Doing Business 2018 Portugal Economy Pro le of Portugal 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 Portugal Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Portugal Income Category High income 29 Population 10,324,611 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 19,850 0 100 76.84 City Covered Lisbon DB 2018 Distance to Frontier (DTF) 0 100 82.22: United Kingdom (Rank: 7) 79.00: Germany (Rank: 20) 77.46: Regional Average (OECD high income) 77.02: Spain (Rank: 28) 76.84: Portugal (Rank: 29) Page 3   76.13: France (Rank: 31) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Portugal Ease of Doing Business in Region OECD high income DB 2018 Rank 190 1 Portugal Income Category High income 29 Population 10,324,611 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 19,850 0 100 76.84 City Covered Lisbon DB 2018 Distance to Frontier (DTF) 0 100 82.22: United Kingdom (Rank: 7) 79.00: Germany (Rank: 20) 77.46: Regional Average (OECD high income) 77.02: Spain (Rank: 28) 76.84: Portugal (Rank: 29) 76.13: France (Rank: 31) 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 - Portugal 1 1 15 19 32 28 28 38 48 58 57 55 82 Rank 105 109 136 163 190 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 - Portugal 100.00 100 91.26 83.75 80.18 80.26 79.67 80 76.52 71.74 60.00 60 DTF 45.00 40 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:+0.01 Change:0.00 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-1.50 Change:+0.01 Permits Change:0.00 Change:0.00 Change:+0.05 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:0.00 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-1.50 Change:+0.01 Permits Change:0.00 Change:0.00 Doing Business 2018 Portugal Change:+0.05 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 Portugal Standardized Company Legal form Sociedade por Quotas Paid-in minimum capital requirement EUR 5 City Covered Lisbon OECD high OECD high Indicator Portugal income income Overall Best Performer Procedure – Men (number) 6 4.9 4.9 1.00 (New Zealand) Time – Men (days) 5 8.5 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 2.1 3.1 3.1 0.00 (United Kingdom) Procedure – Women (number) 6 4.9 4.9 1.00 (New Zealand) Time – Women (days) 5 8.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 2.1 3.1 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 8.7 8.7 0.00 (113 Economies) Figure – Starting a Business in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 94.58: United Kingdom (Rank: 14) 93.28: France (Rank: 25) 91.35: Regional Average (OECD high income) 91.26: Portugal (Rank: 48) 86.65: Spain (Rank: 86) 83.46: Germany (Rank: 113) 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 Portugal – Procedure, Time and Cost Time Cost 5 2.5 4 2 ost (% of income per capita) Time (days) 3 1.5 2 1 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Portugal Figure – Starting a Business in Portugal – Procedure, Time and Cost Time Cost 5 2.5 4 2 Cost (% of income per capita) Time (days) 3 1.5 2 1 1 0.5 0 0 1 2 3 4 5 *6 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 Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register at the one-stop shop (Empresa na Hora) 1 day EUR 360 or EUR 220 Agency : One-Stop Shop (Empresa na Hora) There are two ways of starting a business in Portugal: 1) "On the Spot Firm" (Empresa na Hora). This is currently the most common way to register a business. This service enables to set up a company in less than an hour at a single contact point. As long as the partners have all of necessary documents, the company is set up immediately at one of the desks of the On the Spot Firm o ces, available throughout the country, regardless of the location of the company’s headquarters. The rst step is to choose a name from the list of pre-approved names available at the website On the Spot Firm or to submit a name of its choice to the RNPC, which will issue a company's name certi cate. This certi cate of approval may be requested online, is valid for 90 days and may be renewed only once. If the name of the company is composed by the name of its shareholders, it may now be approved at the moment of incorporation of the company at the one-stop shop. Then entrepreneurs need to choose one of the pre-approved standard memorandum and articles of association packs, available at On the Spot Firm and in the portfolio of packs available at the desks. The following documentation needs to be submitted at the On the Spot Firm’s desk: Page 7   In case partners are legal enterprises/corporations: (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Portugal Details – Starting a Business in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register at the one-stop shop (Empresa na Hora) 1 day EUR 360 or EUR 220 Agency : One-Stop Shop (Empresa na Hora) There are two ways of starting a business in Portugal: 1) "On the Spot Firm" (Empresa na Hora). This is currently the most common way to register a business. This service enables to set up a company in less than an hour at a single contact point. As long as the partners have all of necessary documents, the company is set up immediately at one of the desks of the On the Spot Firm o ces, available throughout the country, regardless of the location of the company’s headquarters. The rst step is to choose a name from the list of pre-approved names available at the website On the Spot Firm or to submit a name of its choice to the RNPC, which will issue a company's name certi cate. This certi cate of approval may be requested online, is valid for 90 days and may be renewed only once. If the name of the company is composed by the name of its shareholders, it may now be approved at the moment of incorporation of the company at the one-stop shop. Then entrepreneurs need to choose one of the pre-approved standard memorandum and articles of association packs, available at On the Spot Firm and in the portfolio of packs available at the desks. The following documentation needs to be submitted at the On the Spot Firm’s desk: In case partners are legal enterprises/corporations: - Corporate tax identi cation or identity card; - Current extract of the entry in the Commercial Registry; and, - Minutes of the Inaugural Meeting of incorporation. At the service desk, it is possible to get both the articles of association and commercial registration. Partners will receive a certi cate of incorporation, the corporate identi cation card, the Social Security number, the deed, and a business registration certi cate. 2) "Online company setting up” (Empresa Online): This service enables to set up a company through the Internet in 1 to 2 days. The access to the service On-Line Company (‘Empresa Online’) can be made through the Citizen's Portal (https://bde.portaldocidadao.pt/evo/landingpage.aspx). The costs are the following: Incorporation under "Empresa na Hora": EUR 360; Incorporation under ""Empresa on-line"": (i) EUR 360 if not incorporated with pre-approved by-laws, or (ii) EUR 220 if incorporated with pre-approved by- laws. 2 Open a bank account and obtain a Bank Identi cation Number (IBAN) 1 day no charge Agency : Bank Business founders must open a bank account and obtain a Bank Identi cation Number (IBAN). Page 8   pre-approved by-laws, or (ii) EUR 220 if incorporated with pre-approved by- Doing laws. Business 2018 Portugal 2 Open a bank account and obtain a Bank Identi cation Number (IBAN) 1 day no charge Agency : Bank Business founders must open a bank account and obtain a Bank Identi cation Number (IBAN). 3 File the declaration of commencement of activity with the Tax Authority 1 day no charge and register for VAT Agency : Tax Authority The declaration of commencement of activity has to be submitted at the Tax Authorities’ O ces along with evidence that the company was incorporated. Business founders must provide the Tax Authority with their Bank Identi cation Number (IBAN) and their corporate identi cation card. VAT registration can be done when submitting the declaration of commencement of activity. 4 Register with the Social Security Regional Center Less than one day no charge Agency : Social Security Regional Center (online procedure) The employers shall communicate the admission of employees to the Portuguese Social Security services of the area of the employee's workplace, by any written means, or online at www.seg-social.pt, within (i) 24 hours preceding the employment agreement’s entry into force; or (ii) 24 hours following the beginning of the activity, whenever – due to exceptional and duly justi ed reasons in connection with the conclusion of very short term employment agreements or due to shift work – such notice cannot be served within the set out deadline. The non-compliance with this obligation implies the assumption that the relevant employee started to work for the company on the 1st working day of the sixth month prior to the occurrence of the infringement. In case the relevant employee is receiving sickness or unemployment bene ts there is also an assumption that the employ started to work for the company on the date in which those bene ts were granted, whereby the company will be severally liable for returning the whole amounts unduly received by the employee by the Portuguese Social Security. Moreover, the non-compliance with the above mentioned obligation may result in a minor or a serious misdemeanor, depending on its compliance within 24 hours after the deadline or after that, corresponding to a ne from € 75 up to € 4,800. Pursuant to the enacted Law No. 83-C/2013, of 31 December 2013, the above mentioned communication will now have to be made online. 5 Register for the workers' accident insurance at a private insurer 1 day no charge Agency : Private Insurer In order to guarantee an e ective compensation of damages arising from work accidents covering employees, trainees and paid managers, the Portuguese legislator requires from the employer the transfer of all its responsibility to insurance companies, before the entry into force of the relevant agreements. In case not all the responsibilities are transferred by the employer to the insurance company, the rst one will be solely responsible in the extent of the non transferred responsibilities. Furthermore, the non-compliance with the above mentioned obligation may trigger a very serious misdemeanor, implying the payment of a ne between € 3,264 and € 19,380. 6 Register employees with the Labor Compensation Funds (FCT and FGCT) Less than one day no charge (online procedure) Page 9   Agency : Labor Compensation Funds (Fundo de Compensação do Trabalho - trigger a very serious misdemeanor, implying the payment of a ne between Doing € 3,264 and € Business 19,380. Portugal 2018 6 Register employees with the Labor Compensation Funds (FCT and FGCT) Less than one day no charge Agency : Labor Compensation Funds (Fundo de Compensação do Trabalho - (online procedure) FCT and Fundo de Garantia de Compensação do Trabalho - FGCT) According to the Portuguese labor law (Law 70 of August 30, 2013), employees shall be registered in two Labor Compensation Funds (Fundo de Compensação do Trabalho - FCT and Fundo de Garantia de Compensação do Trabalho - FGCT). Registration at FGCT takes place automatically once one registers with FCT online. The contribution to these funds is intended to enable the payment of part of the compensation eventually due in case of termination of the employment agreement. The employer is responsible for the monthly payment of the amount of 0.925% to FCT and of 0.075% to FGCT, both calculated on the amount of base salary and seniority premiums due to each employee. 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 Page 10   obtaining further documentation or getting prior approvals from external Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Portugal 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 Portugal Standardized Warehouse Estimated value of warehouse EUR 877,206.50 City Covered Lisbon OECD high OECD high Indicator Portugal income income Overall Best Performer Procedures (number) 14 12.5 12.5 7.00 (Denmark) Time (days) 113 154.6 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 1.2 1.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.39: United Kingdom (Rank: 14) 79.29: France (Rank: 18) 78.16: Germany (Rank: 24) 76.52: Portugal (Rank: 32) 75.14: Regional Average (OECD high income) 63.50: Spain (Rank: 123) 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 Portugal – Procedure, Time and Cost Time Cost 0.9 100 0.8 Cost (% of warehouse value) 0.7 80 0.6 Time (days) 0.5 60 0.4 40 0.3 0.2 20 0.1 0 0 1 2 3 *4 5 6 7 8 9 * 10 11 12 13 * 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Portugal Figure – Dealing with Construction Permits in Portugal – Procedure, Time and Cost Time Cost 0.9 100 0.8 Cost (% of warehouse value) 0.7 80 0.6 Time (days) 0.5 60 0.4 40 0.3 0.2 20 0.1 0 0 1 2 3 *4 5 6 7 8 9 * 10 11 12 13 * 14 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a 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 Portugal and comparator economies – Measure of Quality 16 14.0 14 12 11.0 11.0 11.4 9.5 Index score 10 9.0 8 6 4 2 0 Portugal France Germany Spain United Kingdom OECD high income Details – Dealing with Construction Permits in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain approval of project designs from Municipality and other relevant 30 days EUR 348 entities Agency : Municipality The land-use regime in the area of the site is regulated by a detail plan in force or an approved allotment project. A building notice procedure should then be followed to obtain approval of the building design. BuildCo submits an application for a building permit to the municipality. The application must comply with a statutory list of submission requirements. The architectural design and liability declarations of the designers are among the elements that must be submitted. The municipality veri es whether the application complies with the Page 13   administrative requirements and the architectural design complies with the Portugal France Germany Spain United Kingdom OECD high income Doing Business 2018 Portugal Details – Dealing with Construction Permits in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain approval of project designs from Municipality and other relevant 30 days EUR 348 entities Agency : Municipality The land-use regime in the area of the site is regulated by a detail plan in force or an approved allotment project. A building notice procedure should then be followed to obtain approval of the building design. BuildCo submits an application for a building permit to the municipality. The application must comply with a statutory list of submission requirements. The architectural design and liability declarations of the designers are among the elements that must be submitted. The municipality veri es whether the application complies with the administrative requirements and the architectural design complies with the detail plan or approved allotment project and building regulations. The municipality also assess if external public entities must be consulted. If that is the case, the municipality forwards the application to the coordination and regional development commission that sends it to the external public entities that have to be consulted. Their appraisals must be sent back to the commission within 20 or 40 days, depending on nature of the external public entity. The applicant may also choose to consult directly with the external public entities for a forehand approval/appraisal of the design and submit their answers together with the application to the municipality, as it is the case with BuildCo. The municipality must decide on the application within 20 days of its submission, or 60 days if external public entities are consulted. The cost to obtain the approval of the building design is EUR 348.08. The legal basis of the above is the following: 1. Decree-Law No. 555/99 with amendments (Art 4.4.c, 10.1, 10.2, 11.2. 11.3, 13-B.2, 13-B.3, 34.5, 35.4 and 35.7) 2. Ordinance No. 113/2015 (Annex I, no. 1 to 6 and 15) 3. Ordinance No. 228/2015 (August 3, 2015) 4. Regulation of Permissions, Taxes and Other Revenues of the Municipality of Oeiras, Art 191.1. 5. Table of Fees and Other Revenues of the Municipality of Oeiras (2014), Art 16.7 2 Obtain building permit and pay fee 30 days EUR 2,061 Agency : Municipality Within one year from the date of noti cation of nal approval of the building design, BuildCo must request the building permit to be issued and pay the relevant taxes. The municipality issues the building permit within 30 days of the date of the request. There are statutory requirements on how to request the building permit certi cate and also on the content of the certi cate. BuildCo posts an announcement at the construction site within 10 days after a building permit is obtained. This announcement must follow a standardised format and content established by law and remain visible until the end of the construction works. The cost to obtain the building permit is EUR 357.25 plus EUR 1.31 per Page 14   16.7 Doing Business 2018 Portugal 2 Obtain building permit and pay fee 30 days EUR 2,061 Agency : Municipality Within one year from the date of noti cation of nal approval of the building design, BuildCo must request the building permit to be issued and pay the relevant taxes. The municipality issues the building permit within 30 days of the date of the request. There are statutory requirements on how to request the building permit certi cate and also on the content of the certi cate. BuildCo posts an announcement at the construction site within 10 days after a building permit is obtained. This announcement must follow a standardised format and content established by law and remain visible until the end of the construction works. The cost to obtain the building permit is EUR 357.25 plus EUR 1.31 per square meter. The legal basis of the above is the following: 1. Decree-Law No. 555/99 with amendments (Art 34.2, 34.3, 35.8, 35.9, 78.5 and 80.2) 2. Ordinance 228/215 3. Regulation of Permissions, Taxes and Other Revenues of the Municipality of Oeiras, Art 191.1. 4.Table of Fees and Other Revenues of the Municipality of Oeiras (2014), Art 5. This procedure can only be actioned once the building approval has been granted. For that reason it cannot be a simultaneous process with the previous one. 3 Inform the Municipality about the beginning of construction 1 day no charge Agency : Municipality Based on Article 8-A of Decree-Law No. 555/99 with amendments, BuildCo has until ve days before the start of the construction works on the site to inform the municipality of his intentions, as well as of the identity of the technical director responsible for the works. This procedure can only be actioned upon the start of the construction, thus it cannot be a simultaneous process with the previous one. 4 Inform the Labor Conditions Agency about the new construction site 1 day no charge Agency : Labor Conditions Agency According to Art 15.1, 15.2 and 15.3 of Decree-Law 273/2003, BuildCo must inform the Labor Conditions Agency before starting construction work. This is only necessary if one of the following conditions occur: 1. Construction work takes longer than 30 days and have more than 20 workers simultaneously on the site at any moment; or 2. Construction work takes more than 500 man days of work. There are statutory requirements on the content of the notice to the Labor Conditions Agency. Since this procedure can be addressed in the Labor Conditions Agency, it can be a simultaneous one. 5 Receive inspection from the Labor Conditions Agency 1 day no charge Agency : Labor Conditions Agency The Labor Conditions Agency may perform on-site inspections during construction. The Agency has been conducting more inspections in recent years. The inspections mainly examine health and safety conditions. The Page 15   agency will also check for employment contracts and the legal status of Conditions Agency. Since this procedure can be addressed in the Labor BusinessAgency, Doing Conditions can be a simultaneous one. 2018 it Portugal 5 Receive inspection from the Labor Conditions Agency 1 day no charge Agency : Labor Conditions Agency The Labor Conditions Agency may perform on-site inspections during construction. The Agency has been conducting more inspections in recent years. The inspections mainly examine health and safety conditions. The agency will also check for employment contracts and the legal status of workers. A construction site can be inspected more than once during the term of a building permit. Source:Activity of Labor Conditions Agency: 2013 report, pp. 133-135. This procedure can only be actioned once the request to the Labor Conditions Agency has been done. For that reason it cannot be a simultaneous process with the previous one. 6 Receive inspection from Municipality 1 day no charge Agency : Municipality According to Art. 93, 94, 95 and 96 of Decree-Law no. 555/99 with amendments, during construction, other public authorities may also carry out unscheduled inspections to the site to accomplish their supervision role. The municipality may carry out site inspections without notifying the developer beforehand. All aspects of the construction works can be checked during inspections, including the construction log book. Construction works are selected randomly, except if complaints have been made. Such cases are more likely to undergo a site inspection by municipal building inspectors. The Real Estate and Construction Institute may also carry out site inspections. This procedure can only be actioned once the construction has started. For that reason it cannot be a simultaneous process with the previous one. 7 Receive inspection from Institute of Public Markets, Real Estate and 1 day no charge Construction (IMPIC - Instituto dos Mercados Públicos, do Imobiliário e da Construção) Agency : Institute of Public Markets, Real Estate and Construction (Instituto dos Mercados Públicos, do Imobiliário e da Construção). The construction site might also receive unscheduled inspections from the Institute of Construction and Real Estate (Instituto da Construção e do Imobiliário - INCI) to check if BuildCo has the “alvara” and the construction permit. The legal basis is article 25 of Decreto Lei No. 12 published on January 8, 2004 and article 5 of Portaria N. 378 of November 20, 2012. This procedure can only be actioned once the construction has nished. For that reason it cannot be a simultaneous process with the previous one. 8 Apply for occupancy permit and pay fees 1 day EUR 356 Agency : Municipality Once the building has been completed, BuildCo requests the municipality to issue an occupancy permit for the building. There is a statutory list of submission requirements to request an occupancy permit. If the actual construction works executed on the site di er from the approved designs, an updated set of design documents must be presented to the municipality with the request for the occupancy permit. The construction log book, and a Page 16   liability declaration by the construction director must be presented as well. This procedure can only be actioned once the construction has nished. For Doing that reason it Business be a simultaneous process with the previous one. cannot Portugal 2018 8 Apply for occupancy permit and pay fees 1 day EUR 356 Agency : Municipality Once the building has been completed, BuildCo requests the municipality to issue an occupancy permit for the building. There is a statutory list of submission requirements to request an occupancy permit. If the actual construction works executed on the site di er from the approved designs, an updated set of design documents must be presented to the municipality with the request for the occupancy permit. The construction log book, and a liability declaration by the construction director must be presented as well. In this declaration, the construction director states that the construction works were carried out according to the approved design, and, where applicable, changes comply with the relevant legal and regulatory requirements. Within 10 days of the submission of the request the municipality informs BuildCo if the occupancy permit will be granted on the basis of the liability declaration mentioned above. No site inspection is required, unless the municipality has doubts about whether the construction works comply with the approved design. If a site inspection is determined, it takes place within 15 days. According to Article 7 of Fee Schedule (2014) from Oeiras, the occupancy permit costs EUR 81.49 + EUR 10.56 per 50 sq. m. The legal basis of the above is the following: 1- Ordinance No. 113/2015 (Annex I, no.25) 2- Decree-Law No. 555/99 with amendments, Art 63, Art 64.1, Art 64.2, Art 65.1 3- Regulation of Permissions, Taxes and Other Revenues of the Municipality of Oeiras, Art 191.4 and 191.8 4- Table of Fees and Other Revenues of the Municipality of Oeiras, Art 7\ This procedure can only be actioned once the fees has been paid. For that reason it cannot be a simultaneous process with the previous one. 9 Obtain occupancy permit 10 days no charge Agency : Municipality Once BuildCo has been noti ed that the occupancy permit will be issued, it has one year to request it from the City Hall. There are statutory requirements for applying for the occupancy permit and for the content of the permit. The occupancy permit is granted by the City Hall within 5 days of the submission of the request. The building can start being legally used only after the occupancy permit is issued. The legal basis of the above is the following: 1- Decree-Law No. 555/99 with amendments, Art 4.5, Art 76.1, Art 76.6, 77.5, 77.6, Art 64.3, 2- Ordinance No. 216-E/2008, Art 6 3- Ordinance No. 216-D/2008, Annex VII This procedure can only be actioned once the permit has been granted. For that reason it cannot be a simultaneous process with the previous one. Submit application for a water and sewage connection at the Water and 1 day no charge 10 Sanitation Authority Agency : Municipal Water and Sanitation Authority This procedure can only be actioned once the occupancy permit has been Page 17   granted. For that reason it cannot be a simultaneous process with the This procedure can only be actioned once the permit has been granted. For Doing that reason it Business be a simultaneous process with the previous one. cannot Portugal 2018 Submit application for a water and sewage connection at the Water and 1 day no charge 10 Sanitation Authority Agency : Municipal Water and Sanitation Authority This procedure can only be actioned once the occupancy permit has been granted. For that reason it cannot be a simultaneous process with the previous one. 11 Receive inspection by Water and Sanitation Authority 1 day EUR 451 Agency : Municipal Water and Sanitation Authority This procedure can be done once the request for these services has been submitted. For this reason, it cannot be a simultaneous one with the previous step. 12 Obtain water and sewerage connection 31 days EUR 7,571 Agency : Municipal Water and Sanitation Authority The steps for obtaining a water and sewerage connection are as follows: – BuildCo informs the utility until 5 working days before the beginning of the construction works on the water and sewerage networks. –During construction, the utility, directly or through a certi ed entity, can carry out site inspections whenever deemed appropriate and without notifying the developer beforehand. –BuildCo informs the utility when the construction works on the water and sewerage networks are complete and asks for a nal site inspection. Liability declarations of the technicians responsible for construction of the water and sewage networks must then be submitted. – Within 7 days the utility, or a certi ed entity on its behalf, carries out a nal inspection of the water and sewerage networks. Pipes must not be covered before being inspected. –If construction was done according to the approved design and the network met the test conditions, the utility considers the construction works on the water and sewerage networks complete. –BuildCo demands the permanent connection to the public water and sewerage networks. The water connection is carried out by the water utility within 15 days. The sewerage connection is carried out by BuildCo. –BuildCo and the water utility celebrate a water supply contract and the water meters are installed within 3 days. Usually these tasks are carried out before the construction of the building is complete. A water and sewerage connection is required to get an occupancy permit. BuildCo must pay a total of EUR 7,570.50 to obtain water and sewerage connection. The cost breakdown is the following: 1. Connection to the water network: For distances until 20 m – no charge. For distances greater than 20 m: 13.29 € / meter 2. Connection to the sewerage network: 37.18 € / meter This procedure can only be actioned once request for these services has been donet. For that reason it cannot be a simultaneous process with the previous one. 13 Register the building with the Real Estate Registry 5 days EUR 60 Agency : Real Estate Registry Page 18   Once the description of the property in the tax authority has been updated, been donet. For that reason it cannot be a simultaneous process with the Doing previous Business one. 2018 Portugal 13 Register the building with the Real Estate Registry 5 days EUR 60 Agency : Real Estate Registry Once the description of the property in the tax authority has been updated, BuildCo requests the update of the description in the Real Estate Registry. The update is done within 5-10 days. If the request is deemed urgent, the registration takes place within 1 day. The cost to register the building with the Real Estate Registry is EUR 60. The legal basis is the following: 1- Decree-Law No. 224/84 with amendments, Art 75.1 2- Decree-Law No. 322-A/2001 with amendments. Art 21.3.1 This procedure can only be actioned once the water and sewage connection have been installed. For that reason it cannot be a simultaneous process with the previous one. Register the building with the Tax Authority 1 day no charge 14 Agency : Tax Authority Once the occupancy permit has been granted, BuildCo has 60 days to inform the tax authority. There is an o cial form for this purpose. The architectural design, updated with any modi cation carried out during construction, is attached to the o cial form. The tax authority updates the description of the property in the tax authority registry. A site inspection is only required if there are not enough elements to assess the taxable value of the property. The legal basis of the above is the following: 1- Decree-Law No. 287/2003 with amendments, Art 13.1.d., 13.3, 37.1 and 37.2 2- Declaration for enrollment or updating of urban buildings in the array (Model 1) This procedure can be done in parallel with the registration. For that reason it can be a simultaneous process with the previous one. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Portugal – Measure of Quality Answer Score Building quality control index (0-15) 11.0 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 Page 19   compliance with existing building regulations? (0-1) architect; Takes place simultaneously with previous procedure. Doing Business 2018 Portugal Details – Dealing with Construction Permits in Portugal – Measure of Quality Answer Score Building quality control index (0-15) 11.0 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; Private rm. 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) in-house engineer; Unscheduled inspections. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, in-house 2.0 accordance with the approved plans and regulations? (0-2) engineer submits report for nal 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. Page 20   Liability Doing 2018 regimes and insurance Business index (0-2) Portugal 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) 2.0 What are the quali cation requirements for the professional responsible for verifying University 1.0 that the architectural plans or drawings are in compliance with existing building degree in regulations? (0-2) architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the University 1.0 construction on the ground? (0-2) degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Page 21   Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square architect or engineer. Doing Business 2018 Portugal 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 warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes 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 Portugal Standardized Connection Price of electricity (US cents per kWh) 17.3 Name of utility EDP Distribuição - Energia, SA City Covered Lisbon OECD high OECD high Indicator Portugal income income Overall Best Performer Procedures (number) 7 4.7 4.7 2 (United Arab Emirates) Time (days) 46 79.1 79.1 10 (United Arab Emirates) Cost (% of income per capita) 36 63.0 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 8 7.4 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 98.79: Germany (Rank: 5) 93.29: United Kingdom (Rank: 9) 85.89: France (Rank: 26) 84.44: Regional Average (OECD high income) 82.99: Spain (Rank: 42) 80.18: Portugal (Rank: 58) 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 Portugal – Procedure, Time and Cost Time Cost 30 45 40 25 Cost (% of income per capita) 35 30 20 Time (days) 25 15 20 15 10 10 5 5 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 Portugal Figure – Getting Electricity in Portugal – Procedure, Time and Cost Time Cost 30 45 40 25 Cost (% of income per capita) 35 30 20 Time (days) 25 15 20 15 10 10 5 5 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 Portugal and comparator economies – Measure of Quality 8.1 8 8 8 8 8 8 7.9 7.8 Index score 7.7 7.6 7.5 7.4 7.4 7.3 7.2 7.1 Portugal France Germany Spain United Kingdom OECD high income Details – Getting Electricity in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain internal inspection and certi cate from Certiel 12 calendar days EUR 51.23 Agency : Certiel Before the external connection works can start the client must request an internal inspection of the warehouse at Certiel. Once the Certiel approves the internal wiring, EDP is automatically noti ed. 2 Submit application to EDP and await estimate 8 calendar days EUR 4,861.17 Agency : EDP The customer submits the application at the utility in person, by fax or letter and waits for the estimate. The location map of the warehouse needs to be attached to the application. Page 24   Portugal France Germany Spain United Kingdom OECD high income Doing Business 2018 Portugal Details – Getting Electricity in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain internal inspection and certi cate from Certiel 12 calendar days EUR 51.23 Agency : Certiel Before the external connection works can start the client must request an internal inspection of the warehouse at Certiel. Once the Certiel approves the internal wiring, EDP is automatically noti ed. 2 Submit application to EDP and await estimate 8 calendar days EUR 4,861.17 Agency : EDP The customer submits the application at the utility in person, by fax or letter and waits for the estimate. The location map of the warehouse needs to be attached to the application. 3 Receive external inspection by EDP 1 calendar day EUR 0 Agency : EDP A representative from the utility will come to inspect the site of the warehouse. 4 Receive external works from EDP 20 calendar days EUR 0 Agency : EDP The utility is partially responsible for the design and the physical connection works for connections that are longer than 30 meters. The rst 30 meters are considered as an exclusive connection of the client, and they are the client's responsibility. 5 Obtain an excavation permit from the Municipal Chamber of Lisbon 8 calendar days EUR 201.55 Agency : Municipal Chamber of Lisbon (Câmara Municipal de Lisboa) The client must obtain an excavation permit (autorização de infraestruturas no subsolo) from the Municipality (Câmara Municipal de Lisboa), in order to carry out their part of the connection works. 6 The electrical contractor performs their part of the external connection 4 calendar days EUR 1,209.83 works Agency : Private contractor The client is responsible for the rst 30 meters of the external connection works. A maximum charge is regulated by ERSE, the national energy regulator, but costs can be negotiated with the contractor. 7 Conclude supply contract and receive meter installation by EDP 2 calendar days EUR 0 Agency : EDP The customer has to conclude a supply contract before meter installation. After the conclusion of the supply contract, the utility comes to install the meter and to do the nal connection. Takes place simultaneously with previous procedure. Details – Getting Electricity in Portugal – Measure of Quality Answer Page 25   Takes place simultaneously with previous procedure. Doing Business 2018 Portugal Details – Getting Electricity in Portugal – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.6 System average interruption frequency index (SAIFI) 0.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online www.erse.pt 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. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable Page 26   To make the data comparable across economies, several assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Portugal 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 purchase. Quality of land administration index (0-30) - 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 EUR 877,206.50 City Covered Lisbon Page 27   OECD high OECD high Doing Business 2018 Portugal Standard Property Transfer Property value EUR 877,206.50 City Covered Lisbon OECD high OECD high Indicator Portugal income income Overall Best Performer Procedures (number) 1 4.6 4.6 1.00 (4 Economies) Time (days) 1 22.3 22.3 1.00 (3 Economies) Cost (% of property value) 7.3 4.2 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 21.0 22.7 22.7 29.00 (Singapore) Figure – Registering Property in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.26: Portugal (Rank: 28) 76.81: Regional Average (OECD high income) 74.51: United Kingdom (Rank: 47) 73.88: Spain (Rank: 53) 65.71: Germany (Rank: 77) 60.69: France (Rank: 100) 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 Portugal – Procedure, Time and Cost Time Cost 1 8 7 0.8 Cost (% of property value) 6 5 Time (days) 0.6 4 0.4 3 2 0.2 1 0 0 1 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 28   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Portugal Figure – Registering Property in Portugal – Procedure, Time and Cost Time Cost 1 8 7 0.8 Cost (% of property value) 6 5 Time (days) 0.6 4 0.4 3 2 0.2 1 0 0 1 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 Portugal and comparator economies – Measure of Quality 25 24.5 24.0 24 23 22.7 Index score 22.5 22.0 22 21.0 21 20 19 Portugal France Germany Spain United Kingdom OECD high income Details – Registering Property in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register the property at the Real Property Registry 1 day 6.5% of the of the Agency : Land Registry (Registo Predial) property’s fiscal value or sale price, It is possible to register a property transfer in Portugal at any of the whichever is higher + locations of the one-stop shop “On the spot house” (Casa pronta, 0.8% stamp duty and www.casapronta.pt) in person. In April 2010, there were 33 locations in 250 EUR for the Land Lisboa, and 346 locations in all of Portugal. Banks can request that a public Registry + 50% of 250 employee comes with a laptop with secured access to the database to complete the property transfer in the bank (for free) without going to a Casa EUR for urgent pronta location. Also real estate agents can request that a public employee registration in 1 day comes with a laptop with secured access to the database to complete the property transfer in their o ce. At the one-stop shop, the public employee Page 29   will verify the following aspects: • Identity of parties • Powers of attorney Portugal France Germany Spain United Kingdom OECD high income Doing Business 2018 Portugal Details – Registering Property in Portugal – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Register the property at the Real Property Registry 1 day 6.5% of the of the Agency : Land Registry (Registo Predial) property’s fiscal value or sale price, It is possible to register a property transfer in Portugal at any of the whichever is higher + locations of the one-stop shop “On the spot house” (Casa pronta, 0.8% stamp duty and www.casapronta.pt) in person. In April 2010, there were 33 locations in 250 EUR for the Land Lisboa, and 346 locations in all of Portugal. Banks can request that a public Registry + 50% of 250 employee comes with a laptop with secured access to the database to complete the property transfer in the bank (for free) without going to a Casa EUR for urgent pronta location. Also real estate agents can request that a public employee registration in 1 day comes with a laptop with secured access to the database to complete the property transfer in their o ce. At the one-stop shop, the public employee will verify the following aspects: • Identity of parties • Powers of attorney (stating that the individuals are legal representatives of the rms) • Verify the legality of the transaction (that all laws are ful lled) • Verify the ownership and the encumbrances (with access to the “predial” database) • Verify that all taxes have been paid (with access to the Tax administration’s database) Once all the checks are completed, if there are any outstanding taxes, those can be paid at Casa pronta, though a speci c agreement between the Tax Authorities and Casa pronta. A receipt is issued to show that the taxes have been paid. The deed is prepared and submitted, and the transaction is completed. Property registration is mandatory in Portugal and the one stop shop process is available since July 2008, and its use is gradually increasing. As an alternative to using the Casa pronta, it is possible to use the services of a notary or a lawyer (lawyers can do so only since 2008) to prepare and authenticate the deed and verify tax payments. The authenticated deed can be submitted to the Predial (land registry, www.predialonline.pt). Only an authenticated deed can be submitted to the Predial. Predial has 307 property registries (in each municipality) all connected to a central database. Casa pronta is an interface with the buyers and sellers that is connected to the central database managed by the “Registo Predial” (land registry). Preemption rights exist in Portugal but are not mandatory, unless the property is located in special areas (old town, cultural, or close to airport or near railways). In many commercial areas there is no need for such a waiver. In addition to «On the spot house» (that works as describe above), land registry requests can be performed online. When people prefer to perform a public deed, instead of the simpli ed procedure, they can apply for the registry sending the deed through a web site (http://www.predialonline.pt/PredialOnline/). In this case the applicant needs to be authenticated with a quali ed digital certi cate, as the one every Portuguese citizen as in his/her citizens card. The online procedure however may take up to a week to be processed. Takes place simultaneously with previous procedure. Details – Registering Property in Portugal – Measure of Quality Answer Score Quality of the land administration index (0-30) 21.0 Page 30   Doing Business 2018 Portugal Details – Registering Property in Portugal – Measure of Quality Answer Score Quality of the land administration index (0-30) 21.0 Reliability of infrastructure index (0-8) 7.0 What is the institution in charge of immovable property registration? Any Registo Predial in Portugal In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Autoridade Tributaria In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 4.5 Who is able to obtain information on land ownership at the agency in charge of Freely accessible 1.0 immovable property registration in the largest business city? by anyone 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: http://www.predi alonline.pt Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.irn.m j.pt/IRN/sections/ irn/legislacao/do cs- legislacao/regula mento- emolumentar/ Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 31   mento- Doing Business 2018 Portugal emolumentar/ Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.predi alonline.pt Is there a speci c and separate mechanism for ling complaints about a problem that Yes 1.0 occurred at the agency in charge of immovable property registration? Contact information: http://www.sires. gov.pt/inserirRES Passo1.do?tipo=r 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 Portugal, 360,285 transfers occurred in 2017. Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee 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) 4.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 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? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 5.5 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 Yes 0.5 guarantee? Page 32   Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 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 makePortugal 2018 Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information 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; Lawyer; Interested Parties. 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; Lawyer; Interested Parties. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a The Judicial property worth 50 times gross national income (GNI) per capita and located in the Court of Lisbon largest business city, what court would be in charge of the case in the rst instance? (Tribunal Judicial da Comarca de Lisboa - Instância Central) How long does it take on average to obtain a decision from the rst-instance court for Between 2 and 3 1.0 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) Page 33   measures rules and practices a ecting the coverage, scope and Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Portugal Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. OECD high OECD high Indicator Portugal income income Overall Best Performer Strength of legal rights index (0-12) 2 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.6 6.6 8.00 (34 Economies) Page 34   Credit registry coverage (% of adults) 100.0 18.3 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Portugal OECD high OECD high Indicator Portugal income income Overall Best Performer Strength of legal rights index (0-12) 2 6.0 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 6.6 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 100.0 18.3 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 7.8 63.7 63.7 100.00 (23 Economies) Figure – Getting Credit in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: United Kingdom (Rank: 29) 70.00: Germany (Rank: 42) 63.03: Regional Average (OECD high income) 60.00: Spain (Rank: 68) 50.00: France (Rank: 90) 45.00: Portugal (Rank: 105) 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 Portugal and comparator economies 8 7 7 6 6.0 6 5 Index score 5 4 4 3 2 2 1 0 Portugal France Germany Spain United Kingdom OECD high income Details – Legal Rights in Portugal Strength of legal rights index (0-12) 2 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 35   Portugal France Germany Spain United Kingdom OECD high income Doing Business 2018 Portugal Details – Legal Rights in Portugal Strength of legal rights index (0-12) 2 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 No 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 Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Portugal and comparator economies 10 8 8 8 7 7 6.6 Index score 6 6 4 2 0 Portugal France Germany Spain United Kingdom OECD high income Details – Credit Information in Portugal Page 36   0 Portugal Doing Business 2018 France Portugal Germany Spain United Kingdom OECD high income Details – Credit Information in Portugal Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes Yes 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 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 Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes Yes 1 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 Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 508,736 7,404,901 Number of firms 16,664 429,743 Total 525,400 7,834,644 Percentage of adult population 7.8 100.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 37   transactions; Available legal remedies (damages, Percentage of adult population 7.8 100.0 Doing Business 2018 Portugal Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. OECD high OECD high Indicator Portugal income income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 6.4 6.4 Page 38   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Portugal OECD high OECD high Indicator Portugal income income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.4 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6 6.4 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: United Kingdom (Rank: 10) 70.00: Spain (Rank: 24) 66.67: France (Rank: 33) 63.93: Regional Average (OECD high income) 60.00: Portugal (Rank: 57) 58.33: Germany (Rank: 62) 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 Portugal and comparator economies – Measure of Quality Portugal 8 5 6 6 4 7 France 10 3 8 8 5 6 Germany 7 5 5 6 7 5 Spain 9 6 7 5 9 6 United Kingdom 8 7 10 5 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 0 5 10 15 20 25 30 35 40 45 50 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 Portugal – Measure of Quality Answer Score Page 39   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Portugal Details – Protecting Minority Investors in Portugal – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 6 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Existence of a 1.0 con ict without any speci cs Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 1.0 2) the transaction only Extent of director liability index (0-10) 5 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by 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) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 7 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) Any relevant 3.0 Page 40   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Portugal 7 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) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6 Extent of shareholder rights index (0-10) 4 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? 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 Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Page 41   Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of Doing their term? Business 2018 Portugal Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 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 No 0.0 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? Yes 1.0 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 Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. Page 42   Assuming that Buyer is a limited company, must Buyer's annual nancial statements be No 0.0 audited by an external auditor? Doing Business 2018 Portugal 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. OECD high OECD high Indicator Portugal income income Overall Best Performer Payments (number per year) 8 10.9 10.9 3 (Hong Kong SAR, China) Page 43   return, but within the tax assessment period. Doing Business 2018 Portugal OECD high OECD high Indicator Portugal income income Overall Best Performer Payments (number per year) 8 10.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 243 160.7 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 39.8 40.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 92.71 83.45 83.45 99.38 (Estonia) Figure – Paying Taxes in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.70: United Kingdom (Rank: 23) 84.44: Spain (Rank: 34) 83.75: Portugal (Rank: 38) 83.07: Regional Average (OECD high income) 82.14: Germany (Rank: 41) 78.55: France (Rank: 54) 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 Portugal and comparator economies – Measure of Quality 120 97.67 93.60 100 92.71 92.40 83.45 80 71.00 Index score 60 40 20 0 Portugal France Germany Spain United Kingdom OECD high income Details – Paying Taxes in Portugal Tax or Total tax and mandatory Payments Notes on Time contribution rate (% Notes on contribution (number) Payments (hours) Statutory tax rate Tax base of profit) TTR Page 44   Social security 1 online 90 23.75% gross salaries 26.79 Doing Business 2018 Portugal Figure – Paying Taxes in Portugal and comparator economies – Measure of Quality 120 97.67 93.60 100 92.71 92.40 83.45 80 71.00 Index score 60 40 20 0 Portugal France Germany Spain United Kingdom OECD high income Details – Paying Taxes in Portugal Tax or Total tax and mandatory Payments Notes on Time contribution rate (% Notes on contribution (number) Payments (hours) Statutory tax rate Tax base of profit) TTR Social security 1 online 90 23.75% gross salaries 26.79 contributions Corporate 1 online 63 17% for first taxable profit 11.58 income tax EUR15,000 and 21% thereafter Municipal 0 jointly 1.5% taxable income 0.88 business tax Interest tax 1 online 25% interest income 0.64 included (withholding in other tax) taxes Property tax 1 0.8% property value 0.44 Vehicle tax 1 fixed fee 0.07 depending on type of vehicle Withheld 0 11% gross salaries 0.00 withheld contributions Fuel tax 1 28 cents fuel consumption 0.00 in liters Value added 1 online 90 23% value added 0.00 not tax (VAT) included Tax on check 1 online EUR 0.05 per check 0.00 transactions Totals 8 243 39.8 Details – Paying Taxes in Portugal – Tax by Type Page 45   Totals 8 243 39.8 Doing Business 2018 Portugal Details – Paying Taxes in Portugal – Tax by Type Taxes by type Answer Profit tax (% of profit) 12.5 Labor tax and contributions (% of profit) 26.8 Other taxes (% of profit) 0.5 Details – Paying Taxes in Portugal – Measure of Quality Answer Score Post ling index (0-100) 92.71 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 4.0 92 Time to obtain a VAT refund (weeks) 14.2 78.83 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 1.0 100 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario 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 recent compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The mostPage 46   round of data collection for the project was completed in June 2017. See the methodology for more information. a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Portugal 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) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 47   of agriculture or industry, national security agencies and any other Doing Business 2018 Portugal government authorities. OECD high OECD high Indicator Portugal income income Overall Best Performer Time to export: Border compliance (hours) 0 12.7 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 0 149.9 149.9 0.00 (19 Economies) Time to export: Documentary compliance 1 2.4 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 0 35.4 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 0 8.7 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 0 111.6 111.6 0.00 (27 Economies) Time to import: Documentary compliance 1 3.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 0 25.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 93.92: Regional Average (OECD high income) 93.76: United Kingdom (Rank: 28) 91.77: Germany (Rank: 39) 100.00: Spain (Rank: 1) 100.00: France (Rank: 1) 100.00: Portugal (Rank: 1) 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 Portugal – Time and Cost Time Cost 1.2 1.2 1 1 1 1 0.8 0.8 Time (hours) Cost (USD) 0.6 0.6 0.4 0.4 0.2 0.2 0 0 0 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 48   Doing Business 2018 Portugal Figure – Trading across Borders in Portugal – Time and Cost Time Cost 1.2 1.2 1 1 1 1 0.8 0.8 Time (hours) Cost (USD) 0.6 0.6 0.4 0.4 0.2 0.2 0 0 0 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Portugal Characteristics Export Import Product HS 87 : Vehicles other than railway or tramway rolling-stock, and HS 8708: Parts and accessories of parts and accessories thereof motor vehicles Trade partner Germany Germany Border Portugal-Spain border crossing Portugal-Spain border crossing Distance (km) 350 350 Domestic transport 6 6 time (hours) Domestic transport 598 598 cost (USD) Details – Trading across Borders in Portugal – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 0.0 0.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.0 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.0 0.0 Details – Trading across Borders in Portugal – Trade Documents Export Import Page 49   cost (USD) Doing Business 2018 Portugal Details – Trading across Borders in Portugal – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 0.0 0.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 0.0 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.0 0.0 Details – Trading across Borders in Portugal – Trade Documents Export Import Packing list Packing list Commercial invoice Commercial Invoice CMR waybill CMR waybill Intrastat Intrastat 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. Page 50   Intrastat Intrastat Doing Business 2018 Portugal 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 EUR 33,921.00 Court name Juízo Local Cível de Lisboa City Covered Lisbon OECD high OECD high Indicator Portugal income income Overall Best Performer Time (days) 547 577.8 577.8 164.00 (Singapore) Cost (% of claim value) 17.2 21.5 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 12.5 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.04: France (Rank: 15) 71.74: Portugal (Rank: 19) 71.32: Germany (Rank: 22) Page 51   of judicial processes Quality Business Doing index (0-18) 2018 Portugal 12.5 11.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.04: France (Rank: 15) 71.74: Portugal (Rank: 19) 71.32: Germany (Rank: 22) 69.97: Spain (Rank: 26) 68.69: United Kingdom (Rank: 31) 66.76: Regional Average (OECD high income) 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 Portugal – Time and Cost Time Cost 700 45.7 50 600 577.8 547 Cost (% of claim value) 499 510 40 500 437 Time (days) 395 30 400 21.5 300 17.4 17.2 17.2 20 14.4 200 10 100 0 0 France Germany OECD high income Portugal Spain United Kingdom Figure – Enforcing Contracts in Portugal and comparator economies – Measure of Quality Portugal 2.5 4 2.5 3.5 France 2.5 3 1 4.5 Germany 3 1.5 2 4.5 Spain 3 2.5 2.5 3 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 Page 52   16 0 0 France Germany OECD high income Portugal Spain United Kingdom Doing Business 2018 Portugal Figure – Enforcing Contracts in Portugal and comparator economies – Measure of Quality Portugal 2.5 4 2.5 3.5 France 2.5 3 1 4.5 Germany 3 1.5 2 4.5 Spain 3 2.5 2.5 3 United Kingdom 2 5 3.5 4.5 OECD high income 2.5 2.9 2 3.6 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Portugal Indicator Time (days) 547 Filing and service 30 Trial and judgment 337 Enforcement of judgment 180 Cost (% of claim value) 17.2 Attorney fees 10.7 Court fees 6 Enforcement fees 0.5 Quality of judicial processes index (0-18) 12.5 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 4.0 Court automation (0-4) 2.5 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Portugal – Measure of Quality Page 53   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Portugal Details – Enforcing Contracts in Portugal – Measure of Quality Answer Score Quality of judicial processes index (0-18) 12.5 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 2.5 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 54   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 Portugal 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? Yes 1.0 4. Publication of judgments 0.5 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 Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 55   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Portugal Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) OECD high OECD high Indicator Portugal income income Overall Best Performer Recovery rate (cents on the dollar) 63.8 71.2 71.2 93.1 (Norway) Time (years) 3.0 1.7 1.7 0.4 (Ireland) Page 56   Cost (% of estate) 9.0 9.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Portugal OECD high OECD high Indicator Portugal income income Overall Best Performer Recovery rate (cents on the dollar) 63.8 71.2 71.2 93.1 (Norway) Time (years) 3.0 1.7 1.7 0.4 (Ireland) Cost (% of estate) 9.0 9.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 1 .. .. .. concern) Strength of insolvency framework index (0-16) 14.5 12.1 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Portugal and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.27: Germany (Rank: 4) 80.24: United Kingdom (Rank: 14) 79.67: Portugal (Rank: 15) 78.74: Spain (Rank: 19) 76.12: Regional Average (OECD high income) 73.91: France (Rank: 28) 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 Portugal – Time and Cost Time Cost 3.5 11.0 12 3.0 3 10 9.0 9.1 9.0 2.5 8.0 Cost (% of estate) 8 Time (years) 2 1.9 1.7 6.0 1.5 6 1.5 1.2 1.0 4 1 0.5 2 0 0 France Germany OECD high income Portugal Spain United Kingdom Figure – Resolving Insolvency in Portugal and comparator economies – Measure of Quality Portugal 5.5 3 3 3 Page 57   0 0 France Germany OECD high income Portugal Spain United Kingdom Doing Business 2018 Portugal Figure – Resolving Insolvency in Portugal and comparator economies – Measure of Quality Portugal 5.5 3 3 3 France 6 3 1 1 Germany 6 3 3 3 Spain 6 3 1 2 United Kingdom 5 3 2 1 OECD high income 5.4 2.8 2.3 1.9 0 2 4 6 8 10 12 14 16 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 Portugal and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 90 85.2 80.6 76.6 80 73.5 71.2 70 63.8 60 50 40 30 20 10 0 Portugal France Germany Spain United Kingdom OECD high income Details – Resolving Insolvency in Portugal Indicator Answer Explanation Proceeding liquidation As there is an interest maintaining Mirage in operation, it may opt to initiate a "Processo (after an Especial de Revitalização" (Special Recovery Proceeding) foreseen under articles 17.º-A to attempt at 17.º-I of the Insolvency Code. This will suspend all enforcement actions and force BizBank into reorganization) negotiations. During the negotiation period, no decision on insolvency will be made. Under the case assumptions, BizBank is not willing to restructure the loan. Therefore, it is expected that it will not cooperate in the elaboration and approval of a reorganization plan. After the reorganization plan is rejected by BizBank, which accounts for the majority of votes due to the amount of the credit, the insolvency representative will likely ask the court to declare Mirage insolvent and commence liquidation proceedings. Outcome going concern It is possible to keep the hotel operating during insolvency proceedings by using the cash flow, which is sufficient to cover operating expenses. BizBank will be interested in selling the hotel as a going concern, because this will maximize the sale value. Page 58   Portugal France Germany Spain United Kingdom OECD high income Doing Business 2018 Portugal Details – Resolving Insolvency in Portugal Indicator Answer Explanation Proceeding liquidation As there is an interest maintaining Mirage in operation, it may opt to initiate a "Processo (after an Especial de Revitalização" (Special Recovery Proceeding) foreseen under articles 17.º-A to attempt at 17.º-I of the Insolvency Code. This will suspend all enforcement actions and force BizBank into reorganization) negotiations. During the negotiation period, no decision on insolvency will be made. Under the case assumptions, BizBank is not willing to restructure the loan. Therefore, it is expected that it will not cooperate in the elaboration and approval of a reorganization plan. After the reorganization plan is rejected by BizBank, which accounts for the majority of votes due to the amount of the credit, the insolvency representative will likely ask the court to declare Mirage insolvent and commence liquidation proceedings. Outcome going concern It is possible to keep the hotel operating during insolvency proceedings by using the cash flow, which is sufficient to cover operating expenses. BizBank will be interested in selling the hotel as a going concern, because this will maximize the sale value. Time (in years) 3.0 Taking into consideration the court in which the proceedings have to be claimed and with the presumption that the proceedings will take their natural due course and will not be subject to claim disputes, the special recovery proceedings and insolvency proceedings, together, will take about 3 years from filing to closing. Cost (% of 9.0 Major expenses include remuneration of the administrator, attorneys' fees and fees of other estate) professionals involved in the insolvency proceedings, such as accountants and assessors. Recovery rate (cents on the 63.8 dollar) Details – Resolving Insolvency in Portugal – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 14.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.5 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 Page 59   dollar) Doing Business 2018 Portugal Details – Resolving Insolvency in Portugal – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 14.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 5.5 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 Yes 1.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (a) Yes over all 0.5 pre- commencement creditors, secured or unsecured Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 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 Yes 1.0 plan, does each class vote separately and are creditors in the same class treated Page 60   equally? Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they would obtain in a liquidation? Portugal Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 3.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 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 Page 61   (i) notice period for redundancy dismissal; (ii) 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 Portugal 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 Portugal Answer Hiring Page 62   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Portugal Details – Labor Market Regulation in Portugal Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 36.0 Maximum length of xed-term contracts, including renewals (months) 36.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 735.2 Ratio of minimum wage to value added per worker 0.3 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) 25.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 31.3 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 22.0 Paid annual leave for a worker with 5 years of tenure (working days) 22.0 Paid annual leave for a worker with 10 years of tenure (working days) 22.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 22.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Page 63   Third-party Doing approval Business 2018 if nine workers are dismissed? Portugal No Retraining or reassignment obligation before redundancy? Yes 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 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.6 Notice period for redundancy dismissal for a worker with 10 years of tenure 10.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.9 Severance pay for redundancy dismissal for a worker with 1 year of tenure 1.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure 8.6 Severance pay for redundancy dismissal for a worker with 10 years of tenure 17.1 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 9.1 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 120.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? No Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Portugal 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 Portugal implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2017 Getting Electricity: Portugal made getting an electricity connection faster by reducing the time required to approve electrical connection requests. Paying Taxes: Portugal made paying taxes easier and less costly by using better accounting software and enhancing the online ling system of taxes and decreasing the corporate income tax rate. Labor Market Regulation: Portugal reduced the maximum duration of xed-term contracts. Page 64   DB2016 Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Portugal Business Reforms in Portugal 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 Portugal implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2017 Getting Electricity: Portugal made getting an electricity connection faster by reducing the time required to approve electrical connection requests. Paying Taxes: Portugal made paying taxes easier and less costly by using better accounting software and enhancing the online ling system of taxes and decreasing the corporate income tax rate. Labor Market Regulation: Portugal reduced the maximum duration of xed-term contracts. DB2016 Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate and increasing the allowable amount of the loss carried forward. At the same time, Portugal slightly increased the vehicle tax. Labor Market Regulation: Portugal introduced priority rules for redundancy dismissals and new regulations for collective bargaining agreements. DB2015 Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate and introducing a reduced corporate tax rate for a portion of the taxable pro ts of qualifying small and medium-size enterprises. Enforcing Contracts: Portugal made enforcing contracts easier by adopting a new code of civil procedure designed to reduce case backlogs, streamline court procedures, enhance the role of judges and speed up the resolution of standard civil and commercial disputes. Labor Market Regulation: Portugal reduced the amount of severance pay per year of service and increased the maximum cumulative duration of xed-term contracts. DB2014 Starting a Business: Portugal made starting a business easier by eliminating the requirement to report to the Ministry of Labor. Labor Market Regulation: Portugal reduced the wage premium for weekly holiday work and abolished priority rules for redundancy dismissals. DB2013 Dealing with Construction Permits: Portugal made obtaining construction permits easier by implementing strict time limits to process urban projects and simplifying the associated procedures. Trading across Borders: Portugal made trading across borders easier by implementing an electronic single window for port procedures. Resolving Insolvency: Portugal made resolving insolvency easier by introducing a new insolvency law that expedites liquidation procedures and creates fast-track mechanisms both in and out of court. Labor Market Regulation: Portugal increased the maximum duration of xed-term contracts and reduced the severance pay applicable in cases of redundancy dismissals. DB2012 Starting a Business: Portugal made starting a business easier by allowing company founders to choose the amount of minimum capital and make their paid-in capital contribution up to 1 year after the company’s creation, and by eliminating the stamp tax on company’s share capital subscriptions. Page 65   Dealing with Construction Permits: Portugal made dealing with construction permits easier by streamlining its inspection Starting a Business: Portugal made starting a business easier by allowing company founders to choose the amount of minimum Doing capital Business and 2018 make their Portugal paid-in capital contribution up to 1 year after the company’s creation, and by eliminating the stamp tax on company’s share capital subscriptions. Dealing with Construction Permits: Portugal made dealing with construction permits easier by streamlining its inspection system. DB2011 Dealing with Construction Permits: Portugal made it easier dealing with construction permits by implementing the 95 day time limit for the approval of project designs. Registering Property: Portugal established a one-stop shop for property registration. Paying Taxes: Portugal introduced a new social security code and lowered corporate tax rates. Labor Market Regulation: Portugal approved a new Labor Code. DB2010 Dealing with Construction Permits: Portugal made dealing with construction permits easier by introducing an improved re safety appraisal system for new construction projects and faster registration of new buildings. Registering Property: Portugal speeded up property registration through computerization at the registry backed by an amendment to the registry code making the use of notaries optional. Trading across Borders: Portugal reduced the time required for customs clearance through sta training and improvements in customs procedures. Enforcing Contracts: Portugal reduced the time and improved the procedures for contract enforcement by allowing electronic ling for the initiation of a suit and by reducing the need for intervention by the judge in the enforcement of a judgment. Labor Market Regulation: Portugal increased both the notice period for redundancy dismissals and the maximum cumulative duration of xed-term contracts. DB2009 Dealing with Construction Permits: Portugal made dealing with construction permits easier by allowing online applications for building permits, assigning o cers to each application and simplifying approvals—though it also introduced stricter control of labor regulations, adding a new procedure for inspection during construction. Enforcing Contracts: Portugal reduced procedural complexity in enforcing contracts through the courts by raising the monetary threshold for cases going through summary proceedings. Resolving Insolvency: Portugal made resolving insolvency easier by eliminating the formality of publishing insolvency notices in newspapers, introducing a fast-track procedure for debtors with less than €5,000 in assets, implementing new procedures to accelerate payments to insolvency administrators and limiting appeals. DB2008 Starting a Business: Portugal made starting a business easier by eliminating outdated formalities, simplifying requirements for company registration and implementing an online incorporation system for use by lawyers. Registering Property: Portugal reduced the time required to register property through continued computerization of real estate registries in Lisbon. Protecting Minority Investors: Portugal strengthened investor protections by clarifying directors’ duties, introducing a statutory provision on the business judgment rule and lowering the minimum shareholding threshold relating to the right of action against directors on behalf of listed companies. Paying Taxes: Portugal made paying taxes less costly for companies by reducing the corporate income tax rate. Enforcing Contracts: Portugal made enforcing contracts easier by simplifying the rules for small claims and improving the case management system. Resolving Insolvency: Portugal made resolving insolvency easier through legislation creating fast-track procedures for the voluntary liquidation of commercial enterprises. Page 66   Resolving Insolvency: Portugal made resolving insolvency easier through legislation creating fast-track procedures for the voluntary liquidation Doing Business of commercial 2018 Portugalenterprises. Page 67