Doing Business 2018 Kuwait Economy Pro le of Kuwait Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Kuwait Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Middle East & North DB 2018 Rank Region 190 1 Africa Kuwait Income Category High income 96 DB 2018 Distance to Frontier (DTF) Population 4,052,584 0 100 GNI Per Capita (US$) 39,050 61.23 City Covered Kuwait City DB 2018 Distance to Frontier (DTF) 0 100 68.13: Bahrain (Rank: 66) 67.20: Oman (Rank: 71) 61.23: Kuwait (Rank: 96) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Kuwait Ease of Doing Business in Middle East & North DB 2018 Rank Region 190 1 Africa Kuwait Income Category High income 96 DB 2018 Distance to Frontier (DTF) Population 4,052,584 0 100 GNI Per Capita (US$) 39,050 61.23 City Covered Kuwait City DB 2018 Distance to Frontier (DTF) 0 100 68.13: Bahrain (Rank: 66) 67.20: Oman (Rank: 71) 61.23: Kuwait (Rank: 96) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) 44.87: Iraq (Rank: 168) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Kuwait 1 6 28 55 70 73 81 82 97 Rank 110 109 129 133 136 149 154 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Kuwait 100 92.48 77.21 80 69.60 67.55 62.20 59.58 60 55.00 54.24 DTF 39.44 40 35.00 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+4.61 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-0.14 Change:+10.44 Permits Change:0.00 Change:0.00 Change:+0.28 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.04 Change:+4.61 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-0.14 Change:+10.44 Permits Change:0.00 Change:0.00 Doing Business 2018 Kuwait Change:+0.28 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Kuwait Standardized Company Legal form Limited Liability company (WLL) Paid-in minimum capital requirement KWD 1,000 City Covered Kuwait City Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Procedure – Men (number) 9 7.7 4.9 1.00 (New Zealand) Time – Men (days) 38 18.6 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 1.7 18.7 3.1 0.00 (United Kingdom) Procedure – Women (number) 10 8.4 4.9 1.00 (New Zealand) Time – Women (days) 39 19.3 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 1.7 18.7 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 8.5 9.9 8.7 0.00 (113 Economies) Figure – Starting a Business in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.85: Oman (Rank: 31) 87.87: Bahrain (Rank: 75) 84.40: Jordan (Rank: 105) 82.05: Regional Average (Middle East & North Africa) 77.21: Kuwait (Rank: 149) 75.87: Iraq (Rank: 154) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Kuwait – Procedure, Time and Cost Time Cost 0.8 35 0.7 ost (% of income per capita) 30 0.6 25 0.5 Time (days) 20 0.4 15 0.3 Page 6   10 0.2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Kuwait Figure – Starting a Business in Kuwait – Procedure, Time and Cost Time Cost 0.8 35 0.7 Cost (% of income per capita) 30 0.6 25 0.5 Time (days) 20 0.4 15 0.3 10 0.2 5 0.1 0 0 1 2 3 4 5 6 7 8 9 * 10 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain permission to work outside the 1 day no charge marital home Agency : Home As per Article 89 of the Personal Status Law, 1984, if a woman fails to obtain the permission/support of her husband to work outside the marital home (for example, for entrepreneurial ventures) it is possible that she may su er consequences under the law. For example, if the husband consider that the work of his wife is against the well-being of the family, she could be considered disloyal (Nashez) and may not be entitled to nancial alimony 2 Register at the Kuwait Business Center (KBC) 1day + 10 days wait no charge Agency : Department of Companies to get the confirmation email To register, the entrepreneur must submit online a completed standard and go in person to application form to the Kuwait Busines Center (KBC) and submit a copy of KBC the memorandum of association. The completed application must include the names of the founding partners and their respective shares; the capital, scope and objective of the company; and the name of the manager. The applicant submits the paperwork online (www.kbc.gov.kw/) The entrepreneur can select up to 5 potential company names during the online application. Once the application is approved, it is stamped and signed by the Page 7   Department of Companies, and allocated a reference number. The MOCI (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Kuwait Details – Starting a Business in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain permission to work outside the 1 day no charge marital home Agency : Home As per Article 89 of the Personal Status Law, 1984, if a woman fails to obtain the permission/support of her husband to work outside the marital home (for example, for entrepreneurial ventures) it is possible that she may su er consequences under the law. For example, if the husband consider that the work of his wife is against the well-being of the family, she could be considered disloyal (Nashez) and may not be entitled to nancial alimony 2 Register at the Kuwait Business Center (KBC) 1day + 10 days wait no charge Agency : Department of Companies to get the confirmation email To register, the entrepreneur must submit online a completed standard and go in person to application form to the Kuwait Busines Center (KBC) and submit a copy of KBC the memorandum of association. The completed application must include the names of the founding partners and their respective shares; the capital, scope and objective of the company; and the name of the manager. The applicant submits the paperwork online (www.kbc.gov.kw/) The entrepreneur can select up to 5 potential company names during the online application. Once the application is approved, it is stamped and signed by the Department of Companies, and allocated a reference number. The MOCI electronically sends information for further checking to the Ministry of the Interior, Kuwait Fire Service Directorate and the Municipality (Baladia). 3 Retrieve the letter addressed to the bank from the Department of 1 day no charge Companies Agency : Department of Companies The entrepreneur must return to the Department of Companies to retrieve the necessary letter addressed to the commercial bank of choice where the paid-in capital of the company will be deposited. The Department of Companies may further issue additional letters addressed to di erent government authorities depending on the scope and activity of the company in order to obtain their approval of the company formation. For example, for restaurants and food establishments, a letter addressed to the Ministry of Health is issued; for the oil industry, a letter addressed to the Ministry of Oil and Energy is issued, and so forth. 4 Deposit the capital at the bank and obtain proof thereof 1 day no charge Agency : Bank In deference to the Department of Companies' letter, the bank open an account in the name of the company with the term "under formation" annexed to the account. The deposited capital remains frozen until the bank receives the notarized deed of incorporation and the commercial license of the company, following which the term "under formation" is removed and the account is activated. The bank issues a deposit certi cate in the name of the company addressed to the Ministry of Commerce and Industry, detailing Page 8   addressed to the Ministry of Health is issued; for the oil industry, a letter Doing addressed Business to the Ministry 2018 Kuwaitof Oil and Energy is issued, and so forth. 4 Deposit the capital at the bank and obtain proof thereof 1 day no charge Agency : Bank In deference to the Department of Companies' letter, the bank open an account in the name of the company with the term "under formation" annexed to the account. The deposited capital remains frozen until the bank receives the notarized deed of incorporation and the commercial license of the company, following which the term "under formation" is removed and the account is activated. The bank issues a deposit certi cate in the name of the company addressed to the Ministry of Commerce and Industry, detailing the amount deposited by each partner against his/her share in the company. 5 Sign and notarize the memorandum of association before the public 1 day KWD 2 for the first notary of the Ministry of Justice page of the Agency : Notary - Ministry of Justice Memorandum and KWD 1 for every The entrepreneur submits the draft memorandum of association along with subsequent page Department of Companies' letter and the bank capital deposit certi cate to the Notary Public Department at the Ministry of Justice. The o cer veri es that the required documents are complete and schedules an appointment for signing before the notary public at the Company Formation Department of the Ministry of Justice, during which the memorandum of association is signed by the founding partners and notarized on the set date in 3 originals: one for the company, one for the Ministry of Justice, and one to be eld with the Ministry of Commerce and Industry. 6 Obtain the commercial license from the Department of Companies 1-2 days KWD 80 Agency : Department of Companies Once the commercial registration certi cate is issued, the entrepreneur obtains the commercial license from the Department of Companies. The entrepreneur can apply online: https://mociweb01.csc.gov.kw/TradeWebsite_KBC/CompanyLicnReq.aspx 7 Receive approval of the company premises by the Municipality 5 days on average no charge Agency : Municipality The entrepreneur needs to go in person to apply for the municipality approval of the company's premises. The entrepreneur submit a copy of the MOCI trading license con rmation email and originals of the lease agreement. The municipality issues a certi cate of no objection in the name of the company, allowing the use of the indicated premises as the company location. This process usually takes 5 to 14 days. 8 Register with the Kuwait Chamber of Commerce and Industry 1 day KWD 82 for Agency : Chamber of Commerce registration and KWD 55 for annual The company must apply for membership at the Chamber of Commerce and renewal Industry by submitting copies of its commercial license and memorandum of association, and lling out a specimen signature form signed by the company's authorized signatories. The membership is a pre-requisite to dealing with other government authorities, banks and participation in public tenders. 9 Register with Public Authority for Civil Information (PACI) 15 days KWD 1 Agency : Public Authority for Civil Information (PACI) The company must register with the Public Authority for Civil Information (PACI) in order to obtain a civil number, which is required in dealing with Page 9   other governmental bodies. dealing with other government authorities, banks and participation in public Doing tenders. Business 2018 Kuwait 9 Register with Public Authority for Civil Information (PACI) 15 days KWD 1 Agency : Public Authority for Civil Information (PACI) The company must register with the Public Authority for Civil Information (PACI) in order to obtain a civil number, which is required in dealing with other governmental bodies. Register at the Ministry of Labor and Social A airs 15 days KWD 25 10 Agency : Ministry of Social A airs and Manpower (simultaneous with procedure 11) The Ministry of Labor may inspect the premises to determine whether the size of the company premises and its business scope are commensurate with the number of employees declared at the Ministry. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: Page 10   and regulatory requirements). Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Kuwait Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 11   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Kuwait Standardized Warehouse Estimated value of warehouse KWD 589,980.80 City Covered Kuwait City Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Procedures (number) 23 16.2 12.5 7.00 (Denmark) Time (days) 236 132.1 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.1 4.3 1.6 0.10 (5 Economies) Building quality control index (0-15) 13.0 11.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.73: Bahrain (Rank: 47) 72.15: Oman (Rank: 60) 67.66: Iraq (Rank: 93) 65.74: Jordan (Rank: 110) 62.20: Kuwait (Rank: 129) 59.84: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Kuwait – Procedure, Time and Cost Time Cost 0.7 200 0.6 Cost (% of warehouse value) 0.5 150 Time (days) 0.4 100 0.3 0.2 50 0.1 0 0 1 *2 3 *4 5 6 *7 *8 9 * 10 11 * 12 13 14 15 16 17 18 19 * 20 * 21 * 22 23 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Kuwait Figure – Dealing with Construction Permits in Kuwait – Procedure, Time and Cost Time Cost 0.7 200 0.6 Cost (% of warehouse value) 0.5 150 Time (days) 0.4 100 0.3 0.2 50 0.1 0 0 1 *2 3 *4 5 6 *7 *8 9 * 10 11 * 12 13 14 15 16 17 18 19 * 20 * 21 * 22 23 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Kuwait and comparator economies – Measure of Quality 14 13.0 12.0 11.8 12 11.0 11.0 10 Index score 8 6 5.5 4 2 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Dealing with Construction Permits in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Conduct soil test with private laboratory 7 days KWD 200 Agency : Private Laboratory BuildCo must conduct a soil test with a private laboratory that is certi ed by the Municipality of Kuwait. The soil test report must be submitted to the Municipality as part of the building permit application. 2 Obtain a topographical survey of the land 3 days KWD 75 Agency : Private accredited rms or the Ministry of Public Works Topographic Surveys are used to identify and map the contours of the land plot. Its purpose is to serve as a base map for the design of a building. It also shows the boundary lines and is used by designers to accurately show the Page 13   Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Doing Business 2018 Kuwait Details – Dealing with Construction Permits in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Conduct soil test with private laboratory 7 days KWD 200 Agency : Private Laboratory BuildCo must conduct a soil test with a private laboratory that is certi ed by the Municipality of Kuwait. The soil test report must be submitted to the Municipality as part of the building permit application. 2 Obtain a topographical survey of the land 3 days KWD 75 Agency : Private accredited rms or the Ministry of Public Works Topographic Surveys are used to identify and map the contours of the land plot. Its purpose is to serve as a base map for the design of a building. It also shows the boundary lines and is used by designers to accurately show the required setbacks. It is used for the site plan, which is a mandatory requirement for all construction. 3 Submit drawings and receive certi cate from the Public Authority for 30 days no charge Industry (PAI) Agency : Public Authority for Industry (PAI) Since the warehouse will be used for storage, BuildCo must submit the project drawings to the Public Authority for Industry (PAI). PAI will then review the drawings and issue an approval certi cate. Submission of drawings to PAI is required for any construction that will be used for storage or industrial activities. A copy of the government’s lease agreement is needed. 4 Hire an external rm/engineer to supervise construction 1 day KWD 3,902 Agency : Private Firm 5 Obtain lot plan with site map from the Municipal Authority 7 days KWD 5 Agency : Municipality of Kuwait BuildCo must request a lot plan physically at the municipality. 6 Obtain approval of plans from Kuwait Fire Services Directorate 60 days KWD 200 Agency : Kuwait Fire Services Directorate Documents to be submitted include: - Architectural design - Ventilation design - Elevators design - Hazard sector plans - Alarm system plans 7 Request electricity and water plans approval from Ministry of Electricity 1 day no charge and Water Agency : Ministry of Electricity and Water According to No. 30/2012 issued by Kuwait Municipality on August 2012, the building permit will not be granted unless the Ministry of Electricity and Water (MEW) gives its approval on the electric supply. A site inspection must be conducted before the approval can be issued. Page 14   MEW is understa ed and therefore, it can take anywhere from 1 week to 1 - Hazard sector plans Alarm system Doing -Business plans Kuwait 2018 7 Request electricity and water plans approval from Ministry of Electricity 1 day no charge and Water Agency : Ministry of Electricity and Water According to No. 30/2012 issued by Kuwait Municipality on August 2012, the building permit will not be granted unless the Ministry of Electricity and Water (MEW) gives its approval on the electric supply. A site inspection must be conducted before the approval can be issued. MEW is understa ed and therefore, it can take anywhere from 1 week to 1 month for the site inspection to happen. Approval of the plans can take 1-2 months after the inspection takes place. 8 Request sewage plans approval (sanitary certi cate) from Ministry of 1 day no charge Public Works Agency : Ministry of Public Works BuildCo must request approval of sewage plans from the Ministry of Public Works. Upon approval, the Ministry will issue a sanitary certi cate. A site inspection must be conducted before the certi cate is issued. 9 Receive electricity and water inspection from Ministry of Electricity and 1 day no charge Water Agency : Ministry of Electricity and Water Receive sewage inspection from Ministry of Public Works 1 day no charge 10 Agency : Ministry of Public Works 11 Obtain electricity and water plans approval from Ministry of Electricity 7 days no charge and Water Agency : Ministry of Electricity and Water Obtain sewage plans approval from Ministry of Public Works 7 days no charge 12 Agency : Ministry of Public Works 13 Obtain zoning approval from the Municipal Authority 30 days KWD 200 Agency : Municipality of Kuwait BuildCo must request a zoning approval from the Municipality. This initial request can be done electronically. Pursuant to Law 5 of 2005, the Municipality is mandated with the authority to plan the use of land in Kuwait. This involves designating permitted uses of land based on mapped zones which separate one set of land uses from another (e.g. residential, industrial, recreational, etc). Once an area has been “zoned” (e.g. for industrial use), the location of an actual project / industry within the zone has to be approved by the Municipality. The documents that need to be submitted include: - Area plans - Level plans - Sector plans - Floor plans - Boundaries - Sanitary certi cate - Contract with the client Page 15   - Civil IDs Obtain sewage plans approval from Ministry of Public Works 7 days no charge 12 Agency : Ministry of Public Works Doing Business 2018 Kuwait 13 Obtain zoning approval from the Municipal Authority 30 days KWD 200 Agency : Municipality of Kuwait BuildCo must request a zoning approval from the Municipality. This initial request can be done electronically. Pursuant to Law 5 of 2005, the Municipality is mandated with the authority to plan the use of land in Kuwait. This involves designating permitted uses of land based on mapped zones which separate one set of land uses from another (e.g. residential, industrial, recreational, etc). Once an area has been “zoned” (e.g. for industrial use), the location of an actual project / industry within the zone has to be approved by the Municipality. The documents that need to be submitted include: - Area plans - Level plans - Sector plans - Floor plans - Boundaries - Sanitary certi cate - Contract with the client - Civil IDs - Land deed - Electrical drawings - Mechanical drawings - Fire safety drawings - Master plan approval - Architectural drawings If a change needs to be made, the process has to be started from the beginning. 14 Request and obtain building permit 30 days KWD 200 Agency : Municipality of Kuwait The initial packet of documents needs to be submitted electronically to the Municipality. Most of the documents are submitted as scanned copies. The website for submission is: www.baladiya.gov.kw BuildCo must submit Application Form 1 for a building license and attach the following documents (including the documents described in the procedures above): • A copy of the deed of title to the land, allocation decree, or lease agreement. In the case of an allocation decree or lease agreement, a recent rent receipt must be submitted. • A copy of the architectural contract between BuildCo and an accredited engineering rm responsible for the architecture of the building • Scanned letter of the zoning approval • Original soil test report • Approval from the Fire and Safety Department • Approval from the Roads Department, if underground parking is included (which does not apply to the warehouse project) • Scanned Form 2, Undertaking of compliance of the plans with the buildings Page 16   codes and cadastres, which should be signed and submitted (by an Doing Business 2018 Kuwait 14 Request and obtain building permit 30 days KWD 200 Agency : Municipality of Kuwait The initial packet of documents needs to be submitted electronically to the Municipality. Most of the documents are submitted as scanned copies. The website for submission is: www.baladiya.gov.kw BuildCo must submit Application Form 1 for a building license and attach the following documents (including the documents described in the procedures above): • A copy of the deed of title to the land, allocation decree, or lease agreement. In the case of an allocation decree or lease agreement, a recent rent receipt must be submitted. • A copy of the architectural contract between BuildCo and an accredited engineering rm responsible for the architecture of the building • Scanned letter of the zoning approval • Original soil test report • Approval from the Fire and Safety Department • Approval from the Roads Department, if underground parking is included (which does not apply to the warehouse project) • Scanned Form 2, Undertaking of compliance of the plans with the buildings codes and cadastres, which should be signed and submitted (by an engineering rm) • Scanned Form 3, Undertaking of compliance with the construction plans, which should be signed and submitted (by an engineering rm) • Civil ID of the owner • Undertaking to provide speci c plans (done by an engineering rm) that meet the requirements of: 1. The Ministry of Electricity and Energy for the electric supply. 2. The Ministry of Public Works for the sewerage system. 3. The Public Authority for Civil Aviation for the height of the warehouse. 4. The Ministry of Communications for the telephone lines. These four documents are scanned and can be sent in advance electronically. While the application can be submitted online, BuildCo must follow up with hard copies of the supporting documents in order to have them stamped by the Municipality. 15 Obtain site take-over letter (supervision commitment license) 3 days KWD 16 Agency : Municipality of Kuwait BuildCo must submit an application for the site take-over letter and attach the following documents: • A copy of the construction license • An undertaking from BuildCo that it shall carry out the construction work on the warehouse or, alternatively, that it has a construction contract with a contractor. In case of a construction contract with a contractor, a copy of the performance bond should be submitted. • An undertaking from an accredited supervising engineer to supervise the construction approved by the municipality. The Municipality will then issue a site take-over letter, which essentially allows BuildCo (or the contractor) to take over the site and begin construction. 16 Submit nal report and the le of cadastral measure of the structure to 1 day KWD 10 the Municipality for approval Page 17   allows BuildCo (or the contractor) to take over the site and begin Doing construction. Business 2018 Kuwait 16 Submit nal report and the le of cadastral measure of the structure to 1 day KWD 10 the Municipality for approval Agency : Municipality of Kuwait BuildCo prepares the end of supervision commitment report with the supervising engineer's signature and the le of cadastral measure of the structure and submits them to Kuwait Municipality. The le will be reviewed by the Engineering Supervisor (an employee of the Kuwait Municipality) to ensure it contains all the required documentation and information. Kuwait Municipality will then conduct a nal inspection to ensure that the construction has been carried out to the necessary speci cations (as per the building plans submitted and approved) and complies with the relevant constructions regulations entirely. Once the Kuwait Municipality is satis ed with the information and documentation concerning the building’s speci cations and construction works, it will grant the necessary approvals. 17 Receive nal inspection from the Municipality 1 day no charge Agency : Municipality of Kuwait The municipality inspects the buildings to ensure compliance with the drawings. 18 Receive nal approval certi cate from Municipality 18 days no charge Agency : Municipality of Kuwait Once the nal inspection is carried out, BuildCo typically receives the nal approval certi cate from the Municipality within a week. The Municipality then forwards the certi cate of no objection to the Ministry of Electricity and Water, the Kuwait Fire Services Directorate and the Ministry of Public Works. 19 Obtain commercial license from Ministry of Commerce 7 days no charge Agency : Ministry of Commerce BuildCo must obtain a commercial license from the Ministry of Commerce certifying that building is for commercial use. Without this license, the warehouse cannot become operational. Obtain water connection 7 days KWD 750 20 Agency : Ministry of Electricity and Water Obtain sewage connection 7 days KWD 750 21 Agency : Ministry of Public Works Receive inspection from the Kuwait Fire and Safety Department 1 day KWD 5 22 Agency : Kuwait Fire and Safety Department Upon conducting a nal inspection, the Kuwait Fire and Safety Department will issue a certi cate of re and panic safety. 23 Obtain certi cate of re and panic safety from the Kuwait Fire and 30 days no charge Safety Department Agency : Kuwait Fire and Safety Department Takes place simultaneously with previous procedure. Page 18   Takes Business Doing 2018 Kuwait place simultaneously with previous procedure. Details – Dealing with Construction Permits in Kuwait – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) external engineer or rm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice; Inspections are not mandated by law but commonly occur in practice during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 Page 19   always occurs in Takes place simultaneously with previous procedure. Doing Business 2018 Kuwait Details – Dealing with Construction Permits in Kuwait – Measure of Quality Answer Score Building quality control index (0-15) 13.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) external engineer or rm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice; Inspections are not mandated by law but commonly occur in practice during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Yes, in- house engineer submits report for nal inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Page 20   for nal Doing Business 2018 Kuwait inspection. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certi cation exam. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, Page 21   transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June certi cation exam. Doing Business 2018 Kuwait Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 22   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Kuwait Standardized Connection Price of electricity (US cents per kWh) 0.7 Name of utility Ministry of Electricity and Water (MEW) City Covered Kuwait City Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Procedures (number) 7 4.8 4.7 2 (United Arab Emirates) Time (days) 85 81.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 64.2 780.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 83.33: Jordan (Rank: 40) 79.35: Oman (Rank: 61) 74.83: Bahrain (Rank: 79) 69.60: Kuwait (Rank: 97) 67.21: Regional Average (Middle East & North Africa) 61.64: Iraq (Rank: 116) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Kuwait – Procedure, Time and Cost Time Cost 60 80 70 50 Cost (% of income per capita) 60 40 Time (days) 50 30 40 30 20 20 10 10 Page 23   getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Kuwait Figure – Getting Electricity in Kuwait – Procedure, Time and Cost Time Cost 60 80 70 50 Cost (% of income per capita) 60 40 Time (days) 50 30 40 30 20 20 10 10 0 0 1 2 *3 4 *5 6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Kuwait and comparator economies – Measure of Quality 8 7 7 7 6 6 5 Index score 5 4.2 4 3 2 1 0 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Getting Electricity in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Hire licensed electrical engineer to prepare study of electrical load and 2 calendar days KWD 1,250 power requirement Agency : Electrical engineer licensed by the Ministry of Electricity and Water (MEW) The client hires an engineering consulting rm that is approved by the union of engineers and that has a Supervision Engineer licensed by MEW. The consulting rm (i.e. contractor), will then study and estimate the electrical load and power requirement of the project so as to obtain MEW's approval/authorization for availability of electricity supply (see procedure below). The fees vary depending on the prices set by the contractor. Page 24   2 Submit application to Ministry of Electricity and Water and await 30 calendar days KWD 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Doing Business 2018 Kuwait Details – Getting Electricity in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Hire licensed electrical engineer to prepare study of electrical load and 2 calendar days KWD 1,250 power requirement Agency : Electrical engineer licensed by the Ministry of Electricity and Water (MEW) The client hires an engineering consulting rm that is approved by the union of engineers and that has a Supervision Engineer licensed by MEW. The consulting rm (i.e. contractor), will then study and estimate the electrical load and power requirement of the project so as to obtain MEW's approval/authorization for availability of electricity supply (see procedure below). The fees vary depending on the prices set by the contractor. 2 Submit application to Ministry of Electricity and Water and await 30 calendar days KWD 0 estimate Agency : Ministry of Electricity and Water (MEW) The client submits an application to the Distribution department of MEW to get the approval/authorization of electricity supply. The client needs to submit: - The study and estimate done by the consulting rm in Procedure 1. - 3 copies to the concerned governorate engineer of the electrical distribution network (EDN) department requesting approval/authorization for the electricity supply - Copy of the application after necessary approval duly signed and stamped by the governorate engineer - Licenses of construction The request can be submitted online through the following link:https://portal.mew.gov.kw/ However, all forms need to be submitted in person. 3 Receive site inspection by Ministry of Electricity and Water 1 calendar day KWD 0 Agency : Ministry of Electricity and Water (MEW) The client obtains a site inspection from the Ministry of Electricity and Water (MEW) and awaits the estimate of connection fees. After the inspection is done, MEW hands the client a stamped approval and authorization 4 Obtain "no objection" letter from municipality 22 calendar days KWD 0 Agency : Municipality After completing the building works and obtaining the approval of the municipality, the applicant will need to apply for a no-objection letter from the municipality. The municipality will then send the letter by mail to the Ministry of Electricity and Water (MEW) so the latter can install the meter and turn on supply of electricity to the project. 5 Submit nal electrical drawings for approval and obtain inspection of 21 calendar days KWD 0 internal wiring Agency : Ministry of Electricity and Water (MEW) During or after execution of the internal wiring the client’s licensed engineer will need to submit the nal electrical drawings related to the internal wiring for approval to the Electrical Installation Department of the Ministry. These Page 25   drawings include air-conditioning, lighting and all other electrical equipment, Ministry of Electricity and Water (MEW) so the latter can install the meter and Doing turn on supply Business 2018of electricity Kuwait to the project. 5 Submit nal electrical drawings for approval and obtain inspection of 21 calendar days KWD 0 internal wiring Agency : Ministry of Electricity and Water (MEW) During or after execution of the internal wiring the client’s licensed engineer will need to submit the nal electrical drawings related to the internal wiring for approval to the Electrical Installation Department of the Ministry. These drawings include air-conditioning, lighting and all other electrical equipment, electrical mains, switches, cable sizes, circuit breakers and fuses. The client will also need to submit a load form in order to obtain inspection of internal wiring and nal connection. The load form will then be handed over to the applicant themselves. If the applicant is a company, the form will be handed over to an authorized sta of the company. The approval itself is granted after a couple of weeks, but is obtained in parallel with the external works. The inspection however, happens only after the Ministry of Electricity and Water (MEW) has obtained the letter of no-objection from the municipality. If the drawings meet the Ministry’s speci cations, then inspectors from the Electrical Installation Department of the Ministry will inspect the internal installation (size of cables, type of fuses, cable connection process and installation of main panels and sub-panels inside and outside the warehouse). The engineer also needs to submit approvals from the Municipality and the Kuwait Fire Department. The Municipality will also check that plans are actually corresponding to latest drawings. 6 Obtain external works from Electrical Installation Department 21 calendar days KWD 6,189.95 Agency : Ministry of Electricity and Water (MEW) Once the drawings are approved, the client needs to pay the fees of the project to Ministry of Electricity & Water (MEW) for the power supply connection. This cost is for the equipment supplied by the ministry. The payment is done at the estimation department of MEW. The estimation department then gives the green light to the Electrical Distribution Networks Department so that external works can be started. External works are designed and carried out by the Electrical Distribution Networks Department of MEW. A 140-kVA load can be supplied from an existing distribution sub-station in the area, if capacity is available. In the absence of the infrastructure facilities, the holder of the license can allocate a space on the plot not exceeding 5x5 m2 for the MEW to install an electrical transformer to provide additional power to the plot. Having the transformer installed will not result in additional cost to the customer. The former scenario is however, the more likely one for the assumed case. 7 Obtain meter installation and nal turn-on of supply 10 calendar days KWD 140 Agency : Ministry of Electricity and Water (MEW) The client needs to show a receipt of payment to one of the nearest emergency departments of the Ministry of Electricity and Water to obtain nal supply. The meter is handed over to the client directly by the Consumer A airs Department, and the installation is carried out by the Electrical Installation Department. Takes place simultaneously with previous procedure. Details – Getting Electricity in Kuwait – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Page 26   Takes place simultaneously with previous procedure. Doing Business 2018 Kuwait Details – Getting Electricity in Kuwait – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.1 System average interruption frequency index (SAIFI) 0.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 0 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on No reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.mew.gov .kw/? com=content&act=vi ew&id=92 Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 27   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Kuwait Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value KWD 589,980.80 City Covered Kuwait City Page 28   Middle East & OECD high Doing Business 2018 Kuwait Standard Property Transfer Property value KWD 589,980.80 City Covered Kuwait City Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Procedures (number) 9 5.7 4.6 1.00 (4 Economies) Time (days) 35 30.3 22.3 1.00 (3 Economies) Cost (% of property value) 0.5 6.0 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 17.0 13.4 22.7 29.00 (Singapore) Figure – Registering Property in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 81.07: Bahrain (Rank: 25) 73.62: Oman (Rank: 54) 67.55: Kuwait (Rank: 70) 66.40: Jordan (Rank: 72) 60.91: Regional Average (Middle East & North Africa) 59.97: Iraq (Rank: 101) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Kuwait – Procedure, Time and Cost Time Cost 35 0.6 30 0.5 Cost (% of property value) 25 0.4 Time (days) 20 0.3 15 0.2 10 0.1 5 0 0 1 *2 3 *4 *5 *6 7 *8 *9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 29   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Kuwait Figure – Registering Property in Kuwait – Procedure, Time and Cost Time Cost 35 0.6 30 0.5 Cost (% of property value) 25 0.4 Time (days) 20 0.3 15 0.2 10 0.1 5 0 0 1 *2 3 *4 *5 *6 7 *8 *9 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Kuwait and comparator economies – Measure of Quality 25 22.5 20 17.5 17.0 Index score 15 13.0 13.4 10.5 10 5 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Registering Property in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Seller noti es Kuwait City Municipality of intention to sell a plot of land 1 day no cost Agency : Kuwait City Municipality A seller (or a designated third party with an authorization from the seller) goes to the Kuwait City Municipality in person to present a preliminary sale/purchase agreement. Other documents that need to be presented include: Civil IDs of both seller and buyer, Articles of Association (if these are two companies) and the original deed. Municipality reviews the submitted documents and authorizes the deal. Only after this step is completed, one can apply for the Cadastral Description Certi cate at a di erent department within the Municipality. Page 30   2 Apply for the Cadastral Description Certi cate (Shahadat Al-Awsaf) from 1 day KWD 10 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Doing Business 2018 Kuwait Details – Registering Property in Kuwait – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Seller noti es Kuwait City Municipality of intention to sell a plot of land 1 day no cost Agency : Kuwait City Municipality A seller (or a designated third party with an authorization from the seller) goes to the Kuwait City Municipality in person to present a preliminary sale/purchase agreement. Other documents that need to be presented include: Civil IDs of both seller and buyer, Articles of Association (if these are two companies) and the original deed. Municipality reviews the submitted documents and authorizes the deal. Only after this step is completed, one can apply for the Cadastral Description Certi cate at a di erent department within the Municipality. 2 Apply for the Cadastral Description Certi cate (Shahadat Al-Awsaf) from 1 day KWD 10 the Municipality Agency : Kuwait City Municipality The seller must request a Cadastral Description Certi cate from the Municipality providing the details of the property in question (i.e. its size, the developments on it, the zoning, etc) and con rming that the property is in compliance with all the Municipality regulations. This document is prepared following an inspection of the property by an architect of the Municipality. The warehouse is likely to be in one of the following areas: Shuwaikh, Sulaibiya, Sabhan, Al Rai, Anghara and Ardiya. This is however not an exclusive list. The Kuwait Municipality, which is the authority responsible for zoning, may authorize the construction of a warehouse in an area that is not ordinarily used for warehousing. The documentation shall include: -Application from the seller on the selling company's letterhead -Copy of the deed of title of the property provided by the seller -Documents proving the authority of the person submitting the application on behalf of the seller The Cadastral Description Certi cate will also include among other things: any violations that the property has incurred (e.g. non-maintenance of the property, or encroachment of the property borders on neighboring plots), any violations of the structure (e.g. if the building does not meet the re regulations), usage of the plot (e.g. for commercial or residential purpose). Any licenses granted to the plot (e.g. license to have machinery brought onto the property to be used on the plot) and drawings of the plot and structures approved from the Municipality showing the areas and utilization of the plot. 3 Inspection of the property by an architect representing the Municipality 30 days KWD 150 Agency : Kuwait City Municipality (simultaneous with Procedures 4, 5, The Municipality will send out an inspector/architect to inspect the property and 6) in question and collect the relevant information; after which the Municipality will issue the Cadastral Description Certi cate and transfer the same along with a letter of no objection to the transfer to the Ministry of Justice to continue the process of the property transfer. The process is typically as follows: the seller will go to the Municipality (with jurisdiction over the location of the warehouse to be sold) to submit an Page 31   application for an allocation letter (specifying the size of the plot and the the property to be used on the plot) and drawings of the plot and structures Doing approved Businessfrom Kuwait showing the areas and utilization of the plot. the Municipality 2018 3 Inspection of the property by an architect representing the Municipality 30 days KWD 150 Agency : Kuwait City Municipality (simultaneous with Procedures 4, 5, The Municipality will send out an inspector/architect to inspect the property and 6) in question and collect the relevant information; after which the Municipality will issue the Cadastral Description Certi cate and transfer the same along with a letter of no objection to the transfer to the Ministry of Justice to continue the process of the property transfer. The process is typically as follows: the seller will go to the Municipality (with jurisdiction over the location of the warehouse to be sold) to submit an application for an allocation letter (specifying the size of the plot and the buildings on it if any) and a description certi cate (description of the existing buildings if any on the plot and size/use of such building). The fee to be paid for these documents is KD150 (for a commercial property). The seller concurrently delivers the warehouse's title deed to the Municipality against a receipt thereof. The engineer/architect responsible for the area then xes a date to meet with the seller at the warehouse to carry out the inspection, or may alternatively carry out the inspection on his own. Meanwhile, the seller should obtain clearance from the utility authorities (i.e. electricity, water and telephone). When the Municipality engineer completes the inspection (veri es the deed against the actual plot of land and stores report at the Municipality) and the Municipality has issued the descriptions certi cate and the allocation letter for the property, the seller will be issued with a receipt with a reference number from the Municipality with which the seller will receive the original title deed, the allocation letter and the descriptions certi cate from the Real Estate Registry Division at the Ministry of Justice. 4 Obtain clearance from the Ministry of Communications 1 day no cost Agency : Ministry of Communications (simultaneous with Procedures 3, 5, The Seller must obtain a clearance from the Ministry of Communications and 6) (necessary for all types of properties both commercial and residential). The clearance is to con rm that the previous owner/seller has settled all related utility bills. 5 Obtain clearance from the Ministry of the Electricity regarding 1 day no cost outstanding electricity bills (simultaneous with Agency : Ministry of Electricity and Water Procedures 3, 4, and 6) Parties obtain a certi cate of Ministry of Electricity and Water that there are no outstanding electricity bills or other dues to the Ministry. 6 Obtain a certi cate from the Ministry of Commerce and Industry 1 day KWD 10 evidencing the signatory authority of the legal representative of the (simultaneous with parties Procedures 3, 4, Agency : Ministry of Commerce and Industry and 5) Parties obtain a certi cate from the Ministry of Commerce and Industry evidencing the signatory authority of the legal representative of the parties who will sign the sale agreement, together with copies of their civil identi cation cards, in order to check that the companies are authorized to buy or sell property in their Articles of Association. They obtain Form I "Undertaking & Acknowledgement" and Form IX "Acknowledgement of the Representative" from the Department of Commercial Companies at the Ministry of Commerce and Industry, that must be submitted for registration in Procedure 6. Form I shows that the parties exist and have the power to conclude the sale/purchase transaction in accordance with their own Article of Association. Form IX con rms the authority of their representatives who Page 32   follow up the Procedures with the Department. and 6) Parties obtain a certi cate of Ministry of Electricity and Water that there are Doing no outstanding Business 2018electricity Kuwaitbills or other dues to the Ministry. 6 Obtain a certi cate from the Ministry of Commerce and Industry 1 day KWD 10 evidencing the signatory authority of the legal representative of the (simultaneous with parties Procedures 3, 4, Agency : Ministry of Commerce and Industry and 5) Parties obtain a certi cate from the Ministry of Commerce and Industry evidencing the signatory authority of the legal representative of the parties who will sign the sale agreement, together with copies of their civil identi cation cards, in order to check that the companies are authorized to buy or sell property in their Articles of Association. They obtain Form I "Undertaking & Acknowledgement" and Form IX "Acknowledgement of the Representative" from the Department of Commercial Companies at the Ministry of Commerce and Industry, that must be submitted for registration in Procedure 6. Form I shows that the parties exist and have the power to conclude the sale/purchase transaction in accordance with their own Article of Association. Form IX con rms the authority of their representatives who follow up the Procedures with the Department. 7 Obtain a new deed from the Contracts Control Department of the Real 1 day 0.5% of property Estate Registration O ce of the Ministry of Justice (simultaneous with value (registration Agency : Real Estate Registration O ce at the Ministry of Justice Procedures 8 and fee) 9) Once the ‘No Objection’ letter is received from the Municipality, the parties receive a phone text message to come to the Ministry of Justice to complete the transaction. The seller must prepare an application requesting a transfer of title to be led with the Contracts Control Department of the Real Estate Registration O ce of the Ministry of Justice. The Contracts Control Department reviews the application and the attached documents in person in the matter of about 30 minutes. Once approved, the same is printed on the o cial pink papers used by the Ministry and becomes ready for signature. The 0.5% registration fee is paid to the Department of Real Estate Registration & Authentication (Ministry of Justice) upon the completion of the registration procedures, which approves the submitted documents before parties sign the notarized sale contract. The documentation shall include: -original deed -IDs of seller and buyer -Cadastral Certi cate from the Municipality -con rmation of payment for the land through a certi ed bank check 8 Legal representative of the parties must appear in person to sign the 1 day KWD 5 sale agreement before the notary public (simultaneous with Agency : Notary public at the Ministry of justice Procedures 7 and 9) The parties must appear in person, or through their attorneys, to sign the sale agreement before the notary public. The notary public veri es the contents of the written agreement (a form commonly prescribed by the Ministry of Justice), authenticates the required signatures, and satis es all other related matters. 9 The sale agreement is recorded under the name of the buyer by the 1 day no cost Contracts Control Department (simultaneous with Agency : Contracts Control Department at the Ministry of Justice Procedures 7 and 8) The authorized third party (or buyer and seller) gives the notarized sale agreement to the Contracts Control Department o cer for it to be recorded under the name of the purchasing company. The sale agreement is used as the deed of title. An original of the sale agreement, proving title, is issued to Page 33   the buyer there. It is printed on the special authorized paper and is stamped. Ministry of Justice), authenticates the required signatures, and satis es all Doing other related Business matters. 2018 Kuwait 9 The sale agreement is recorded under the name of the buyer by the 1 day no cost Contracts Control Department (simultaneous with Agency : Contracts Control Department at the Ministry of Justice Procedures 7 and 8) The authorized third party (or buyer and seller) gives the notarized sale agreement to the Contracts Control Department o cer for it to be recorded under the name of the purchasing company. The sale agreement is used as the deed of title. An original of the sale agreement, proving title, is issued to the buyer there. It is printed on the special authorized paper and is stamped. Takes place simultaneously with previous procedure. Details – Registering Property in Kuwait – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.0 Reliability of infrastructure index (0-8) 3.0 What is the institution in charge of immovable property registration? Real Estate registration and authentication department of the the Ministry of Justice In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Municipality In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 1.5 Who is able to obtain information on land ownership at the agency in charge of Only 0.0 immovable property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://www.moj. Page 34   Takes place simultaneously with previous procedure. Doing Business 2018 Kuwait Details – Registering Property in Kuwait – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.0 Reliability of infrastructure index (0-8) 3.0 What is the institution in charge of immovable property registration? Real Estate registration and authentication department of the the Ministry of Justice In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Municipality In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 1.5 Who is able to obtain information on land ownership at the agency in charge of Only 0.0 immovable property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://www.moj. gov.kw/sites/ar/R ealEstate/Pages/ MOJServices.aspx Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: https://www.moj. gov.kw/sites/ar/R ealEstate/Pages/ MOJServices.aspx Page 35   immovable property registration in the largest business city made publicly available– and if Doing so, how? 2018 Business Kuwait Link for online access: https://www.moj. gov.kw/sites/ar/R ealEstate/Pages/ MOJServices.aspx Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: In Kuwait City for 2016: 551 Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, in person 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 8.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 4.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private No 0.0 Page 36   guarantee? Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property Doing registry Business them opposable to third parties? to makeKuwait 2018 Is the system of immovable property registration subject to a state or private No 0.0 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Court of First property worth 50 times gross national income (GNI) per capita and located in the Instance largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) Page 37   security interest is created, publicized and enforced according to the law. Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Kuwait Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Strength of legal rights index (0-12) 1 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 4.8 6.6 8.00 (34 Economies) Page 38   Credit registry coverage (% of adults) 15.0 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Kuwait Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Strength of legal rights index (0-12) 1 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 15.0 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 31.0 14.2 63.7 100.00 (23 Economies) Figure – Getting Credit in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 45.00: Bahrain (Rank: 105) 35.00: Kuwait (Rank: 133) 35.00: Oman (Rank: 133) 32.25: Regional Average (Middle East & North Africa) 25.00: Jordan (Rank: 159) 0.00: Iraq (Rank: 186) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Kuwait and comparator economies 1.8 1.7 1.6 1.4 1.2 Index score 1 1 1 1 0.8 0.6 0.4 0.2 0 0 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Legal Rights in Kuwait Strength of legal rights index (0-12) 1 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 39   Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Doing Business 2018 Kuwait Details – Legal Rights in Kuwait Strength of legal rights index (0-12) 1 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Kuwait and comparator economies 10 8 8 Index score 6 6 6 5 4.8 4 2 0 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Credit Information in Kuwait Page 40   0 0 Kuwait Doing Business 2018 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Credit Information in Kuwait Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? No No 0 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 6 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 947,015 441,044 Number of firms 0 17,020 Total 947,015 458,064 Percentage of adult population 31.0 15.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 41   transactions; Available legal remedies (damages, Percentage of adult population 31.0 15.0 Doing Business 2018 Kuwait Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 5.7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5.3 4.7 6.4 Page 42   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Kuwait Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 5.7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 5.3 4.7 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.00: Kuwait (Rank: 81) 50.00: Bahrain (Rank: 108) 47.92: Regional Average (Middle East & North Africa) 46.67: Iraq (Rank: 124) 46.67: Oman (Rank: 124) 40.00: Jordan (Rank: 146) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Kuwait and comparator economies – Measure of Quality Kuwait 8 9 4 5 3 4 Bahrain 5 4 8 4 5 4 Iraq 3 5 4 3 8 5 Jordan 7 4 4 5 2 2 Oman 4 5 8 4 4 3 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Middle East & North Africa 5.2 4.6 6.2 4.2 4.7 4 0 5 10 15 20 25 30 35 40 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Kuwait – Measure of Quality Answer Score Page 43   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Kuwait Details – Protecting Minority Investors in Kuwait – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 5.7 Extent of disclosure index (0-10) 4 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) No disclosure 0.0 obligation Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 1.0 the transaction only Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 9 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if unfair or 2.0 caused to Buyer? (0-2) prejudicial Can shareholders hold the other directors liable for the damage the transaction caused Liable if unfair or 2.0 to Buyer (0-2) prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by Yes 1.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 4 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Page 44   Can the plainti directly question the defendant and witnesses at trial? (0-2) No 0.0 the defendant Doing Business 2018 Kuwait relied on Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) No 0.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 5.3 Extent of shareholder rights index (0-10) 3 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of No 0.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 5 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 Page 45   Buyer pay declared MustBusiness Doing dividends within a maximum period set by law? 2018 Kuwait No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? No 0.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a No 0.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, Page 46   and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Kuwait Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Payments (number per year) 12 17.9 10.9 3 (Hong Kong SAR, China) Page 47   return, but within the tax assessment period. Doing Business 2018 Kuwait Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Payments (number per year) 12 17.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 98 203.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 13.0 32.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 50.56 83.45 99.38 (Estonia) Figure – Paying Taxes in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.89: Bahrain (Rank: 5) 92.48: Kuwait (Rank: 6) 90.60: Oman (Rank: 11) 74.31: Regional Average (Middle East & North Africa) 70.75: Jordan (Rank: 97) 63.55: Iraq (Rank: 129) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Kuwait and comparator economies – Measure of Quality 90 85.32 80 70 60 Index score 50.56 50 40 34.69 30 21.43 20 10 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Paying Taxes in Kuwait Tax or mandatory Payments Notes on Time Statutory Tax Total tax and contribution Notes contribution (number) Payments (hours) tax rate base rate (% of profit) on TTR Employer paid -Social 12 98 11.5% gross 12.97 Page 48   security contributions salaries Doing Business 2018 Kuwait Figure – Paying Taxes in Kuwait and comparator economies – Measure of Quality 90 85.32 80 70 60 Index score 50.56 50 40 34.69 30 21.43 20 10 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Paying Taxes in Kuwait Tax or mandatory Payments Notes on Time Statutory Tax Total tax and contribution Notes contribution (number) Payments (hours) tax rate base rate (% of profit) on TTR Employer paid -Social 12 98 11.5% gross 12.97 security contributions salaries Employee paid - Social 0 withheld 10.5% gross 0.00 not security contributions salaries included Totals 12 98 13.0 Details – Paying Taxes in Kuwait – Tax by Type Taxes by type Answer Profit tax (% of profit) 0.0 Labor tax and contributions (% of profit) 13.0 Other taxes (% of profit) 0.0 Details – Paying Taxes in Kuwait – Measure of Quality Answer Score Post ling index (0-100) VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process N/A Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Page 49   Time to comply with VAT refund (hours) No VAT No VAT Percentage Doing of cases Business 2018exposed to a VAT audit (%) Kuwait Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT No VAT Time to obtain a VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? No Percentage of cases exposed to a corporate income tax audit (%) Not applicable Time to comply with a corporate income tax audit (hours) No corporate No corporate income tax income tax Time to complete a corporate income tax audit (weeks) No corporate No corporate income tax income tax Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Page 50   Handling and inspections that take place at the are informed about exchange rates. a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Kuwait Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 51   of agriculture or industry, national security agencies and any other Doing Business 2018 Kuwait government authorities. Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Time to export: Border compliance (hours) 96 62.6 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 602 464.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 72 74.3 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 191 243.6 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 89 112.3 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 491 540.7 111.6 0.00 (27 Economies) Time to import: Documentary compliance 96 94.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 332 266.2 25.6 0.00 (30 Economies) Figure – Trading across Borders in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.93: Jordan (Rank: 53) 79.39: Oman (Rank: 72) 75.97: Bahrain (Rank: 78) 58.07: Regional Average (Middle East & North Africa) 54.24: Kuwait (Rank: 154) 25.33: Iraq (Rank: 179) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Kuwait – Time and Cost Time Cost 120 700 602 100 96 96 600 89 491 500 80 72 Time (hours) Cost (USD) 400 332 60 300 40 191 200 20 100 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 52   Doing Business 2018 Kuwait Figure – Trading across Borders in Kuwait – Time and Cost Time Cost 120 700 602 100 96 96 600 89 491 500 80 72 Time (hours) Cost (USD) 400 332 60 300 40 191 200 20 100 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Kuwait Characteristics Export Import Product HS 29 : Organic chemicals HS 8708: Parts and accessories of motor vehicles Trade partner India Japan Border Shuwaikh port Shuwaikh port Distance (km) 10 10 Domestic transport time (hours) 2 2 Domestic transport cost (USD) 153 125 Details – Trading across Borders in Kuwait – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 72.0 211.0 Export: Clearance and inspections required by agencies other than customs 30.6 196.0 Export: Port or border handling 72.0 195.0 Import: Clearance and inspections required by customs authorities 89.0 172.7 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 89.5 318.3 Details – Trading across Borders in Kuwait – Trade Documents Export Import Bill of lading Trade license Certificate of origin Certificate of origin Page 53   Domestic transport cost (USD) 153 125 Doing Business 2018 Kuwait Details – Trading across Borders in Kuwait – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 72.0 211.0 Export: Clearance and inspections required by agencies other than customs 30.6 196.0 Export: Port or border handling 72.0 195.0 Import: Clearance and inspections required by customs authorities 89.0 172.7 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 89.5 318.3 Details – Trading across Borders in Kuwait – Trade Documents Export Import Bill of lading Trade license Certificate of origin Certificate of origin Packing list Cargo release order Invoice Terminal handling receipt Export order Commercial invoice Chemical license/EPA Certificate Manifest/Bayan Customs export declaration Bill of lading SOLAS certificate Packing list SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the (Seller - The dispute concerns a lawful transaction between two businessesPage 54   courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 SOLAS certificate Doing Business 2018 Kuwait Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value KWD 19,562.00 Court name Kuwait City Court of First Instance, Commercial Circuit City Covered Kuwait City Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Time (days) 566 638.5 577.8 164.00 (Singapore) Cost (% of claim value) 18.6 24.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.5 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 60.02: Oman (Rank: 67) 59.58: Kuwait (Rank: 73) 54.53: Bahrain (Rank: 111) Page 55   of judicial processes Quality Business Doing index (0-18) 2018 Kuwait 6.5 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 60.02: Oman (Rank: 67) 59.58: Kuwait (Rank: 73) 54.53: Bahrain (Rank: 111) 54.21: Regional Average (Middle East & North Africa) 53.71: Jordan (Rank: 118) 48.02: Iraq (Rank: 144) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Kuwait – Time and Cost Time Cost 635 642 638.5 35 31.2 577.8 598 600 566 520 28.1 30 Cost (% of claim value) 500 24.4 25 21.5 Time (days) 400 18.6 20 14.7 15.1 300 15 200 10 100 5 0 0 Bahrain Iraq Jordan Kuwait Middle East & OECD high income Oman North Africa Figure – Enforcing Contracts in Kuwait and comparator economies – Measure of Quality Kuwait 2.5 0 4 Bahrain 2 0 2 Iraq 1.5 0 Jordan 3 2 0 2 Oman 2.5 0 4 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 Page 56   12 Bahrain Iraq Jordan Kuwait Middle East & OECD high income Oman North Africa Doing Business 2018 Kuwait Figure – Enforcing Contracts in Kuwait and comparator economies – Measure of Quality Kuwait 2.5 0 4 Bahrain 2 0 2 Iraq 1.5 0 Jordan 3 2 0 2 Oman 2.5 0 4 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 12 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Kuwait Indicator Time (days) 566 Filing and service 26 Trial and judgment 420 Enforcement of judgment 120 Cost (% of claim value) 18.6 Attorney fees 15 Court fees 2.6 Enforcement fees 1 Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 4.0 Case management (0-6) 0.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Kuwait – Measure of Quality Page 57   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Kuwait Details – Enforcing Contracts in Kuwait – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.5 Court structure and proceedings (-1-5) 4.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? No -1.0 Case management (0-6) 0.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 58   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Kuwait 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., Yes if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 59   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Kuwait Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Recovery rate (cents on the dollar) 32.6 25.5 71.2 93.1 (Norway) Time (years) 4.2 3.0 1.7 0.4 (Ireland) Page 60   Cost (% of estate) 10.0 13.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Kuwait Middle East & OECD high Indicator Kuwait North Africa income Overall Best Performer Recovery rate (cents on the dollar) 32.6 25.5 71.2 93.1 (Norway) Time (years) 4.2 3.0 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.8 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.0 5.4 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Kuwait and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 44.42: Bahrain (Rank: 90) 42.40: Oman (Rank: 98) 39.44: Kuwait (Rank: 110) 30.53: Jordan (Rank: 146) 30.45: Regional Average (Middle East & North Africa) 0.00: Iraq (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Kuwait – Time and Cost Time Cost 4.5 4.2 25 4.0 4 20.0 3.5 20 3.0 3.0 Cost (% of estate) Time (years) 3 2.5 13.8 15 2.5 2 9.5 10.0 1.7 9.1 10 1.5 1 3.5 5 0.5 0 0 Bahrain no practice Jordan Kuwait Middle East & OECD high income Oman Iraq North Africa Figure – Resolving Insolvency in Kuwait and comparator economies – Measure of Quality Kuwait 4 2 1 0 Page 61   Bahrain 4 2 1 0 Bahrain no practice Jordan Kuwait Middle East & OECD high income Oman Iraq North Africa Doing Business 2018 Kuwait Figure – Resolving Insolvency in Kuwait and comparator economies – Measure of Quality Kuwait 4 2 1 0 Bahrain 4 2 1 0 Iraq 4 2 1 0 Jordan 2 2 1 0 Oman 4 2 1 0 OECD high income 5.4 2.8 2.3 1.9 Middle East & North Africa 3.3 2.1 0.9 0.2 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Kuwait and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 45 41.9 40 38.1 35 32.6 30 27.7 25.5 25 20 15 10 5 0.0 0 Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Details – Resolving Insolvency in Kuwait Indicator Answer Explanation Proceeding foreclosure Security documents relating to collateral (Hotel) located in Kuwait would be enforced before the Court of First Instance. After Mirage's default, BizBank would initiate foreclosure by enforcing its security interest over Mirage's assets. Other unsecured creditors will file petition at the Court attempting to convert the foreclosure proceeding into liquidation which however won't stay BizBank to proceed with actions against the property securing their rights according to Commercial Law Article 597. Foreclosure proceedings may only be initiated in the event the security documents were endorsed by a writ of execution. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal in a public auction upon the completion of the proceeding. Time (in years) 4.2 The foreclosure procedure takes approximately 4.2 years until BizBank is repaid some or all of the money owed to it. The delay is largely due to the difficulty in scheduling a court Page 62   Kuwait Bahrain Iraq Jordan Oman Middle East & North Africa Doing Business 2018 Kuwait Details – Resolving Insolvency in Kuwait Indicator Answer Explanation Proceeding foreclosure Security documents relating to collateral (Hotel) located in Kuwait would be enforced before the Court of First Instance. After Mirage's default, BizBank would initiate foreclosure by enforcing its security interest over Mirage's assets. Other unsecured creditors will file petition at the Court attempting to convert the foreclosure proceeding into liquidation which however won't stay BizBank to proceed with actions against the property securing their rights according to Commercial Law Article 597. Foreclosure proceedings may only be initiated in the event the security documents were endorsed by a writ of execution. Outcome piecemeal sale The hotel will stop operating and Mirage assets will be sold piecemeal in a public auction upon the completion of the proceeding. Time (in years) 4.2 The foreclosure procedure takes approximately 4.2 years until BizBank is repaid some or all of the money owed to it. The delay is largely due to the difficulty in scheduling a court hearing to resolve appeals from relevant parties to BizBank's foreclosure attempt, as well as the preparation and implementation of the auction. It takes at least half a year (probably 8 months) for the Court to review BizBank's initial foreclosure request. If appeals arise from unsecured creditors , the Court will hold hearings and make the decision, which can take up to 3 years. Cost (% of 10.0 The costs associated with the case would amount to approximately 10% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include court or government agency fees (1%), attorney fees (5%), fees of accountants, assessors, inspectors and other professionals (1%), and fees of auctioneers (1%-5%). Recovery rate (cents on the 32.6 dollar) Details – Resolving Insolvency in Kuwait – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 Page 63   goods and services to the debtor? dollar) Doing Business 2018 Kuwait Details – Resolving Insolvency in Kuwait – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Page 64   Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment Doing Business of the 2018insolvency Kuwaitrepresentative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity Page 65   leave; (iv) whether employees on maternity leave the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Kuwait Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Kuwait Answer Hiring Page 66   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Kuwait Details – Labor Market Regulation in Kuwait Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) 60.0 Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 198.6 Ratio of minimum wage to value added per worker 0.0 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 25.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? Yes Restrictions on overtime work? Yes Paid annual leave for a worker with 1 year of tenure (working days) 30.0 Paid annual leave for a worker with 5 years of tenure (working days) 30.0 Paid annual leave for a worker with 10 years of tenure (working days) 30.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 30.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 67   Third-party Doing approval Business 2018 if nine workers are dismissed? Kuwait No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 13.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 13.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 13.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 13.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure 2.1 Severance pay for redundancy dismissal for a worker with 5 years of tenure 10.7 Severance pay for redundancy dismissal for a worker with 10 years of tenure 32.5 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 15.1 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 70.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 6.0 Business Reforms in Kuwait In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Kuwait implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Kuwait made starting a business easier by establishing a one-stop shop and improving online registration. Registering Property: Kuwait made registering property easier by lowering the number of days necessary to register property and by improving the transparency of the land administration system. DB2017 Starting a Business: Kuwait made starting a business more di cult by increasing the time required to register by requiring Page 68   companies to submit the original documents online and in person. Minimum contribution period for unemployment protection (months)? 6.0 Doing Business 2018 Kuwait Business Reforms in Kuwait In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Kuwait implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Kuwait made starting a business easier by establishing a one-stop shop and improving online registration. Registering Property: Kuwait made registering property easier by lowering the number of days necessary to register property and by improving the transparency of the land administration system. DB2017 Starting a Business: Kuwait made starting a business more di cult by increasing the time required to register by requiring companies to submit the original documents online and in person. Trading across Borders: Kuwait made exporting and importing easier by introducing customs e-links and electronic exchange of information among various agencies. DB2016 Starting a Business: Kuwait made starting a business easier by reducing the minimum capital requirement. DB2015 Starting a Business: Kuwait made starting a business more di cult by increasing the commercial license fee. DB2014 Starting a Business: Kuwait made starting a business more di cult by increasing the minimum capital requirement. Protecting Minority Investors: Kuwait strengthened investor protections by making it possible for minority shareholders to request the appointment of an auditor to review the company’s activities. DB2011 Labor Market Regulation: Kuwait increased the number of days of paid annual leave and increased the notice period applicable in case of redundancy dismissals. DB2010 Trading across Borders: Kuwait reduced the time required for customs clearance by improving administrative procedures and sta training. Resolving Insolvency: Kuwait enhanced its insolvency process by introducing a new legal procedure that enables nancially distressed companies on the verge of insolvency to restructure. DB2008 Dealing with Construction Permits: Kuwait reduced the time required for dealing with construction permits by introducing an automated system for issuing technical approvals for utility connections. Getting Credit: Kuwait’s private credit bureau expanded its coverage by adding retailers to those supplying it with credit information. Page 69   Getting Credit: Kuwait’s private credit bureau expanded its coverage by adding retailers to those supplying it with credit information. Doing Business 2018 Kuwait Page 70