Doing Business 2018 Bhutan Economy Pro le of Bhutan Doing Business 2018 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 Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, 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 and total tax 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 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 rms. 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 distance to frontier 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 e cient regulation; o ers 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 o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent 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 rst 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 bene ted 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. Page 2   for insolvency Doing Business Labor market 2018 regulation Bhutan Flexibility in employment regulation and aspects of job quality 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 rms. 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 distance to frontier 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 e cient regulation; o ers 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 o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent 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 rst 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 bene ted 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. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region South Asia DB 2018 Rank 190 1 Bhutan Income Category Lower middle income 75 Population 797,765 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 2,510 0 100 66.27 City Covered Thimphu DB 2018 Distance to Frontier (DTF) 0 100 77.44: Thailand (Rank: 26) 66.27: Bhutan (Rank: 75) 65.29: China (Rank: 78) 60.76: India (Rank: 100) 54.42: Maldives (Rank: 136) Page 3   53.64: Regional Average (South Asia) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Bhutan Ease of Doing Business in Region South Asia DB 2018 Rank 190 1 Bhutan Income Category Lower middle income 75 Population 797,765 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 2,510 0 100 66.27 City Covered Thimphu DB 2018 Distance to Frontier (DTF) 0 100 77.44: Thailand (Rank: 26) 66.27: Bhutan (Rank: 75) 65.29: China (Rank: 78) 60.76: India (Rank: 100) 54.42: Maldives (Rank: 136) 53.64: Regional Average (South Asia) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Bhutan 1 17 26 25 28 56 56 55 77 82 82 88 Rank 109 124 136 163 168 190 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 Distance to Frontier (DTF) on Doing Business topics - Bhutan 100 94.25 86.33 88.00 80.36 80 73.41 68.69 69.99 60 55.00 DTF 46.67 40 20 0.00 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.20 Change:+0.01 Change:+5.00 Investors Change:0.00 Borders Change:+2.78 Change:0.00 Change:+0.74 Permits Change:+1.67 Change:0.00 Change:+0.19 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.20 Change:+0.01 Change:+5.00 Investors Change:0.00 Borders Change:+2.78 Change:0.00 Change:+0.74 Permits Change:+1.67 Change:0.00 Doing Business 2018 Bhutan Change:+0.19 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in 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 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 distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Bhutan Standardized Company Legal form Limited Liability Company Paid-in minimum capital requirement BTN 0 City Covered Thimphu OECD high Indicator Bhutan South Asia income Overall Best Performer Procedure – Men (number) 8 7.9 4.9 1.00 (New Zealand) Time – Men (days) 12 15.4 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 3.9 21.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 8 8.1 4.9 1.00 (New Zealand) Time – Women (days) 12 15.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 3.9 21.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 0.2 8.7 0.00 (113 Economies) Figure – Starting a Business in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.34: Thailand (Rank: 36) 89.06: Maldives (Rank: 68) 86.33: Bhutan (Rank: 88) 85.47: China (Rank: 93) 83.27: Regional Average (South Asia) 75.40: India (Rank: 156) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Bhutan – Procedure, Time and Cost Time Cost 12 2 10 ost (% of income per capita) 1.5 8 Time (days) 6 1 4 Page 6   0.5 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Bhutan Figure – Starting a Business in Bhutan – Procedure, Time and Cost Time Cost 12 2 10 Cost (% of income per capita) 1.5 8 Time (days) 6 1 4 0.5 2 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 di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Conduct a company name search 1 to 3 days BTN 1,000 Agency : Company Registry Division - Ministry of Economic A airs The entrepreneurs submit a company name search application to verify the uniqueness of the desired company name. The rules for permitted company name is de ned by the Chapter 5 of the Companies Act, 2016. No company shall be incorporated with a name which, in the opinion of the Registrar, is undesirable or is identical with, or too nearly resembles the name by which a company in existence has been previously registered. Preliminary search of availability of the name can be done online at http://www.cra.gov.bt/searchCompanyName . There is an option to conduct name search and approval online, however, the majority of promoters prefer to do this in person. Name search is free of charge, and after approval it is possible to reserve the name at a fee of Nu. 1,000. 2 Obtain a Security Clearance Certi cate (SCC) from the Royal Bhutan 1 day no charge Police (simultaneous with Agency : Royal Bhutan Police previous procedure) In June 2011, The Ministry of Home and Cultural A airs launched the Security Clearance Service: an online system to issue Security Clearance Certi cates (SCC). The system was developed in coordination with the Department of Information Technology and Telecom at the Ministry of Industry and Commerce in response to the directives issued by the Bhutan Cabinet on March 27, 2009. The security clearance certi cate is valid for one year. It is possible to request SCC online at www.sec.rbp.bt. Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Bhutan Details – Starting a Business in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Conduct a company name search 1 to 3 days BTN 1,000 Agency : Company Registry Division - Ministry of Economic A airs The entrepreneurs submit a company name search application to verify the uniqueness of the desired company name. The rules for permitted company name is de ned by the Chapter 5 of the Companies Act, 2016. No company shall be incorporated with a name which, in the opinion of the Registrar, is undesirable or is identical with, or too nearly resembles the name by which a company in existence has been previously registered. Preliminary search of availability of the name can be done online at http://www.cra.gov.bt/searchCompanyName . There is an option to conduct name search and approval online, however, the majority of promoters prefer to do this in person. Name search is free of charge, and after approval it is possible to reserve the name at a fee of Nu. 1,000. 2 Obtain a Security Clearance Certi cate (SCC) from the Royal Bhutan 1 day no charge Police (simultaneous with Agency : Royal Bhutan Police previous procedure) In June 2011, The Ministry of Home and Cultural A airs launched the Security Clearance Service: an online system to issue Security Clearance Certi cates (SCC). The system was developed in coordination with the Department of Information Technology and Telecom at the Ministry of Industry and Commerce in response to the directives issued by the Bhutan Cabinet on March 27, 2009. The security clearance certi cate is valid for one year. It is possible to request SCC online at www.sec.rbp.bt. The SCC clearance given by Ministry of home is now integrated with online single window registry system and veri cation of a persons SCC status can be availed simultaneously with company registration through online portal of O ce of the Registrar (www.cra.gov.bt). 3 Submit project proposal to the Industrial Department Division (IDD) of 4 days BTN 600 the Ministry of Economic A airs Agency : Industrial Department Division (IDD) of the Ministry of Economic A airs An application form along with the project proposal is submitted to the Industrial Department Division (IDD) of the Ministry of Economic A airs. In the case of small and cottage-scale companies with startup capital of up to BTN 10 million, the Regional Trade & Industry O ce of the Department of Cottage and Small Industries reviews the project proposal. The project proposal approval is required to verify that the proposed industrial project is in line with industrial development plans of the country, and for issuance of the industrial license. The Doing Business case-study does not need location or environmental clearance. Online services of the Department of Cottage and Small Industry were introduced at https://www.citizenservices.gov.bt/moea-services. After submitting the project proposal online, it may be requested to follow-up in person in order to submit additional documents or provide further Page 8   clari cations. be availed simultaneously with company registration through online portal Doing of O ce of the Business Registrar 2018 (www.cra.gov.bt). Bhutan 3 Submit project proposal to the Industrial Department Division (IDD) of 4 days BTN 600 the Ministry of Economic A airs Agency : Industrial Department Division (IDD) of the Ministry of Economic A airs An application form along with the project proposal is submitted to the Industrial Department Division (IDD) of the Ministry of Economic A airs. In the case of small and cottage-scale companies with startup capital of up to BTN 10 million, the Regional Trade & Industry O ce of the Department of Cottage and Small Industries reviews the project proposal. The project proposal approval is required to verify that the proposed industrial project is in line with industrial development plans of the country, and for issuance of the industrial license. The Doing Business case-study does not need location or environmental clearance. Online services of the Department of Cottage and Small Industry were introduced at https://www.citizenservices.gov.bt/moea-services. After submitting the project proposal online, it may be requested to follow-up in person in order to submit additional documents or provide further clari cations. 4 Register at the O ce of the Registrar 2 days BTN 1,500 Agency : Regulatory Authority for Companies - Ministry of Economic A airs Company registration is subject to the Companies Act, 2006. Upon applying for registration, the entrepreneur must present his/her original citizenship identity card and submit the following documents to the Regulatory Authority for Companies: 1. Articles of Incorporation 2. Company name clearance form 3. Consent to act as Directors of the company form 4. Declaration of compliance form signed by the company directors 5. Sectoral clearance from the concerned sectors (if applicable) 6. Name and Address of the rst Chief Executive O cer of the company 7. Security Clearance Certi cates of company directors The company receives its certi cate of incorporation. Once the documents are processed, the Registrar of Companies issues the certi cate of registration. The registered company may choose to publish a notice in the Kuensel weekly newspaper announcing its registration. Registration fees are as follows: - For an authorized share capital up to BTN 1 million: BTN 1,000 - For an authorized share capital between BTN 1 million and BTN 2 million: BTN 1,500 Page 9   - For authorized share capital above BTN 2 million: BTN 2,000 person in order to submit additional documents or provide further Doing clari cations. Business 2018 Bhutan 4 Register at the O ce of the Registrar 2 days BTN 1,500 Agency : Regulatory Authority for Companies - Ministry of Economic A airs Company registration is subject to the Companies Act, 2006. Upon applying for registration, the entrepreneur must present his/her original citizenship identity card and submit the following documents to the Regulatory Authority for Companies: 1. Articles of Incorporation 2. Company name clearance form 3. Consent to act as Directors of the company form 4. Declaration of compliance form signed by the company directors 5. Sectoral clearance from the concerned sectors (if applicable) 6. Name and Address of the rst Chief Executive O cer of the company 7. Security Clearance Certi cates of company directors The company receives its certi cate of incorporation. Once the documents are processed, the Registrar of Companies issues the certi cate of registration. The registered company may choose to publish a notice in the Kuensel weekly newspaper announcing its registration. Registration fees are as follows: - For an authorized share capital up to BTN 1 million: BTN 1,000 - For an authorized share capital between BTN 1 million and BTN 2 million: BTN 1,500 - For authorized share capital above BTN 2 million: BTN 2,000 5 Obtain a business license from the Regional Trade and Industry O ce of 1 to 2 days BTN 3,100 the Ministry of Economic A airs Agency : Regional Trade and Industry O ce To apply for the license, the following documents must be submitted: 1- Application Form for Industrial License (Form III) 2- Citizenship ID Card 3- Sector Clearance (depending on activity) 4- Location Clearance obtained from the Thimphu City Corporation (Dzongkhag or Thromde) 5- Valid Security Clearance Certi cate 6- Two recent passport size photographs 7- Project Approval from the Department of Cottage & Small Industry for cottage and small industries and from the Department of industry for medium and large scale industries. License fees are as follows: - For cottage scale industries: BTN 1,600 - For small scale industries: BTN 3,100 - For medium scale industries: BTN 6,100 Page 10   - For large scale industries: BTN 12,100 For authorized Doing -Business 2018share capital above BTN 2 million: BTN 2,000 Bhutan 5 Obtain a business license from the Regional Trade and Industry O ce of 1 to 2 days BTN 3,100 the Ministry of Economic A airs Agency : Regional Trade and Industry O ce To apply for the license, the following documents must be submitted: 1- Application Form for Industrial License (Form III) 2- Citizenship ID Card 3- Sector Clearance (depending on activity) 4- Location Clearance obtained from the Thimphu City Corporation (Dzongkhag or Thromde) 5- Valid Security Clearance Certi cate 6- Two recent passport size photographs 7- Project Approval from the Department of Cottage & Small Industry for cottage and small industries and from the Department of industry for medium and large scale industries. License fees are as follows: - For cottage scale industries: BTN 1,600 - For small scale industries: BTN 3,100 - For medium scale industries: BTN 6,100 - For large scale industries: BTN 12,100 Cottage industries are those industries with an investment of less than Nu.1 million and engaging up to 4 people. Small industries are undertakings engaging between 5 and 19 employees with investment from Nu.1 to Nu.10 million. Medium industries employ between 20 to 99 people with investment from Nu.10 to Nu.100 million and large industries are undertakings with an investment of more than Nu.100 million employing 100 or more employees. Where there is a con ict, investment will take precedence over employment in de ning the scale of business. Since July 1, 2005, applications forms for trade and industrial licenses can be downloaded from the Ministry of Trade and Industry’s website (www.moea.gov.bt). Photocopies of application forms are accepted. Online licensing portal of the government was launched at https://www.citizenservices.gov.bt/moea-services. However, the majority of entrepreneurs prefer to perform the procedure in person. 6 Register for taxes and obtain the Business Identi er Code (BIC) Number 1 day no charge Agency : Department of Revenue and Customs, Ministry of Finance Every company must register for corporate income tax. A Business Identi cation Code (BIC, also called TPN) is then assigned to the company. This BIC number must be presented to participate in public tenders and works. On January 1, 2015, the Department of Revenue and Customs has launched an online platform RAMIS (available at drc.gov.bt), which can be used to register for income tax and obtain BIC. However, the majority of entrepreneurs prefers to perform registration in person. 7 Make a company seal 1 day BTN 100 to BTN 1,200 Agency : Seal maker According to Section 225 of the Companies Act, 2016, companies may have a common seal. The company seal is required to open a bank account. 8 Open a bank account 1 day no charge Page 11   (simultaneous with According to Section 225 of the Companies Act, 2016, companies may have a Doing common seal. Business The company 2018 Bhutanseal is required to open a bank account. 8 Open a bank account 1 day no charge Agency : Commercial Bank (simultaneous with previous Majority of companies open the bank account as soon as they register. procedure) Company shall submit the bank account details to the Department of Revenue and Customs. Applies to women only. Takes place simultaneously with previous procedure. 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 noti cations, 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 certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) Page 12   - Will have an average water use of 662 liters (175 gallons) a day and an Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Bhutan 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 noti cations, 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 certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow 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 ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 13   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Bhutan Standardized Warehouse Estimated value of warehouse BTN 8,699,721.10 City Covered Thimphu OECD high Indicator Bhutan South Asia income Overall Best Performer Procedures (number) 21 16.0 12.5 7.00 (Denmark) Time (days) 150 193.9 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.1 17.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.0 8.7 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 74.58: Thailand (Rank: 43) 72.87: Maldives (Rank: 54) 68.69: Bhutan (Rank: 82) 56.21: Regional Average (South Asia) 47.28: China (Rank: 172) 38.80: India (Rank: 181) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost Time Cost 1.2 140 1 120 Cost (% of warehouse value) 100 0.8 Time (days) 80 0.6 60 0.4 40 0.2 20 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 * 20 21 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 14   component indicators. Doing Business 2018 Bhutan Figure – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost Time Cost 1.2 140 1 120 Cost (% of warehouse value) 100 0.8 Time (days) 80 0.6 60 0.4 40 0.2 20 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 * 20 21 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 di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Bhutan and comparator economies – Measure of Quality 14 12.0 12 11.5 11.0 9.6 10 8.7 Index score 8 7.0 6 4 2 0 Bhutan China India Maldives Thailand South Asia Details – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain an o cial site plan 5 days BTN 100 Agency : Thimphu Thromde After a fee is paid, the o cial site plan is obtained from the survey section of the City Corporation. 2 Request and obtain building permit 90 days BTN 86,022 Agency : Thimphu Thromde (Architecture Section) During stage 1 of the approval process, the company must submit a duly completed form to the architecture section of the Thimphu Thromde (City Corporation), along with the following: Page 15   Bhutan China India Maldives Thailand South Asia Doing Business 2018 Bhutan Details – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain an o cial site plan 5 days BTN 100 Agency : Thimphu Thromde After a fee is paid, the o cial site plan is obtained from the survey section of the City Corporation. 2 Request and obtain building permit 90 days BTN 86,022 Agency : Thimphu Thromde (Architecture Section) During stage 1 of the approval process, the company must submit a duly completed form to the architecture section of the Thimphu Thromde (City Corporation), along with the following: i. Latest Plot/Land Ownership Certi cate ii. Latest/re-validated o cial site plan issued by Urban Planning Division of Thimphu Thromde ii. Certi cate of the Architect and design engineers and Construction Development Board (CDB) registration number of the design Architect iv. Three sets of Architectural drawings (A3 size) drawn to a suitable scale v. Three sets of Structural drawings (A3 size) vi. Three sets of Electrical drawings (A3 size) vii. Three sets of Sanitary/Sewerage drawings (A3 size) viii. Three sets of Plumbing/Water supply drawings (A3 size) ix. Three sets of Utility (Telephone/Internet) drawings (A3 size) x. Three sets of Drainage drawings (A3 size) During stage 2 the architecture section will undergo a planning check with the structural, electrical, sewerage, and water supply sections. Although this is an internal process carried out by the City Corporation, not the company, BuildCo must follow up to ensure progress. During stage 3, the Head of the Architecture Section receives the proposal with recommendations and ndings for nal approval. As with stage 2, BuildCo must follow up on the progress of this internal process. The cost is the following: • Amenities fee: 1. Residential and institutional building: BTN 30.00 per sq. m. 2. Commercial and industrial building: BTN 50.00 per sq. m. • Scrutiny fee: BTN 3,000.00 or BTN 16.14 per sq. m. (the greater of). 3 Notify the Municipality of the beginning of construction 1 day no charge Agency : Thimphu Thromde BuildCo must pick up its construction permit. A preconstruction site inspection must be requested in writing. Upon starting construction, the company noti es the City Corporation in writing. 4 Receive pre-construction inspection 1 day no charge Page 16   Agency : Thimphu Thromde (Building Section) Upon starting construction, the company noti es the City Corporation in Doing writing. Business 2018 Bhutan 4 Receive pre-construction inspection 1 day no charge Agency : Thimphu Thromde (Building Section) Upon BuildCo’s request to the City Corporation’s building section, the building inspector conducts a site inspection. Afterwards, routine inspections occur every 3 weeks. If the work is not conducted according to plan, the City Corporation issues a notice to rectify the process. If the company does not comply with the rst notice, the utility company disconnects service. If the company does not comply with the third notice, the structure will be demolished (in the presence of a building inspector, engineer, architect, surveyor, and police personnel). 5 Request water connection and inspection 1 day BTN 3,200 Agency : Thimphu Thromde To obtain a water connection, BuildCo must submit an application to the building section of the City Corporation and pay a connection fee of BTN 3,200.00 for a 1.5 inch pipe to the revenue section of the water company. 6 Receive inspection of water connection 1 day no charge Agency : Thimphu Thromde (Building Section) All connections must be veri ed in advance to check whether they comply with water and sanitation rules. The wait time is about 7 -- 9 days. 7 Receive excavation work inspection 1 day no charge Agency : Thimphu Thromde Excavation work is inspected about 3 weeks after the previous inspection. Thus, Buildco does not have to request an inspection. Moreover, BuildCo does not need to stop work during inspection. However, it must provide the inspector with transportation to the site. 8 Receive foundation work inspection 1 day no charge Agency : Thimphu Thromde Foundation work is inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 9 Receive ground oor inspection 1 day no charge Agency : Thimphu Thromde The ground oor work is inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 10 Receive drainage inspection 1 day no charge Agency : Thimphu Thromde Drainage work is inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo Company does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 11 Receive rst oor inspection 1 day no charge Agency : Thimphu Thromde The rst oor work is inspected about 3 weeks after the previous inspection. Page 17   Thus, BuildCo does not have to request an inspection. Moreover, BuildCo Company does not need to stop work during the inspection. However, it Doing must provide Business the inspector 2018 Bhutan with transportation to the site. 11 Receive rst oor inspection 1 day no charge Agency : Thimphu Thromde The rst oor work is inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 12 Receive second oor inspection 1 day no charge Agency : Thimphu Thromde The second oor work is inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 13 Receive sanitary inspection 1 day no charge Agency : Thimphu Thromde Sanitary conditions are inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 14 Receive re inspection 1 day no charge Agency : Fire Department Fire conditions are inspected about 3 weeks after the previous inspection. Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does not need to stop work during the inspection. However, it must provide the inspector with transportation to the site. 15 Receive structure inspection 1 day no charge Agency : Thimphu Thromde 16 Receive inspection of the building surroundings 1 day no charge Agency : Thimphu Thromde 17 Notify building controller of building completion 1 day no charge Agency : Thimphu Thromde (Building Section) A written con rmation, stating that construction is completed, is issued to the building controller. 18 Receive nal inspection 1 day no charge Agency : Thimphu Thromde When the construction (including utility connections) is completed, BuildCo must notify the City Corporation. Subsequently, the site will be inspected by a team (architect, engineer, surveyor, the Corporation’s building inspector, and representatives of electrical, plumbing, and sanitation agencies). The environmental commission and the telephone company are also informed and asked to join the team, if necessary. If the team deems that the construction has been completed according to the agreed standard and plans, it recommends the issuance of an occupancy certi cate. Otherwise, they ask BuildCo to remedy the de ciencies. 19 Connect to sewage services 25 days BTN 3,000 Agency : Thimphu Thromde Page 18   To obtain sewage services, BuildCo submits an application to the head of plans, it recommends the issuance of an occupancy certi cate. Otherwise, Doing they ask BuildCo Business 2018 to remedy the de ciencies. Bhutan 19 Connect to sewage services 25 days BTN 3,000 Agency : Thimphu Thromde To obtain sewage services, BuildCo submits an application to the head of sewerage section of Thimpu Thromde through architect cell for new sewerage connection with a copy of the plan and a connection fee of BTN 3,000. The application should include the sewerage layout drawings, and ensure that the distance between the proposed sewer connection and the nearest municipal sewer do not exceed 70 m (as per the ‘water and sanitation rules, 1995). The technical feasibility for sewer connection shall be carried out at site. The application should also include a drawing of the lay out and the alignment of the sewer. The nal connection to the municipal manhole shall be veri ed and approved by TCC. Connect to water services 21 days BTN 3,200 20 Agency : Thimpu Thromde In order to obtain a new water connection, BuildCo must submit a duly lled application form to the water supply section. The forms are available at the Engineering Division and Water Complaint O ces or can be downloaded from the TCC website. The Building Section will conduct veri cation check for the feasibility of the connection, and water Meter will be issued after the approval from Engineering Division and the payments for connection. BuildCo carries out necessary works for connection, and TCC will connect the private line to the municipal main. v.The property owner shall also be responsible for the maintenance of the water meter after the installation. vi.The Meter Chamber must be built according to the Standard Water Meter Chamber Drawing which can be collected from the o ce or can be downloaded from the website. Meter shall be installed only when the meter chamber is ready. 21 Request and obtain occupancy certi cate 14 days no charge Agency : Thimphu Thromde Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Bhutan – Measure of Quality Answer Score Building quality control index (0-15) 12.0 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 speci ed 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. Page 19   Quality control before construction index (0-1) 1.0 Takes place simultaneously with previous procedure. Doing Business 2018 Bhutan Details – Dealing with Construction Permits in Bhutan – Measure of Quality Answer Score Building quality control index (0-15) 12.0 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 speci ed 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) architect; Licensed 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 Inspections at 1.0 construction? (0-2) various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 Page 20   Liability Insurance or Decennial Insurance)? (0-1) to obtain Doing Business 2018 Bhutan insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. 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 tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. 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 are (number) 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 receiving all necessary inspections data are 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 purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a Page 21   subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little architect or engineer. Doing Business 2018 Bhutan 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 tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. 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 are (number) 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 receiving all necessary inspections data are 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 purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 22   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Bhutan Standardized Connection Price of electricity (US cents per kWh) 5.5 Name of utility Bhutan Power Corporation Ltd City Covered Thimphu OECD high Indicator Bhutan South Asia income Overall Best Performer Procedures (number) 4 5.7 4.7 2 (United Arab Emirates) Time (days) 61 136.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 461.4 1163.2 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 2.1 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.99: Thailand (Rank: 13) 85.21: India (Rank: 29) 80.36: Bhutan (Rank: 56) 68.83: China (Rank: 98) 56.52: Regional Average (South Asia) 53.69: Maldives (Rank: 143) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Bhutan – Procedure, Time and Cost Time Cost 60 500 50 400 Cost (% of income per capita) 40 Time (days) 300 30 200 20 100 10 Page 23   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Bhutan Figure – Getting Electricity in Bhutan – Procedure, Time and Cost Time Cost 60 500 50 400 Cost (% of income per capita) 40 Time (days) 300 30 200 20 100 10 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 di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Bhutan and comparator economies – Measure of Quality 8 7 7 7 6 6 5 Index score 5 4 3 2.1 2 1 0 0 Bhutan China India Maldives Thailand South Asia Details – Getting Electricity in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Bhutan Power Corporation and await site 5 calendar days BTN 0 inspection Agency : Bhutan Power Corporation The customer submits an application, in person, along with the building drawings to Bhutan Power Corporation and await site the site inspection. There is no charge for the application and no documents has to be notarized. 2 Receive site inspection and await estimate 7 calendar days BTN 0 Agency : Bhutan Power Corporation The utility will conducts an external site inspection and a cost estimate will Page 24   Bhutan China India Maldives Thailand South Asia Doing Business 2018 Bhutan Details – Getting Electricity in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to Bhutan Power Corporation and await site 5 calendar days BTN 0 inspection Agency : Bhutan Power Corporation The customer submits an application, in person, along with the building drawings to Bhutan Power Corporation and await site the site inspection. There is no charge for the application and no documents has to be notarized. 2 Receive site inspection and await estimate 7 calendar days BTN 0 Agency : Bhutan Power Corporation The utility will conducts an external site inspection and a cost estimate will be provided to the customer. 3 Purchase equipment and carry out external works 42 calendar days BTN 801,274.55 Agency : Electrical contractor The cost estimate provided to the customer also includes the cost of the required materials such as a250 KVA substation, rabbit conductor, cables, poles and line extension. The customer has a choice of getting external connection works done by either the utility or by a private contractor. In general, customers choose to have the external done by the private contractor as it can be done faster. All materials, except the distribution transformer are purchased from the utility as they have materials of the correct speci cation. The distribution transformer needs to be imported, usually from India. 4 Receive internal wiring inspection, transformer testing, meter 7 calendar days BTN 1,500 installation and electricity ow Agency : Bhutan Power Corporation The utility inspects the internal wiring, conducts testing of the transformer and installs the meter. The customer pays the meter deposit charge and electricity is turned-on by the utility. Takes place simultaneously with previous procedure. Details – Getting Electricity in Bhutan – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.8 System average interruption frequency index (SAIFI) 1.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Page 25   Does the distribution utility use automated tools to monitor outages? No Takes place simultaneously with previous procedure. Doing Business 2018 Bhutan Details – Getting Electricity in Bhutan – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 2.8 System average interruption frequency index (SAIFI) 1.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 0 Does the distribution utility use automated tools to monitor outages? No Mechanisms for restoring service (0-1) 0 Does the distribution utility use automated tools to restore service? No Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.bpc.bt/ut ilities/electricity- tari s/ Are customers noti ed of a change in tari 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 tari 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. 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 ve 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 June 2017. See the methodology for more information. Page 26   What the indicators measure Case study assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Bhutan 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 ve 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 June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value BTN 8,699,721.10 City Covered Thimphu Page 27   OECD high Doing Business 2018 Bhutan Standard Property Transfer Property value BTN 8,699,721.10 City Covered Thimphu OECD high Indicator Bhutan South Asia income Overall Best Performer Procedures (number) 3 6.8 4.6 1.00 (4 Economies) Time (days) 77 111.6 22.3 1.00 (3 Economies) Cost (% of property value) 5.0 6.9 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 24.0 8.0 22.7 29.00 (Singapore) Figure – Registering Property in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.15: China (Rank: 41) 73.41: Bhutan (Rank: 56) 68.75: Thailand (Rank: 68) 47.08: India (Rank: 154) 45.97: Regional Average (South Asia) 39.97: Maldives (Rank: 174) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Bhutan – Procedure, Time and Cost Time Cost 6 70 5 60 Cost (% of property value) 50 4 Time (days) 40 3 30 2 20 1 10 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 28   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Bhutan Figure – Registering Property in Bhutan – Procedure, Time and Cost Time Cost 6 70 5 60 Cost (% of property value) 50 4 Time (days) 40 3 30 2 20 1 10 0 0 1 2 3 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 di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Bhutan and comparator economies – Measure of Quality 30 25 24.0 20 18.3 18.0 Index score 15 10 8.2 8.5 8.0 5 0 Bhutan China India Maldives Thailand South Asia Details – Registering Property in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Complete and submit the Land Transfer Form to the Thimphu District about 75 days no cost Municipality (TDM) Agency : Thimmphu Thromde 1. A complete set of Land Transfer Form is submitted to the Thimphu Thromdey (Thimphu Municipality O ce), which issues PIN (Personal Identi cation Number). 2. As per Section 161 of the Land Act 2007, the Thimphu Thromdey shall post a notice of the transaction for public viewing for 30 days. 3. If no objection is raised, the Forms are validated and submitted to National Land Commission Secretariat within 7 Days after completion of the public viewing (Section 164 of the Land Act 2007). Since the Case Study Page 29   provided mentions that the property in question is to be sold without Bhutan China India Maldives Thailand South Asia Doing Business 2018 Bhutan Details – Registering Property in Bhutan – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Complete and submit the Land Transfer Form to the Thimphu District about 75 days no cost Municipality (TDM) Agency : Thimmphu Thromde 1. A complete set of Land Transfer Form is submitted to the Thimphu Thromdey (Thimphu Municipality O ce), which issues PIN (Personal Identi cation Number). 2. As per Section 161 of the Land Act 2007, the Thimphu Thromdey shall post a notice of the transaction for public viewing for 30 days. 3. If no objection is raised, the Forms are validated and submitted to National Land Commission Secretariat within 7 Days after completion of the public viewing (Section 164 of the Land Act 2007). Since the Case Study provided mentions that the property in question is to be sold without fragmentation, Section 163 does not apply. 4. After the receipt of the forms by the National Land Commission Secretariat, ownership changes are e ected in the land registration certi cate. The certi cate is then sent back to Thimphu Thromde. 5. The Thromde then informs the buyer to pay the transfer tax after which the certi cate is issued to the new land owner. 2 Buyer pays the transfer tax at the Thimphu Thromde Revenue Section 1 day 5% of property value Agency : Thimmphu Thromde The buyer pays the transfer tax at the Thimphu Thromde Revenue Section and collects the Revenue Certi cate, as proof of payment (separate building). The Revenue Section is closed on Thursday and Friday. From Monday October 18, 2010 the Revenue Section set up an o ce in the same building as the Land Records Section and company can pay in the same building. The company will pick up an already ready Revenue Certi cate upon payment. The company must pay transfer tax with the Thimphu Thromde within 2 months otherwise the buyer will be asked to pay charges, i.e 5% of the land tax applicable multiplied by the number of days from the two months payment has to be done with the TT. 3 Buyer collects Ownership Certi cate and Revenue Certi cate at the 1 day BTN 200 Thimphu Thromde Land Records Section Agency : Thimmphu Thromde The ownership certi cate guarantees all legal rights to the owner. The certi cate is supported by a site plan/map and is issued upon the landowner's request. Takes place simultaneously with previous procedure. Details – Registering Property in Bhutan – Measure of Quality Answer Score Quality of the land administration index (0-30) 24.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Thimphu Page 30   Thromde Takes place simultaneously with previous procedure. Doing Business 2018 Bhutan Details – Registering Property in Bhutan – Measure of Quality Answer Score Quality of the land administration index (0-30) 24.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Thimphu Thromde In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Thimphu Thromdey & National land commission In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital 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 Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Records are not 0.0 immovable property registration in the largest business city? publicly available Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: www.nlcs.gov.bt 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://www.thim phucity.bt/index. php/2014-01-10- 10-38- 48/property- land-transection Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 31   48/property- Doing Business 2018 Bhutan land-transection Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.nlcs.g ov.bt/wp- content/uploads /2016/09/The- Land-Act-of- Kingdom-of- Bhutan-2007- English.pdf Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 1927.0 Who is able to consult maps of land plots in the largest business city? Records are not 0.0 publicly available Is the applicable fee schedule for accessing maps of land plots made publicly available No 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: www.nlcs.gov.bt  and  http://www.thim phucity.bt Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 8.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 6.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Page 32   Land dispute Doing 2018 index resolution Business (0–8) Bhutan 6.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private No 0.0 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property 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? Lawyer. Does the legal system require veri cation 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? Interested Parties. 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 the Royal Court property worth 50 times gross national income (GNI) per capita and located in the of Justice largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. 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 Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information Page 33   whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Bhutan Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. 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 Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) 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. OECD high Indicator Bhutan South Asia income Overall Best Performer Strength of legal rights index (0-12) 4 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.0 6.6 8.00 (34 Economies) Page 34   Credit registry coverage (% of adults) 0.0 3.8 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Bhutan OECD high Indicator Bhutan South Asia income Overall Best Performer Strength of legal rights index (0-12) 4 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 3.8 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 25.9 14.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: India (Rank: 29) 70.00: Thailand (Rank: 42) 60.00: China (Rank: 68) 55.00: Bhutan (Rank: 77) 46.25: Regional Average (South Asia) 35.00: Maldives (Rank: 133) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Bhutan and comparator economies 9 8 8 7 7 6 Index score 5.3 5 4 4 4 3 2 2 1 0 Bhutan China India Maldives Thailand South Asia Details – Legal Rights in Bhutan Strength of legal rights index (0-12) 4 Does an integrated or uni ed 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 Yes requiring a speci c description of collateral? Page 35   Bhutan China India Maldives Thailand South Asia Doing Business 2018 Bhutan Details – Legal Rights in Bhutan Strength of legal rights index (0-12) 4 Does an integrated or uni ed 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 Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be 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 uni ed geographically No and by 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 No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (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 No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or 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 Yes allow 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 Bhutan and comparator economies 10 8 8 7 7 7 Index score 6 5 4.0 4 2 0 Bhutan China India Maldives Thailand South Asia Details – Credit Information in Bhutan Page 36   0 Bhutan Doing Business 2018 Bhutan China India Maldives Thailand South Asia Details – Credit Information in Bhutan Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 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 banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 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 140,167 0 Number of firms 1,225 0 Total 141,392 0 Percentage of adult population 25.9 0.0 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 June 2017. 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 of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 37   transactions; Available legal remedies (damages, Percentage of adult population 25.9 0.0 Doing Business 2018 Bhutan 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 June 2017. 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 of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. OECD high Indicator Bhutan South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 4.7 5.5 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 4.7 5.3 6.4 Page 38   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Bhutan OECD high Indicator Bhutan South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 4.7 5.5 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 4.7 5.3 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: India (Rank: 4) 73.33: Thailand (Rank: 16) 53.75: Regional Average (South Asia) 48.33: China (Rank: 119) 46.67: Bhutan (Rank: 124) 43.33: Maldives (Rank: 132) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Bhutan and comparator economies – Measure of Quality Bhutan 5 4 4 5 4 6 China 9 1 10 2 3 4 India 8 7 8 8 10 7 Maldives 4 8 01 5 8 Thailand 7 7 10 7 5 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 South Asia 6.1 5.9 5.6 5.8 6.5 6.4 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Bhutan – Measure of Quality Answer Score Page 39   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Bhutan Details – Protecting Minority Investors in Bhutan – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 4.7 Extent of disclosure index (0-10) 4 Which corporate body is legally su cient 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 con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 4 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by No 0.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove speci c facts in the plainti ’s Page 40   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Bhutan Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 2.0 directly prove speci c facts in the plainti ’s claim Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 4.7 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 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 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 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 a ected No 0.0 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 members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the No 0.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Page 41   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 Can shareholders remove members of the board of directors without cause before the No 0.0 end of Doing their term? Business 2018 Bhutan Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% No 0.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 5 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? No 0.0 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? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial 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 No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? 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 measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. Page 42   Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Bhutan 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 measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. 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 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. OECD high Indicator Bhutan South Asia income Overall Best Performer Payments (number per year) 18 28.5 10.9 3 (Hong Kong SAR, China) Page 43   return, but within the tax assessment period. Doing Business 2018 Bhutan OECD high Indicator Bhutan South Asia income Overall Best Performer Payments (number per year) 18 28.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 85 277.3 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 35.3 43.0 40.1 18.47% (32 Economies) Postfiling index (0-100) 95.50 41.05 83.45 99.38 (Estonia) Figure – Paying Taxes in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 88.00: Bhutan (Rank: 17) 76.73: Thailand (Rank: 67) 66.08: Maldives (Rank: 118) 66.06: India (Rank: 119) 62.90: China (Rank: 130) 59.55: Regional Average (South Asia) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax 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 rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Bhutan and comparator economies – Measure of Quality 120 100 95.50 80 73.41 Index score 60 49.08 49.31 46.10 41.05 40 20 0 Bhutan China India Maldives Thailand South Asia Details – Paying Taxes in Bhutan Tax or Total tax and mandatory Payments Notes on Time contribution rate Notes on contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) TTR Page 44   Corporate 2 53 30% taxable 33.86 Doing Business 2018 Bhutan Figure – Paying Taxes in Bhutan and comparator economies – Measure of Quality 120 100 95.50 80 73.41 Index score 60 49.08 49.31 46.10 41.05 40 20 0 Bhutan China India Maldives Thailand South Asia Details – Paying Taxes in Bhutan Tax or Total tax and mandatory Payments Notes on Time contribution rate Notes on contribution (number) Payments (hours) Statutory tax rate Tax base (% of profit) TTR Corporate 2 53 30% taxable 33.86 income tax profit Property tax 1 BTN 75 per unit 0.97 Business 1 varies from BTN 500 to size of 0.28 license 25,000 building and land Annual vehicle 1 BTN 6,000 (Fees and fixed fee 0.18 registration charges) + BTN 7,000 (Motov vehicle tax) Tax on interest 0 5% interest 0.12 included income in other taxes Stamp duty 1 BTN 10 per 0.00 small signature amount Employee paid - 0 jointly 1% gross 0.00 withheld Health salaries insurance Personal 12 32 various rates gross 0.00 withheld income tax salaries Totals 18 85 35.3 Details – Paying Taxes in Bhutan – Tax by Type Taxes by type Answer Profit tax (% of profit) 33.9 Labor tax and contributions (% of profit) 0.0 Page 45   Totals 18 85 35.3 Doing Business 2018 Bhutan Details – Paying Taxes in Bhutan – Tax by Type Taxes by type Answer Profit tax (% of profit) 33.9 Labor tax and contributions (% of profit) 0.0 Other taxes (% of profit) 1.4 Details – Paying Taxes in Bhutan – Measure of Quality Answer Score Post ling index (0-100) 95.50 VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process N/A Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT No VAT Time to obtain a VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 75% - 100% Time to comply with a corporate income tax audit (hours) 3.0 97.25 Time to complete a corporate income tax audit (weeks) 2.0 93.75 Notes: Names of taxes have been standardized. For instance income tax, pro t 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 post ling 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 audit and time to complete a corporate income tax audit. N/A = Not applicable. 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 tari s) 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 June 2017. See the methodology for more information. Page 46   Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Bhutan 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 tari s) 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 June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. 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 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import 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, airport 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 47   of agriculture or industry, national security agencies and any other Doing Business 2018 Bhutan government authorities. OECD high Indicator Bhutan South Asia income Overall Best Performer Time to export: Border compliance (hours) 5 59.4 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 59 369.8 149.9 0.00 (19 Economies) Time to export: Documentary compliance 9 77.0 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 50 179.5 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 5 113.8 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 110 638.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 8 104.7 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 50 341.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 94.25: Bhutan (Rank: 26) 84.10: Thailand (Rank: 57) 69.91: China (Rank: 97) 58.56: India (Rank: 146) 58.32: Regional Average (South Asia) 55.87: Maldives (Rank: 152) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Bhutan – Time and Cost Time Cost 10 110 120 9 8 100 8 80 Time (hours) Cost (USD) 6 5 59 5 50 50 60 4 40 2 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 48   Doing Business 2018 Bhutan Figure – Trading across Borders in Bhutan – Time and Cost Time Cost 10 110 120 9 8 100 8 80 Time (hours) Cost (USD) 6 5 59 5 50 50 60 4 40 2 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Bhutan Characteristics Export Import Product HS 72 : Iron and steel HS 8708: Parts and accessories of motor vehicles Trade partner India India Border Jaigaon border crossing Jaigaon border crossing Distance (km) 175 175 Domestic transport time (hours) 8 8 Domestic transport cost (USD) 287 287 Details – Trading across Borders in Bhutan – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.2 12.7 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 1.9 46.5 Import: Clearance and inspections required by customs authorities 2.7 13.6 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 5.0 96.5 Details – Trading across Borders in Bhutan – Trade Documents Export Import Commercial invoice Commercial invoice Certificate of origin Customs import declaration Page 49   Domestic transport cost (USD) 287 287 Doing Business 2018 Bhutan Details – Trading across Borders in Bhutan – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 5.2 12.7 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 1.9 46.5 Import: Clearance and inspections required by customs authorities 2.7 13.6 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 5.0 96.5 Details – Trading across Borders in Bhutan – Trade Documents Export Import Commercial invoice Commercial invoice Certificate of origin Customs import declaration Customs export declaration Insurance certificate Insurance certificate Packing list Packing list Certificate of origin Purchase order Purchase order Shipping bill Report quality certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. 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 courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees Page 50   economies the data are also collected for the second largest business city. Report quality certificate Doing Business 2018 Bhutan Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. 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 courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment 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. Standardized Case Claim value BTN 322,344.00 Court name Thimphu District Court, Commercial Bench City Covered Thimphu OECD high Indicator Bhutan South Asia income Overall Best Performer Time (days) 225 1101.6 577.8 164.00 (Singapore) Cost (% of claim value) 23.1 29.6 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 8.0 7.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.23: China (Rank: 5) 69.99: Bhutan (Rank: 25) 67.91: Thailand (Rank: 34) Page 51   of judicial processes Quality Business Doing index (0-18) 2018 Bhutan 8.0 7.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.23: China (Rank: 5) 69.99: Bhutan (Rank: 25) 67.91: Thailand (Rank: 34) 55.07: Maldives (Rank: 106) 43.48: Regional Average (South Asia) 40.76: India (Rank: 164) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Bhutan – Time and Cost Time Cost 1600 35 1445 31.0 1400 29.6 30 Cost (% of claim value) 1200 23.1 1101.6 25 21.5 Time (days) 1000 20 16.2 760 16.5 16.9 800 577.8 15 600 496.3 420 10 400 225 200 5 0 0 Bhutan China India Maldives OECD high income South Asia Thailand Figure – Enforcing Contracts in Bhutan and comparator economies – Measure of Quality Bhutan 2.5 3 0 2.5 China 3 4.5 3 4.5 India 2.3 1.5 2 4.5 Maldives 1.5 0 1 4 Thailand 2.5 2 1 3 OECD high income 2.5 2.9 2 3.6 South Asia 2.3 1.1 0.8 3.2 0 2 4 6 8 10 12 14 Page 52   16 0 0 Bhutan China India Maldives OECD high income South Asia Thailand Doing Business 2018 Bhutan Figure – Enforcing Contracts in Bhutan and comparator economies – Measure of Quality Bhutan 2.5 3 0 2.5 China 3 4.5 3 4.5 India 2.3 1.5 2 4.5 Maldives 1.5 0 1 4 Thailand 2.5 2 1 3 OECD high income 2.5 2.9 2 3.6 South Asia 2.3 1.1 0.8 3.2 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Bhutan Indicator Time (days) 225 Filing and service 20 Trial and judgment 90 Enforcement of judgment 115 Cost (% of claim value) 23.1 Attorney fees 23 Court fees 0.1 Enforcement fees 0 Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 2.5 Case management (0-6) 3.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Bhutan – Measure of Quality Page 53   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Bhutan Details – Enforcing Contracts in Bhutan – Measure of Quality Answer Score Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 2.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 0.0 2.a. Is there a small claims court or a fast-track procedure for small claims? No 2.b. If yes, is self-representation allowed? n.a. 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? No 0.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 3.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? 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) Yes 1.0 time to 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 Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 54   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Bhutan 2. Is it possible to carry out service of process electronically for claims led 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 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 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 nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? 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 for the project was completed in June 2017. 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 Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 55   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Bhutan 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 for the project was completed in June 2017. 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 Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. 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) OECD high Indicator Bhutan South Asia income Overall Best Performer Recovery rate (cents on the dollar) 0.0 32.7 71.2 93.1 (Norway) Time (years) no practice 2.6 1.7 0.4 (Ireland) Page 56   Cost (% of estate) no practice 9.9 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Bhutan OECD high Indicator Bhutan South Asia income Overall Best Performer Recovery rate (cents on the dollar) 0.0 32.7 71.2 93.1 (Norway) Time (years) no practice 2.6 1.7 0.4 (Ireland) Cost (% of estate) no practice 9.9 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 0.0 4.9 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Bhutan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.64: Thailand (Rank: 26) 55.82: China (Rank: 56) 40.75: India (Rank: 103) 33.26: Maldives (Rank: 139) 33.04: Regional Average (South Asia) 0.00: Bhutan (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Bhutan – Time and Cost Time Cost 4.5 4.3 25 22.0 4 3.5 18.0 20 Cost (% of estate) Time (years) 3 2.6 15 2.5 2 1.7 1.7 9.1 9.9 9.0 1.5 1.5 10 1.5 1 4.0 5 0.5 0 0 no practice China India Maldives OECD high income South Asia Thailand Bhutan Figure – Resolving Insolvency in Bhutan and comparator economies – Measure of Quality Bhutan 1 2 1 0 Page 57   China 5 3 1 2.5 no practice China India Maldives OECD high income South Asia Thailand Bhutan Doing Business 2018 Bhutan Figure – Resolving Insolvency in Bhutan and comparator economies – Measure of Quality Bhutan 1 2 1 0 China 5 3 1 2.5 India 4.5 2 1 1 Maldives 0 2 0 Thailand 5 2.5 2 3 OECD high income 5.4 2.8 2.3 1.9 South Asia 2.6 2 0.9 0.4 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Bhutan and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 80 68.0 70 60 50.2 50 40 36.9 32.7 30 26.4 20 10 0.0 0 Bhutan China India Maldives Thailand South Asia Details – Resolving Insolvency in Bhutan Indicator Answer Explanation Proceeding No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. In case you do not agree with this lack of practice, please provide details in the present section. Outcome piecemeal sale According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. In case you do not agree with this lack of practice, please provide details in the present section. Time (in years) No Practice Page 58   According to the research conducted by the team, there were no foreclosure, liquidation or Bhutan China India Maldives Thailand South Asia Doing Business 2018 Bhutan Details – Resolving Insolvency in Bhutan Indicator Answer Explanation Proceeding No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. In case you do not agree with this lack of practice, please provide details in the present section. Outcome piecemeal sale According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. In case you do not agree with this lack of practice, please provide details in the present section. Time (in years) No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Cost (% of No Practice According to the research conducted by the team, there were no foreclosure, liquidation or estate) reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Recovery rate (cents on the 0.0 dollar) Details – Resolving Insolvency in Bhutan – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 0.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le 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) 1.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 Page 59   dollar) Doing Business 2018 Bhutan Details – Resolving Insolvency in Bhutan – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 0.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le 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) 1.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods 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? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after 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? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, 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 No 0.0 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? Page 60   Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment Doing Businessof the 2018insolvency Bhutanrepresentative? 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 No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions 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”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-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 nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. 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 Page 61   leave; (iv) whether employees on maternity leave the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Bhutan Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-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 nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. 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 ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Bhutan Answer Hiring Page 62   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Bhutan Details – Labor Market Regulation in Bhutan Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 54.1 Ratio of minimum wage to value added per worker 0.2 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) 0.0 Premium for overtime work (% of hourly pay) 0.0 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) 9.0 Paid annual leave for a worker with 5 years of tenure (working days) 18.0 Paid annual leave for a worker with 10 years of tenure (working days) 18.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 15.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 63   Third-party Doing approval Business 2018 if nine workers are dismissed? Bhutan No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 5.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 9.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 10.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 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)? 56.0 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? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Bhutan In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Bhutan implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Bhutan made starting a business easier by reducing the time for obtaining a Security Clearance Certi cate, registering at the O ce of the Registrar and registering for taxes. Getting Credit: Bhutan improved access to credit information by beginning to distribute payment data from two utility companies. Protecting Minority Investors: Bhutan strengthened minority investor protections by clarifying ownership and control structures but weakened minority investor protections by reducing shareholder rights. Page 64   Enforcing Contracts: Bhutan made enforcing contracts easier by creating a dedicated bench to resolve commercial cases. Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Bhutan Business Reforms in Bhutan In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Bhutan implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Bhutan made starting a business easier by reducing the time for obtaining a Security Clearance Certi cate, registering at the O ce of the Registrar and registering for taxes. Getting Credit: Bhutan improved access to credit information by beginning to distribute payment data from two utility companies. Protecting Minority Investors: Bhutan strengthened minority investor protections by clarifying ownership and control structures but weakened minority investor protections by reducing shareholder rights. Enforcing Contracts: Bhutan made enforcing contracts easier by creating a dedicated bench to resolve commercial cases. DB2016 Getting Electricity: Bhutan made getting electricity easier by speeding up the process for obtaining a new connection. Registering Property: Bhutan made transferring property easier by introducing a computerized land information system. DB2014 Starting a Business: Bhutan made starting a business easier by reducing the time required to obtain the security clearance certi cate. Getting Credit: Bhutan improved access to credit information through new regulations governing the licensing and functioning of the credit bureau and guaranteeing borrowers’ right to access their data. DB2013 Labor Market Regulation: Bhutan introduced a minimum wage. DB2012 Starting a Business: Bhutan eased the process of starting a business by making its criminal records search electronic and making the rubber company stamps available on the local market. Getting Credit: Bhutan improved its credit information system by launching the operation of a public credit registry. DB2011 Labor Market Regulation: Bhutan established the mandatory paid annual leave. DB2009 Enforcing Contracts: Bhutan eased the caseload of district courts by creating a land commission to handle property transfers (previously about 30% of all district court cases), thereby reducing the time required to enforce contracts through the courts. DB2008 Starting a Business: Bhutan made it easier to start a limited liability trading company by eliminating 2 procedures—name approval and location clearance—and increasing e ciency at the company registrar. Labor Market Regulation: Bhutan increased the maximum duration of xed-term contracts, eliminated restrictions on night work, introduced a requirement for third-party noti cation for redundancy dismissals and increased redundancy costs. Page 65   Labor Market Regulation: Bhutan increased the maximum duration of xed-term contracts, eliminated restrictions on night work, introduced 2018 forBhutan a requirement Doing Business third-party noti cation for redundancy dismissals and increased redundancy costs. Page 66