Doing Business 2018 Saudi Arabia Economy Pro le of Saudi Arabia 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 Saudi Arabia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Middle East & North DB 2018 Rank Region 190 1 Africa Saudi Arabia Income Category High income 92 DB 2018 Distance to Frontier (DTF) Population 32,275,687 0 100 GNI Per Capita (US$) 21,750 62.50 City Covered Riyadh DB 2018 Distance to Frontier (DTF) 0 100 78.73: United Arab Emirates (Rank: 21) 67.20: Oman (Rank: 71) 62.50: Saudi Arabia (Rank: 92) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Saudi Arabia Ease of Doing Business in Middle East & North DB 2018 Rank Region 190 1 Africa Saudi Arabia Income Category High income 92 DB 2018 Distance to Frontier (DTF) Population 32,275,687 0 100 GNI Per Capita (US$) 21,750 62.50 City Covered Riyadh DB 2018 Distance to Frontier (DTF) 0 100 78.73: United Arab Emirates (Rank: 21) 67.20: Oman (Rank: 71) 62.50: Saudi Arabia (Rank: 92) 60.58: Jordan (Rank: 103) 56.72: Regional Average (Middle East & North Africa) 56.48: Iran, Islamic Rep. (Rank: 124) 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 - Saudi Arabia 1 10 24 28 38 59 55 76 83 82 90 Rank 109 135 136 161 163 168 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Saudi Arabia 100 80.04 79.88 81.19 80 75.52 75.00 75.00 58.78 60 DTF 50.00 49.59 40 20 0.00 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:+2.68 Change:0.00 Investors Change:+0.70 Borders Change:+3.71 Change:0.00 Change:+4.68 Permits Change:+16.67 Change:+1.14 Change:-0.41 Starting a Business Page 4   a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:0.00 Change:+2.68 Change:0.00 Investors Change:+0.70 Borders Change:+3.71 Change:0.00 Change:+4.68 Permits Change:+16.67 Change:+1.14 Doing Business 2018 Saudi Arabia Change:-0.41 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 Saudi Arabia Standardized Company Legal form Limited Liability Company Paid-in minimum capital requirement SAR 0 City Covered Riyadh Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Procedure – Men (number) 10 7.7 4.9 1.00 (New Zealand) Time – Men (days) 17 18.6 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 6.8 18.7 3.1 0.00 (United Kingdom) Procedure – Women (number) 12 8.4 4.9 1.00 (New Zealand) Time – Women (days) 19 19.3 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 6.8 18.7 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 9.9 8.7 0.00 (113 Economies) Figure – Starting a Business in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.85: Oman (Rank: 31) 91.16: United Arab Emirates (Rank: 51) 85.16: Iran, Islamic Rep. (Rank: 97) 84.40: Jordan (Rank: 105) 82.05: Regional Average (Middle East & North Africa) 80.04: Saudi Arabia (Rank: 135) 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 Saudi Arabia – Procedure, Time and Cost Time Cost 6 18 16 5 ost (% of income per capita) 14 4 12 Time (days) 10 3 8 2 6 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 Saudi Arabia Figure – Starting a Business in Saudi Arabia – Procedure, Time and Cost Time Cost 6 18 16 5 Cost (% of income per capita) 14 4 12 Time (days) 10 3 8 6 2 4 1 2 0 0 1 2 3 4 5 6 7 8 9 10 11 * 12 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 Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain a stand alone ID card for a woman 1 day no charge Agency : Home When obtaining a stand alone ID, a Saudi woman has to be identi ed by one of her male relatives like her father, brother, husband or son. This ID card is not just for opening a business but for any activity a woman might have to do. For example, going to university, staying alone at a hospital, etc.  2 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day no charge house Agency : Home If a woman fails to obtain the permission/support of her husband in leaving the home (for example, for entrepreneurial ventures) it is possible that she may su er consequences under the law; for example she may not be entitled to nancial alimony as per Royal Decree No. 53 of 2012, Art. 75 3 Reserve the company name and submit Articles of Association 5 days on average no charge Agency : Uni ed Center (UC)/Companies Department To initiate a company incorporation process, entrepreneurs or their third- party representatives (commonly lawyers) need to go to https://com.er.sa and ll out the necessary forms with information about the company. Through the same platform entrepreneurs select a company name and submit Articles of Association. Within 5 days, the Ministry of Commerce and Industry will complete the due diligence of all the submitted documents. Once the due diligence process is completed an entrepreneur receives an SMS stating that the Articles of Association are ready to be notarized. Also, at Page 7   the end of the registration the newly formed entry is assigned a company (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Saudi Arabia Details – Starting a Business in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs  1 APPLIES TO WOMEN ONLY: Obtain a stand alone ID card for a woman 1 day no charge Agency : Home When obtaining a stand alone ID, a Saudi woman has to be identi ed by one of her male relatives like her father, brother, husband or son. This ID card is not just for opening a business but for any activity a woman might have to do. For example, going to university, staying alone at a hospital, etc.  2 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day no charge house Agency : Home If a woman fails to obtain the permission/support of her husband in leaving the home (for example, for entrepreneurial ventures) it is possible that she may su er consequences under the law; for example she may not be entitled to nancial alimony as per Royal Decree No. 53 of 2012, Art. 75 3 Reserve the company name and submit Articles of Association 5 days on average no charge Agency : Uni ed Center (UC)/Companies Department To initiate a company incorporation process, entrepreneurs or their third- party representatives (commonly lawyers) need to go to https://com.er.sa and ll out the necessary forms with information about the company. Through the same platform entrepreneurs select a company name and submit Articles of Association. Within 5 days, the Ministry of Commerce and Industry will complete the due diligence of all the submitted documents. Once the due diligence process is completed an entrepreneur receives an SMS stating that the Articles of Association are ready to be notarized. Also, at the end of the registration the newly formed entry is assigned a company number. 4 Notarize the Articles of Association with the Notary Public 1 day no charge Agency : First Notary Public The notary public is located in the same building of the UC. After the articles of association are submitted online to the Ministry of Commerce and Industry, it takes a few days for MOCI to review electronically submitted AOA and for the person to come on-site and get it stamped, as well as retrieve the letter of capital deposit from MOCI. An appointment with the notary is then scheduled. The notary public reviews all the documents to make sure that they are complete. Currently, the notary public reviews up to 15 companies per day. The notary’s o ce consists of about 5-6 employees. 5 Pay Company Registration Fees Less than one day SAR 1,200 for Agency : Ministry of Commerce and Industry (online procedure) commercial registration + SAR The fees are only paid after a notary signs the Articles of Association and a 2,000 a fee to notary clerk processes the information in the online system. Then, an become member of entrepreneur or his representative receives an email and an SMS stating Chamber of that the payment can now be made. Most entrepreneurs make payments Commerce + SAR 500 through SADAD (https://www.sadad.com/). All fees are submitted at one. e-magazine publication fee Page 8   public reviews up to 15 companies per day. The notary’s o ce consists of Doing about 5-6 employees. Business 2018 Saudi Arabia 5 Pay Company Registration Fees Less than one day SAR 1,200 for Agency : Ministry of Commerce and Industry (online procedure) commercial registration + SAR The fees are only paid after a notary signs the Articles of Association and a 2,000 a fee to notary clerk processes the information in the online system. Then, an become member of entrepreneur or his representative receives an email and an SMS stating Chamber of that the payment can now be made. Most entrepreneurs make payments Commerce + SAR 500 through SADAD (https://www.sadad.com/). All fees are submitted at one. e-magazine publication fee 6 Open an "under-formation" bank account 1 day no charge Agency : Bank The entrepreneur applies for opening an "under-formation" company bank account at a bank of choice. After the certi cate of registration is issued, the company founders go back to the bank to unblock their capital deposit and activate their bank account. 7 Obtain a Business Location License from the Municipality 4 days SAR 1,000 Agency : Municipality of Riyadh In order to obtain a business location license from the municipality an entrepreneur needs to go to the Municipality and present the lease, commercial registration certi cate as well as a map indicating the exact location of the business. Then, the Municipality appoints an investigator who goes and inspects the property and con rms the precise location. Afterwards, the investigator submits the nal report to the municipality and if everything is in order, the Municipality issues a license and assigns to it a 10-digit identi cation number. 8 Register with the Ministry of Labor 1 day no charge Agency : Ministry of Labor In order to register with the Ministry of Labor, the company must submit its certi cate of registration, articles of association, Chamber of Commerce attested signatories and the business location license. Registration with the Ministry of Labor is needed to register with the General Organization for Social Insurance. Registration can be made online or in person. If the entrepreneur chooses to register online, they must then submit the original documents in person as well. 9 Register with the Post O ce “Wasel” Less than one day SAR 500 Agency : Post O ce (online procedure) Registering with the Post O ce “Wasel” can be done in person, but a majority of entrepreneurs prefer to compete the registration online through the following webportal: https://balady.gov.sa. In order to complete the registration, an entrepreneur needs to create an account, log in with the already existing information, such as geographic location, address and zip code. Then, a payment is submitted through the same website. After which, a registration certi cate is issued electronically. A company must register with the post o ce "Wasel" every year. 10 Make a company seal 1 day SAR 50 Agency : Seal maker The seal must include the Certi cate of Registration number and the name of the company. It costs around SAR 40-50 to make. It is needed to attest signatories at the Chamber of Commerce, register with the General Page 9   registration certi cate is issued electronically. A company must register with Doing the post o ce Business "Wasel" 2018 year. every Arabia Saudi 10 Make a company seal 1 day SAR 50 Agency : Seal maker The seal must include the Certi cate of Registration number and the name of the company. It costs around SAR 40-50 to make. It is needed to attest signatories at the Chamber of Commerce, register with the General Organization for Social Insurance and for the companies’ invoices. It is commonly used in practice. The seal is always used on the following documents: 1) Any contracts 2) Shareholder resolutions 3) Management resolutions 4) O cial letters and notices 5) All Gvt agencies require documents to be put on o cial company letterheads and stamped. 11 Register with the General Organization for Social Insurance (GOSI) 1 day no charge Agency : General Organization for Social Insurance (GOSI) To register for social security insurance, the employer must open a le with the General Organization for Social Insurance (GOSI). This procedure can be done online as follows: The employer visits GOSI’s website, completes an application and provides the company's Ministry of Labor number. The application must be stamped with a company seal. In addition, the location of the entity (business location license) and the designation of the authorized person to represent the company before GOSI must be included. The number that GOSI gives the employer is di erent from his/her Ministry of Labor number. The employer enters username and password and registers the employees with their IDs, wages, occupation, nationality, date of commencement and location. Register with the Department of Zakat 3 days no charge 12 Agency : Zakat Zakat, a religious wealth tax, is assessed based on taxable income and certain assets. To register with DZIT, the employer will visit DZIT's website and complete an online application, attaching the Certi cate of Registration and the details of the authorized person/signatory of the company. Then, the employer receives a unique ID number which is di erent from the Company ID number. The Certi cate of Zakat will be issued and sent by mail and email within 2-3 days. This certi cate is needed for the company to participate in tender o ers and government contracts, among others. 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 Page 10   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Saudi Arabia 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 agencies, these are counted as procedures. Building quality control index (0-15) - 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 Saudi Arabia Standardized Warehouse Estimated value of warehouse SAR 3,846,610.70 City Covered Riyadh Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Procedures (number) 17 16.2 12.5 7.00 (Denmark) Time (days) 89.5 132.1 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 2.3 4.3 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.0 11.8 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.38: United Arab Emirates (Rank: 2) 78.07: Iran, Islamic Rep. (Rank: 25) 75.52: Saudi Arabia (Rank: 38) 72.15: Oman (Rank: 60) 65.74: Jordan (Rank: 110) 59.84: Regional Average (Middle East & North Africa) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost Time Cost 1.6 80 1.4 70 Cost (% of warehouse value) 1.2 60 1 Time (days) 50 0.8 40 0.6 30 0.4 20 10 0.2 0 0 1 *2 *3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 12   component indicators. Doing Business 2018 Saudi Arabia Figure – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost Time Cost 1.6 80 1.4 70 Cost (% of warehouse value) 1.2 60 1 Time (days) 50 0.8 40 0.6 30 0.4 20 10 0.2 0 0 1 *2 *3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 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 Saudi Arabia and comparator economies – Measure of Quality 16 15.0 14 12.5 12.0 11.8 12 11.0 11.0 Index score 10 8 6 4 2 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a geotechnical study / soil test 7 days SAR 4,000 Agency : Private rms BuildCo will request a soil test for the structural calculations for the foundation. 2 Obtain surveyor's report from Riyadh Municipality 3 days no charge Agency : Riyadh Municipality BuildCo must obtain a surveyor's report from the Municipality prior to requesting the building permit. The report outlines whether the intended project can be built on the particular location. It also indicates the boundaries, leveling and area of the land. This report is needed for the Page 13   Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Doing Business 2018 Saudi Arabia Details – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain a geotechnical study / soil test 7 days SAR 4,000 Agency : Private rms BuildCo will request a soil test for the structural calculations for the foundation. 2 Obtain surveyor's report from Riyadh Municipality 3 days no charge Agency : Riyadh Municipality BuildCo must obtain a surveyor's report from the Municipality prior to requesting the building permit. The report outlines whether the intended project can be built on the particular location. It also indicates the boundaries, leveling and area of the land. This report is needed for the consultant to prepare the drawings. 3 Obtain a topographical study of the land 2 days SAR 1,500 Agency : Private rms 4 Apply for building approval and request inspection 7 days SAR 7,804 Agency : Riyadh Municipality BuildCo submits the application le with all the supporting documentation through the online portal located on the Riyadh Municipality website (http://eservices.alriyadh.gov.sa). Documents include: • A cover page • Legal documentation from the owner of the land (in this case BuildCo), and the design engineer (in this case, an employee of BuildCo) • A copy of the applicant’s identity card • Surveyor's report from the branch municipality • Draft of the building permit, which has been prepared in advance by BuildCo and contains full information including the instrument number, street name, the name of the neighborhood, rebounds and components of construction and the amount of construction drawings and number and the date of receipt of payment, and the general location of all data set forth in the license • Building plans drawn to a 50/1 scale with all the annexes • Two copies of the nal plans on A3 paper for Municipal record and a CD containing the complete project information Incomplete les will not be accepted for further processing. Once all documents are submitted, the system will generate the permit fees, which can also be paid online through the Sadad Payment System. After this, BuildCo's engineer must be physically present to submit hard copies of all the plans and sign a sworn a davit of responsibility before picking up the temporary permit. 5 Receive inspection from Riyadh Municipality 1 day no charge Agency : Riyadh Municipality The Municipality physically inspects the premise to ensure that it matches the drawings. The customer must be physically present at the inspection. Page 14   6 Hire independent authorized engineer 1 day SAR 52,024 the plans and sign a sworn a davit of responsibility before picking up the Businesspermit. Doing temporary 2018 Saudi Arabia 5 Receive inspection from Riyadh Municipality 1 day no charge Agency : Riyadh Municipality The Municipality physically inspects the premise to ensure that it matches the drawings. The customer must be physically present at the inspection. 6 Hire independent authorized engineer 1 day SAR 52,024 Agency : Private Company The building standards set forth in the surveyor's report are given to the engineering rm in order for the rm to begin drawing the building plans. 7 Apply for a civil defense approval from the Department of Civil Defense 7 days no charge Agency : Civil Defense Municipality will only issue a building permit after obtaining the approval document from the Civil Defense Department. The document should be presented in paper and in original. The Civil Defense needs to con rm that the design is done in compliance with all the safety standards. If everything is in compliance with the existing standards, the department of Civil Defense issues a non-objection certi cate. The initial application can be submitted online but an in-person visit is necessary to present all the original documents and to pick-up the actual approval. The building rm needs to submit re and safety drawings as well as hydraulic calculations. 8 Obtain building permit 12 days SAR 7,804 Agency : Riyadh Municipality BuildCo needs to ll out and attach all the required documentation through the Municipality’s website: http://eservices.alriyadh.gov.sa However, original drawings and copies of all the documents (originals as well) need to be presented in person. Examples of documents include land deed, land surveys, owners’ identity cards. During the in-person visit municipal clerks scan in all the documents for archiving purposes. Once all the documents are presented, the Municipality initiates the review process. The review process for small scale projects lasts 2-3 days. For big buildings, such as sky scrapers, the review process is at least one week. 9 Receive inspection during construction 1 day no charge Agency : Riyadh Municipality The customer noti es the Branch Municipality in person that construction has begun and the site is ready for inspection. Once the site has been inspected, the Municipality will proceed with random inspections. However, the Municipality will likely only inspect once since the supervising engineer is responsible for supervising the construction throughout the project. 10 Request certi cate of completion from the Riyadh Municipality 0.5 days no charge Agency : Riyadh Municipality The customer noti es the Branch Municipality electronically that construction has been completed and the site is ready for inspection. Upon completion, the branch municipality inspects the site to ensure that all work has been performed as stated in the building permit. As of February 2017, once the certi cate of completion is issued, this information is automatically sent to Sewage, Water, Power and Civil Defense. 11 Receive nal inspection to issue certi cate of completion 1 day no charge Page 15   the Municipality will likely only inspect once since the supervising engineer is Doing responsible Saudi the for supervising Business 2018 construction throughout the project. Arabia 10 Request certi cate of completion from the Riyadh Municipality 0.5 days no charge Agency : Riyadh Municipality The customer noti es the Branch Municipality electronically that construction has been completed and the site is ready for inspection. Upon completion, the branch municipality inspects the site to ensure that all work has been performed as stated in the building permit. As of February 2017, once the certi cate of completion is issued, this information is automatically sent to Sewage, Water, Power and Civil Defense. 11 Receive nal inspection to issue certi cate of completion 1 day no charge Agency : Riyadh Municipality Municipality appoints an inspector and this inspector comes to check that all the set backs are in order. Inspectors also check the height of all oors and all the other standard building parameters. Everything has to be built in accordance with previously submitted plans. Inspectors also take multiple pictures of the constructed object for reporting and ling purposes. The nal inspection report can be obtained electronically through the Municipality’s website. 12 Obtain certi cate of completion from the Riyadh Municipality 7 days no charge Agency : Riyadh Municipality 13 Request letter of approval from Civil Defense 1 day no charge Agency : Civil Defense BuildCo must visit the Civil Defense agency in person to request the letter of approval. The Civil Defense must then visit the site to approve that the warehouse is safe for commercial use. 14 Receive nal inspection by Civil Defense 1 day no charge Agency : Civil Defense 15 Obtain letter of approval from Civil Defense 12 days no charge Agency : Civil Defense If the completed building complies with all the re safety regulations, the Civil Defense issues a letter of approval. 16 Obtain water and sewage connection 30 days SAR 16,250 Agency : National Water Company 17 Obtain occupancy certi cate 1 day no charge Agency : Riyadh Municipality The occupancy certi cate needs to be collected in person from the Municipality. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Saudi Arabia – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Page 16   Takes place simultaneously with previous procedure. Doing Business 2018 Saudi Arabia Details – Dealing with Construction Permits in Saudi Arabia – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Unscheduled inspections; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Page 17   Liability Insurance or Decennial Insurance)? (0-1) to obtain building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the Doing Business 2018 Saudi Arabia law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certi cation exam. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. 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 Page 18   time. architect or engineer. Doing Business 2018 Saudi Arabia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 19   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Saudi Arabia Standardized Connection Price of electricity (US cents per kWh) 8.5 Name of utility Saudi Electricity Company (SEC) City Covered Riyadh Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Procedures (number) 5 4.8 4.7 2 (United Arab Emirates) Time (days) 68 81.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 32.1 780.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 6 4.2 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 99.92: United Arab Emirates (Rank: 1) 83.33: Jordan (Rank: 40) 79.88: Saudi Arabia (Rank: 59) 79.35: Oman (Rank: 61) 68.43: Iran, Islamic Rep. (Rank: 99) 67.21: Regional Average (Middle East & North Africa) 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 Saudi Arabia – Procedure, Time and Cost Time Cost 35 60 30 Cost (% of income per capita) 50 25 Time (days) 40 20 30 15 20 10 10 Page 20   5 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Saudi Arabia Figure – Getting Electricity in Saudi Arabia – Procedure, Time and Cost Time Cost 35 60 30 Cost (% of income per capita) 50 25 Time (days) 40 20 30 15 20 10 10 5 0 0 1 *2 3 4 5 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 Saudi Arabia and comparator economies – Measure of Quality 9 8 8 7 7 7 6 6 Index score 5 5 4.2 4 3 2 1 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Getting Electricity in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to utility and await estimate 14 calendar days SAR 0 Agency : Saudi Electricity Company (SEC) The online application system is now operational in Riyadh. The connection fees can also be paid online through the SADAD system. The documents required are commercial license, industrial license, and building permit. SEC receives subscribers' applications in principle after obtaining a building license and starting construction. The subscriber can le an application by phone, fax or online (SADAD system) where the SEC informs customer on the Page 21   requirement. The locations speci ed for the stations and electric meters will Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Doing Business 2018 Saudi Arabia Details – Getting Electricity in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to utility and await estimate 14 calendar days SAR 0 Agency : Saudi Electricity Company (SEC) The online application system is now operational in Riyadh. The connection fees can also be paid online through the SADAD system. The documents required are commercial license, industrial license, and building permit. SEC receives subscribers' applications in principle after obtaining a building license and starting construction. The subscriber can le an application by phone, fax or online (SADAD system) where the SEC informs customer on the requirement. The locations speci ed for the stations and electric meters will be checked and con rmed by utility and then an estimate is delivered. 2 Obtain external inspection by utility 4 calendar days SAR 0 Agency : Saudi Electricity Company (SEC) The utility conducts a site inspection to determine the details of the connection and prepare an estimate of the connection fees. The inspection is generally scheduled within 1 week. There are 5 SEC o ces in Riyadh. Each o ce is divided into 5 zones. The surveyor visits each zone 1-2 times per week. The utility will then prepare an estimate of the connection fees. SEC sends a text to the customer saying the le is ready for payment. The customer goes to the bank and pays the fees or he can pay online via the SADAT system. No inspection of the entire internal wiring, however, is carried out during the process. Upon the completion of the inspection, the customer receives an inspection report, which needs to be picked up in-person. 3 Obtain external works from utility 40 calendar days SAR 24,500 Agency : Saudi Electricity Company (SEC) The external works consist of laying out cables from the warehouse to the closest supply on the LV network. The material is all provided by the utility. If the building is located within grid coverage or at a distance less than 1,000 meters outside of coverage the client pays only the connection fees and does not pay for the actual works. Connection fees were increased, as part of a recent change in low-voltage standards from 127/220 V to 230/400 V. As such, a new "administrative decision" ruled that connection fees be changed in January 2012 from xed per range of capacities to a fee per kVA speci ed by capacity range. The decision was issued by the Saudi Arabia Electricity and Cogeneration Regulatory Authority based on article (9) of the electricity regulations, as well as Ministerial decisions 169 and 324. 4 Obtain meter installation from the utility 7 calendar days SAR 203.24 Agency : Saudi Electricity Company (SEC) The client needs to submit a separate application for meter installation and nal supply. Page 22   Regulatory Authority based on article (9) of the electricity regulations, as well Doing as Ministerial Business decisions 2018 169 and Saudi 324. Arabia 4 Obtain meter installation from the utility 7 calendar days SAR 203.24 Agency : Saudi Electricity Company (SEC) The client needs to submit a separate application for meter installation and nal supply. 5 Obtain Electricity Release Certi cate 7 calendar days SAR 0 Agency : Municipality The Municipality reviews the Certi cate of Completion from the Department of Civil Defense (obtained during the Dealing with Construction Permit indicator). The Municipality also requires a document from SEC proving that the wiring and installation follows the electricity regulations (received in the Procedure 2 from Utility as a result of inspection) to issue the the Certi cate. The municipality authorizes the release of electricity, and the warehouse is energized. Takes place simultaneously with previous procedure. Details – Getting Electricity in Saudi Arabia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 1.9 System average interruption frequency index (SAIFI) 1.2 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 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) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.se.com. sa/en- Page 23   us/Customers/Pages Takes place simultaneously with previous procedure. Doing Business 2018 Saudi Arabia Details – Getting Electricity in Saudi Arabia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 6 Total duration and frequency of outages per customer a year (0-3) 2 System average interruption duration index (SAIDI) 1.9 System average interruption frequency index (SAIFI) 1.2 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 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) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online https://www.se.com. sa/en- us/Customers/Pages /Tari Rates.aspx Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 24   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 Saudi Arabia Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value SAR 3,846,610.70 City Covered Riyadh Page 25   Middle East & OECD high Doing Business 2018 Saudi Arabia Standard Property Transfer Property value SAR 3,846,610.70 City Covered Riyadh Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Procedures (number) 2 5.7 4.6 1.00 (4 Economies) Time (days) 1.5 30.3 22.3 1.00 (3 Economies) Cost (% of property value) 0.0 6.0 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 10.0 13.4 22.7 29.00 (Singapore) Figure – Registering Property in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.02: United Arab Emirates (Rank: 10) 81.19: Saudi Arabia (Rank: 24) 73.62: Oman (Rank: 54) 66.40: Jordan (Rank: 72) 64.16: Iran, Islamic Rep. (Rank: 87) 60.91: Regional Average (Middle East & North Africa) 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 Saudi Arabia – Procedure, Time and Cost Time Cost 1.2 1.4 1 1.2 Cost (% of property value) 1 0.8 Time (days) 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 1 2 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 26   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 Saudi Arabia Figure – Registering Property in Saudi Arabia – Procedure, Time and Cost Time Cost 1.2 1.4 1 1.2 Cost (% of property value) 1 0.8 Time (days) 0.8 0.6 0.6 0.4 0.4 0.2 0.2 0 0 1 2 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 Saudi Arabia and comparator economies – Measure of Quality 25 22.5 21.0 20 15.0 Index score 15 13.0 13.4 10.0 10 5 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Registering Property in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The buyer conducts a title search on the property Less than a day no cost Agency : First Notary Public Department (online procedure) The procedure is conducted by the buyer to verify that (i) the details in the deed provided by the seller match those in the records of the agency; (ii) to get an o cial detailed description of the property and (iii) check if any encumbrances are registered on the property. In order to have access to the information, the buyer needs to be authorized by the seller. Since April 2017, it is possible to access all this information online through the website of the Ministry of Justice. The buyer would obtain a printout with the assigned deed number, which is validated electronically through an o cial digital stamp. Page 27   Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Doing Business 2018 Saudi Arabia Details – Registering Property in Saudi Arabia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 The buyer conducts a title search on the property Less than a day no cost Agency : First Notary Public Department (online procedure) The procedure is conducted by the buyer to verify that (i) the details in the deed provided by the seller match those in the records of the agency; (ii) to get an o cial detailed description of the property and (iii) check if any encumbrances are registered on the property. In order to have access to the information, the buyer needs to be authorized by the seller. Since April 2017, it is possible to access all this information online through the website of the Ministry of Justice. The buyer would obtain a printout with the assigned deed number, which is validated electronically through an o cial digital stamp. 2 Notary drafts the deed and parties sign before the notary 1 day no cost Agency : First Notary Public Department Customers rst check in the front desk and are given a room number where the transfer will happen. The customer proceeds to the Notary’s o ce (after having waited a bit in the assistant’s room). Notary clerks will retrieve all the necessary documents and checks them. Then the clerk will input manually all the relevant information in the electronic Notary system which is linked with the Ministry of Justice’s online portal. and approves the transaction and the change of name. Then the parties meet with the Notary to sign the deed. Both parties or their representatives need to be present for the transfer to take place. The check is handed to the Seller by the Buyer and a new deed is issued: One copy is given to the buyer, with the Notary’s signature; the other one is archived with the parties’ signatures. Takes place simultaneously with previous procedure. Details – Registering Property in Saudi Arabia – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.0 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? First Notary Public Department In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Municipality of Ryadh In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Page 28   Takes place simultaneously with previous procedure. Doing Business 2018 Saudi Arabia Details – Registering Property in Saudi Arabia – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.0 Reliability of infrastructure index (0-8) 4.0 What is the institution in charge of immovable property registration? First Notary Public Department In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Municipality of Ryadh In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 1.5 Who is able to obtain information on land ownership at the agency in charge of Only 0.0 immovable property registration in the largest business city? intermediaries and interested parties Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://www.moj. gov.sa/ar/Ministr y/Pages/DeedsR equirments.aspx Is the applicable fee schedule for any property transaction at the agency in charge of Yes, in person 0.0 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Page 29   Link for Doing online access: Business 2018 Saudi Arabia Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 59,823 property transfers in the 1436 Hijri year in Riyadh Who is able to consult maps of land plots in the largest business city? Only 0.0 intermediaries and interested parties Is the applicable fee schedule for accessing maps of land plots made publicly available No cost 0.5 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a Yes, in person 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) 0.0 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 No 0.0 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? No 0.0 Land dispute resolution index (0–8) 4.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 Page 30   engaged in good faith in a property transaction based on erroneous information Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Doing Business 2018 Saudi Arabia Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar. 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. 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 General court property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for More than 3 0.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: From October 2015 to October 2016 (year 1437 in Saudi Arabia) the amount of real estate disputes in Riyadh amounted to 4,866. From October 2016 until July 2017 (year 1438 in Saudi Arabia) there were had 3.897 Real Estate disputes in Riyadh. 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. Page 31   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Saudi Arabia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Strength of legal rights index (0-12) 2 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Page 32   Credit registry coverage (% of adults) 0.0 14.0 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Saudi Arabia Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Strength of legal rights index (0-12) 2 1.7 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 4.8 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 14.0 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 50.2 14.2 63.7 100.00 (23 Economies) Figure – Getting Credit in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 50.00: United Arab Emirates (Rank: 90) 50.00: Iran, Islamic Rep. (Rank: 90) 50.00: Saudi Arabia (Rank: 90) 35.00: Oman (Rank: 133) 32.25: Regional Average (Middle East & North Africa) 25.00: Jordan (Rank: 159) 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 Saudi Arabia and comparator economies 2.5 2 2 2 2 1.7 Index score 1.5 1 1 0.5 0 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Legal Rights in Saudi Arabia 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 Yes requiring a speci c description of collateral? Page 33   Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Doing Business 2018 Saudi Arabia Details – Legal Rights in Saudi Arabia 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 Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring 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 No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Saudi Arabia and comparator economies 10 8 8 8 8 Index score 6 6 5 4.8 4 2 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Credit Information in Saudi Arabia Page 34   0 Saudi Arabia Doing Business 2018 Iran, Saudi Islamic Rep. Arabia Jordan Oman United Arab Emirates Middle East & North Africa Details – Credit Information in Saudi Arabia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 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 10,957,917 0 Number of firms 165,902 0 Total 11,123,819 0 Percentage of adult population 50.2 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 35   transactions; Available legal remedies (damages, Percentage of adult population 50.2 0.0 Doing Business 2018 Saudi Arabia Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 4.7 6.4 Page 36   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Saudi Arabia Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Extent of conflict of interest regulation index (0- 7 4.9 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 4.7 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: United Arab Emirates (Rank: 10) 75.00: Saudi Arabia (Rank: 10) 47.92: Regional Average (Middle East & North Africa) 46.67: Oman (Rank: 124) 40.00: Jordan (Rank: 146) 33.33: Iran, Islamic Rep. (Rank: 170) 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 Saudi Arabia and comparator economies – Measure of Quality Saudi Arabia 9 8 9 8 7 4 Iran, Islamic Rep. 2 4 7 3 3 1 Jordan 7 4 4 5 2 2 Oman 4 5 8 4 4 3 United Arab Emirates 7 9 10 9 6 4 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Middle East & North Africa 5.2 4.6 6.2 4.2 4.7 4 0 5 10 15 20 25 30 35 40 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 Saudi Arabia – Measure of Quality Answer Score Page 37   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Saudi Arabia Details – Protecting Minority Investors in Saudi Arabia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 7 Extent of disclosure index (0-10) 9 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders 3.0 excluding interested parties Must an external body review the terms of the transaction before it takes place? (0-1) Yes 1.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts 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) 8 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 Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by Yes 1.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair 2.0 or prejudicial Ease of shareholder suits index (0-10) 4 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) No 0.0 Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Page 38   Can the Doing obtain any plainti 2018 Business documents Saudi Arabiafrom the defendant and witnesses at trial? (0-3) No 0.0 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) 8 Extent of shareholder rights index (0-10) 7 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new No 0.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a No 0.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 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) 8 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising 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 Page 39   Buyer pay declared MustBusiness Doing dividends 2018 Saudi within a maximum period set by law? Arabia 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 No 0.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender Yes 1.0 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) 9 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, Page 40   and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Saudi Arabia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect Post ling Index tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Payments (number per year) 3 17.9 10.9 3 (Hong Kong SAR, China) Page 41   return, but within the tax assessment period. Doing Business 2018 Saudi Arabia Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Payments (number per year) 3 17.9 10.9 3 (Hong Kong SAR, China) Time (hours per year) 47 203.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 15.7 32.6 40.1 18.47% (32 Economies) Postfiling index (0-100) 0.00 50.56 83.45 99.38 (Estonia) Figure – Paying Taxes in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 99.44: United Arab Emirates (Rank: 1) 90.60: Oman (Rank: 11) 75.00: Saudi Arabia (Rank: 76) 74.31: Regional Average (Middle East & North Africa) 70.75: Jordan (Rank: 97) 56.57: Iran, Islamic Rep. (Rank: 150) 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 Saudi Arabia and comparator economies – Measure of Quality 90 85.32 80 70 60 Index score 50.56 50 40 34.69 30 26.88 20 10 0.00 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Paying Taxes in Saudi Arabia Total tax and Tax or mandatory Payments Notes on Time Statutory tax contribution rate (% Notes contribution (number) Payments (hours) rate Tax base of profit) on TTR Page 42   Employer paid - 1 online 16 11% (12% gross salaries 13.54 Doing Business 2018 Saudi Arabia Figure – Paying Taxes in Saudi Arabia and comparator economies – Measure of Quality 90 85.32 80 70 60 Index score 50.56 50 40 34.69 30 26.88 20 10 0.00 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Paying Taxes in Saudi Arabia Total tax and Tax or mandatory Payments Notes on Time Statutory tax contribution rate (% Notes contribution (number) Payments (hours) rate Tax base of profit) on TTR Employer paid - 1 online 16 11% (12% gross salaries 13.54 Labor contributions starting September 2014) Zakat 1 online 31 2.5% Higher of zakat 2.18 base or taxable income Employee paid - 0 online 9% (10% gross salaries 0.00 withheld Social security and starting contributions jointly September 2014) Vehicle fee 1 0.00 small amount Totals 3 47 15.7 Details – Paying Taxes in Saudi Arabia – Tax by Type Taxes by type Answer Profit tax (% of profit) 2.2 Labor tax and contributions (% of profit) 13.5 Other taxes (% of profit) 0.0 Details – Paying Taxes in Saudi Arabia – Measure of Quality Answer Score Post ling index (0-100) 0.00 Page 43   Doing Business 2018 Saudi Arabia Answer Score Post ling index (0-100) 0.00 VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process N/A Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) No VAT No VAT Time to obtain a VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax audit (hours) 70.5 0 Time to complete a corporate income tax audit (weeks) 33.6 0 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit Page 44   submitted to a customs agency at 8:00a.m., are processed overnight and economies a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Saudi Arabia 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 45   of agriculture or industry, national security agencies and any other Doing Business 2018 Saudi Arabia government authorities. Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Time to export: Border compliance (hours) 69 62.6 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 363 464.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 81 74.3 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 105 243.6 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 228 112.3 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 779 540.7 111.6 0.00 (27 Economies) Time to import: Documentary compliance 122 94.5 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 390 266.2 25.6 0.00 (30 Economies) Figure – Trading across Borders in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.93: Jordan (Rank: 53) 79.39: Oman (Rank: 72) 71.50: United Arab Emirates (Rank: 91) 58.07: Regional Average (Middle East & North Africa) 49.59: Saudi Arabia (Rank: 161) 46.11: Iran, Islamic Rep. (Rank: 166) 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 Saudi Arabia – Time and Cost Time Cost 250 900 228 779 800 200 700 600 Time (hours) Cost (USD) 150 122 500 363 390 400 100 81 69 300 50 200 105 100 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary CompliancePage 46   Doing Business 2018 Saudi Arabia Figure – Trading across Borders in Saudi Arabia – Time and Cost Time Cost 250 900 228 779 800 200 700 600 Time (hours) Cost (USD) 150 122 500 363 390 400 100 81 69 300 50 200 105 100 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Saudi Arabia Characteristics Export Import Product HS 39 : Plastics and articles thereof HS 8708: Parts and accessories of motor vehicles Trade partner China Japan Border Jeddah port Jeddah port Distance (km) 995 995 Domestic transport time (hours) 17 14 Domestic transport cost (USD) 1408 1692 Details – Trading across Borders in Saudi Arabia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 29.0 150.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 69.0 213.0 Import: Clearance and inspections required by customs authorities 93.2 240.4 Import: Clearance and inspections required by agencies other than customs 98.8 200.0 Import: Port or border handling 129.2 338.5 Details – Trading across Borders in Saudi Arabia – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Page 47   Domestic transport cost (USD) 1408 1692 Doing Business 2018 Saudi Arabia Details – Trading across Borders in Saudi Arabia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 29.0 150.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 69.0 213.0 Import: Clearance and inspections required by customs authorities 93.2 240.4 Import: Clearance and inspections required by agencies other than customs 98.8 200.0 Import: Port or border handling 129.2 338.5 Details – Trading across Borders in Saudi Arabia – Trade Documents Export Import Bill of lading Bill of lading Certificate of origin Certificate of origin Commercial invoice Commercial invoice Customs declaration Customs declaration Packing list Packing list SOLAS certificate Trade license Certificate of conformity SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees Page 48   economies the data are also collected for the second largest business city. SOLAS certificate Doing Business 2018 Saudi Arabia 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 SAR 157,353.00 Court name Riyadh Board of Grievances, Commercial Circuit City Covered Riyadh Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Time (days) 575 638.5 577.8 164.00 (Singapore) Cost (% of claim value) 27.5 24.4 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 8.0 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 74.02: United Arab Emirates (Rank: 12) 60.02: Oman (Rank: 67) 59.07: Iran, Islamic Rep. (Rank: 80) Page 49   of judicial processes Quality Business Doing index (0-18) 2018 Saudi Arabia 8.0 5.9 11.0 15.50 (Australia) Figure – Enforcing Contracts in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 74.02: United Arab Emirates (Rank: 12) 60.02: Oman (Rank: 67) 59.07: Iran, Islamic Rep. (Rank: 80) 58.78: Saudi Arabia (Rank: 83) 54.21: Regional Average (Middle East & North Africa) 53.71: Jordan (Rank: 118) 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 Saudi Arabia – Time and Cost Time Cost 700 642 638.5 35 31.2 577.8 598 575 600 27.5 30 Cost (% of claim value) 505 24.4 500 445 25 21.5 21.0 Time (days) 400 17.0 20 15.1 300 15 200 10 100 5 0 0 Iran, Islamic Rep. Jordan Middle East & OECD high income Oman Saudi Arabia United Arab Emirates North Africa Figure – Enforcing Contracts in Saudi Arabia and comparator economies – Measure of Quality Saudi Arabia 2 2 0 4 Iran, Islamic Rep. 2.5 1 1 0.5 Jordan 3 2 0 2 Oman 2.5 0 4 United Arab Emirates 2 3 3 5 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 12 Page 50   14 Iran, Islamic Rep. Jordan Middle East & OECD high income Oman Saudi Arabia United Arab Emirates North Africa Doing Business 2018 Saudi Arabia Figure – Enforcing Contracts in Saudi Arabia and comparator economies – Measure of Quality Saudi Arabia 2 2 0 4 Iran, Islamic Rep. 2.5 1 1 0.5 Jordan 3 2 0 2 Oman 2.5 0 4 United Arab Emirates 2 3 3 5 OECD high income 2.5 2.9 2 3.6 Middle East & North Africa 2.1 0.7 0.3 2.8 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Saudi Arabia Indicator Time (days) 575 Filing and service 30 Trial and judgment 365 Enforcement of judgment 180 Cost (% of claim value) 27.5 Attorney fees 20 Court fees 7.5 Enforcement fees 0 Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 4.0 Case management (0-6) 2.0 Court automation (0-4) 0.0 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Saudi Arabia – Measure of Quality Page 51   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Saudi Arabia Details – Enforcing Contracts in Saudi Arabia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 8.0 Court structure and proceedings (-1-5) 4.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? No -1.0 Case management (0-6) 2.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 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) 0.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 52   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Saudi Arabia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.0 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme No court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 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 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., 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 53   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 Saudi Arabia Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Recovery rate (cents on the dollar) 0.0 25.5 71.2 93.1 (Norway) Time (years) no practice 3.0 1.7 0.4 (Ireland) Page 54   Cost (% of estate) no practice 13.8 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Saudi Arabia Middle East & OECD high Indicator Saudi Arabia North Africa income Overall Best Performer Recovery rate (cents on the dollar) 0.0 25.5 71.2 93.1 (Norway) Time (years) no practice 3.0 1.7 0.4 (Ireland) Cost (% of estate) no practice 13.8 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 0.0 5.4 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Saudi Arabia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 49.80: United Arab Emirates (Rank: 69) 42.40: Oman (Rank: 98) 30.53: Jordan (Rank: 146) 30.45: Regional Average (Middle East & North Africa) 23.93: Iran, Islamic Rep. (Rank: 160) 0.00: Saudi Arabia (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Saudi Arabia – Time and Cost Time Cost 5 25 4.5 20.0 4.0 20.0 4 20 3.2 Cost (% of estate) Time (years) 15.0 3.0 3.0 3 13.8 15 2 1.7 9.1 10 1 3.5 5 0 0 Iran, Islamic Rep. Jordan Middle East & OECD high income Oman no practice United Arab Emirates North Africa Saudi Arabia Figure – Resolving Insolvency in Saudi Arabia and comparator economies – Measure of Quality Saudi Arabia 0 2 0 Page 55   Iran, Islamic Rep. 2 2 1 0 Iran, Islamic Rep. Jordan Middle East & OECD high income Oman no practice United Arab Emirates North Africa Saudi Arabia Doing Business 2018 Saudi Arabia Figure – Resolving Insolvency in Saudi Arabia and comparator economies – Measure of Quality Saudi Arabia 0 2 0 Iran, Islamic Rep. 2 2 1 0 Jordan 2 2 1 0 Oman 4 2 1 0 United Arab Emirates 6 2 1 2 OECD high income 5.4 2.8 2.3 1.9 Middle East & North Africa 3.3 2.1 0.9 0.2 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Saudi Arabia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 40 38.1 35 30 27.7 28.7 25.5 25 20 15.4 15 10 5 0.0 0 Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Details – Resolving Insolvency in Saudi Arabia Indicator Answer Explanation Proceeding No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Outcome piecemeal sale According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Time (in years) No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this Page 56   circumstance, it is not possible to assess the time, the cost or the outcome associated with Saudi Arabia Iran, Islamic Rep. Jordan Oman United Arab Emirates Middle East & North Africa Doing Business 2018 Saudi Arabia Details – Resolving Insolvency in Saudi Arabia Indicator Answer Explanation Proceeding No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Outcome piecemeal sale According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Time (in years) No Practice According to the research conducted by the team, there were no foreclosure, liquidation or reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Cost (% of No Practice According to the research conducted by the team, there were no foreclosure, liquidation or estate) reorganization proceedings filed in the country in the last 12 months. Due to this circumstance, it is not possible to assess the time, the cost or the outcome associated with the insolvency scenario described in the case study. Recovery rate (cents on the 0.0 dollar) Details – Resolving Insolvency in Saudi Arabia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 0.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 0.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Page 57   Does the insolvency framework allow avoidance of preferential transactions? No 0.0 dollar) Doing Business 2018 Saudi Arabia Details – Resolving Insolvency in Saudi Arabia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 0.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 0.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome No 0.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? No 0.0 Does the insolvency framework allow avoidance of undervalued transactions? No 0.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 0.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Page 58   Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment Doing Businessof the 2018insolvency Saudi representative? Arabia Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to No 0.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 59   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 Saudi Arabia 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 Saudi Arabia Answer Hiring Page 60   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Saudi Arabia Details – Labor Market Regulation in Saudi Arabia Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) 48.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 0.0 Ratio of minimum wage to value added per worker 0.0 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 18.0 Paid annual leave for a worker with 5 years of tenure (working days) 26.0 Paid annual leave for a worker with 10 years of tenure (working days) 26.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 23.3 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 61   Third-party Doing approval Business 2018 if nine workers Saudi are dismissed? Arabia No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 8.6 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 8.6 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.6 Severance pay for redundancy dismissal for a worker with 1 year of tenure 2.2 Severance pay for redundancy dismissal for a worker with 5 years of tenure 10.8 Severance pay for redundancy dismissal for a worker with 10 years of tenure 32.5 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 15.2 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 70.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 12.0 Business Reforms in Saudi Arabia 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 Saudi Arabia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Saudi Arabia made starting a business easier through the use of an online system that merges the name reservation and submission of the articles of association into one procedure. Saudi Arabia also improved the online payment system, removing the need to pay fees in person. Registering Property: Saudi Arabia improved the e ciency of its land administration system by implementing an online platform to check for ownership and encumbrances and by streamlining the property registration process. Additionally, Saudi Arabia made registering property easier by improving the land administration system’s dispute resolution mechanisms. Protecting Minority Investors: Saudi Arabia strengthened minority investor protections by increasing shareholder rights and Page 62   Minimum contribution period for unemployment protection (months)? 12.0 Doing Business 2018 Saudi Arabia Business Reforms in Saudi Arabia 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 Saudi Arabia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Saudi Arabia made starting a business easier through the use of an online system that merges the name reservation and submission of the articles of association into one procedure. Saudi Arabia also improved the online payment system, removing the need to pay fees in person. Registering Property: Saudi Arabia improved the e ciency of its land administration system by implementing an online platform to check for ownership and encumbrances and by streamlining the property registration process. Additionally, Saudi Arabia made registering property easier by improving the land administration system’s dispute resolution mechanisms. Protecting Minority Investors: Saudi Arabia strengthened minority investor protections by increasing shareholder rights and role in major decisions, clarifying ownership and control structures, requiring greater corporate transparency and regulating the disclosure of transactions with interested parties. Paying Taxes: Saudi Arabia made paying taxes by improving its online platforms used by taxpayers for ling and paying taxes. Trading across Borders: Saudi Arabia reduced the time for documentary compliance for exports and imports by reducing the number of documents required for customs clearance. Enforcing Contracts: Saudi Arabia made enforcing contracts easier by introducing an electronic case management system for the use of judges and lawyers. DB2017 Starting a Business: Saudi Arabia made starting a business easier by reducing the time to notarize a company's article of association. Protecting Minority Investors: Saudi Arabia strengthened minority investor protections by strengthening ownership and control structures of companies and by increasing corporate transparency requirements. Paying Taxes: Saudi Arabia made paying taxes more di cult by introducing a more complex income tax return. Labor Market Regulation: Saudi Arabia increased the length of the notice period for redundancy dismissals. DB2016 Registering Property: Saudi Arabia made property transfers faster by introducing a new computerized system at the land registry. DB2014 Trading across Borders: DB2013 Getting Electricity: Saudi Arabia made getting electricity more expensive by increasing the connection fees. Paying Taxes: Saudi Arabia made paying taxes easier for companies by introducing online ling and payment systems for social security contributions. Enforcing Contracts: Saudi Arabia made enforcing contracts easier by expanding the computerization of its courts and introducing an electronic ling system. DB2012 Starting a Business: Saudi Arabia made starting a business easier by bringing together representatives from the Department of Page 63   Zakat and Income Tax and the General Organization of Social Insurance at the Uni ed Center to register new companies with their Doing Business 2018 DB2012 Saudi Arabia Starting a Business: Saudi Arabia made starting a business easier by bringing together representatives from the Department of Zakat and Income Tax and the General Organization of Social Insurance at the Uni ed Center to register new companies with their agencies. DB2011 Dealing with Construction Permits: Saudi Arabia made dealing with construction permits easier for the second year in a row by introducing a new, streamlined process. Getting Credit: An amendment to Saudi Arabia’s commercial lien law enhanced access to credit by making secured lending more exible and allowing out-of-court enforcement in case of default. Trading across Borders: Saudi Arabia reduced the time to import by launching a new container terminal at the Jeddah Islamic Port. Resolving Insolvency: Saudi Arabia speeded up the insolvency process by providing earlier access to amicable settlements and putting time limits on the settlements to encourage creditors to participate. DB2010 Starting a Business: Saudi Arabia made starting a business easier by introducing a one-stop center at the Ministry of Commerce that merged registration procedures and simpli ed publication requirements. Dealing with Construction Permits: Saudi Arabia made dealing with construction permits less time consuming by introducing a 1-day permitting procedure that enables builders to obtain a temporary building permit allowing them to begin construction after 1 day and a nal building permit after 1 week. DB2009 Starting a Business: Saudi Arabia reduced the time and cost to start a business by eliminating non-value-added formalities. Registering Property: Saudi Arabia made property registration faster and easier by adopting a comprehensive electronic system for registering title deeds. Protecting Minority Investors: Saudi Arabia strengthened investor protections by prohibiting interested parties from voting on the approval of related-party transactions and by increasing sanctions against directors found liable for harm to a company resulting from a transaction in which they had a personal interest. Resolving Insolvency: Saudi Arabia introduced strict deadlines for bankruptcy procedures, with the result that auctions of debtors’ assets now take place more quickly than before. DB2008 Starting a Business: Saudi Arabia made starting a business easier by eliminating the paid-in minimum capital requirement and speeding up company registration. Getting Credit: Saudi Arabia’s private credit bureau launched a commercial credit bureau that issues reports on companies, including on their credit exposure. Trading across Borders: Saudi Arabia made importing easier by abolishing the requirement for a consular certi cate, allowing the electronic transfer of data (and therefore eliminating the requirement for hard copies of documents) and improving the capacity of facilities in the port of Jeddah. Page 64   the electronic transfer of data (and therefore eliminating the requirement for hard copies of documents) and improving the capacity of facilities Doing in the port Business of Jeddah. 2018 Saudi Arabia Page 65