58480 Denmark © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet www.worldbank.org All rights reserved. 1 2 3 4 08 07 06 05 A copublication of The World Bank and the International Finance Corporation. This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. 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ISBN: 978-0-8213-7960-8 E-ISBN: 978-0-8213-8630-9 DOI: 10.1596/978-0-8213-7960-8 ISSN: 1729-2638 Library of Congress Cataloging-in-Publication data has been applied for. Printed in the United States Current features News on the Doing Business project http://www.doingbusiness.org Rankings How economies rank-from 1 to 183 http://www.doingbusiness.org/rankings/ Contents Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004 Introduction and a ranking simulation tool and Aggregate Rankings http://www.doingbusiness.org/reforms/ 5 - Year Measure of Historical data Cumulative Change Customized data sets since DB2004 http://www.doingbusiness.org/custom-query/ Starting a Business Methodology and research Dealing with The methodologies and research papers underlying Doing Business Construction Permits http://www.doingbusiness.org/Methodology/ Registering Property Download reports Access to Doing Business reports as well as subnational and regional Getting Credit reports, reform case studies and customized country and regional profiles Protecting Investors http://www.doingbusiness.org/reports/ Paying Taxes Subnational and regional projects Differences in business regulations at the subnational and regional Trading Across Borders level http://www.doingbusiness.org/subnational-reports/ Enforcing Contracts Law Library Closing a Business Online collection of business laws and regulations relating to business and gender issues Doing Business 2011 http://www.doingbusiness.org/law-library/ Business Reforms http://wbl.worldbank.org/ Local partners More than 8,200 specialists in 183 economies who participate in Doing Business http://www.doingbusiness.org/Local-Partners/Doing-Business/ Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet Doing Business 2011 : Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business's life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy 's proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Denmark. 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 Denmark is ranked 6 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business. Denmark - Compared to global good practice economy as well as selected economies: Denmark's ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 6 Starting a Business 27 Dealing with Construction Permits 10 Registering Property 30 Getting Credit 15 Protecting Investors 28 Paying Taxes 13 Trading Across Borders 5 Enforcing Contracts 30 Closing a Business 5 2 Summary of Indicators - Denmark Starting a Business Procedures (number) 4 Time (days) 6 Cost (% of income per capita) 0.0 Min. capital (% of income per capita) 26.0 Dealing with Construction Permits Procedures (number) 6 Time (days) 69 Cost (% of income per capita) 61.7 Registering Property Procedures (number) 3 Time (days) 42 Cost (% of property value) 0.6 Getting Credit Strength of legal rights index (0-10) 9 Depth of credit information index (0-6) 4 Public registry coverage (% of adults) 0.0 Private bureau coverage (% of adults) 5.4 Protecting Investors Extent of disclosure index (0-10) 7 Extent of director liability index (0-10) 5 Ease of shareholder suits index (0-10) 7 Strength of investor protection index (0-10) 6.3 Paying Taxes Payments (number per year) 9 Time (hours per year) 135 Profit tax (%) 21.9 Labor tax and contributions (%) 3.6 Other taxes (%) 3.7 Total tax rate (% profit) 29.2 Trading Across Borders Documents to export (number) 4 Time to export (days) 5 Cost to export (US$ per container) 744 Documents to import (number) 3 Time to import (days) 5 Cost to import (US$ per container) 744 3 Enforcing Contracts Procedures (number) 35 Time (days) 410 Cost (% of claim) 23.3 Closing a Business Recovery rate (cents on the dollar) 89.4 Time (years) 1.1 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 0.14 0.12 0.10 Doing business has 0.08 become easier (DB 0.06 change score) 0.04 0.02 0.00 Doing business has -0.02 become more difficult or more -0.04 France Denmark Germany Finland Norway Iceland costly 6 1. Benchmarking Starting a Business Regulations: Denmark is ranked 27 overall for Starting a Business. Ranking of Denmark in Starting a Business - Compared to good practice and selected economies: 7 The following table shows Starting a Business data for Denmark 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 Denmark 4 6 0.0 26.0 Comparator Economies Finland 3 14 1.1 7.9 France 5 7 0.9 0.0 Germany 9 15 4.8 0.0 Iceland 5 5 2.3 12.0 Norway 5 7 1.8 20.0 * 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 Denmark Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 27 27 Procedures (number) 4 4 4 4 Time (days) 6 6 6 6 Cost (% of income per capita) 0.0 0.0 0.0 0.0 Min. capital (% of income per capita) 40.7 40.1 38.6 26.0 3. The following graphs illustrate the Starting a Business sub indicators in Denmark over the past 4 years: 9 Starting a Business Summary - Denmark This table summarizes the procedures and costs associated with setting up a business in Denmark. STANDARDIZED COMPANY Legal Form: Anpartselskab (ApS) City: Copenhagen Registration Requirements: No: Procedure Time to complete Cost to complete 1 Obtain a digital signature 1 no charge 2 Deposit startup capital at a bank 1 no charge 3 Register the company with the Danish Commercial and Companies 3 no charge Agency over Webreg system 4 Register employees with workmen's insurance 1 no charge 10 Starting a Business Details - Denmark Procedure 1 Obtain a digital signature Time to complete: 1 Cost to complete: no charge Comment: The digital signature is obtained from www.digitalsignatur.dk. Procedure 2 Deposit startup capital at a bank Time to complete: 1 Cost to complete: no charge Comment: Procedure 3 Register the company with the Danish Commercial and Companies Agency over Webreg system Time to complete: 3 Cost to complete: no charge Comment: The business and tax registrations are centralized in a one-stop service, so all registrations are processed when a new limited liability company is registered with the Danish Commerce and Companies Agency. The Webreg system, which captures new and updated registration information, is connected to a backend database that automatically validates the input data. Memoranda of incorporation and articles of association are submitted electronically, with the entire process taking place on the Internet without agency official involvement or approval. To obtain security for payment of the startup capital, lawyers, accountants, or bank employees log on to Webreg's capital information page and confirm the type and amount of capital by using their digital signature. After completing registration, the client obtains a registration receipt, stating the business identification number and confirming that the registration is visible at www.cvr.dk., where the National Gazette is published electronically. Procedure 4 Register employees with workmen's insurance Time to complete: 1 Cost to complete: no charge Comment: Employees must be registered with one of the private insurance companies. More information and companies that insure can be found at www.forsikringsoplysningen.dk/. 11 12 1. Benchmarking Dealing with Construction Permits Regulations: Denmark is ranked 10 overall for Dealing with Construction Permits. Ranking of Denmark in Dealing with Construction Permits - Compared to good practice and selected economies: 13 The following table shows Dealing with Construction Permits data for Denmark 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 Denmark 6 69 61.7 Comparator Economies Finland 18 66 134.2 France 13 137 23.6 Germany 12 100 61.8 Iceland 18 75 19.6 Norway 14 252 43.8 14 2. Historical data: Dealing with Construction Permits in Denmark Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 10 10 Procedures (number) 6 6 6 6 Time (days) 69 69 69 69 Cost (% of income per capita) 61.8 60.9 58.7 61.7 3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Denmark over the past 4 years: 15 Dealing with Construction Permits in Denmark The table below summarizes the procedures, time, and costs to build a warehouse in Denmark. BUILDING A WAREHOUSE City: Copenhagen Registration Requirements: No: Procedure Time to complete Cost to complete 1 Request and obtain permit to start the construction works at the 40 days DKK 186,875 municipality 2 Receive construction inspection from the supervising authority 1 day no charge 3 Request and receive connection to electricity 5 days DKK 1,000 4 * Request and receive connection to water and sewage 5 days DKK 1,000 5 * Request and receive connection to telephone 3 days DKK 1,000 6 Receive final inspection and obtain occupancy permit 21 days no charge * Takes place simultaneously with another procedure. 16 Dealing with Construction Permits Details - Denmark Procedure 1 Request and obtain permit to start the construction works at the municipality Time to complete: 40 days Cost to complete: DKK 186,875 Agency: Municipality Comment: BuildCo does not need to prepare any background information. The builder needs to prepare relevant drawings of the building to be constructed, including sewage and fire protection. On this basis, the authorities will themselves check whether the construction complies with area plans and relevant legislation, particularly legislation on fire protection. The authorities may conduct on-site inspections before issuing a permit, but this is not normal. To process the warehouse permit application, the authorities will check all relevant documents. Thus, the entire process is covered by a single procedure that covers examining the area plan, checking plans and drawings, checking the lot plan, securing fire department permission, issuing a temporary building permit, issuing the structural engineer certificate, checking the rain water drainage, and checking building compliance with the Real Estate Registry's regulations and requirements for registration and specific projects. Procedure 2 Receive construction inspection from the supervising authority Time to complete: 1 day Cost to complete: no charge Agency: Supervising Authorities (Sewage, Fire, or Safety-at-Work Authorities) Comment: During the construction process, the municipality does not generally inspect construction. If conducted, such inspections will normally include inspections by the relevant fire, sewerage, or worker safety authorities. Such inspections are carried out without prior notice. They do generally not pose delays barring lack of compliance with relevant legislation. Procedure 3 Request and receive connection to electricity Time to complete: 5 days Cost to complete: DKK 1,000 Agency: NESA Comment: Utilities connections are established by agreement with local suppliers. The time and cost depend on the supplier. Procedure 4 Request and receive connection to water and sewage Time to complete: 5 days Cost to complete: DKK 1,000 Agency: Water & Sewage Authority 17 Comment: Utilities connections are established by agreement with local suppliers. The time and cost depend on the supplier. Procedure 5 Request and receive connection to telephone Time to complete: 3 days Cost to complete: DKK 1,000 Agency: Tele-Denmark Communications Comment: Utilities connections are established by agreement with local suppliers. The time and cost depend on the supplier. Procedure 6 Receive final inspection and obtain occupancy permit Time to complete: 21 days Cost to complete: no charge Agency: Municipality Comment: To grant the usage permit, the authorities primarily check fire protection and compliance with other construction requirements. This is done by one inspection normally carried out during one day and that can normally be initiated within a few weeks of submitting the application. Time may vary greatly, depending on compliance with relevant legislation. If the building complies with the regulations, in most municipalities the permit may be obtained in a few weeks. 18 19 1. Benchmarking Registering Property Regulations: Denmark is ranked 30 overall for Registering Property. Ranking of Denmark in Registering Property - Compared to good practice and selected economies: 20 The following table shows Registering Property data for Denmark 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 Denmark 3 42 0.6 Comparator Economies Finland 3 14 4.0 France 8 59 6.1 Germany 5 40 5.1 Iceland 3 4 2.4 Norway 1 3 2.5 * The following economies are also good practice economies for : Procedures (number): United Arab Emirates Time (days): Saudi Arabia, Thailand, United Arab Emirates 21 2. Historical data: Registering Property in Denmark Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 47 30 Procedures (number) 6 6 6 3 Time (days) 42 42 42 42 Cost (% of property value) 0.6 0.6 0.6 0.6 3. The following graphs illustrate the Registering Property sub indicators in Denmark over the past 4 years: 22 Registering Property in Denmark This topic examines the steps, time, and cost involved in registering property in Denmark. STANDARDIZED PROPERTY Property Value: 15,397,780.46 City: Copenhagen Registration Requirements: No: Procedure Time to complete Cost to complete 1 Obtain relevant documents at the Land Registry 1 day DKK 420 online 2 Obtain a transcript from the Danish Commerce and 1 day DKK 16 Companies Agency documenting the power to bind the buyer 3 Apply for registration with the Land Registry online 40 days DKK 1,400 + 0.6% of transaction price (Registration fee) 23 Registering Property Details - Denmark Procedure 1 Obtain relevant documents at the Land Registry online Time to complete: 1 day Cost to complete: DKK 420 Agency: Land Registry Court (www.cuzk.cz) Comment: The following documents are obtained at the Land Registry: · copy of entries on the land register (DKK 175) · transcript of owner's property return (DKK 70) · copies of easements and other encumbrances registered on the property (DKK 175) These documents are obtained online. It is necessary to previously register with the land registry and get a user name, as well as pay for every enquiry. The more you pay, the more information is available online (max 175 DKK). In general, professional are the usual suscribers to the Land registry. Procedure 2 Obtain a transcript from the Danish Commerce and Companies Agency documenting the power to bind the buyer Time to complete: 1 day Cost to complete: DKK 16 Agency: Danish Commerce and Companies Agency Comment: The buyer or the representative obtains transcript from the Danish Commerce and Companies Agency documenting the power to bind the buyer. The buyer or the buyer's representative prepares a conveyance (sale contract), which is signed by the buyer and the seller. Procedure 3 Apply for registration with the Land Registry online Time to complete: 40 days Cost to complete: DKK 1,400 + 0.6% of transaction price (Registration fee) Agency: Land Registry Court (www.cuzk.cz) Comment: A deed is prepared containing the relevant details from the Sale Agreement. Anyone can write the deed. Normally a lawyer (conveyancer) writes the deed, but it is not mandatory. The title deed must be prepared in accordance with formal requirements laid down in or pursuant to the Land Register Act, which also states that the issuer's signature must be confirmed by two witnesses or a lawyer. At this moment, ownership is transferred, but it is still necessary to register with the land registry in order to make it opposable to third parties. Registration is made online and the system sends back an email immediately mentioning that the transaction is now complete. The registration fee is paid at the Land registry. 24 25 1. Benchmarking Getting Credit Regulations: Denmark is ranked 15 overall for Getting Credit. Ranking of Denmark in Getting Credit - Compared to good practice and selected economies: 26 The following table shows Getting Credit data for Denmark 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 Denmark 9 4 0.0 5.4 Comparator Economies Finland 7 5 0.0 14.9 France 7 4 33.3 0.0 Germany 7 6 1.0 98.4 Iceland 7 5 0.0 100.0 Norway 7 4 0.0 100.0 * The following economies are also good practice economies for : Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden, United Kingdom, United States 27 countries have the highest credit information index. 27 2. Historical data: Getting Credit in Denmark Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 14 15 Strength of legal rights index (0-10) 9 9 9 9 Depth of credit information index (0-6) 4 4 4 4 Private bureau coverage (% of adults) 11.5 5.0 5.2 5.4 Public registry coverage (% of adults) 0.0 0.0 0.0 0.0 3. The following graphs illustrate the Getting Credit sub indicators in Denmark over the past 4 years: 28 Getting Credit in Denmark The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit registries in Denmark. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 4 bureau registry Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative data distributed? No No 0 Does the registry distribute credit information from retailers, trade Yes No 1 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? Yes No 1 Is it guaranteed by law that borrowers can inspect their data in the Yes No 1 largest credit registry? Coverage 5.4 0.0 Number of individuals 208,060 0 Number of firms 37,329 0 29 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? Yes 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? No 30 31 1. Benchmarking Protecting Investors Regulations: Denmark is ranked 28 overall for Protecting Investors. Ranking of Denmark in Protecting Investors - Compared to good practice and selected economies: 32 The following table shows Protecting Investors data for Denmark compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Denmark 6.3 Comparator Economies Finland 5.7 France 5.3 Germany 5.0 Iceland 5.3 Norway 6.7 33 2. Historical data: Protecting Investors in Denmark Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 27 28 Strength of investor protection index (0-10) 6.3 6.3 6.3 6.3 3. The following graph illustrates the Protecting Investors index in Denmark compared to best practice and selected Economies: 9.7 6.7 6.3 5.7 5.3 5.3 5.0 k d ay ar y nd ce d an an an m w an a nl or en m al el Fi Fr N Ic Ze er D G ew N Note: The higher the score, the greater the investor protection. 34 Protecting Investors in Denmark The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are calculated in Denmark. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 7 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 2 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 1 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 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? 35 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 1 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company? Ease of shareholder suits index (0-10) 7 3 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 2 Whether the plaintiff can directly question the defendant and witnesses during trial? 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) 6.3 36 37 1. Benchmarking Paying Taxes Regulations: Denmark is ranked 13 overall for Paying Taxes. Ranking of Denmark in Paying Taxes - Compared to good practice and selected economies: 38 The following table shows Paying Taxes data for Denmark 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 Denmark 9 135 29.2 Comparator Economies Finland 8 243 44.6 France 7 132 65.8 Germany 16 215 48.2 Iceland 31 140 26.8 Norway 4 87 41.6 * The following economies are also good practice economies for : Payments (number per year): Qatar 39 2. Historical data: Paying Taxes in Denmark Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 12 13 Total tax rate (% profit) 33.3 29.9 29.2 29.2 Payments (number per year) 9 9 9 9 Time (hours per year) 135 135 135 135 3. The following graphs illustrate the Paying Taxes sub indicators in Denmark over the past 4 years: 40 Paying Taxes in Denmark The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year in Denmark, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (VAT) 1 online 40 25.0% value added filing Vehicle tax 1 fixed amount vehicle 0.00 (DKK 4,000) weight Tax on insurance 1 14.0% Sum of 0.30 contracts insurance Social security 1 online 70 DKK 2,160 per employee 0.80 contributions (ATP) filing Injury insurance 0 paid jointly DKK 4,000 per employee 1.40 contribution Social security 0 paid jointly DKK 3,840 per employee 1.40 contributions Fuel tax 1 included in 1.50 the fuel price Property tax 1 online various rates value of 1.90 filing property Corporate income tax 3 25 25.0% taxable profit 21.90 41 Totals 9 135 29.2 42 43 1. Benchmarking Trading Across Borders Regulations: Denmark is ranked 5 overall for Trading Across Borders. Ranking of Denmark in Trading Across Borders - Compared to good practice and selected economies: 44 The following table shows Trading Across Borders data for Denmark 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 Denmark 4 5 744 3 5 744 Comparator Economies Finland 4 8 540 5 8 620 France 2 9 1078 2 11 1248 Germany 4 7 872 5 7 937 Iceland 5 19 1532 5 14 1674 Norway 4 7 830 4 7 729 * The following economies are also good practice economies for : Time to export (days): Estonia 45 2. Historical data: Trading Across Borders in Denmark Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 7 5 Cost to export (US$ per container) 603 744 744 744 Cost to import (US$ per container) 603 744 744 744 Documents to export (number) 4 4 4 4 Documents to import (number) 3 3 3 3 Time to export (days) 5 5 5 5 Time to import (days) 5 5 5 5 3. The following graphs illustrate the Trading Across Borders sub indicators in Denmark over the past 4 years: 46 47 Trading Across Borders in Denmark These tables list the procedures necessary to import and export a standardized cargo of goods in Denmark. The documents required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 2 203 Customs clearance and technical control 1 75 Ports and terminal handling 1 191 Inland transportation and handling 1 275 Totals 5 744 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 2 203 Customs clearance and technical control 1 75 Ports and terminal handling 1 191 Inland transportation and handling 1 275 Totals 5 744 48 Documents for Export and Import Export Bill of lading Commercial invoice Customs export declaration Packing list Import Bill of lading Commercial invoice Customs import declaration 49 50 1. Benchmarking Enforcing Contracts Regulations: Denmark is ranked 30 overall for Enforcing Contracts. Ranking of Denmark in Enforcing Contracts - Compared to good practice and selected economies: 51 The following table shows Enforcing Contracts data for Denmark 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 Denmark 35 410 23.3 Comparator Economies Finland 32 375 13.3 France 29 331 17.4 Germany 30 394 14.4 Iceland 27 417 8.2 Norway 33 280 9.9 52 2. Historical data: Enforcing Contracts in Denmark Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 29 30 Procedures (number) 35 35 35 35 Time (days) 380 380 380 410 Cost (% of claim) 23.3 23.3 23.3 23.3 3. The following graphs illustrate the Enforcing Contracts sub indicators in Denmark over the past 4 years: 53 Enforcing Contracts in Denmark This topic looks at the efficiency of contract enforcement in Denmark. Nature of Procedure (2010) Indicator Procedures (number) 35 Time (days) 410 Filing and service 60.0 Trial and judgment 260.0 Enforcement of judgment 90.0 Cost (% of claim)* 23.30 Attorney cost (% of claim) 5.0 Court cost (% of claim) 3.3 Enforcement Cost (% of claim) 15.0 54 Court information: Copenhagen District Court ("Københavns Byret") * Claim assumed to be equivalent to 200% of income per capita. 55 56 1. Benchmarking Closing Business Regulations: Denmark is ranked 5 overall for Closing a Business. Ranking of Denmark in Closing Business - Compared to good practice and selected economies: 57 The following table shows Closing Business data for Denmark 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 Denmark 89.4 1.1 4 Comparator Economies Finland 89.4 0.9 4 France 45.2 1.9 9 Germany 53.1 1.2 8 Iceland 78.5 1.0 4 Norway 90.9 0.9 1 * The following economies are also good practice economies for : Cost (% of estate): Colombia, Kuwait, Norway 58 2. Historical data: Closing Business in Denmark Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 7 5 Time (years) 1.1 1.1 1.1 1.1 Cost (% of estate) 4 4 4 4 Recovery rate (cents on the dollar) 87.0 86.5 86.5 89.4 3. The following graphs illustrate the Closing Business sub indicators in Denmark over the past 4 years: 59 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. 60 Summary of changes to business regulation in top 10 most improved economies in Doing Business 2011 and selected comparator economies. Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier. Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks. Denmark Denmark eased business start-up by reducing the minimum capital requirement for limited liability companies from 125,000 Danish kroner ($22,850) to 80,000 Danish kroner ($14,620). Computerization of Denmark's land registry cut the number of procedures required to register property by half. Germany Germany eased business start-up by increasing the efficiency of communications between the notary and the commercial registry and eliminating the need to publish an announcement in a newspaper. Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada's customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users. Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary's bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy. Iceland Iceland made dealing with construction permits more costly by increasing the fees to obtain the design approval and receive inspections. Iceland increased the corporate income tax rate from 15% to 18% and raised social security and pension contribution rates. Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation. Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals. Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank's public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment. Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 61 Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors. Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 62 63