 days Cost to complete: no charge Agency: Road Authorities Comment: Procedure 5 Obtain approval from the water company prior to building Time to complete: 10 days Cost to complete: no charge 19 Agency: Water Authority Comment: Approval from the electricity company is not necessary. Only an authorization for water and sewage is required. Procedure 6 Obtain approval from the sewage company prior to building Time to complete: 10 days Cost to complete: no charge Agency: Sewage Authority Comment: Procedure 7 Obtain the frame permit (first step of the building permit) Time to complete: 210 days Cost to complete: NOK 80,400 Agency: Municipal Building Authorities Comment: The frame permit is the first step toward obtaining the building permit. It grants only the right to build the project as designed; it does not authorize construction. The permit ensures that the project meets all relevant regulations and is valid for 3 years. The application for a frame permit must contain all relevant information on the project, architectural drawings, and other requirements, according to the Planning and Building Act and other relevant regulations. The legal maximum time to complete this procedure is 84 days. In practice, obtaining the frame permit in Oslo currently takes about 7 months (the time estimated by the building authorities themselves). The reasons for the delayed executive work are: - High building activity. - A corresponding increase in building applications. - A shortage of manpower in the building authorities. The cost of obtaining a frame permit is calculated as follows: - For areas up to 200 sq. m., the total cost is NOK 22,100. - For areas exceeding 200 sq. m., the cost is NOK 5,300 per 100 sq. m. In the case considered here, the cost is 22,100 + (1,300 - 200) x 53 = NOK 80,400. Procedure 8 Obtain the start-up permit and present a control registration form Time to complete: 21 days Cost to complete: no charge Comment: The start-up permit authorizes the start of construction activities. This permit contains the authorization (construction license) of the companies responsible for the coordination, design, construction, and monitoring of the project. The company must in this respect either present its qualifications to the municipal building authorities or present a license from the central register. The company must also present all the consents/approvals obtained through the previous procedures. The applicant should ensure that a construction oversight plan is drawn up. Such a plan should appear in the application or be submitted while the application for a start-up permit is being reviewed, at the latest. The construction may be monitored by means of documented self-inspections or by an independent enterprise. The developer, the applicant, the designer, and the contractor in charge must provide the information necessary to monitor the construction. The latter is normally executed through self-inspection. The legal maximum time to complete this stage is 84 days. Obtaining a start-up permit in Oslo currently takes 3 weeks. 20 Procedure 9 Obtain an approval from the municipal building authorities upon completion of the project Time to complete: 10 days Cost to complete: no charge Agency: Municipal Building Authorities Comment: The company must obtain an approval from the municipal building authorities upon completion of the project. Procedure 10 Request power connection Time to complete: 1 day Cost to complete: no charge Agency: Hafslund Comment: BuildCo does not have to obtain the approval of the electricity company (Hafslund) before starting the construction (unlike for water and sewerage service). However, the electricity company will need to check the site to see if there is any need for transformers to be installed, and the like. Procedure 11 Receive electricity inspection Time to complete: 1 day Cost to complete: no charge Agency: Hafslund Comment: Procedure 12 Obtain electricity connection Time to complete: 4 days Cost to complete: NOK 50,000 Agency: Hafslund Comment: The different utility connections have all been approved during the application for the building permit. The company will therefore be connected to utilities once it requests them, and on the date agreed upon. Inspectors will inspect the installations if necessary and connect the warehouse to the electricity network. When the inspection is requested, processing the request may take up to 2 weeks. From 2009, the final electricity connection fee is calculated as: expenses for the electricity connection - kr 30.000. If the total cost is under kr 30.000, there is no charge. The new cost is NOK 50,000. Procedure 13 Obtain water and sewage connection Time to complete: 1 day 21 Cost to complete: NOK 87,856 Agency: Water and Sewage Authorities Comment: The water and sewage authorities must be present when the connection is installed, and the applicant must send a request form determining the time for the connection. Such a request must be received by the authorities, at the latest, at 10 a.m. the day before the connection is to take place. The receipt for the paid connection fee must be attached to the request form where the connection time and place are determined. For 2010, the City Parliament of Oslo has established that the taxes to be paid for water and sewage connection are NOK 37,84 per sq.m for water and NOK 56.73 per sq.m for sewage (in 2008, the total cost was NOK 73.1 per sq.m). The cost is NOK 87,855. The connection fee is a nonrecurrent one and covers the costs of building and maintaining the public pipelines (both water and sewage pipelines--that is, the water supply from purification plant to the consumer, and sewage transport from the consumer to waste water plant). A reduction is given when the land plot is larger than 3,000 square meters and utilization is less than 12.5% (not applicable in this case). Procedure 14 Obtain telephone connection Time to complete: 1 day Cost to complete: NOK 990 Agency: Telenor Comment: Due to market fluctuations the connection fee was increased in 2008 to NOK 990. 22 23 1. Benchmarking Registering Property Regulations: Norway is ranked 8 overall for Registering Property. Ranking of Norway in Registering Property - Compared to good practice and selected economies: 24 The following table shows Registering Property data for Norway compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Norway 1 3 2.5 Comparator Economies Denmark 3 42 0.6 Finland 3 14 4.0 France 8 59 6.1 Germany 5 40 5.1 Iceland 3 4 2.4 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 25 2. Historical data: Registering Property in Norway Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 11 8 Procedures (number) 1 1 1 1 Time (days) 3 3 3 3 Cost (% of property value) 2.5 2.5 2.5 2.5 3. The following graphs illustrate the Registering Property sub indicators in Norway over the past 4 years: 26 Registering Property in Norway This topic examines the steps, time, and cost involved in registering property in Norway. STANDARDIZED PROPERTY Property Value: 25,037,230.39 City: Oslo Registration Requirements: No: Procedure Time to complete Cost to complete 1 Submit an application for registration of transfer at 3 days NOK 1,548 (registration the Land Registry fee) + 2.5% of the value of the property (stamp duty) 27 Registering Property Details - Norway Procedure 1 Submit an application for registration of transfer at the Land Registry Time to complete: 3 days Cost to complete: NOK 1,548 (registration fee) + 2.5% of the value of the property (stamp duty) Agency: Land Registry Comment: There is no need for a lawyer or notary to be involved in the process. The application is a standard form and may be acquired in book stores and the internet. The fee to receive the title is NOK 1,548 and the stamp duty tax is 2.5% of the value of the property. If the transaction is financed by debt, the buyer has to pay a public fee to register a mortgage bond, equal to NOK 1,935. Upon refinancing an existing mortgage loan within the same loan frame, the fee to register a new mortgage deed or transporting the old mortgage deed to the new one, has been reduced to NOK 215. As of April 1st, 2005 the registration fee and the transfer tax is to be paid after the registration, not before, and can be paid online. Until 2004 the registration process had been performed by the local courts under the supervision of a judge (however the work is mainly executed by clerks without the involvement of any judge). Between March 2004 and 2007 the registration responsibility was being transferred from 87 public courts to the Norwegian Mapping and Cadastre Authority, which will maintain one single registration office for the entire country. The registration process was formally transferred to the Norwegian Mapping and Cadastre Authority on October 20, 2007. Currently all documents are received by post, but the reform shall facilitate the use of electronic documents. Due to the Centralization of the registry in Oslo, the time needed to complete the only registration procedure (the registration process, in other words) has increased temporarily. The current process goes as follows: First, the required documents will be received and registered by the registry in the daily book. Second, the relevant data will be entered into database. Third, staff members will verify the data. Fourth, a deed stamped by the Register is sent by ordinary mail to the buyer. An invoice is also sent for the registration fees and stamp duty, and the payment can be made online. 28 29 1. Benchmarking Getting Credit Regulations: Norway is ranked 46 overall for Getting Credit. Ranking of Norway in Getting Credit - Compared to good practice and selected economies: 30 The following table shows Getting Credit data for Norway compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Norway 7 4 0.0 100.0 Comparator Economies Denmark 9 4 0.0 5.4 Finland 7 5 0.0 14.9 France 7 4 33.3 0.0 Germany 7 6 1.0 98.4 Iceland 7 5 0.0 100.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 31 2. Historical data: Getting Credit in Norway Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 44 46 Strength of legal rights index (0-10) 7 7 7 7 Depth of credit information index (0-6) 4 4 4 4 Private bureau coverage (% of adults) 100.0 100.0 100.0 100.0 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Norway over the past 4 years: 32 Getting Credit in Norway The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Norway. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 4 bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative data distributed? No No 0 Does the registry distribute credit information from retailers, trade No No 0 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes No 1 Is it guaranteed by law that borrowers can inspect their data in the Yes No 1 largest credit registry? Coverage 100.0 0.0 Number of individuals .. 0 Number of firms .. 0 33 Strength of legal rights index (0-10) 7 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Yes without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without No requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, No proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the Yes grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes Do secured creditors have absolute priority to their collateral in bankruptcy procedures? Yes During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No Does the law authorize parties to agree on out of court enforcement? Yes 34 35 1. Benchmarking Protecting Investors Regulations: Norway is ranked 20 overall for Protecting Investors. Ranking of Norway in Protecting Investors - Compared to good practice and selected economies: 36 The following table shows Protecting Investors data for Norway compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Norway 6.7 Comparator Economies Denmark 6.3 Finland 5.7 France 5.3 Germany 5.0 Iceland 5.3 37 2. Historical data: Protecting Investors in Norway Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 20 20 Strength of investor protection index (0-10) 6.7 6.7 6.7 6.7 3. The following graph illustrates the Protecting Investors index in Norway compared to best practice and selected Economies: 9.7 6.7 6.3 5.7 5.3 5.3 5.0 k d ay ar y nd ce d an an an m w an a nl or en m al el Fi Fr N Ic Ze er D G ew N Note: The higher the score, the greater the investor protection. 38 Protecting Investors in Norway The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Norway. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 7 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 1 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 1 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 1 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 6 2 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 1 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 39 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 1 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 7 3 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 0 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 1 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 6.7 40 41 1. Benchmarking Paying Taxes Regulations: Norway is ranked 18 overall for Paying Taxes. Ranking of Norway in Paying Taxes - Compared to good practice and selected economies: 42 The following table shows Paying Taxes data for Norway compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Norway 4 87 41.6 Comparator Economies Denmark 9 135 29.2 Finland 8 243 44.6 France 7 132 65.8 Germany 16 215 48.2 Iceland 31 140 26.8 * The following economies are also good practice economies for : Payments (number per year): Qatar 43 2. Historical data: Paying Taxes in Norway Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 17 18 Total tax rate (% profit) 42.0 41.6 41.6 41.6 Payments (number per year) 4 4 4 4 Time (hours per year) 87 87 87 87 3. The following graphs illustrate the Paying Taxes sub indicators in Norway over the past 4 years: 44 Paying Taxes in Norway The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Norway, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (VAT) 1 online 48 25.0% value added filing fuel tax 1 included in 1.30 fuel price Social security 1 online 15 14.1% gross salaries 15.90 contributions filing Corporate income tax 1 online 24 28.0% taxable profit 24.40 filing Totals 4 87 41.6 45 46 1. Benchmarking Trading Across Borders Regulations: Norway is ranked 9 overall for Trading Across Borders. Ranking of Norway in Trading Across Borders - Compared to good practice and selected economies: 47 The following table shows Trading Across Borders data for Norway compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Norway 4 7 830 4 7 729 Comparator Economies Denmark 4 5 744 3 5 744 Finland 4 8 540 5 8 620 France 2 9 1078 2 11 1248 Germany 4 7 872 5 7 937 Iceland 5 19 1532 5 14 1674 * The following economies are also good practice economies for : Time to export (days): Estonia 48 2. Historical data: Trading Across Borders in Norway Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 9 9 Cost to export (US$ per container) 568 830 830 830 Cost to import (US$ per container) 488 729 729 729 Documents to export (number) 4 4 4 4 Documents to import (number) 4 4 4 4 Time to export (days) 7 7 7 7 Time to import (days) 7 7 7 7 3. The following graphs illustrate the Trading Across Borders sub indicators in Norway over the past 4 years: 49 50 Trading Across Borders in Norway These tables list the procedures necessary to import and export a standardized cargo of goods in Norway. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 4 225 Customs clearance and technical control 1 125 Ports and terminal handling 1 130 Inland transportation and handling 1 350 Totals 7 830 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 4 150 Customs clearance and technical control 1 79 Ports and terminal handling 1 150 Inland transportation and handling 1 350 Totals 7 729 51 Documents for Export and Import Export Bill of lading Commercial invoice Customs export declaration Packing list Import Bill of lading Commercial invoice Customs import declaration Packing list 52 53 1. Benchmarking Enforcing Contracts Regulations: Norway is ranked 4 overall for Enforcing Contracts. Ranking of Norway in Enforcing Contracts - Compared to good practice and selected economies: 54 The following table shows Enforcing Contracts data for Norway compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Norway 33 280 9.9 Comparator Economies Denmark 35 410 23.3 Finland 32 375 13.3 France 29 331 17.4 Germany 30 394 14.4 Iceland 27 417 8.2 55 2. Historical data: Enforcing Contracts in Norway Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 4 4 Procedures (number) 33 33 33 33 Time (days) 310 310 280 280 Cost (% of claim) 9.9 9.9 9.9 9.9 3. The following graphs illustrate the Enforcing Contracts sub indicators in Norway over the past 4 years: 56 Enforcing Contracts in Norway This topic looks at the efficiency of contract enforcement in Norway. Nature of Procedure (2010) Indicator Procedures (number) 33 Time (days) 280 Filing and service 40.0 Trial and judgment 195.0 Enforcement of judgment 45.0 Cost (% of claim)* 9.90 Attorney cost (% of claim) 8.0 Court cost (% of claim) 1.3 Enforcement Cost (% of claim) 0.6 57 Court information: Oslo District Court ("Oslo Tingrett") * Claim assumed to be equivalent to 200% of income per capita. 58 59 1. Benchmarking Closing Business Regulations: Norway is ranked 4 overall for Closing a Business. Ranking of Norway in Closing Business - Compared to good practice and selected economies: 60 The following table shows Closing Business data for Norway compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Norway 90.9 0.9 1 Comparator Economies Denmark 89.4 1.1 4 Finland 89.4 0.9 4 France 45.2 1.9 9 Germany 53.1 1.2 8 Iceland 78.5 1.0 4 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 61 2. Historical data: Closing Business in Norway Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 3 4 Time (years) 0.9 0.9 0.9 0.9 Cost (% of estate) 1 1 1 1 Recovery rate (cents on the dollar) 90.7 89.0 89.0 90.9 3. The following graphs illustrate the Closing Business sub indicators in Norway over the past 4 years: 62 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 63 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Denmark Denmark eased business start-up by reducing the minimum capital requirement for limited liability companies from 125,000 Danish kroner ($22,850) to 80,000 Danish kroner ($14,620). Computerization of Denmark's land registry cut the number of procedures required to register property by half. Germany Germany eased business start-up by increasing the efficiency of communications between the notary and the commercial registry and eliminating the need to publish an announcement in a newspaper. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Iceland Iceland made dealing with construction permits more costly by increasing the fees to obtain the design approval and receive inspections. Iceland increased the corporate income tax rate from 15% to 18% and raised social security and pension contribution rates. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 64 Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 65 66