Doing Business 2019 Malta Economy Profile Malta Page 1 Doing Business 2019 Malta Economy Profile of Malta Doing Business 2019 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2 Doing Business 2019 Malta About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. More about Doing Business (PDF, 5MB) Page 3 Doing Business 2019 Malta Ease of Doing Business in DB 2019 Rank Region Middle East & North Africa 190 1 Malta Income Category High income 84 DB 2019 Ease of doing business score Population 465,292 0 100 City Covered Valletta 65.43 DB 2019 Ease of Doing Business Score 0 100 77.68: Spain (Rank: 30) 72.56: Italy (Rank: 51) 71.71: Cyprus (Rank: 57) 68.08: Greece (Rank: 72) 65.43: Malta (Rank: 84) 58.30: Regional Average (Middle East & North Africa) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Malta 1 28 39 45 41 57 55 71 77 82 Rank 103 109 121 134 136 151 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Ease of Doing Business Score on Doing Business topics - Malta 100 91.01 84.86 80 74.75 76.34 76.18 67.57 61.67 Score 60 48.87 40 38.07 35.00 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Page 4 Doing Business 2019 Malta Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per capita. • Each procedure starts on a separate day (2 procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5 Doing Business 2019 Malta Starting a Business - Malta Standardized Company Legal form Private Limited Liability company Paid-in minimum capital requirement EUR 233 City Covered Valletta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Procedure – Men (number) 8 7.2 4.9 1 (New Zealand) Time – Men (days) 16 20.5 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 7.1 22.6 3.1 0.0 (Slovenia) Procedure – Women (number) 8 7.9 4.9 1 (New Zealand) Time – Women (days) 16 21.2 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 7.1 22.6 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 1.0 8.1 8.6 0.0 (117 Economies) Figure – Starting a Business in Malta and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 92.39: Greece (Rank: 44) 91.24: Cyprus (Rank: 52) 89.50: Italy (Rank: 67) 86.91: Spain (Rank: 86) 84.86: Malta (Rank: 103) 82.00: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2019 Malta Figure – Starting a Business in Malta – Procedure, Time and Cost Time (days) Cost (% of income per capita) 16 4 14 3.5 Cost (% of income per capita) 12 3 Time (days) 10 2.5 8 2 6 1.5 4 1 2 0.5 0 0 1 2 3 4 5 6 7 *8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2019 Malta Details – Starting a Business in Malta – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Reserve a unique company name Less than one day EUR 10 Agency : Online (online procedure) Checking the availability of a company name can be made online through the website of the Registry of Companies or in person. The reservation confirmation is sent by email. 2 Draft the memorandum and articles of association 1 day Between EUR 500 Agency : Lawyer, accountant or a registered corporate services provider. and EUR 1,000. Lawyers or corporate service providers draft the memorandum and articles of association. 3 Deposit the paid-in minimum capital 1 day no charge Agency : Bank The Bank will open a company account once it receives reference letters from the signatories' respective banks. The following documents are necessary to open a bank account: 1. A duly filled in Know-Your-Client (KYC) form 2. A completed request to open an account specifying the type of account, the currency and the preferred mode of tax payment 3. Copy of the Memorandum and Articles of Association together with a certified copy of the Certificate of Registration issued by the Registry of Companies once the company is registered. The bank may also require a description of the activities of the company and the anticipated turnover thereof. 4. Confirmation of the permanent address of the Directors through a completed identification statement certified by a Prime bank or Maltese Embassy in the country of residence. The bank also requires the authenticated identification documents for all the directors, signatories, beneficial owners and secretaries. An original copy of a utility bill to be certified by the bank may also be required. 5. A completed form signed by the directors of the company appointing the bankers. 4 Register at the Companies Registry and obtain Tax Identification Number 2 days If share capital (TIN) exceeds €100,000 Agency : Registry but does not exceed The following documents are submitted to the Companies Registry in order to €250,000, they incorporate the company: payment for 1. Confirmation of name reservation; electronic submission 2. Signed memorandum and articles of association; is calculated as €736 3. Confirmation of deposit of share capital; 4. Information about beneficial owners; with the addition of €8 4. Copy of the passport/ID of each shareholder, director and company secretary. for each €15,000 or part thereof in excess The Registry will take about 2 days to incorporate the company at which point the of €100,000. official memorandum and articles along with the certificate of registration bearing the registration number and registration date of the company are issued. These documents are then subsequently uploaded to the website of the Registry of Companies. The Registrar of Companies also provides an alternative service for the registration of Companies. Registration may now be carried out online through the Registry's portal. Prior to registration, an applicant must register for an account and obtain a personal Digital Certificate by registering for an e-ID. The MFSA would then vet the application within 5 working days. MFSA communicates C-number with the Office of the Commissioner for Revenue (OCR) and OCR then creates an Income Tax Number. This normally happens within a couple of hours. OCR will then communicate this number to the company through email without the entrepreneur having to make a separate visit to the OCR. Since January 1, 2018, all new companies are legally required to disclose information about beneficial ownership. The information can be submitted at the business registry for free at the time of business incorporation Page 8 Doing Business 2019 Malta 5 Register for VAT 7 days no charge Agency : Office of the Commissioner for Revenue - VAT Department To register for VAT, the entrepreneur submits the application form S.L. 406.09 "Value Added Tax (Forms) Regulations", along with the company Tax Identification Number (TIN). Furthermore, a copy of the memorandum and articles of association, and a copy of the original certificate of registration including the stamp of the Malta Financial Services Authority (MFSA) should be produced. Recently, a new electronic service was introduced through which companies can register with the VAT Department, obtain an employer identification number and notify the National Statistics Office on one application form. However, this was not used by the majority of users at the beginning of 2018. Such form shall become mandatory in the future. 6 Obtain a PE number (employer identification number) and register 3 days no charge employees Agency : Office of the Commissioner for Revenue - PE number Both the VAT number and the Income Tax number are required to obtain the PE number For PE number: the registration form is available, the entrepreneur can either complete it online or print it and send it to IRD. The entrepreneur has to provide: - The tax ID number - The number of employees - Details of the business - Date of first employment 7 Register the employees with Jobplus Less than one day no charge Agency : Jobplus (online procedure) The entrepreneur must declare the company's recruits to Jobplus. The PE number is required. 8 Register for Data Protection 1 day (simultaneous EUR 23.29 Agency : Office of the Information and Data Protection Commissioner with previous Such registration must be done before the company carries out any data procedure) processing operations. VAT and registration numbers are required according to the form to be submitted. Such requirement is likely to change in May 2018. Takes place simultaneously with previous procedure. Page 9 Doing Business 2019 Malta Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or • Registering and selling the warehouse after its completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 10 Doing Business 2019 Malta Dealing with Construction Permits - Malta Standardized Warehouse Estimated value of warehouse EUR 1,110,950 City Covered Valletta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Procedures (number) 14 16.6 12.7 None in 2017/18 Time (days) 170 137.4 153.1 None in 2017/18 Cost (% of warehouse value) 2.0 4.7 1.5 None in 2017/18 Building quality control index (0-15) 13.0 12.1 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Malta and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 75.29: Greece (Rank: 39) 74.75: Malta (Rank: 45) 70.60: Spain (Rank: 78) 67.39: Italy (Rank: 104) 64.08: Cyprus (Rank: 126) 59.17: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Figure – Dealing with Construction Permits in Malta – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 2 160 Cost (% of warehouse value) 140 1.5 120 Time (days) 100 1 80 60 40 0.5 20 0 0 1 2 3 4 *5 6 7 8 9 * 10 11 12 13 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2019 Malta Figure – Dealing with Construction Permits in Malta and comparator economies – Measure of Quality 15 13.0 13.0 12.1 11.0 11.0 11.0 Index score 10 5 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Details – Dealing with Construction Permits in Malta – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain fire and safety report for the plans of the building 7 days EUR 450 Agency : Private consultant An engineer's report dealing with fire safety and ventilation is required. A mechanical and electrical engineer is engaged to prepare this report which may be submitted to Planning Authority after the screening letter is issued. Upon completion of construction, the engineer must submit a statement to Planning Authority at the end of construction stating that the building has been built according to the proper fire safety standards. 2 Apply for building permit and await estimation of fees 15 days EUR 50 Agency : Planning Authority The architect to fill the online application, upload necessary drawings and documentation (including the fires and safety ventilation report) and pay an initial €50 fee (which is then deducted from the overall development planning fee). The application is reviewed by the Authority and a bill for the remainder of the development planning fee is sent electronically. 3 Obtain a Permit Application Report (DPAR), attend hearing in front of the 60 days EUR 19,695 Environmental Planning Commission (EPC) and receive building permit Agency : Planning Authority Once payment is effected the PA publishes a notice in the government gazette and the Department of Information website, informs the relevant local council and neighbours of the site, and affixes a notice on the site. This is done so that the public is informed that an application has been received, and the public may comment within 30 days from publication in the newspaper. Persons doing so will be recognised as interested parties during the processing of the application. At the same time the Authority will automatically consult with 11 government agencies whose input may be relevant to the application in question and these will send in their views within the above mentioned time period. The Development Control Directorate will prepare a DPAR assessing the application, and concludes with their recommendation as to whether the application should be approved or not. If the recommendation is favourable, a draft building permit with conditions is attached to the DPAR. The DPAR also specifies the bank guarantees that may be required to obtain the permit, such as for the protection of the surrounding road surface, archaeological or environmental sensitive site (which is not the case since warehouse is to be situated next to similar development), etc. The DPAR notice gives the date for the hearing in front of the PCDP (Planning Commission – Development Planning) which is held not later than 14 days from the conclusion of the same DPAR. The application is reviewed in a public hearing which is attended by the applicant and the Architect and Civil Engineer responsible for the application. The permit issued is valid for 5 years. 4 Obtain approval from Building Regulation Office prior to starting 7 days no charge construction Agency : Building Regulation Office (BRO) At least 2 months before BuildCo can start construction work, it must submit the following documents to the Building Regulation Office and await approval: - Condition report of adjoining properties - Construction method statement - Bank guarantee of 3,000 EUR per floor - Insurance of 500,000 EUR Page 12 Doing Business 2019 Malta 5 Submit commencement of works notice and request for official alignment 1 day no charge Agency : Planning Authority The building permit issued includes a site notice which is to be affixed on the site while works are ongoing, and a commencement notice which is to be submitted to Planning Authority not less than 5 days before commencement of works. The commencement notice requires details of the contractor and site manager (including 24-hour contact details) who will be engaged on the site. When submitting the commencement notice, the Architect and Civil Engineer can indicate whether Planning Authority is required to provide official alignment on site or not. If yes, Planning Authority will provide this within 10 days. 6 Request and receive initial inspection by Planning Authority for road 10 days no charge alignments and levels Agency : Planning Authority Once the building permit is issued Planning Authority visits the site to provide the official road alignments and levels. 7 Hire an agency specialized in safety 1 day EUR 1,500 Agency : Private consultant A specialized agency in health and safety is generally hired to be in charge of safety issues to ensure that everything is done according to regulations on the construction site. The reason for this is that the legal responsibility lies with the owner and the contractor in case of an accident. The state will initiate a lawsuit against both if there is some form of accident or complaint. Hiring a specialized agency decreases the risk of accidents or non-observance of legislation on site. 8 Request and receive inspection from OHSA during construction works 1 day no charge Agency : Occupational Health and Safety Authority (OHSA) The applicant / developer advises the OHSA with basic information regarding the construction works (i.e. presence of equipment such as cranes / scaffolding on site, as well as any specific additional details such as the requirement to close a road during works, etc). OHSA carries out random inspections during the works. 9 Request and receive inspection by the local council to release bank 1 day no charge guarantee on roads Agency : Local Council The local council inspects that the roads are not damaged. It is done the same day. Receive final inspection for road alignments and levels from MEPA 1 day no charge 10 Agency : Planning Authority Once construction is completed, Planning Authority must visit the site to ensure that the building was built according to the approved road alignment and levels. This is a separate inspection from the final inspection to receive a compliance certificate and is conducted by a different department within Planning Authority. 11 Apply for a compliance certificate from Planning Authority 1 day EUR 60 Agency : Planning Authority The application for compliance takes the form of a declaration by the Architect and Civil Engineer that the building has been constructed in accordance with the building permit, or outlines any deviations therefrom. MEPA may then inspect the site (on a random basis) to verify or issue the compliance certificate on the basis of the architect's declaration. 12 Request and receive inspection by Planning Authority for the compliance 14 days no charge certificate Agency : Planning Authority An inspector from Planning Authority visits the construction to check that the construction has been completed in accordance with the approved plans. 13 Obtain compliance certificate 7 days no charge Agency : Planning Authority Once the client has received the compliance certificate, the bank guarantees are released. The compliance certificate is necessary to apply for electricity, water and sewage (but not telephone). 14 Request and obtain water and sewage connection 45 days EUR 842 Agency : Water Services Corporation The owner of the building must provide the following documents to make a request for water and sewage connection: • The compliance certificate issued by Planning Authority • A recent site plan showing the extents of the property • Color photos showing the property facades and adjacent properties • Copy of identity card • Company Board resolution authorizing the application • Proof of ownership • Completed application for a public sewer discharge permit Takes place simultaneously with previous procedure. Page 13 Doing Business 2019 Malta Details – Dealing with Construction Permits in Malta – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0 (0-2) house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 2.0 Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0 with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated final inspections occur in practice? (0-1) Final inspection 0.0 does not always occur in practice; Final inspection occurs most of the time. Liability and insurance regimes index (0-2) 2.0 Which parties (if any) are held liable by law for structural flaws or problems in the building Architect or 1.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 1.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance ; Owner or investor; Insurance is commonly taken in practice. Professional certifications index (0-4) 4.0 Page 14 Doing Business 2019 Malta What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. What are the qualification requirements for the professional who supervises the construction Minimum number 2.0 on the ground? (0-2) of years of experience; University degree in engineering, construction or construction management; Passing a certification exam. Page 15 Doing Business 2019 Malta Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters obtaining final supply (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property income per capita) because the warehouse has access to a road. - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor the ranking on the ease of getting electricity. Page 16 Doing Business 2019 Malta Getting Electricity - Malta Standardized Connection Price of electricity (US cents per kWh) 17.0 Name of utility Enemalta PLC City Covered Valletta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Procedures (number) 4 4.7 4.5 3 (25 Economies) Time (days) 105 72.4 77.2 18 (3 Economies) Cost (% of income per capita) 213.8 479.9 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff 5 4.2 7.5 8.0 (27 Economies) index (0-8) Figure – Getting Electricity in Malta and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 85.28: Italy (Rank: 37) 83.00: Spain (Rank: 48) 78.35: Cyprus (Rank: 70) 76.34: Malta (Rank: 77) 75.97: Greece (Rank: 79) 69.45: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Page 17 Doing Business 2019 Malta Figure – Getting Electricity in Malta – Procedure, Time and Cost Time (days) Cost (% of income per capita) 120 100 Cost (% of income per capita) 100 80 80 Time (days) 60 60 40 40 20 20 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Figure – Getting Electricity in Malta and comparator economies – Measure of Quality 8 8 8 7 7 7 6 Index score 5 5 4.2 4 3 2 1 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Page 18 Doing Business 2019 Malta Details – Getting Electricity in Malta – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Client submits completed application for a new connection to the 3 calendar days EUR 900 Automated Revenue Management Services Agency : Automated Revenue Management Services Client submits completed to the Automated Revenue Management Services Portal (ARMS) online: https://www.smartutilities.com.mt ARMS processes the application and forwards it to the utility - Enemalta PLC through a computerized system to notify the utility of a new connection request. The application needs to be accompanied by the following documentation: 1- Valid electrician’s License 2- Compliance certificate 3- Recent original Site Plan signed by architect 4- Photo of Facade: colored photo, showing premises facade and adjacent premises (from both sides) 5- Photo copy of Identity Card or Passport. 6- Company resolution: Authorizing the applicant to apply on behalf of the company 7- Notary declaration or contract of sale 2 Enemalta meets client to discuss requirements and issue quote for external 16 calendar days EUR 23,300 works Agency : Enemalta PLC The utility's engineer will meet with the client requesting a new connection. The engineer discusses in detail the requirements for the connection and the how it can best be completed. Once the client and the utility agrees, Enemalta PLC will forward the quote for works to the client. 3 Enemalta applies for excavation permit and completes external works 75 calendar days EUR 0 Agency : Enemalta PLC The utility is responsible for obtaining the excavation permit, required for crossing a road on public domain. The external works are completed by the utility connecting the new premises to the electric grid. The client also has the option to complete the external works through a private contractor following public procurement regulations. 4 Enemalta installs meter and finalizes installation 11 calendar days EUR 23,300 Agency : Enemalta PLC Enemalta PLC's personnel installs the connection's meter, finalizes the connection and energizes the warehouse. Takes place simultaneously with previous procedure. Page 19 Doing Business 2019 Malta Details – Getting Electricity in Malta – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 7.4 System average interruption frequency index (SAIFI) 3.4 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 0.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No exceed a certain cap? Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online https://www.rews.org .mt/#/en/fa/31 Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 20 Doing Business 2019 Malta Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. • Official costs only (such as administrative fees, - Has no trees, natural water sources, natural reserves or historical monuments of duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 21 Doing Business 2019 Malta Registering Property - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Procedures (number) 7 5.6 4.7 1 (4 Economies) Time (days) 15 29.7 20.1 1 (New Zealand) Cost (% of property value) 13.4 5.7 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 12.5 14.2 23.0 None in 2017/18 Figure – Registering Property in Malta and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 81.72: Italy (Rank: 23) 71.74: Spain (Rank: 58) 63.46: Cyprus (Rank: 94) 62.11: Regional Average (Middle East & North Africa) 48.87: Malta (Rank: 151) 47.59: Greece (Rank: 153) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Figure – Registering Property in Malta – Procedure, Time and Cost Time (days) Cost (% of property value) 14 14 12 Cost (% of property value) 12 10 10 Time (days) 8 8 6 6 4 4 2 2 0 0 1 2 *3 4 5 *6 *7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below. Page 22 Doing Business 2019 Malta Figure – Registering Property in Malta and comparator economies – Measure of Quality 30 26.5 25 23.0 22.5 Index score 20 15 14.2 12.5 10 4.5 5 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Details – Registering Property in Malta – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Notary registers the promise of sales with Inland Revenue Department 1 day EUR 11,109.5; (Pre- Agency : Notary paid stamp duty paid The promise of sale has to be registered in the Inland Revenue Department by a by the buyer: 1% of notary property value (20% from the total amount of the Stamp duty (5%))) 2 Notary orders a search of title at Land Registry 10 days EUR 5.15; ( Agency : Land Registry ) It is in this transitory time between signing of promise of sale and the final contract that the Notary is engaged with all necessary verifications and preparations that will in turn enable the final contract to be made. The Notary orders searches to ascertain that the Seller has good title and can proceed with the sale without being impeded by legal niceties. The Notary conducts a search at Land Registry by submitting an application (Form E) with a Land Registry plan of the property being transferred to verify if the property is in a registration area or not (since not all properties are in a registration area). If the property is in a registration area, the land registry informs the Notary whether the property is registered or not. If registered, the Land Registry notifies the Notary and issues a Certificate of Title with details on whom the property is registered and other details ancillary thereto (such as for e.g. contract details, if property is freehold or not etc..) The Land Registry will give an official search result within 8 working days from the date the request was submitted. 3 Notary orders a search on people and companies from Public Registry 3 days EUR 31.7; (EUR Agency : Identity Malta - this Government Agency incorporates the Land and 15.85 (regular) or Public Registries EUR 31.7 (fast track)) The Notary orders searches of transfers and liabilities on persons and companies and publis wills from Public Registry to acquire information as to how the seller acquired the property and to see if the seller has any liabilities that can affect the property being sold. 4 Parties sign a final deed of sale at Notary 1 day EUR 4,077.37; Agency : Notary (Notary fee is To sign the final deed of sale the parties must provide the following: • Identity regulated by 356 of card, passport, or any other official document for personal identification for both 2012 – Notarial parties • In the case of a company, a copy of the Memorandum and Articles of Profession and association or resolution of the board of directors authorising such person to Notarial Archives Act represent the company • Copy of last receipts of payment due in view of ground rent, electricity/water bills etc. • Any other document (such as plans, permits, (Schedule) cancellation of hypothecs, etc.) asked for by the Notary • If for some reason the (Substitution) parties appearing on the promise of sale cannot all be present for the final Regulations, 2012 contract, a power of attorney is required • All keys of the property being sold • Government Gazette Buyer brings cheque book in order to pay the balance on the final consideration, of Malta No. 18,979 – the duty on documents, as well as the dues for the act and notarial fees 19.10.2012 Notary fee for transfer of property: 1% of property value up to EUR10,000; 0.5% from EUR10,001 to EUR500,000; 0.25% from EUR500,001 onwards) Page 23 Doing Business 2019 Malta 5 Notary pays the taxes collected on the transaction 1 day EUR 133,314; Agency : Inland Revenue Department (Balance of stamp After the final contract has been duly signed, the Notary has 15 days within which duty of 4% of to pay the tax collected on such contract. purchase price and the final withholding With effect from 1st January 2015, a taxpayer may no longer opt to be taxed at tax of 8%.) 35% on the capital gain. A final withholding tax of 8% (previously 12%) of the property’s value will apply on all transfers of immovable property subject to two exceptions and a transitional measure as follows: 1) A final withholding tax of 10% of the property’s value will be applicable on transfers of property which was acquired prior to 1st January 2004; 2) A final withholding tax of 4% of the property’s value will be applicable on transfers of property which is transferred not later than five years from the date of acquisition where the transferor is an individual who does not habitually trade in property; • As a transition measure, the current system will continue to apply to any transfers of property which occur following the entry into force of this new system where the Commissioner for Revenue was notified of the prospective transfer by 17th November 2014 by way of registration of the promise of sale or notification of the transfer. 6 Notary registers the final deed of sale with Land Registry 1 day EUR 606.75; (Fee Agency : Land Registry schedule according to After the final contract has been duly signed, the Notary has 15 days within which Subsidiary Legislation to enroll the deed in the Malta Public Registry or the Gozo Public Registry, or in 296.01, specifically the Land Registry, where applicable. under the Second Schedule: up to EUR 11,646.87 ................................... ......................... EUR 15.4 over EUR 11,646.87 to EUR 23,293.73 ................................... .... EUR 20.50 over EUR 23,293.73 to EUR 46,587.47 ................................... ... EUR 30.75 over EUR 46,587.47 to EUR 69,881.20 ................................... ... EUR 41.00 over EUR 69,881.20 to EUR 93,174.94 ................................... ... EUR 51.25 for every additional EUR 23,293.73 or part thereof .................... EUR 10.25.) 7 Notary registers the final deed of sale with Public Registry 1 day EUR 3.85 Agency : Public Registry After the final contract has been duly signed, the Notary has 15 days within which to enroll the deed in the Malta Public Registry or the Gozo Public Registry, where applicable. Takes place simultaneously with previous procedure. Page 24 Doing Business 2019 Malta Details – Registering Property in Malta – Measure of Quality Answer Score Reliability of infrastructure index (0-8) 6.0 What is the institution in charge of immovable property registration? The Land Registry In what format are the majority of title or deed records kept in the largest business city—in a Computer/Scann 1.0 paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions Yes 1.0 and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: The Land Registry In what format are the majority of maps of land plots kept in the largest business city—in a Computer/Scann 1.0 paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral Single database 1.0 or mapping agency kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the Yes 1.0 same identification number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of immovable Anyone who 1.0 property registration in the largest business city? pays the official fee Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5 publicly available–and if so, how? Link for online access: https://mtip.gov.m t/en/landregistry/ Pages/default.as px Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available–and if so, how? Link for online access: http://mgoz.gov.m t/en/Pages/Depar tments/DG%20O perations/Land% 20Registry/Regis tration-of- Property.aspx Does the agency in charge of immovable property registration commit to delivering a legally No 0.0 binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2017: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the official fee Page 25 Doing Business 2019 Malta Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, on public 0.5 and if so, how? boards Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a Yes, on public 0.5 specific time frame—and if so, how does it communicate the service standard? boards Link for online access: Is there a specific and separate mechanism for filing complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable property No 0.0 registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.0 Does the law require that all property sale transactions be registered at the immovable No 0.0 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Is there a specific compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a property Yes 0.5 transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary; Does the legal system require verification of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary; Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a property First Hall Civil worth 50 times gross national income (GNI) per capita and located in the largest business Court city, what court would be in charge of the case in the first instance? How long does it take on average to obtain a decision from the first-instance court for such a More than 3 0.0 case (without appeal)? years Are there any statistics on the number of land disputes in the first instance? No 0.0 Number of land disputes in the largest business city in 2017: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 26 Doing Business 2019 Malta Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of • Rights of borrowers and lenders through indicators. The depth of credit information index measures rules and practices collateral laws (0-10) affecting the coverage, scope and accessibility of credit information available • Protection of secured creditors’ rights through through a credit registry or a credit bureau. The strength of legal rights index bankruptcy laws (0-2) measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first Depth of credit information index (0–8) determined whether a unitary secured transactions system exists. Then two case • Scope and accessibility of credit information scenarios, case A and case B, are used to determine how a nonpossessory security distributed by credit bureaus and credit registries interest is created, publicized and enforced according to the law. Special emphasis (0-8) is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest In some economies the legal framework for secured transactions will allow only case credit bureau as a percentage of adult population A or case B (not both) to apply. Both cases examine the same set of legal provisions Credit registry coverage (% of adults) relating to the use of movable collateral. • Number of individuals and firms listed in credit Several assumptions about the secured borrower (ABC) and lender (BizBank) registry as a percentage of adult population are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 27 Doing Business 2019 Malta Getting Credit - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Strength of legal rights index (0-12) 2 2.2 6.1 12 (5 Economies) Depth of credit information index (0-8) 5 5.1 6.7 8 (42 Economies) Credit registry coverage (% of adults) 54.7 14.7 21.8 100.0 (4 Economies) Credit bureau coverage (% of adults) 0 15.5 65.3 100.0 (25 Economies) Figure – Getting Credit in Malta and comparator economies – Ranking and Score DB 2019 Getting Credit Score 0 100 60.00: Cyprus (Rank: 73) 60.00: Spain (Rank: 73) 50.00: Greece (Rank: 99) 45.00: Italy (Rank: 112) 36.00: Regional Average (Middle East & North Africa) 35.00: Malta (Rank: 134) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Malta and comparator economies 8 7 7 6 Index Score 5 5 4 3 3 2 2 2.2 2 1 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Page 28 Doing Business 2019 Malta Details – Legal Rights in Malta Strength of legal rights index (0-12) 2 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without 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 a Yes specific description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and No replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be Yes secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by No asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed No online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization No procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow No the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Malta and comparator economies 8 7 7 7 7 6 5.1 Index Score 5 5 5 4 3 2 1 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Page 29 Doing Business 2019 Malta Details – Credit Information in Malta Depth of credit information index (0-8) Credit Credit Score bureau registry Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and No No 0 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries No Yes 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No No 0 By law, do borrowers have the right to access their data in the credit bureau or No Yes 1 credit registry? Can banks and financial institutions access borrowers’ credit information online No Yes 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help No No 0 banks and financial institutions assess the creditworthiness of borrowers? Total Score ("yes" to either public bureau or private registry) 5 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 152,245 Number of firms 0 16,045 Total 0 168,290 Percentage of adult population 0 54.7 Page 30 Doing Business 2019 Malta Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related- party transactions The business (Buyer): • Extent of director liability index (0–10): Ability - Is a publicly traded corporation listed on the economy’s most important stock of minority shareholders to sue and hold exchange. If there are fewer than ten listed companies or if there is no stock interested directors liable for prejudicial related- exchange in the economy, it is assumed that Buyer is a large private company with party transactions; Available legal remedies multiple shareholders. (damages, disgorgement of profits, fines, - Has a board of directors and a chief executive officer (CEO) who may legally act on imprisonment, rescission of the transaction) behalf of Buyer where permitted, even if this is not specifically required by law. • Ease of shareholder suits index (0–10): - Has a supervisory board in economies with a two-tier board system on which Mr. Access to internal corporate documents; James appointed 60% of the shareholder-elected members. Evidence obtainable during trial and allocation of - Has not adopted bylaws or articles of association that go beyond the minimum legal expenses requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory. • Extent of conflict of interest regulation index - Is a manufacturing company with its own distribution network. (0–10): Simple average of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two • Extent of shareholder rights index (0-10): directors to Buyer’s five-member board. Shareholders’ rights and role in major corporate - Mr. James also owns 90% of Seller, a company that operates a chain of retail decisions hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-10): - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Governance safeguards protecting shareholders Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price from undue board control and entrenchment is equal to 10% of Buyer’s assets and is higher than the market value. - The proposed transaction is part of the company’s principal activity and is not • Extent of corporate transparency index (0-10): outside the authority of the company. Corporate transparency on ownership stakes, - Buyer enters into the transaction. All required approvals are obtained, and all compensation, audits and financial prospects required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0– - The transaction causes damages to Buyer. Shareholders sue Mr. James and the 10): Simple average of the extent of shareholders executives and directors that approved the transaction. rights, extent of ownership and control and extent of corporate transparency indices • Strength of minority investor protection index (0–10): Simple average of the extent of conflict of interest regulation and extent of shareholder governance indices Page 31 Doing Business 2019 Malta Protecting Minority Investors - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Extent of disclosure index (0-10) 3.0 6.4 6.5 10 (13 Economies) Extent of director liability index (0-10) 6.0 4.7 5.3 10 (Cambodia) Ease of shareholder suits index (0-10) 8.0 4.5 7.3 10 (Djibouti) Extent of shareholder rights index (0-10) 7.0 5.1 6.4 10 (Kazakhstan) Extent of ownership and control index (0-10) 4.0 4.7 5.4 None in 2017/18 Extent of corporate transparency index (0-10) 9.0 5.8 7.6 10 (6 Economies) Figure – Protecting Minority Investors in Malta and comparator economies – Ranking and Score DB 2019 Protecting Minority Investors Score 0 100 70.00: Spain (Rank: 30) 66.67: Cyprus (Rank: 38) 63.33: Greece (Rank: 51) 61.67: Malta (Rank: 57) 58.33: Italy (Rank: 72) 51.83: Regional Average (Middle East & North Africa) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Malta and comparator economies – Measure of Quality Malta 9 6 3 4 7 8 Cyprus 7 4 9 6 7 7 Greece 8 4 7 7 7 5 Italy 8 4 7 4 6 6 Spain 9 6 7 5 9 6 OECD high income 7.4 5.5 6.5 5.2 6.3 7.4 Middle East & North Africa 5.8 4.7 6.4 4.7 5.1 4.5 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0-10) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-10) Extent of shareholder rights index (0-10) Ease of shareholder suits index (0-10) Page 32 Doing Business 2019 Malta Details – Protecting Minority Investors in Malta – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-10) 5.7 Extent of disclosure index (0-10) 3.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a 1.0 conflict without any specifics Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) No disclosure 0.0 obligation Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 6.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the Yes 1.0 transaction caused to Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0- Liable if unfair or 2.0 2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused to Liable if unfair or 2.0 Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay profits made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying Yes 1.0 specific ones? (0-1) Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) At the discretion 0.0 of the court Extent of shareholder governance index (0-10) 6.7 Extent of shareholder rights index (0-10) 7.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Page 33 Doing Business 2019 Malta Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all or almost all members consent to add a No 0.0 new member? Assuming that Buyer is a limited company, must a member first offer to sell their interest to No 0.0 the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 4.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the end Yes 1.0 of their term? Must the board of directors include a separate audit committee exclusively comprising board Yes 1.0 members? Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Yes 1.0 Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender offer to No 0.0 all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute profits within a maximum No 0.0 period set by law? Extent of corporate transparency index (0-10) 9.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting Yes 1.0 agenda? Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on the Yes 1.0 meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual financial statements be Yes 1.0 audited by an external auditor? Page 34 Doing Business 2019 Malta Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2018 covering for the Paying Taxes indicator calendar year 2017 (January 1, 2017 – December 31, 2017). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory contributions a 2017 (number per year adjusted for electronic medium size company must pay in a year, and measures the administrative burden and joint filing and payment) of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax • Total number of taxes and contributions paid or laws, time taken to comply with the requirements of postfiling processes and time withheld, including consumption taxes (value waiting. added tax, sales tax or goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2016. Time required to comply with 3 major taxes It produces ceramic flowerpots and sells them at retail. All taxes and contributions (hours per year) recorded are paid in the second year of operation (calendar year 2017). Taxes and • Collecting information, computing tax payable mandatory contributions are measured at all levels of government. • Preparing separate tax accounting books, if The VAT refund process: required - In June 2017, TaxpayerCo. makes a large capital purchase: the value of the • Completing tax return, filing with agencies machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are • Arranging payment or withholding equally expensed per month (875 times income per capita divided by 12). The Total tax and contribution rate (% of commercial machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, profits) sales and the machine and the tax reporting period is every month. Input VAT will • Profit or corporate income tax exceed Output VAT in June 2017. • Social contributions, labor taxes paid by The corporate income tax audit process: employer - An error in calculation of income tax liability (for example, use of incorrect tax • Property and property transfer taxes depreciation rates, or incorrectly treating an expense as tax deductible) leads to an • Dividend, capital gains, financial transactions incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. taxes discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability • Waste collection, vehicle, road and other taxes due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. Postfiling Index • Time to comply with a VAT refund (hours) • Time to obtain a VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 35 Doing Business 2019 Malta Paying Taxes - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Payments (number per year) 8 17.7 11.2 3 (Hong Kong SAR, China) Time (hours per year) 139 196.7 159.4 49 (Singapore) Total tax and contribution rate (% of profit) 44.0 32.7 39.8 26.1% (32 Economies) Postfiling index (0-100) 52.51 50.08 84.41 None in 2017/18 Figure – Paying Taxes in Malta and comparator economies – Ranking and Score DB 2019 Paying Taxes Score 0 100 84.58: Spain (Rank: 34) 80.78: Cyprus (Rank: 47) 76.89: Greece (Rank: 65) 76.18: Malta (Rank: 71) 74.52: Regional Average (Middle East & North Africa) 66.32: Italy (Rank: 118) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Malta and comparator economies – Measure of Quality 100 93.60 80 74.47 75.70 Index score 60 52.51 52.39 50.08 40 20 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Page 36 Doing Business 2019 Malta Details – Paying Taxes in Malta Tax or Payments Notes on Time Statutory Tax base Total tax Notes on mandatory (number) Payments (hours) tax rate and TTCR contribution contribution rate (% of profit) Corporate 1.0 online 23.0 35% taxable profit 27.62 income tax Employer 1.0 online 92.0 10% gross salaries 10.78 paid - Social security contributions Tax on 1.0 witheld 8% sales price 4.71 property minus transfers brokerage fees Tax on 1.0 15% interest 0.38 interest income Maternity 0.0 online and 0.3% basic salary 0.32 Leave Fund jointly Contribution Annual 1.0 online various rates authorized 0.13 registration share capital fee Annual 1.0 various rates # of axles, 0.01 circulation fee maximum authorized mass and age Employee 0.0 jointly 10% gross salaries 0.00 withheld paid - Social security contributions Fuel tax 1.0 various rates fuel 0.00 small amount consumption Value added 1.0 online 24.0 18% value added 0.00 not included tax (VAT) Totals 8 139 44.0 Page 37 Doing Business 2019 Malta Details – Paying Taxes in Malta – Tax by Type Taxes by type Answer Profit tax (% of profit) 32.3 Labor tax and contributions (% of profit) 11.1 Other taxes (% of profit) 0.5 Page 38 Doing Business 2019 Malta Details – Paying Taxes in Malta – Measure of Quality Answer Score Postfiling index (0-100) 52.51 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 25% - 49% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 0.0 100 Time to obtain a VAT refund (weeks) 27.9 52.26 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax correction (hours) 24.5 57.8 Time to complete a corporate income tax correction (weeks) 46.3 0 Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 39 Doing Business 2019 Malta Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are or border handling in origin economy recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are • Obtaining, preparing and submitting documents recorded as is. Alternatively, suppose documents are submitted to a customs agency required by destination economy and any transit at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. economies The time for customs clearance would be recorded as 24 hours because the actual • Covers all documents required by law and in procedure took 24 hours. practice, including electronic submissions of Cost: Insurance cost and informal payments for which no receipt is issued are information excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors Border compliance are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector • Customs clearance and inspections experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: - For all 190 economies covered by Doing Business, it is assumed a shipment is in a • Handling and inspections that take place at the warehouse in the largest business city of the exporting economy and travels to a economy’s port or border warehouse in the largest business city of the importing economy. - It is assumed each economy imports 15 metric tons of containerized auto parts (HS Domestic transport 8708) from its natural import partner—the economy from which it imports the largest • Loading or unloading of the shipment at the value (price times quantity) of auto parts. It is assumed each economy exports the warehouse or port/border product of its comparative advantage (defined by the largest export value) to its • Transport between warehouse and port/border natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while - The mode of transport is the one most widely used for the chosen export or import shipment is en route product and the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 40 Doing Business 2019 Malta Trading across Borders - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Time to export: Border compliance (hours) 24 58.0 12.5 1 (19 Economies) Cost to export: Border compliance (USD) 325 442.4 139.1 0 (19 Economies) Time to export: Documentary compliance (hours) 3 67.9 2.4 1 (26 Economies) Cost to export: Documentary compliance (USD) 25 244.6 35.2 0 (20 Economies) Time to import: Border compliance (hours) 2 105.4 8.5 0 (25 Economies) Cost to import: Border compliance (USD) 230 536.0 100.2 0 (28 Economies) Time to import: Documentary compliance (hours) 1 75.5 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 0 269.0 24.9 0 (30 Economies) Figure – Trading across Borders in Malta and comparator economies – Ranking and Score DB 2019 Trading Across Borders Score 0 100 93.72: Greece (Rank: 31) 91.01: Malta (Rank: 41) 88.44: Cyprus (Rank: 49) 60.17: Regional Average (Middle East & North Africa) 100.00: Spain (Rank: 1) 100.00: Italy (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Figure – Trading across Borders in Malta – Time and Cost Time (hours) Cost (USD) 30 325 350 25 24 300 Time (hours) 230 250 Cost (USD) 20 200 15 150 10 100 5 3 25 2 50 1 0 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 41 Doing Business 2019 Malta Details – Trading across Borders in Malta Characteristics Export Import Product HS 85 : Electrical machinery and HS 8708: Parts and accessories of motor equipment and parts thereof; sound vehicles recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles Trade partner Singapore Italy Border Malta Freeport Terminals port Valletta port Distance (km) 16 9 Domestic transport time (hours) 1 1 Domestic transport cost (USD) 233 150 Details – Trading across Borders in Malta – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required 3.0 50.0 by customs authorities Export: Clearance and inspections required 0.0 0.0 by agencies other than customs Export: Port or border handling 24.0 275.0 Import: Clearance and inspections required 0.0 0.0 by customs authorities Import: Clearance and inspections required 0.0 0.0 by agencies other than customs Import: Port or border handling 1.6 230.0 Page 42 Doing Business 2019 Malta Details – Trading across Borders in Malta – Trade Documents Export Import Bill of lading CMR waybill Commercial invoice Commercial invoice Packing list Packing list Terminal handling receipt Intrastat Customs Export Declaration SOLAS certificate SOLAS certificate Page 43 Doing Business 2019 Malta Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract between 2 courts (calendar days) domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt • Time to file and serve the case enforcement. • Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses several • Time to enforce the judgment assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller and courts (% of claim) Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. • Attorney fees - The buyer orders custom-made goods, then fails to pay alleging that the goods are • Court fees not of adequate quality. - The value of the dispute is 200% of the income per capita or the equivalent in local • Enforcement fees currency of USD 5,000, whichever is greater. - The seller sues the buyer before the court with jurisdiction over commercial cases Quality of judicial processes index (0-18) worth 200% of income per capita or $5,000. • Court structure and proceedings (-1-5) - The seller requests the pretrial attachment of the defendant’s movable assets to secure the claim. • Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. • Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Page 44 Doing Business 2019 Malta Enforcing Contracts - Malta Standardized Case Claim value EUR 42,705 Court name First Hall of the Civil Court City Covered Valletta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Time (days) 505 622.0 582.4 None in 2017/18 Cost (% of claim value) 21.5 24.7 21.2 None in 2017/18 Quality of judicial processes index (0-18) 10.5 6.1 11.5 None in 2017/18 Figure – Enforcing Contracts in Malta and comparator economies – Ranking and Score DB 2019 Enforcing Contracts Score 0 100 70.90: Spain (Rank: 23) 67.57: Malta (Rank: 39) 55.04: Regional Average (Middle East & North Africa) 54.79: Italy (Rank: 111) 50.19: Greece (Rank: 132) 48.59: Cyprus (Rank: 138) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Figure – Enforcing Contracts in Malta – Time and Cost Time (days) Cost (% of claim value) Cost (% of claim value) 1800 30 1580 1600 24.7 23.1 25 1400 21.5 21.2 Time (days) 1200 1100 1120 20 16.4 17.2 1000 14.4 15 800 622.0 582.4 510 600 505 10 400 5 200 0 0 Cyprus Greece Italy Malta Middle OECD Spain East high & income North Africa Page 45 Doing Business 2019 Malta Figure – Enforcing Contracts in Malta and comparator economies – Measure of Quality Malta 2.5 4 1 3 Cyprus 2.5 1.5 1 3 Greece 2.5 4.5 2 3 Italy 3 4 3 3 Spain 3 2.5 2.5 3.5 OECD high income 2.5 3.1 2.3 3.6 Middle East & North Africa 2.2 0.8 0.4 2.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Malta Indicator Time (days) 505 Filing and service 15 Trial and judgment 365 Enforcement of judgment 125 Cost (% of claim value) 21.5 Attorney fees 15 Court fees 5.2 Enforcement fees 1.3 Quality of judicial processes index (0-18) 10.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 4.0 Court automation (0-4) 1.0 Alternative dispute resolution (0-3) 2.5 Page 46 Doing Business 2019 Malta Details – Enforcing Contracts in Malta – Measure of Quality Answer Score Quality of judicial processes index (0-18) 10.5 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil Yes case? 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) time to Yes 1.0 disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by judges? 6. Are there any electronic case management tools in place within the competent court for Yes 1.0 use by lawyers? Court automation (0-4) 1.0 1. Can the initial complaint be filed electronically through a dedicated platform within the no 0.0 competent court? 2. Is it possible to carry out service of process electronically for claims filed before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 Page 47 Doing Business 2019 Malta 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there financial incentives for parties to attempt mediation or conciliation No (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 48 Doing Business 2019 Malta Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s - The value of the hotel is 100% of the income per capita or the equivalent in local estate) currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s • Measured as percentage of estate value real estate. The hotel cannot pay back the loan, but makes enough money to • Court fees operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to • Lawyers’ fees judicial liquidation and reorganization proceedings and the extent to which best • Assessors’ and auctioneers’ fees insolvency practices have been implemented in each economy covered. • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 49 Doing Business 2019 Malta Resolving Insolvency - Malta Indicator Malta Middle East & OECD high Best Regulatory North Africa income Performance Recovery rate (cents on the dollar) 38.8 26.3 70.5 None in 2017/18 Time (years) 3.0 2.8 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.8 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 5.5 5.9 11.9 None in 2017/18 Figure – Resolving Insolvency in Malta and comparator economies – Ranking and Score DB 2019 Resolving Insolvency Score 0 100 79.10: Spain (Rank: 19) 77.28: Italy (Rank: 22) 75.45: Cyprus (Rank: 26) 55.39: Greece (Rank: 62) 38.07: Malta (Rank: 121) 32.69: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Malta – Time and Cost Time (years) Cost (% of estate) 4 25 3.5 22.0 Cost (% of estate) 3.5 3.0 20 2.8 Time (years) 3 2.5 14.5 13.8 15 2 1.8 1.7 11.0 1.5 9.0 10.0 9.3 1.5 1.5 10 1 5 0.5 0 0 Cyprus Greece Italy Malta Middle OECD Spain East high & income North Africa Page 50 Doing Business 2019 Malta Figure – Resolving Insolvency in Malta and comparator economies – Measure of Quality Malta 2 2.5 1 0 Cyprus 5 3 2 1.5 Greece 5.5 2.5 1 3 Italy 5.5 3 2 3 Spain 6 3 1 2 OECD high income 5.3 2.8 2.2 1.9 Middle East & North Africa 3.3 2.2 1.2 0.4 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Malta and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 100 80 77.3 73.4 65.2 60 38.8 40 33.2 26.3 20 0 Malta Cyprus Greece Italy Spain Middle East & North Africa Page 51 Doing Business 2019 Malta Details – Resolving Insolvency in Malta Indicator Answer Score Proceeding liquidation (after BizBank will likely initiate foreclosure proceedings, because that is the quickest and most efficient an attempt at way to enforce its interest. To prevent foreclosure, Mirage's management will initiate insolvency reorganization) proceedings and will propose reorganization. BizBank, however, will be interested in recovering the debt as quickly as possible, so it is unlikely to agree to reorganization. The proceedings, therefore, will be converted into liquidation. Outcome piecemeal sale Although it is possible under the legislation to sell the hotel as a going concern, such cases are rare in Malta. Time (in years) 3.0 Bank's foreclosure attempt and Mirage's subsequent reorganization attempt will take approximately 1 year. BizBank will try to enforce its executive title first. Then, Mirage's management will file for insolvency in order to prevent foreclosure. The court will hold its first hearing, where a receiver will be appointed. The court will grant a 6 months moratorium while the receiver analyzes the financials of the company. This period can be extended, during which time Mirage could propose a reorganization plan. BizBank will reject the plan and the proceedings will be converted into liquidation. After proceedings are converted into liquidation, it will take approximately 24 months to complete the process. The court will issue a decision on liquidation of the company and a liquidator will be appointed. The liquidator will hold a creditors' meeting, after which creditors will submit their claims. The liquidator will analyze the company's financials and will make a decision on acceptance of creditors' claims. This decision is likely to be disputed by creditors and appealed. After all the claims are finalized, the court will appoint an auctioneer, who will review the assets and prepare them for sale. The sale process may take up to 6 months. Cost (% of 10.0 The cost of the procedure will amount to approximately 10% of the debtor's estate. The main estate) expenses will include attorneys' fees - 4%, remuneration of the insolvency representative - 2%, fees of other professionals involved in the case, such as accountants and assessors - 2%, and court's fees - 2%. Recovery rate 38.8 (cents on the dollar) Page 52 Doing Business 2019 Malta Details – Resolving Insolvency in Malta – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 5.5 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may 1.0 file for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (b) Yes, but a 0.5 creditor may file for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 2.0 Does the insolvency framework allow the continuation of contracts supplying essential goods No 0.0 and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after No 0.0 commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? (c) Other 0.0 Does the insolvency framework require that dissenting creditors in reorganization receive at No 0.0 least as much as what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, No 0.0 does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request information No 0.0 from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to decisions No 0.0 accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 53 Doing Business 2019 Malta Labor Market Regulation Doing Business presents detailed data for the labor market regulation indicators on the Doing Business website (http://www.doingbusiness.org). The report does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2018. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the (i) whether fixed-term contracts are prohibited for worker and the business are used. permanent tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether - Operates a supermarket or grocery store in the economy’s largest business city. nonpregnant and nonnursing women can work For 11 economies the data are also collected for the second largest business city. same night hours as men; (v) length of paid annual - Has 60 employees. leave. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them. Redundancy rules - Abides by every law and regulation but does not grant workers more benefits than (i) whether redundancy can be basis for terminating those mandated by law, regulation or (if applicable) collective bargaining workers; (ii) whether employer needs to notify agreements. and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of five fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Page 54 Doing Business 2019 Malta Labor Market Regulation - Malta Details – Labor Market Regulation in Malta Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) 48.0 Maximum length of fixed-term contracts, including renewals (months) 48.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 806.5 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 24.0 Paid annual leave for a worker with 5 years of tenure (working days) 24.0 Paid annual leave for a worker with 10 years of tenure (working days) 24.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 24.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 2.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 12.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Page 55 Doing Business 2019 Malta Severance pay for redundancy dismissal for a worker with 5 years of tenure 0.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 0.0 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 126.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 6.0 Page 56 Doing Business 2019 Malta Business Reforms in Malta In the past year, Doing Business observed a peaking of reform activity worldwide. From June 2, 2017, to May 1, 2018, 128 economies implemented a record 314 regulatory reforms improving the business climate. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2019 Dealing with Construction Permits: Malta made dealing with construction permits easier by streamlining the process of obtaining a building permit. On the other hand, the time to issue building permits has increased. DB2018 Starting a Business: Malta made starting a business easier by removing the requirement for a trading license for general commercial activities. DB2017 Starting a Business: Malta simplified the process of starting a business by reducing the time needed to register a company. Getting Credit: Malta improved access to credit information by launching a new credit registry. Paying Taxes: Malta made paying taxes more costly by replacing the capital gains tax with a property transfer tax, increasing the maximum social security contribution paid by employers. DB2016 Getting Electricity: The utility in Malta reduced the time required for getting an electricity connection by improving its supervision of trenching works. Registering Property: Malta made the transfer of a property more expensive by introducing the new property transfer tax. DB2015 Starting a Business: Malta made starting a business easier by creating an electronic link between the Registrar of Companies and the Inland Revenue Department to facilitate issuance of a tax identification number. DB2014 Dealing with Construction Permits: Malta made dealing with construction permits less costly by significantly reducing the building permit fees. Page 57 Doing Business 2019 Malta Page 58