59344 -- Taiwan, China © 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 Contents http://www.doingbusiness.org/rankings/ Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 and a ranking simulation tool Introduction http://www.doingbusiness.org/reforms/ and Aggregate Rankings Historical data Customized data sets since DB2004 5 - Year Measure of http://www.doingbusiness.org/custom-query/ Cumulative Change Methodology and research Starting a Business The methodologies and research papers underlying Doing Business http://www.doingbusiness.org/Methodology/ Dealing with Download reports Construction Permits Access to Doing Business reports as well as subnational and regional reports, reform case studies and customized country and regional Registering Property profiles http://www.doingbusiness.org/reports/ Getting Credit Subnational and regional projects Differences in business regulations at the subnational and regional level Protecting Investors http://www.doingbusiness.org/subnational-reports/ Paying Taxes Law Library Online collection of business laws and regulations relating to business and gender issues Trading Across Borders http://www.doingbusiness.org/law-library/ http://wbl.worldbank.org/ Enforcing Contracts Local partners Closing a Business More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Doing Business 2011 Business Reforms 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 Taiwan, China. 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 Taiwan, China is ranked 33 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Taiwan, China - Compared to global good practice economy as well as selected economies: Taiwan, China's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 33 Starting a Business 24 Dealing with Construction Permits 95 Registering Property 32 Getting Credit 72 Protecting Investors 74 Paying Taxes 87 Trading Across Borders 17 Enforcing Contracts 90 Closing a Business 10 2 Summary of Indicators - Taiwan, China Starting a Business Procedures (number) 6 Time (days) 15 Cost (% of income per capita) 4.1 Min. capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 28 Time (days) 142 Cost (% of income per capita) 100.9 Registering Property Procedures (number) 3 Time (days) 5 Cost (% of property value) 6.2 Getting Credit Strength of legal rights index (0-10) 4 Depth of credit information index (0-6) 5 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 90.4 Protecting Investors Extent of disclosure index (0-10) 7 Extent of director liability index (0-10) 4 Ease of shareholder suits index (0-10) 5 Strength of investor protection index (0-10) 5.3 Paying Taxes Payments (number per year) 17 Time (hours per year) 269 Profit tax (%) 20.9 Labor tax and contributions (%) 16.7 Other taxes (%) 4.2 Total tax rate (% profit) 41.9 Trading Across Borders Documents to export (number) 5 Time to export (days) 12 Cost to export (US$ per container) 645 Documents to import (number) 6 Time to import (days) 12 Cost to import (US$ per container) 700 3 Enforcing Contracts Procedures (number) 47 Time (days) 510 Cost (% of claim) 17.7 Closing a Business Recovery rate (cents on the dollar) 82.2 Time (years) 1.9 Cost (% of estate) 4 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 Doing business has become easier (DB change score) 6 1. Benchmarking Starting a Business Regulations: Taiwan, China is ranked 24 overall for Starting a Business. Ranking of Taiwan, China in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Taiwan, China 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 Taiwan, China 6 15 4.1 0.0 Comparator Economies Hong Kong SAR, China 3 6 2.0 0.0 Japan 8 23 7.5 0.0 Korea, Rep. 8 14 14.7 0.0 Malaysia 9 17 17.5 0.0 Philippines 15 38 29.7 6.0 Thailand 7 32 5.6 0.0 * 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 Taiwan, China Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 28 24 Procedures (number) 8 8 6 6 Time (days) 48 42 23 15 Cost (% of income per capita) 4.1 4.1 3.9 4.1 Min. capital (% of income per capita) 178.4 177.4 0.0 0.0 3. The following graphs illustrate the Starting a Business sub indicators in Taiwan, China over the past 4 years: 9 Starting a Business Summary - Taiwan, China This table summarizes the procedures and costs associated with setting up a business in Taiwan (China). STANDARDIZED COMPANY Legal Form: Private Company Limited By Shares City: Taipei Registration Requirements: No: Procedure Time to complete Cost to complete 1 Search the uniqueness of company name online; reserve company name 1 TWD 300 and apply for MOEA approval 2 Make a company seal 1 TWD 450 3 submit a CPA audit report showing that the amount of capital invested is 2 TWD 20,000 sufficient to cover company establishment cost 4 Apply for incorporation and tax registration at the Ministry of Economic 3 TWD 1,355 Affairs (MOEA) 5 Apply for Labor Insurance, National Health Insurance and Pension Plan 1 no charge Report with the Bureau of Labor Insurance 6 Register for retirement plan and work rules with the Council of Labor 7 no charge Affairs 10 Starting a Business Details - Taiwan, China Procedure 1 Search the uniqueness of company name online; reserve company name and apply for MOEA approval Time to complete: 1 Cost to complete: TWD 300 Comment: according to the schedule governing the review period for the application announced on March 3, 2008, the review period has been shortened to 2 days. therefore the procedure now takes one day for search, reservation and application. Then the government officials are required to review the application on the second day. At the end of the second day, (if approved) the approval is ready, and the applicant can pick it up from the Ministry of Economic Affairs (MOEA). Otherwise, it is mailed to the applicant, in which case it takes up to four days to receive the confirmation. The company can search the availability of the company name and check the legality of planned business through the online Company Registration Search System on MOEA web site (http://w2kdmz1.moea.gov.tw/english/index.asp). Procedure 2 Make a company seal Time to complete: 1 Cost to complete: TWD 450 Comment: Company registration documents and deeds must be sealed (chopped). A set of company seals should be prepared for registration, including the name of the company, and name of the chairperson of the board of directors. These seals are required to be used for future company updates. Procedure 3 submit a CPA audit report showing that the amount of capital invested is sufficient to cover company establishment cost Time to complete: 2 Cost to complete: TWD 20,000 Comment: Although the minimum capital requirement was removed, according to the Ministry of Economic Affairs, in place of the minimum capital requirement , now there is a requirement to submitt a CPA audit report showing the invested capital will cover the costs of establishing a company to the Ministry of Economic Affairs. Procedure 4 Apply for incorporation and tax registration at the Ministry of Economic Affairs (MOEA) Time to complete: 3 Cost to complete: TWD 1,355 Comment: The articles of incorporation for a private limited company must include the company name, business purpose, shareholders' contributions, profit-allocation ratio, location of offices, number and names of directors, manner of issuing public announcements, and the date the articles of incorporation were adopted. The application for a taxpayer's identification number is done at the same time. 11 Procedure 5 Apply for Labor Insurance, National Health Insurance and Pension Plan Report with the Bureau of Labor Insurance Time to complete: 1 Cost to complete: no charge Comment: The Labor Insurance Bureau now adopts a three-in-one consolidation application (i.e., the labour insurance application, national health insurance application and the pension plan appropriation application), so the Labor Insurance Bureau and National Health Insurance Bureau can now review and process the application at the same time, if all in order, the Bureau can grant the application in 5 - 7 business days. All firms may apply for national health insurance (NHI) regardless of the number of employees, but only companies with five or more employees may apply for labor insurance (LI). National health insurance, labor insurance, and the pension plan report can be filed with one consolidated form. Forms can be downloaded from the Bureau of Labor Insurance Web site. Procedure 6 Register for retirement plan and work rules with the Council of Labor Affairs Time to complete: 7 Cost to complete: no charge Comment: For a company with 30 employees or more, promoters mustregister its work rules and retirement plan. The Council of Labor Affairs has announced in December 2008 that the review of work rules shall be completed within 14 business days, therefore, the reviewing process is now averagely completed in about 14-15 business days. 12 13 1. Benchmarking Dealing with Construction Permits Regulations: Taiwan, China is ranked 95 overall for Dealing with Construction Permits. Ranking of Taiwan, China in Dealing with Construction Permits - Compared to good practice and selected economies: 14 The following table shows Dealing with Construction Permits data for Taiwan, China 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 Taiwan, China 28 142 100.9 Comparator Economies Hong Kong SAR, China 7 67 19.4 Japan 15 187 20.8 Korea, Rep. 13 34 131.2 Malaysia 25 261 7.9 Philippines 26 169 778.5 Thailand 11 156 9.5 15 2. Historical data: Dealing with Construction Permits in Taiwan, China Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 94 95 Procedures (number) 28 28 28 28 Time (days) 142 142 142 142 Cost (% of income per capita) 97.6 97.0 96.2 100.9 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Taiwan, China over the past 4 years: 16 Dealing with Construction Permits in Taiwan, China The table below summarizes the procedures, time, and costs to build a warehouse in Taiwan (China). BUILDING A WAREHOUSE City: Taipei Registration Requirements: No: Procedure Time to complete Cost to complete 1 * Obtain proof of land title ownership from the city government 1 day TWD 50 2 Apply to the city government to define the building lines and check the 16 days TWD 4,000 boundary of land 3 Obtain information about infrastructure from the water company 14 days no charge 4 * Obtain information about electricity infrastructure from electricity provider 14 days no charge 5 * Obtain information about telecommunications infrastructure from telecom 14 days no charge company 6 Obtain firefighting design approval from the fire protection authority 21 days no charge 7 * Obtain waster water discharge permit from the industry park authority/ city 7 days TWD 3,200 government 8 Apply for building permit from the city government 21 days TWD 19,769 17 9 Report the start date and present construction plan to the city government and 1 day TWD 151,217 pay the city government the air pollution protection fee before starting construction 10 City government inspects layout of the building plan on the land site 1 day no charge 11 City government inspects at foundation stage 1 day no charge 12 City government inspects at second-floor stage 1 day no charge 13 City government inspects at roof construction stage 1 day no charge 14 Receive environmental inspection from the department of environmental 1 day no charge protection (city government) at any time during construction 15 Receive labor inspection from the department of labor (city government) at 1 day no charge any time during construction 16 Obtain firefighting inspection certificate from the fire protection authority 4 days no charge 17 * Obtain address (house number) certification from the city government 3 days TWD 84 18 * Obtain waste water connection certification from the environment protection 10 days no charge bureau/ city government 19 Obtain building usage (occupancy) permit from the city government 6 days TWD 100 20 Obtain building/ land ownership certificate from the city government. 18 days TWD 39,618 21 Apply for water supply from a local water company 1 day no charge 22 Receive inspection from water company 1 day no charge 23 Obtain connection to water 19 days TWD 25,000 24 * Apply for electric power supply from Taiwan power company 1 day no charge 25 * Receive inspection from power company 1 day no charge 26 * Obtain power connection 19 days TWD 300,000 27 * Request telephone line 1 day no charge 18 28 * Obtain telephone line 3 days TWD 3,500 * Takes place simultaneously with another procedure. 19 Dealing with Construction Permits Details - Taiwan, China Procedure 1 Obtain proof of land title ownership from the city government Time to complete: 1 day Cost to complete: TWD 50 Agency: City Government Comment: Procedure 2 Apply to the city government to define the building lines and check the boundary of land Time to complete: 16 days Cost to complete: TWD 4,000 Agency: City Government Comment: Procedure 3 Obtain information about infrastructure from the water company Time to complete: 14 days Cost to complete: no charge Agency: Taiwan Water Corporation Comment: Procedure 4 Obtain information about electricity infrastructure from electricity provider Time to complete: 14 days Cost to complete: no charge Agency: Taiwan Power Company (Taipower) Comment: Procedure 5 Obtain information about telecommunications infrastructure from telecom company Time to complete: 14 days Cost to complete: no charge Agency: Chunghwa Telecom Company Limited 20 Comment: Procedure 6 Obtain firefighting design approval from the fire protection authority Time to complete: 21 days Cost to complete: no charge Agency: Fire Protection Authority Comment: Procedure 7 Obtain waster water discharge permit from the industry park authority/ city government Time to complete: 7 days Cost to complete: TWD 3,200 Agency: City Government (Industry Park Authority) Comment: Procedure 8 Apply for building permit from the city government Time to complete: 21 days Cost to complete: TWD 19,769 Agency: City Government Comment: The building cost is assumed here to be TWD 15,200 per square meter for steel structures. Hence the building cost of the warehouse in this case is TWD 19,769,120. The cost of obtaining a building permit is 0.1% of the building cost estimated by the city government. Procedure 9 Report the start date and present construction plan to the city government and pay the city government the air pollution protection fee before starting construction Time to complete: 1 day Cost to complete: TWD 151,217 Agency: City Government Comment: Procedure 10 City government inspects layout of the building plan on the land site Time to complete: 1 day Cost to complete: no charge 21 Agency: City Government Comment: Procedure 11 City government inspects at foundation stage Time to complete: 1 day Cost to complete: no charge Agency: City Government Comment: Procedure 12 City government inspects at second-floor stage Time to complete: 1 day Cost to complete: no charge Agency: City Government Comment: Procedure 13 City government inspects at roof construction stage Time to complete: 1 day Cost to complete: no charge Agency: City Government Comment: Procedure 14 Receive environmental inspection from the department of environmental protection (city government) at any time during construction Time to complete: 1 day Cost to complete: no charge Agency: Department of Environmental Protection (City Government) Comment: Procedure 15 Receive labor inspection from the department of labor (city government) at any time during construction Time to complete: 1 day 22 Cost to complete: no charge Agency: Department of Labor (City Government) Comment: According to the Enforcement Rules of the Labor Safety and Health Law, BuildCo must assign at least one qualified staff member who holds a certificate of labor safety and hygiene training to the construction site for managing and supervising daily labor safety. Procedure 16 Obtain firefighting inspection certificate from the fire protection authority Time to complete: 4 days Cost to complete: no charge Agency: Fire Protection Authority Comment: Procedure 17 Obtain address (house number) certification from the city government Time to complete: 3 days Cost to complete: TWD 84 Agency: City Government Comment: Procedure 18 Obtain waste water connection certification from the environment protection bureau/ city government Time to complete: 10 days Cost to complete: no charge Agency: City Government (Environment Protection Bureau) Comment: Procedure 19 Obtain building usage (occupancy) permit from the city government Time to complete: 6 days Cost to complete: TWD 100 Agency: City Government Comment: To obtain an occupancy permit, BuildCo requests that the city government approve the as-built drawings of the warehouse. Procedure 20 Obtain building/ land ownership certificate from the city government. Time to complete: 18 days 23 Cost to complete: TWD 39,618 Agency: City Government (Department of Land) Comment: The Department of Land in City Government issues a building/land ownership certificate on the basis of the building surface area calculation prepared by the architect and approved by the Department of Building Administration. Procedure 21 Apply for water supply from a local water company Time to complete: 1 day Cost to complete: no charge Agency: Taiwan Water Corporation Comment: Procedure 22 Receive inspection from water company Time to complete: 1 day Cost to complete: no charge Agency: Taiwan Water Corporation Comment: Procedure 23 Obtain connection to water Time to complete: 19 days Cost to complete: TWD 25,000 Agency: Taiwan Water Corporation Comment: The whole process (from application to connection) may take 14­28 days. Procedure 24 Apply for electric power supply from Taiwan power company Time to complete: 1 day Cost to complete: no charge Agency: Taiwan Power Company (Taipower) Comment: Procedure 25 Receive inspection from power company Time to complete: 1 day 24 Cost to complete: no charge Agency: Taiwan Power Company (Taipower) Comment: Procedure 26 Obtain power connection Time to complete: 19 days Cost to complete: TWD 300,000 Agency: Taiwan Power Company (Taipower) Comment: Procedure 27 Request telephone line Time to complete: 1 day Cost to complete: no charge Agency: Chunghwa Telecom Company Limited Comment: Procedure 28 Obtain telephone line Time to complete: 3 days Cost to complete: TWD 3,500 Agency: Chunghwa Telecom Company Limited Comment: 25 26 1. Benchmarking Registering Property Regulations: Taiwan, China is ranked 32 overall for Registering Property. Ranking of Taiwan, China in Registering Property - Compared to good practice and selected economies: 27 The following table shows Registering Property data for Taiwan, China 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 Taiwan, China 3 5 6.2 Comparator Economies Hong Kong SAR, China 5 36 4.2 Japan 6 14 5.5 Korea, Rep. 7 11 5.1 Malaysia 5 56 2.5 Philippines 8 33 4.3 Thailand 2 2 4.3 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 28 2. Historical data: Registering Property in Taiwan, China Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 30 32 Procedures (number) 3 3 3 3 Time (days) 5 5 5 5 Cost (% of property value) 6.2 6.2 6.2 6.2 3. The following graphs illustrate the Registering Property sub indicators in Taiwan, China over the past 4 years: 29 Registering Property in Taiwan, China This topic examines the steps, time, and cost involved in registering property in Taiwan (China). STANDARDIZED PROPERTY Property Value: 27,095,255.29 City: Taipei Registration Requirements: No: Procedure Time to complete Cost to complete 1 Buyer researches the property rights and encumbrances 1 day (a few hours in TWD 20 per page registered against the property at the registry of titles person at the registry or 3 days by mail) 2 Buyer pays the Deed tax at the Municipality 1 day 6% of standard property value (Deed Tax) + 0.1% Stamp Duty 3 Registration of transfer of title at the Land Registry 3 days 0.1% of property value (registration fee) + TWD 80 for new ownership certificate 30 Registering Property Details - Taiwan, China Procedure 1 Buyer researches the property rights and encumbrances registered against the property at the registry of titles Time to complete: 1 day (a few hours in person at the registry or 3 days by mail) Cost to complete: TWD 20 per page Agency: Land Registry Comment: The buyer obtains copies of the land and building's registration from the electronic registration database. Each page costs TWD 20. Procedure 2 Buyer pays the Deed tax at the Municipality Time to complete: 1 day Cost to complete: 6% of standard property value (Deed Tax) + 0.1% Stamp Duty Agency: Municipality Comment: The Deed tax is 6% of the standard property value, and buyer pays it at the Municipality. Seller pays the Land value increase tax. As a result, Taiwan government (Real-estate Valuation Committee) issues so-called "standard" valuation information of property every year for tax authorities' and tax payers' reference. After years, such government announcement of valuation become the reported tax base by taxpayers and acceptable by tax authorities. The real "contract price" might be ignored when filing deed tax in practice now. The standard value is always lower than market price. As of January 30 2005, the Land value increase tax (capital gains tax) is levied according to the following rates: (1) Where the net increase of the value of any land is no more than 100 per cent of the original value of such land, the rate shall be 20 per cent of the net increase. (2) Where the net increase of the value of any land is no more than 200 per cent of the original value of such land, the rate shall be 30 per cent of that part of the net increase which exceeds the original value by more than 100 per cent in addition to the rate prescribed in the preceding section. (3) Where the net increase of the value of any land is no more than 300 per cent of the original value of such land, the rate shall be 40 per cent of that part of the net increase which exceeds the original value by more than 200 per cent in addition to the rates prescribed in the preceding section. As of October 2009, the Ministry of Finance completed the development of the Local Tax Online Filing Portal, provided for use by the public nationwide. Taiwan government spent two years planning this system, which enables the public to carry out the filing for these local taxes online at home, and speeds up the procedure for property registration. (The Local Tax Online Filing Portal website can be visited at: https://www.etax.nat.gov.tw/wSite/indexLocal.htm) Procedure 3 Registration of transfer of title at the Land Registry Time to complete: 3 days 31 Cost to complete: 0.1% of property value (registration fee) + TWD 80 for new ownership certificate Agency: Land Registry Comment: The transfer of title is registered at the Land Registry. The original ownership certificate must be returned and a new one is issued. 32 33 1. Benchmarking Getting Credit Regulations: Taiwan, China is ranked 72 overall for Getting Credit. Ranking of Taiwan, China in Getting Credit - Compared to good practice and selected economies: 34 The following table shows Getting Credit data for Taiwan, China compared to good practice and comparator economies: Good Practice Strength of Depth of Public registry Private bureau legal rights credit coverage (% coverage (% Economies information index (0-10) of adults) of adults) index (0-6) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Taiwan, China 4 5 0.0 90.4 Comparator Economies Hong Kong SAR, China 10 5 0.0 72.0 Japan 7 6 0.0 76.1 Korea, Rep. 7 6 0.0 93.3 Malaysia 10 6 62.0 100.0 Philippines 3 3 0.0 7.4 Thailand 4 5 0.0 35.7 * 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. 35 2. Historical data: Getting Credit in Taiwan, China Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 69 72 Strength of legal rights index (0-10) 3 4 4 4 Depth of credit information index (0-6) 5 5 5 5 Private bureau coverage (% of adults) 67.1 62.7 63.2 90.4 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Taiwan, China over the past 4 years: 36 Getting Credit in Taiwan, China The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Taiwan (China). Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 5 bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative data distributed? Yes No 1 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 90.4 0.0 Number of individuals 13,280,000 0 Number of firms 210,000 0 37 Strength of legal rights index (0-10) 4 Can any business use movable assets as collateral while keeping possession of the assets; and any financial institution Yes accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No 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 requiring No a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds No or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations and Yes 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 grantor's No 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? No 38 39 1. Benchmarking Protecting Investors Regulations: Taiwan, China is ranked 74 overall for Protecting Investors. Ranking of Taiwan, China in Protecting Investors - Compared to good practice and selected economies: 40 The following table shows Protecting Investors data for Taiwan, China compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Taiwan, China 5.3 Comparator Economies Hong Kong SAR, China 9.0 Japan 7.0 Korea, Rep. 5.3 Malaysia 8.7 Philippines 4.0 Thailand 7.7 41 2. Historical data: Protecting Investors in Taiwan, China Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 73 74 Strength of investor protection index (0-10) 5.3 5.3 5.3 5.3 3. The following graph illustrates the Protecting Investors index in Taiwan, China compared to best practice and selected Economies: Note: The higher the score, the greater the investor protection. 42 Protecting Investors in Taiwan, China The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Taiwan (China). 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? 2 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? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 4 1 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? 43 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 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) 5 3 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 1 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? 0 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) 5.3 44 45 1. Benchmarking Paying Taxes Regulations: Taiwan, China is ranked 87 overall for Paying Taxes. Ranking of Taiwan, China in Paying Taxes - Compared to good practice and selected economies: 46 The following table shows Paying Taxes data for Taiwan, China 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 Taiwan, China 17 269 41.9 Comparator Economies Hong Kong SAR, China 3 80 24.1 Japan 14 355 48.6 Korea, Rep. 14 250 29.8 Malaysia 12 145 33.7 Philippines 47 195 45.8 Thailand 23 264 37.4 * The following economies are also good practice economies for : Payments (number per year): Qatar 47 2. Historical data: Paying Taxes in Taiwan, China Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 96 87 Total tax rate (% profit) 42.3 42.1 42.1 41.9 Payments (number per year) 23 23 17 17 Time (hours per year) 340 340 281 269 3. The following graphs illustrate the Paying Taxes sub indicators in Taiwan, China over the past 4 years: 48 Paying Taxes in Taiwan, China The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Taiwan, China, 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 filing 33 5.0% value added Stamp duty on contracts 1 0.1% transaction value Vehicle license tax 2 fixed fee 0.00 (TWD 11,700) Fuel tax 4 various rates engine size 0.10 Stamp duty on property 1 0.1% transaction 0.10 value Tax on interest 0 withheld 10.0% interest 0.30 income Taipei City Land Value 1 1-5.5% assessed land 0.50 Tax value Commodity tax on fuel 1 included in the 0.60 price of fuel 49 Land value increment tax 1 20.0% capital gains 2.00 (capital gains tax) Taipei City house tax 1 3.0% assessed 2.90 building value Labor insurance 1 online filing 27 various rates gross salaries 4.70 contributions Mandatory health 1 online filing various rates gross salaries 5.30 insurance contributions Pension contributions 1 online filing 6.0% gross salaries 6.80 Corporate income tax 1 online filing 209 25.0% taxable profit 18.90 Totals 17 269 41.9 50 51 1. Benchmarking Trading Across Borders Regulations: Taiwan, China is ranked 17 overall for Trading Across Borders. Ranking of Taiwan, China in Trading Across Borders - Compared to good practice and selected economies: 52 The following table shows Trading Across Borders data for Taiwan, China compared to good practice and comparator economies: Good Practice Documents to Time to export Cost to export Documents to Time to Cost to import export (days) (US$ per import import (days) (US$ per Economies (number) container) (number) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Taiwan, China 5 12 645 6 12 700 Comparator Economies Hong Kong SAR, China 4 6 625 4 5 600 Japan 4 10 1010 5 11 1060 Korea, Rep. 3 8 790 3 7 790 Malaysia 7 18 450 7 14 450 Philippines 8 15 675 8 14 730 Thailand 4 14 625 3 13 795 * The following economies are also good practice economies for : Time to export (days): Estonia 53 2. Historical data: Trading Across Borders in Taiwan, China Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 15 17 Cost to export (US$ per container) 747 757 720 645 Cost to import (US$ per container) 747 769 732 700 Documents to export (number) 5 5 5 5 Documents to import (number) 6 6 6 6 Time to export (days) 12 12 12 12 Time to import (days) 12 12 12 12 3. The following graphs illustrate the Trading Across Borders sub indicators in Taiwan, China over the past 4 years: 54 55 Trading Across Borders in Taiwan, China These tables list the procedures necessary to import and export a standardized cargo of goods in Taiwan, China. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 7 185 Customs clearance and technical control 1 80 Ports and terminal handling 2 180 Inland transportation and handling 2 200 Totals 12 645 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 7 240 Customs clearance and technical control 1 80 Ports and terminal handling 2 180 Inland transportation and handling 2 200 Totals 12 700 56 Documents for Export and Import Export Bill of lading Certificate of origin Commercial invoice Customs export declaration Terminal handling receipts Import Bill of lading Certificate of origin Commercial invoice Customs import declaration Packing list Terminal handling receipts 57 58 1. Benchmarking Enforcing Contracts Regulations: Taiwan, China is ranked 90 overall for Enforcing Contracts. Ranking of Taiwan, China in Enforcing Contracts - Compared to good practice and selected economies: 59 The following table shows Enforcing Contracts data for Taiwan, China compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Economies (number) claim) Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Taiwan, China 47 510 17.7 Comparator Economies Hong Kong SAR, China 24 280 19.5 Japan 30 360 22.7 Korea, Rep. 35 230 10.3 Malaysia 30 585 27.5 Philippines 37 842 26.0 Thailand 36 479 12.3 60 2. Historical data: Enforcing Contracts in Taiwan, China Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 90 90 Procedures (number) 47 47 47 47 Time (days) 510 510 510 510 Cost (% of claim) 17.7 17.7 17.7 17.7 3. The following graphs illustrate the Enforcing Contracts sub indicators in Taiwan, China over the past 4 years: 61 Enforcing Contracts in Taiwan, China This topic looks at the efficiency of contract enforcement in Taiwan, China. Nature of Procedure (2010) Indicator Procedures (number) 47 Time (days) 510 Filing and service 30.0 Trial and judgment 360.0 Enforcement of judgment 120.0 Cost (% of claim)* 17.70 Attorney cost (% of claim) 15.5 Court cost (% of claim) 1.1 Enforcement Cost (% of claim) 1.1 62 Court information: Taipei District Court ("") * Claim assumed to be equivalent to 200% of income per capita. 63 64 1. Benchmarking Closing Business Regulations: Taiwan, China is ranked 10 overall for Closing a Business. Ranking of Taiwan, China in Closing Business - Compared to good practice and selected economies: 65 The following table shows Closing Business data for Taiwan, China 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 Taiwan, China 82.2 1.9 4 Comparator Economies Hong Kong SAR, China 81.2 1.1 9 Japan 92.7 0.6 4 Korea, Rep. 81.7 1.5 4 Malaysia 39.8 2.3 15 Philippines 4.5 5.7 38 Thailand 43.5 2.7 36 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 66 2. Historical data: Closing Business in Taiwan, China Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 11 10 Time (years) 1.9 1.9 1.9 1.9 Cost (% of estate) 4 4 4 4 Recovery rate (cents on the dollar) 80.2 80.9 80.9 82.2 3. The following graphs illustrate the Closing Business sub indicators in Taiwan, China over the past 4 years: 67 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 Getting Credit Negative Change 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. 68 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. 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. Hong Kong SAR, China Hong Kong SAR (China) abolished the fuel tax on diesel. Reforms implemented in the civil justice system of Hong Kong SAR (China) will help increase the efficiency and cost-effectiveness of commercial dispute resolution. 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. Japan Japan made it easier to deal with insolvency by establishing a new entity, the Enterprise Turnaround Initiative Corporation, to support the revitalization of companies suffering from excessive debt but professionally managed. 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. Korea, Rep. Korea made it easier to deal with insolvency by introducing postfiling financing, granting superpriority to the repayment of loans given to companies undergoing reorganization. Malaysia Malaysia eased business start-up by introducing more online services. Malaysia's introduction of online stamping reduced the time and cost to transfer property. 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. Philippines The Philippines eased business startup by setting up a one-stop shop at the municipal level. The Philippines made construction permitting more cumbersome through updated electricity connection costs. The Philippines reduced the time and cost to trade by improving its electronic customs systems, adding such functions as electronic payments and online submission of declarations. 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. 69 Taiwan, China Taiwan (China) eased business start-up by reducing the time required to check company names, register retirement plans and apply for health, pension and labor insurance. Taiwan (China) reduced the corporate income tax rate and simplified tax return forms, rules for assessing corporate income tax and the calculation of interim tax payments. 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. Thailand Thailand made registering property more costly by repealing a 2-year temporary tax reduction for property transfers. Thailand temporarily lowered taxes on business by reducing its specific business tax for 12 months. 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. 70 71