58386 Bahamas, the © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax 978-750-4470; Internet www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax 202-522-2422; e-mail pubrights@worldbank.org. Additional copies of Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010: Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How to Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and Doing Business in 2004:Understanding Regulations may be purchased at www.doingbusiness.org. ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Bahamas, the. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the "good practice" economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good -practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011 : Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org). * Except for the Paying Taxes indicator that refers to the period January to December of 2009. Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology and the addition of new economies (in the case of the rankings). 1 Economy Rankings - Ease of Doing Business Bahamas, the is ranked 77 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Bahamas, the - Compared to global good practice economy as well as selected economies: Bahamas, the's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 77 Starting a Business 66 Dealing with Construction Permits 107 Registering Property 154 Getting Credit 72 Protecting Investors 109 Paying Taxes 50 Trading Across Borders 45 Enforcing Contracts 120 Closing a Business 34 2 Summary of Indicators - Bahamas, the Starting a Business Procedures (number) 7 Time (days) 31 Cost (% of income per capita) 9.1 Min. capital (% of income per capita) 0.0 Dealing with Construction Permits Procedures (number) 18 Time (days) 197 Cost (% of income per capita) 222.0 Registering Property Procedures (number) 7 Time (days) 48 Cost (% of property value) 12.5 Getting Credit Strength of legal rights index (0-10) 9 Depth of credit information index (0-6) 0 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 0.0 Protecting Investors Extent of disclosure index (0-10) 2 Extent of director liability index (0-10) 5 Ease of shareholder suits index (0-10) 7 Strength of investor protection index (0-10) 4.7 Paying Taxes Payments (number per year) 18 Time (hours per year) 58 Profit tax (%) 0.0 Labor tax and contributions (%) 4.5 Other taxes (%) 41.7 Total tax rate (% profit) 46.1 Trading Across Borders Documents to export (number) 5 Time to export (days) 19 Cost to export (US$ per container) 930 Documents to import (number) 5 Time to import (days) 13 Cost to import (US$ per container) 1380 3 Enforcing Contracts Procedures (number) 49 Time (days) 427 Cost (% of claim) 28.9 Closing a Business Recovery rate (cents on the dollar) 54.7 Time (years) 5.0 Cost (% of estate) 4 The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business friendly environment, this new approach shows the extent to which an economy's regulatory environment for business has changed compared with 5 years ago. This snapshot reflects all cumulative changes in an economy's business regulation as measured by the Doing Business indicators-such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection index thanks to new stock exchange rules that tighten disclosure requirements for related -party transactions. This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and Doing Business 2011 0.020 0.018 0.016 Doing business has 0.014 become easier (DB 0.012 change score) 0.010 0.008 0.006 0.004 0.002 Antigua and Grenada Dominica St. Kitts and St. Lucia Barbuda Nevis 6 1. Benchmarking Starting a Business Regulations: Bahamas, the is ranked 66 overall for Starting a Business. Ranking of Bahamas, the in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Bahamas, the compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Min. capital (number) income per (% of income Economies capita) per capita) Denmark* 0.0 New Zealand* 1 1 0.0 Selected Economy Bahamas, the 7 31 9.1 0.0 Comparator Economies Antigua and Barbuda 8 21 11.0 0.0 Dominica 5 14 22.0 0.0 Grenada 6 15 25.2 0.0 St. Kitts and Nevis 7 19 11.3 0.0 St. Lucia 5 14 23.8 0.0 * The following economies are also good practice economies for : Procedures (number): Canada Cost (% of income per capita): Slovenia 8 2. Historical data: Starting a Business in Bahamas, the Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 60 66 Procedures (number) 7 7 7 7 Time (days) 31 31 31 31 Cost (% of income per capita) 10.3 9.8 8.5 9.1 Min. capital (% of income per capita) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Starting a Business sub indicators in Bahamas, the over the past 4 years: 9 Starting a Business Summary - Bahamas, the This table summarizes the procedures and costs associated with setting up a business in the Bahamas. STANDARDIZED COMPANY Legal Form: Limited Liability Company (LLC) City: Nassau Registration Requirements: No: Procedure Time to complete Cost to complete 1 Search for a Company name and reserve the proposed name online 1 no charge 2 A lawyer prepares and notarizes the company documents 1 BSD 650 (memorandum and articles of association). 3 A stamp duty has to be obtained from the Public Treasury for the 1 BSD 795 Memorandum. 4 File the company documents at the Companies Registry 10 USD 370 5 Obtain the National Insurance Number for the Company from the 1 no charge National Insurance Board 6 Register the company for a business license at the Valuation/Business 17 USD 100 License Department of the Ministry of Finance. 7 * Company Seal 2 USD 35 10 * Takes place simultaneously with another procedure. 11 Starting a Business Details - Bahamas, the Procedure 1 Search for a Company name and reserve the proposed name online Time to complete: 1 Cost to complete: no charge Comment: The online name search system has been in place since 2004 and its estimate that less than 50% of all applicants use it while the rest still request the search in person. Since the majority of people cannot search it, it is mainly done by lawyers and service providers who include the name fees in their fees. The name reservation expires after 90 days. Procedure 2 A lawyer prepares and notarizes the company documents (memorandum and articles of association). Time to complete: 1 Cost to complete: BSD 650 Comment: Legally, only the memorandum has to be filed at the moment of the incorporation. Standard Articles of Association are available and the memorandum has to be a statutory declaration. Therefore, the most common scenario is to prepares both. Since 2001, the Bahamas has issued many provisions on anti-money laundering and since then the information requested from the client has increased. Usually, a client has to provide the law firm with a financial and a character reference as well as a copy of his or her passport. Affidavit must be executed by witness to subscribers to Memorandum and Articles of Association and a Statutory Declaration must be executed by Notary Public that has notarized the affidavit before another Notary Public. Lawyer should be a notary (at the same time) Procedure 3 A stamp duty has to be obtained from the Public Treasury for the Memorandum. Time to complete: 1 Cost to complete: BSD 795 Comment: the fees includes $60 stamp duty is payable on the first $5,000 authorized capital of the company and $3 for every additional $1,000 authorized capital. Procedure 4 File the company documents at the Companies Registry Time to complete: 10 Cost to complete: USD 370 Comment: The registration is usually done by the lawyer. The company is incorporated on the date that the incorporation documents are submitted to the Companies Registry. A registration fee of $330 is paid at the Registrar General's office($300 for the Memorandum and $30 for the Articles of Association). Once the final incorporation certificate is ready, an additional fee of $4 per page is charged to obtain a certified copy of the Memorandum & Articles of Association. Procedure 5 Obtain the National Insurance Number for the Company from the National Insurance Board Time to complete: 1 12 Cost to complete: no charge Comment: The National Insurance Number is a requirement to obtain business license. According to the National Insurance Act, every employer has to have a national insurance employer's number. This could be obtained at no cost and it can be done in a day (by mail or in person). Employer also registers the employees if they have not been registered already. The documents required for registration are birth certificate, photograph, and certificate of incorporation. Procedure 6 Register the company for a business license at the Valuation/Business License Department of the Ministry of Finance. Time to complete: 17 Cost to complete: USD 100 Comment: By law, companies has to have a business license but only non-Bahamians have to have it before starting a business. To obtain the license, the following documents have to be provided: proof of citizenship, copy of the certificate of incorporation, Registration of the business/trade name, a simple copy of the lease agreement of the office space or proof of ownership if owned, and a national insurance number. Flat fee of $100 for the first time registration is charged. However, where foreign persons enter into a contract business, such persons must pay a deposit of 1% of the value of the contract as security for the payment of a license fee to be assessed. Moreover, annual fees are levied as a percentage on the turnover of the company from the second year onwards. Procedure 7 Company Seal Time to complete: 2 Cost to complete: USD 35 Comment: A proof of seal has to be provided at the time of filing the first annual income statement. The seal is required from every company according to Art. 26 of the Companies Act. Seals are locally manufactured and can usually be obtained within 2-3 days for $30-35. 13 14 1. Benchmarking Dealing with Construction Permits Regulations: Bahamas, the is ranked 107 overall for Dealing with Construction Permits. Ranking of Bahamas, the in Dealing with Construction Permits - Compared to good practice and selected economies: 15 The following table shows Dealing with Construction Permits data for Bahamas, the compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Bahamas, the 18 197 222.0 Comparator Economies Antigua and Barbuda 13 156 24.2 Dominica 13 182 11.0 Grenada 10 149 25.9 St. Kitts and Nevis 14 67 4.8 St. Lucia 9 139 32.2 16 2. Historical data: Dealing with Construction Permits in Bahamas, the Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 100 107 Procedures (number) 18 18 18 18 Time (days) 197 197 197 197 Cost (% of income per capita) 252.0 241.6 208.6 222.0 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Bahamas, the over the past 4 years: 17 Dealing with Construction Permits in Bahamas, the The table below summarizes the procedures, time, and costs to build a warehouse in the Bahamas. BUILDING A WAREHOUSE City: Nassau Registration Requirements: No: Procedure Time to complete Cost to complete 1 Request and obtain "approval in principle" (planning permission) with the 30 days no charge Town Planning Committee 2 Request and obtain building permit at the Building Control Unit of the 120 days BSD 3,850 Ministry of Works 3 Obtain plumbing certificate 1 day no charge 4 * Request electrical certificate 1 day no charge 5 * Receive inspection for electrical certificate 1 day no charge 6 * Obtain electrical certificate 1 day no charge 7 Receive inspection - floor 1 day no charge 8 Receive inspection - walls 1 day no charge 18 9 Receive inspection - roof 1 day no charge 10 Receive final inspection 1 day no charge 11 Obtain occupancy permit 2 days no charge 12 Request electrical service 1 day no charge 13 Receive electrical inspection 1 day no charge 14 Obtain electrical service 16 days BSD 41,000 15 Request water and sewage 1 day no charge 16 * Receive water and sewage inspection 1 day no charge 17 * Obtain water and sewage service 16 days BSD 2,784 18 * Obtain telephone service 16 days BSD 150 * Takes place simultaneously with another procedure. 19 Dealing with Construction Permits Details - Bahamas, the Procedure 1 Request and obtain "approval in principle" (planning permission) with the Town Planning Committee Time to complete: 30 days Cost to complete: no charge Agency: Town Planning Comission Comment: This approval is not a pre-requisite for the building permit but most constructors would still want to obtain it in advance to make sure that their project is viable/acceptable in terms of town planning. Only the following documents have to be attached: plot and location plan, not proof of ownership needed at this point. The Committee that examines the proposal meets only every other week. The Committee members represent the different interest groups that are interested in building process. The Committee agenda is prepared by the Department of Physical Planning; The Committee also hears complaints and addresses grievances. Procedure 2 Request and obtain building permit at the Building Control Unit of the Ministry of Works Time to complete: 120 days Cost to complete: BSD 3,850 Agency: Ministry of Works Comment: The cost of the permit is a function of the surface of the construction (over 10,000 sq ft = USD 25 per 100 sq ft + 10% of the total, thus 25 * 140 + (25 *140 * 10%) = 3,500 + 350 = LCU 3,850). The permit also has to go again to the Town Planning Department to approve the zoning. The Development Control Unit estimates 90 to 120 days. Buildings Regulation Art. 4. (1) "Subject to the provisions of this Act, no person shall commence or carry on, or cause or procure to be commenced or carried on, any building operation save under and in accordance with the conditions of a valid building permit and in accordance with the provisions of this Act and any rules and the Building Code.". The status of the application can be checked online (http://65.198.211.69/mopwuserlogin/PreguntaPage.htm) Procedure 3 Obtain plumbing certificate Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Licensed plumber hired by BuildCo approves the plumbing works. After this is completed BuildCo must take the official form to the Ministry of Works Procedure 4 Request electrical certificate Time to complete: 1 day Cost to complete: no charge 20 Agency: Ministry of Works Comment: Procedure 5 Receive inspection for electrical certificate Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 6 Obtain electrical certificate Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 7 Receive inspection - floor Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 8 Receive inspection - walls Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 9 Receive inspection - roof Time to complete: 1 day Cost to complete: no charge 21 Agency: Ministry of Works Comment: Procedure 10 Receive final inspection Time to complete: 1 day Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 11 Obtain occupancy permit Time to complete: 2 days Cost to complete: no charge Agency: Ministry of Works Comment: Procedure 12 Request electrical service Time to complete: 1 day Cost to complete: no charge Agency: Bahamas Electricity Corporation Comment: Procedure 13 Receive electrical inspection Time to complete: 1 day Cost to complete: no charge Agency: Bahamas Electricity Corporation Comment: Procedure 14 Obtain electrical service Time to complete: 16 days Cost to complete: BSD 41,000 22 Agency: Bahamas Electricity Corporation Comment: Cost estimate is LCU 30,000 for overhead connection, plus LCU 5,000 for the transformer and a LCU 6,000 security deposit (only returned with 3% interest when contract with Bahamas Electric Corporation is terminated). Procedure 15 Request water and sewage Time to complete: 1 day Cost to complete: no charge Agency: Bahamas Water and Sewerage Corporation Comment: Procedure 16 Receive water and sewage inspection Time to complete: 1 day Cost to complete: no charge Agency: Bahamas Water and Sewerage Corporation Comment: Procedure 17 Obtain water and sewage service Time to complete: 16 days Cost to complete: BSD 2,784 Agency: Bahamas Water and Sewerage Corporation Comment: Bahamas Water and Sewerage Corporation will conduct the works to connect the meter to the main. BuildCo must hire a licensed plumber to connect from the meter to the building. Cost includes labor, connection fee and meter. Procedure 18 Obtain telephone service Time to complete: 16 days Cost to complete: BSD 150 Agency: Bahamas Telecommunications Company Comment: 23 24 1. Benchmarking Registering Property Regulations: Bahamas, the is ranked 154 overall for Registering Property. Ranking of Bahamas, the in Registering Property - Compared to good practice and selected economies: 25 The following table shows Registering Property data for Bahamas, the compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand* 2 Norway* 1 Saudi Arabia 0.0 Selected Economy Bahamas, the 7 48 12.5 Comparator Economies Antigua and Barbuda 7 26 10.9 Dominica 5 42 13.7 Grenada 8 47 7.4 St. Kitts and Nevis 6 81 13.3 St. Lucia 6 16 7.4 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 26 2. Historical data: Registering Property in Bahamas, the Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 151 154 Procedures (number) 7 7 7 7 Time (days) 48 48 48 48 Cost (% of property value) 12.5 12.5 12.5 12.5 3. The following graphs illustrate the Registering Property sub indicators in Bahamas, the over the past 4 years: 27 Registering Property in Bahamas, the This topic examines the steps, time, and cost involved in registering property in the Bahamas. STANDARDIZED PROPERTY Property Value: 1,076,446.40 City: Nassau Registration Requirements: No: Procedure Time to complete Cost to complete 1 Notarization of affidavits of witnesses to signatures of 1 day B$30-B$50 conveyance 2 * Lawyer or his clerk checks for encumbrances at the 1 - 2 months 2.5% of property value Registry of records (regarding any mortgages on the (simultaneous with property). Procedures 3, 4, and 5) 3 * Lawyer checks for judgements against the property at 1 day (simultaneous no cost the Supreme Court with Procedures 2, 4 and 5) 4 * Lawyer checks for other companies using the same 1 day (simultaneous no cost property at the Company Registrar. with Procedures 2,3 and 5) 5 * Real property tax status enquiry with the Valuation 1 day (simultaneous no cost office of the Ministry of Finance. with Procedure 2, 3, and 4) 6 Payment of Stamp Duty 1 day 10% of property value 28 7 Lodge the conveyance for recording at registry of 1 day B$4.5 per page records * Takes place simultaneously with another procedure. 29 Registering Property Details - Bahamas, the Procedure 1 Notarization of affidavits of witnesses to signatures of conveyance Time to complete: 1 day Cost to complete: B$30-B$50 Comment: This procedure is not required by law, but is done in practice by the registrar general as part of the registration documents. Any licensed notary public can do it but in most cases lawyers also have the notary public license. Procedure 2 Lawyer or his clerk checks for encumbrances at the Registry of records (regarding any mortgages on the property). Time to complete: 1 - 2 months (simultaneous with Procedures 3, 4, and 5) Cost to complete: 2.5% of property value Agency: Registry of Records Comment: Searches can be carried out by the Registry staff if dated only 3 months back. Otherwise all searches are done by search clerks. The fee for the search is currently $10 an hour. The Land Registry is being computerized and many deeds have already been scanned (up to 1997). Therefore, the search is still done manually, but in the future this will be done online. Procedure 3 Lawyer checks for judgements against the property at the Supreme Court Time to complete: 1 day (simultaneous with Procedures 2, 4 and 5) Cost to complete: no cost Agency: Supreme Court Comment: This search is conducted to check if there are any judgments regarding the property ­ Any charge on the judgment is levied on your estate. Procedure 4 Lawyer checks for other companies using the same property at the Company Registrar. Time to complete: 1 day (simultaneous with Procedures 2,3 and 5) Cost to complete: no cost Agency: Company Registry Comment: This is only done if the property is owned by a company. The lawyer would also check in the Articles of Association filed at the registry of a former company who (names of the registered directors) would be authorized to sign the conveyance from the seller's side. This is also a new measure of caution introduced under the new money laundering laws introduced after September 11. Procedure 5 Real property tax status enquiry with the Valuation office of the Ministry of Finance. 30 Time to complete: 1 day (simultaneous with Procedure 2, 3, and 4) Cost to complete: no cost Agency: Valuation office of the Ministry of Finance Comment: Although not required by law, it is common for the lawyer to also check if real property taxes on the property are current as they are a first charge on the property; and (2) a discharge of any mortgage granted by the seller to be evidenced prior to a new conveyance being recorded. If the seller hasn't paid them in the past, the new owner will inherit the taxes. In addition to this procedure, the buyer's lawyer might also chose to make an inquiry with utility companies (water, electricity and phone/cable). Such inquiry could be conducted within 2 weeks. Procedure 6 Payment of Stamp Duty Time to complete: 1 day Cost to complete: 10% of property value Comment: Stamp duty is payable as a percent of the value of the property. Paid at the Public Treasury. The rates for stamp duty are as follows: Stamp duty is payable as a percent of the value of the property. The rates of stamp duty applicable to deeds of conveyance, assignments or transfers of realty are as follows: · When the amount or value does not exceed $20,000, the rate is 2%. · Exceeding $20,000, but not exceeding $50,000, the rate is 4%. · Exceeding $50,000, but not exceeding $100,000, the rate is 6%. · Exceeding $100,000, but not exceeding $250,000, the rate is 8%. · Exceeding $250,000, the rate is 10%. Procedure 7 Lodge the conveyance for recording at registry of records Time to complete: 1 day Cost to complete: B$4.5 per page Agency: Registry of Records Comment: 31 32 1. Benchmarking Getting Credit Regulations: Bahamas, the is ranked 72 overall for Getting Credit. Ranking of Bahamas, the in Getting Credit - Compared to good practice and selected economies: 33 The following table shows Getting Credit data for Bahamas, the compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand* 100.0 Portugal 67.1 Singapore* 10 United Kingdom 6 Selected Economy Bahamas, the 9 0 0.0 0.0 Comparator Economies Antigua and Barbuda 7 0 0.0 0.0 Dominica 9 0 0.0 0.0 Grenada 8 0 0.0 0.0 St. Kitts and Nevis 7 0 0.0 0.0 St. Lucia 8 0 0.0 0.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 34 2. Historical data: Getting Credit in Bahamas, the Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 69 72 Strength of legal rights index (0-10) 9 9 9 9 Depth of credit information index (0-6) 0 0 0 0 Private bureau coverage (% of adults) .. 0.0 0.0 0.0 Public registry coverage (% of adults) .. 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Bahamas, the over the past 4 years: 35 Getting Credit in Bahamas, the The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in the Bahamas. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 0 bureau registry Are data on both firms and individuals distributed? No No 0 Are both positive and negative data distributed? No No 0 Does the registry distribute credit information from retailers, trade No No 0 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? No No 0 Is data on all loans below 1% of income per capita distributed? No No 0 Is it guaranteed by law that borrowers can inspect their data in the No No 0 largest credit registry? Coverage 0.0 0.0 Number of individuals 0 0 Number of firms 0 0 36 Strength of legal rights index (0-10) 9 Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yes institution accept such assets as collateral ? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Yes without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Yes requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, Yes proceeds or replacements of the original assets ? Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yes and debts can be secured by stating a maximum amount rather than a specific amount between the parties ? Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the Yes grantor's name of a security right ? Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes Do secured creditors have absolute priority to their collateral in bankruptcy procedures? No During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? Yes Does the law authorize parties to agree on out of court enforcement? Yes 37 38 1. Benchmarking Protecting Investors Regulations: Bahamas, the is ranked 109 overall for Protecting Investors. Ranking of Bahamas, the in Protecting Investors - Compared to good practice and selected economies: 39 The following table shows Protecting Investors data for Bahamas, the compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Bahamas, the 4.7 Comparator Economies Antigua and Barbuda 6.3 Dominica 6.3 Grenada 6.3 St. Kitts and Nevis 6.3 St. Lucia 6.3 40 2. Historical data: Protecting Investors in Bahamas, the Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 108 109 Strength of investor protection index (0-10) 4.7 4.7 4.7 4.7 3. The following graph illustrates the Protecting Investors index in Bahamas, the compared to best practice and selected Economies: 9.7 6.3 6.3 6.3 6.3 6.3 4.7 a da ic ud nd nd a he in i na rb a a uc N tts ,t a om re al .L a as i is Ba igu an t. K Ze G D ev m St nt ha ew S A d Ba N Note: The higher the score, the greater the investor protection. 41 Protecting Investors in Bahamas, the The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in the Bahamas. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 2 1 What corporate body provides legally sufficient approval for the transaction? 0 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 0 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 1 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 5 1 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 1 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 42 1 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 7 3 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 1 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 0 Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the transaction? 1 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit? Strength of investor protection index (0-10) 4.7 43 44 1. Benchmarking Paying Taxes Regulations: Bahamas, the is ranked 50 overall for Paying Taxes. Ranking of Bahamas, the in Paying Taxes - Compared to good practice and selected economies: 45 The following table shows Paying Taxes data for Bahamas, the compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives* 3 0 Timor-Leste 0.2 Selected Economy Bahamas, the 18 58 46.1 Comparator Economies Antigua and Barbuda 56 207 41.5 Dominica 38 120 37.0 Grenada 30 140 45.3 St. Kitts and Nevis 24 155 52.7 St. Lucia 32 92 34.0 * The following economies are also good practice economies for : Payments (number per year): Qatar 46 2. Historical data: Paying Taxes in Bahamas, the Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 43 50 Total tax rate (% profit) 46.1 46.1 46.1 46.1 Payments (number per year) 18 18 18 18 Time (hours per year) 58 58 58 58 3. The following graphs illustrate the Paying Taxes sub indicators in Bahamas, the over the past 4 years: 47 Paying Taxes in Bahamas, the The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Bahamas, the, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Vehicle tax 1 BSD variable 0.00 100-350 Land Tax 1 BSD 100 0r market value 0.80 1.5% if land of land value is higher than BSD 7000 Fuel tax 1 27.5% + 7% diesel fuel 1.20 Stamp on all Fuels Property tax 1 1 and 2% market value 1.60 of property Social security 12 48 5.4% gross salaries 4.50 contributions Stamp duty 1 10.0% sale price 5.10 Business license fee 1 10 1.5% or BSD turnover or 33.00 500,000 flat fee (whichever is greater) 48 Totals 18 58 46.1 49 50 1. Benchmarking Trading Across Borders Regulations: Bahamas, the is ranked 45 overall for Trading Across Borders. Ranking of Bahamas, the in Trading Across Borders - Compared to good practice and selected economies: 51 The following table shows Trading Across Borders data for Bahamas, the compared to good practice and comparator economies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark* 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Bahamas, the 5 19 930 5 13 1380 Comparator Economies Antigua and Barbuda 5 15 1133 5 15 1633 Dominica 7 13 1297 8 15 1310 Grenada 6 10 876 5 15 2129 St. Kitts and Nevis 4 12 850 5 13 2138 St. Lucia 5 14 1700 8 18 2745 * The following economies are also good practice economies for : Time to export (days): Estonia 52 2. Historical data: Trading Across Borders in Bahamas, the Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 41 45 Cost to export (US$ per container) 930 930 930 930 Cost to import (US$ per container) 1380 1380 1380 1380 Documents to export (number) 5 5 5 5 Documents to import (number) 5 5 5 5 Time to export (days) 16 16 16 19 Time to import (days) 13 13 13 13 3. The following graphs illustrate the Trading Across Borders sub indicators in Bahamas, the over the past 4 years: 53 54 Trading Across Borders in Bahamas, the These tables list the procedures necessary to import and export a standardized cargo of goods in Bahamas, the. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 7 300 Customs clearance and technical control 3 130 Ports and terminal handling 7 200 Inland transportation and handling 2 300 Totals 19 930 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 7 300 Customs clearance and technical control 3 130 Ports and terminal handling 2 650 Inland transportation and handling 1 300 Totals 13 1380 55 Documents for Export and Import Export Bill of lading Cargo release order Commercial invoice Customs export declaration Packing list Import Bill of lading Cargo release order Commercial invoice Packing list Certificate of origin 56 57 1. Benchmarking Enforcing Contracts Regulations: Bahamas, the is ranked 120 overall for Enforcing Contracts. Ranking of Bahamas, the in Enforcing Contracts - Compared to good practice and selected economies: 58 The following table shows Enforcing Contracts data for Bahamas, the compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Bahamas, the 49 427 28.9 Comparator Economies Antigua and Barbuda 45 351 22.7 Dominica 47 681 36.0 Grenada 47 688 32.6 St. Kitts and Nevis 47 578 20.5 St. Lucia 47 635 37.3 59 2. Historical data: Enforcing Contracts in Bahamas, the Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 120 120 Procedures (number) 49 49 49 49 Time (days) 427 427 427 427 Cost (% of claim) 28.9 28.9 28.9 28.9 3. The following graphs illustrate the Enforcing Contracts sub indicators in Bahamas, the over the past 4 years: 60 Enforcing Contracts in Bahamas, the This topic looks at the efficiency of contract enforcement in Bahamas, the. Nature of Procedure (2010) Indicator Procedures (number) 49 Time (days) 427 Filing and service 7.0 Trial and judgment 240.0 Enforcement of judgment 180.0 Cost (% of claim)* 28.90 Attorney cost (% of claim) 18.0 Court cost (% of claim) 2.9 Enforcement Cost (% of claim) 8.0 61 Court information: Nassau Supreme Court of the Commonwealth of the Bahamas * Claim assumed to be equivalent to 200% of income per capita. 62 63 1. Benchmarking Closing Business Regulations: Bahamas, the is ranked 34 overall for Closing a Business. Ranking of Bahamas, the in Closing Business - Compared to good practice and selected economies: 64 The following table shows Closing Business data for Bahamas, the compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore* 1 Selected Economy Bahamas, the 54.7 5.0 4 Comparator Economies Antigua and Barbuda 36.7 3.0 7 Dominica 0.0 no practice no practice Grenada 0.0 no practice no practice St. Kitts and Nevis 0.0 no practice no practice St. Lucia 41.5 2.0 9 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 65 2. Historical data: Closing Business in Bahamas, the Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 31 34 Time (years) 5.0 5.0 5.0 5.0 Cost (% of estate) 4 4 4 4 Recovery rate (cents on the dollar) 54.7 54.7 54.7 54.7 3. The following graphs illustrate the Closing Business sub indicators in Bahamas, the over the past 4 years: 66 Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000 reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117 economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and export regulations and improving credit information systems. The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 67 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Antigua and Barbuda In Antigua and Barbuda, to transfer property now requires clearance by the chief surveyor to avoid mischievous declarations. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. 68 Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 69 70