Haïti Doing Business 2016: Profil Économique

Haiti Doing Business 201 6 Economy Profile 2016 Haiti Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 2 Haiti Doing Business 201 6 © 201 6 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone : 202 - 473 - 1000; Internet : www.worldbank.org Some rights reserved 1 2 3 4 18 17 16 15 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. This work is available under the Creative Commons Attribution 33.0 IGO license (CC BY 3.0 IGO). http://creativecommons.org/licenses/by/3.0/igo . Under the Creative Commons Attribution license, you are fre e to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution — Please cite the work as follows: World Bank. 201 6 . Doing Business 201 6 : Measuring Regulatory Quality and Efficiency . Washin gton, DC: World Bank Group. DOI: 10.1596/978 - 1 - 4648 - 0667 - 4 . License: Creative Commons Attribution CC BY 3.0 IGO Translations — If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations — If you create an adaptation of this work, please add the following discl aimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content — The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third - party - owned individual component or part contained in the work will not in fringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re - use a component of the work, it is your responsibility to determine whether permission is needed for that re - use and t o obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division , The World Bank, 1818 H Str eet NW, Washington, DC 20433, USA; fax: 202 - 522 - 2625; e - mail: pubrights@worldbank.org. ISBN (paper): 978-1-4648-0667-4 ISBN (electronic): 978-1-4648-0668-1 DOI: 10.1596/978-1-4648-0667-4 ISSN: 1729-2638 Cover design: Corporate Visions, Inc. 3 Haiti Doing Business 201 6 CONTENTS Introduction .................................................................................................................................. 4 Starting a business ..................................................................................................................... 17 Dealing with construction permits ........................................................................................... 25 Getting electricity ....................................................................................................................... 36 Registering property .................................................................................................................. 44 Getting credit .............................................................................................................................. 55 Protecting minority investors ................................................................................................... 60 Paying taxes ................................................................................................................................ 66 Trading across borders .............................................................................................................. 70 Enforcing contracts .................................................................................................................... 76 Resolving insolvency .................................................................................................................. 83 Labor market regulation ........................................................................................................... 90 Distance to frontier and ease of doing business ranking ...................................................... 96 Resources on the Doing Business website ............................................................................ 100 4 Haiti Doing Business 201 6 INTRODUCTION Doing Business sheds light on how easy or difficult it is for a local entrepreneur to open and run a small to medium-size business when complying with relevant regulations. It measures and tracks changes in regulations affecting 11 areas in the life cycle of a business: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enf orcing contracts , resolving insolvency and labor market regulation . Doing Business 2016 presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on labor market regulation indicators or in clude the topic in the aggregate distance to frontier score or ranking on the ease of doing business. In a series of annual reports Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 189 economies, from Afghanistan to Zimbabwe, over time. The data set covers 47 economies in Sub- Saharan Africa, 32 in Latin America and the Caribbean, 25 in East Asia and the Pacific, 2 5 in Eastern Europe and Central Asia, 20 in the Middle E ast and North Africa and 8 in South Asia, as well as 3 2 OECD high - income economies. The indicators are used to analyze economic outcomes and identify what reforms have worked, where and why. This economy profile presents the Doing Business indicators for Haiti. To allow useful comparison, it also provides data for other selected economies (comparator economies) for each indicator. The data in this report are current as of June 1, 201 5 (except for the paying taxes indicators, which cover the period January – December 201 4 ). The Doing Business methodology has limitations. Other areas important to business —such as an economy’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders and getting electricity), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions — are not directly studied by Doing Business . The indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policy makers in designing regulatory reform. More information is available in the full report. Doing Business 201 6 presents the indicators, analyzes their rel ationship with economic outcomes and presents business regulatory reforms. The data, along with information on ordering Doing Business 201 6 , are available on the Doing Business website at http://www.doingbusiness.org . 5 Haiti Doing Business 201 6 CHANGES IN DOING BUSINESS 2016 As part of a two-year update in methodology, Doing Business 2016 expands the focus of five indicator sets (dealing with construction permits, getting electricity, registering property, enforcing contracts and labor market regulation), substantially revises the methodology for one indicator set (trading across borders) and implements small updates to the methodology for another (protecting minority investors). The indicators on dealing with construction permits now include an index of the quality of building regulation and its implementation. The getting electricity indicators now include a measure of the price of electricity consumption and an index of the reliability of electricity supply and transparency of tariffs. Starting this year, the registering property indicators include an index of the quality of the land administration system in each economy in addition to the indicators on the number of procedures and the time and cost to transfer property. And for enforcing contracts an index of the quality and efficiency of judicial processes has been added while the indicator on the number of procedures to enforce a contract has been dropped. The scope of the labor market regulation indicator set has also been expanded, to include more areas capturing aspects of job quality. The labor market regulation indicators continue to be excluded from the aggregate distance to frontier score and ranking on the ease of doing business. The case study underlying the trading across borders indicators has been changed to increase its relevance. For each economy the export product and partner are now determined on the basis of the economy’s comparative advantage, the import product is auto parts, and the import partner is selected on the basis of which economy has the highest trade value in that product. The indicators continue to measure the time and cost to export and import. Beyond these changes there is one other update in methodology, for the protecting minority investors indicators. A few points for the extent of shareholder governance index have been fine-tuned, and the index now also measures aspects of the regulations applicable to limited companies rather than privately held joint stock companies. For more details on the changes, see the “What is changing in Doing Business ?” chapter starting on page 2 7 of the Doing Business 201 6 report. For more details on the data and methodology, please see the “Data Notes” chapter starting on page 119 of the Doing Business 201 6 report . For more details on the distance to f rontier metric, please see the “Distance to frontier and ease of doing business ranking” chapter in this profile . 6 Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT For policy makers trying to improve the ir economy’s regulatory environment for business, a good place to start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking. Doing Business presents results for 2 aggregate measures: the distance to frontier score and the ease of doing business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. (S ee the chapter on the distance to frontier and ease of doing business ). The ease of doing business ranking compares economies with one another; the distance to frontier score benchmarks economies with respect to regulatory best practice, showing the absolute distance to the best performance on each Doing Business indicator. When compared across years, the distance to frontier score shows how much the regulatory environment for local entrepreneurs in an economy has changed over time in absolute terms, while the ease of doing business ranking can show only how much the regulatory environment has changed relative to that in other economies. The 10 topics included in the ranking in Doing Business 201 6 : 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. The labor market regulation indicators are not included in this year’s aggregate ease of doing business ranking, but the data are presented in the economy profile. ECONOMY OVERVIEW Region : Latin America & Caribbean Income category : Low income Population : 10,461,409 GNI per capita (US$) : 830 DB201 6 rank : 182 DB201 5 rank : 179 * Change in ran k : - 3 DB 2016 DTF: 39.56 DB 2015 DTF: 39.51 Change in DTF: 0.05 * DB201 5 ranking shown is no t last year’s published ranking but a comparable ranking for DB201 5 that capture s the effects of such factors as data revisions and the changes in methodology . See the data notes starting on page 119 of the Doing Business 201 6 report for sources and definitions . Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy stands in the aggregate ranking on the ease of doing business is useful. Also useful is to know how it ranks relative to comparator economies and relative to the regional average (figure 1.2 ). The economy’s rankings (figure 1.3) and distance to frontier scores (figure 1.4) on the topics included in the ease of doing business ranking provide another perspective. Figure 1.2 How Haiti and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2015 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population - weighted average for the 2 cities. Source: Doing Business database. 9 Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Haiti (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Haiti ( S cale: Score 0 center, Score 100 outer edge) Source: Doing Business database. Note: The rankings are benchmarked to June 201 5 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the fronti er. For the economies for which the data cover 2 cities, scores are a population - weighted average for the 2 cities. 10 Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business tells only part of the story, so do changes in that ranking. Yearly movements in rankings can provide some indication of changes in an e conomy’s regulatory environment for firms, but they are always relative. Moreover, year-to-year changes in the overall rankings do not reflect how the business regulatory environment in an economy has changed over time — or how it has changed in different areas. To aid in assessing such changes, Doing Business introduced the distance to frontier score . This measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator . Comparing the measure for an economy at 2 points in time allows users to assess how much the economy’s regulatory environment as measured by Doing Business has changed over time — how far it has moved toward (or away from) the most efficient practices and strongest regulations in areas covered by Doing Business (figure 1. 5 ). Figure 1. 5 How far has Haiti come in the areas measured by Doing Business ? Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator. Starting a business is comparable to 2010. G etting credit , protecting minority investors, paying taxes and resolving insolvency had methodology changes in 2014 and thus are only comparable to 2013 . Dealing with construct ion permits, registering property, trading across borders, enforcing contracts and getting electricity had methodology changes in 2015 and thus are only comparable to 2014 . The measure is normalized to range between 0 and 100, with 100 representing the bes t performance (the frontier). See the data notes starting on page 119 of the Doing Business 2016 report for more details on the distance to frontier score . Source: Doing Business database. 11 Haiti Doing Business 201 6 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of the story (table 1.1). The indicators, on their own or in comparison with the indicators of a good practice economy or those of comparator economies in the region, may reveal bottlenecks reflected in large numbers of procedures, long delays or high costs. Or they may reveal unexpected strengths in an area of business regulation — such as a regulatory process that can be completed with a small number of procedures in a few days and at a low cost. Comparison of the economy’s indicators today with those in the previous year may show where substantial bottlenecks persist — and where they are diminishing. Table 1.1 Summary of Doing Business indicators for Haiti Indicator Haiti DB 20 1 6 Haiti DB201 5 Dominican Republic DB201 6 Guyana DB201 6 Jamaica DB201 6 Mexico DB201 6 Puerto Rico (U.S.) DB201 6 Suriname DB201 6 Best performer g lobally DB201 6 Starting a Business (rank) 188 187 110 92 9 65 51 183 New Zealand (1) Starting a Business (DTF Score) 33.53 33.48 83.12 85.42 97.28 88.94 91.11 48.76 New Zealan d (99.96) Procedures (number) 12.0 12.0 7.0 7.0 2.0 6.0 6.0 13.0 New Zealand (1.00)* Time (days) 97.0 97.0 14.5 18.0 3.0 6.3 6.0 84.0 New Zealand (0.50) Cost (% of income per capita) 235.3 246.7 16.4 10.9 5.0 17.9 1.3 100.7 Slovenia (0.00) Paid - in min. capital (% of income per capita) 16.7 17.6 39.8 0.0 0.0 0.0 0.0 0.3 105 Economies (0.00)* Dealing with Construction Permits (rank) 167 165 44 138 72 67 135 109 Singapore (1) Dealing with Construction Permits (DTF Score) 52.86 52 75.01 61.76 71.1 71.76 6 2.21 66.44 Singapore (92.97) Procedures (number) 12.0 12.0 13.0 7.0 17.0 10.5 20.0 10.0 5 Economies (7.00)* 12 Haiti Doing Business 201 6 Indicator Haiti DB 20 1 6 Haiti DB201 5 Dominican Republic DB201 6 Guyana DB201 6 Jamaica DB201 6 Mexico DB201 6 Puerto Rico (U.S.) DB201 6 Suriname DB201 6 Best performer g lobally DB201 6 Time (days) 80.0 80.0 184.0 195.0 129.5 86.4 165.0 223.0 Singapore (26.00) Cost (% of warehouse value) 15.7 16.4 1.8 0.6 0.9 10.2 6.2 0.2 Qatar ( 0.00) Building quality control index (0 - 15) 5.0 5.0 13.0 1.0 10.0 11.7 12.0 6.5 New Zealand (15.00) Getting Electricity (rank) 136 133 149 165 80 72 57 93 Korea, Rep. (1) Getting Electricity (DTF Score) 55.04 55.48 50.58 43 71.09 73.27 76.58 68.44 Korea , Rep. (99.88) Procedures (number) 4.0 4.0 7.0 8.0 7.0 6.8 5.0 4.0 14 Economies (3.00)* Time (days) 60.0 60.0 82.0 109.0 95.0 78.9 32.0 113.0 Korea, Rep. (18.00)* Cost (% of income per capita) 3,639.1 3,495.8 257.0 411.9 242.9 332.9 346.4 467.2 Japan (0 .00) Reliability of supply and transparency of tariff index (0 - 8) 0.0 0.0 0.0 0.0 7.0 7.0 4.0 3.0 18 Economies (8.00)* Registering Property (rank) 179 178 82 125 122 106 164 176 New Zealand (1) Registering Property (DTF Score) 32.83 32.76 65.24 53.06 53 .7 58.74 43.77 36.27 New Zealand (94.46) Procedures (number) 5.0 5.0 6.0 6.0 8.0 6.8 8.0 6.0 4 Economies (1.00)* Time (days) 312.0 312.0 45.0 75.0 18.0 63.7 193.5 106.0 3 Economies (1.00)* Cost (% of property value) 7.1 7.1 3.7 4.6 9.8 5.1 0.9 13.7 Saud i Arabia (0.00) Quality of the land administration index (0 - 30) 3.5 3.5 14.5 6.0 14.0 14.3 9.5 8.5 3 Economies (28.50)* 13 Haiti Doing Business 201 6 Indicator Haiti DB 20 1 6 Haiti DB201 5 Dominican Republic DB201 6 Guyana DB201 6 Jamaica DB201 6 Mexico DB201 6 Puerto Rico (U.S.) DB201 6 Suriname DB201 6 Best performer g lobally DB201 6 Getting Credit (rank) 174 171 97 167 7 5 7 174 New Zealand (1) Getting Credit (DTF Score) 10 10 45 15 85 90 85 10 New Zealand (100) Strength of legal rights index (0 - 12) 2.0 2.0 1.0 3.0 10.0 10.0 10.0 2.0 3 Economies (12.00)* Depth of credit information index (0 - 8) 0.0 0.0 8.0 0.0 7.0 8.0 7.0 0.0 26 Economies (8.00)* Credit registry coverage (% of adults) 1.6 1.1 23.2 0.0 0.0 0.0 0.0 0.0 Portugal (100.00) Credit bureau coverage (% of adults) 0.0 0.0 74.6 2.4 22.4 100.0 100.0 0.0 22 Economies (100.00)* Protecting Minority Investors (rank) 187 187 81 99 57 57 88 166 Singapore (1)* Protecting Minority Investors (DTF Score) 20 20 55 51 .67 58.33 58.33 53.33 35 Singapore (83.33)* Strength of minority investor protection index (0 - 10) 2.0 2.0 5.5 5.2 5.8 5.8 5.3 3.5 3 Economies (8.30)* Extent of conflict of interest regulation index (0 - 10) 3.0 3.0 5.3 5.3 5.7 6.0 7.0 2.3 Singapore (9.30)* Extent of shareholder governance index (0 - 10) 1.0 1.0 5.7 5.0 6.0 5.7 3.7 4.7 4 Economies (8.00)* Paying Taxes (rank) 143 141 77 117 146 92 134 75 United Arab Emirates (1)* Paying Taxes (DTF Score) 61.87 61.87 76.29 68.69 60.95 73.67 63.93 76.45 United Arab Emirates (99.44)* Payments (number per 47.0 47.0 7.0 35.0 37.0 6.0 16.0 30.0 Hong Kong SAR, 14 Haiti Doing Business 201 6 Indicator Haiti DB 20 1 6 Haiti DB201 5 Dominican Republic DB201 6 Guyana DB201 6 Jamaica DB201 6 Mexico DB201 6 Puerto Rico (U.S.) DB201 6 Suriname DB201 6 Best performer g lobally DB201 6 year) China (3.00)* Time (hours per year) 184.0 184.0 316.0 256.0 358.0 286.0 218.0 199.0 Luxembourg (55.00) Total tax rate (% of profit) 40.3 40.3 42.4 32 .3 35.2 51.7 65.8 27.9 Ireland (25.90) Trading Across Borders (rank) 76 75 57 139 146 59 93 77 Denmark (1)* Trading Across Borders (DTF Score) 77.01 77.01 83.51 55.6 50.84 82.09 70.16 75.37 Denmark (100)* Time to export: Border compliance (hours) 30 30 16 72 82 20 48 84 15 Economies (0.00)* Cost to export: Border compliance (USD) 268 268 488 278 599 400 586 348 18 Economies (0.00)* Time to export: Documentary compliance (hours) 4 4 10 200 62 8 2 48 Jordan (0.00) Cost to export: Documentary compliance (USD) 48 48 15 178 314 60 223 40 20 Economies (0.00)* Time to import: Border compliance (hours) 91 91 24 84 106 44 48 48 19 Economies (0.00)* Cost to import: Border compliance (USD) 583 583 579 265 606 450 586 505 28 Economies (0.00)* Time to import: Do cumentary compliance (hours) 60 60 14 156 87 18 2 24 21 Economies (1.00)* Cost to import: Documentary compliance (USD) 150 150 40 163 331 100 223 40 30 Economies (0.00)* Enforcing Contracts 123 120 115 87 107 41 100 186 Singapore (1) 15 Haiti Doing Business 201 6 Indicator Haiti DB 20 1 6 Haiti DB201 5 Dominican Republic DB201 6 Guyana DB201 6 Jamaica DB201 6 Mexico DB201 6 Puerto Rico (U.S.) DB201 6 Suriname DB201 6 Best performer g lobally DB201 6 (rank) Enforcing Co ntracts (DTF Score) 52.49 52.49 54.12 58.55 55.36 67.39 56.41 25.94 Singapore (84.91) Time (days) 530.0 530.0 460.0 581.0 655.0 389.0 620.0 1,715.0 Singapore (150.00) Cost (% of claim) 42.6 42.6 40.9 25.2 45.6 30.9 25.6 37.1 Iceland (9.00) Quality of ju dicial processes index (0 - 18) 7.0 7.0 6.5 7.5 11.0 10.6 7.0 3.5 3 Economies (15.50)* Resolving Insolvency (rank) 189 189 159 156 35 28 7 128 Finland (1) Resolving Insolvency (DTF Score) 0 0 23.7 25.55 69.08 73.03 84.84 34.21 Finland (93.81) Recovery rat e (cents on the dollar) 0.0 0.0 9.2 18.4 64.5 68.9 70.5 8.4 Japan (92.90) Time (years) no practice no practice 3.5 3.0 1.1 1.8 2.5 5.0 Ireland (0.40) Cost (% of estate) no practice no practice 38.0 28.5 18.0 18.0 11.0 30.0 Norway (1.00) Outcome (0 as pi ecemeal sale and 1 as going concern) 0 0 0 0 1 1 1 0 Strength of insolvency framework index (0 - 16) 0.0 0.0 6.0 5.0 11.0 11.5 15.0 9.5 4 Economies (15.00)* Source: Doing Business database. Note: DB2015 rankings shown are not last year’s published ranking s but comparable rankings for DB2015 that capture the effects of such factors as data revisions and changes to the methodology. The global best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2016 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and VAT or sales tax. If an economy has no laws or regulations covering a specific area — for example, insolvency — it receives a “no practice” mark. Similarly, an economy receives a “no practice” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name 16 Haiti Doing Business 201 6 indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). 17 Haiti Doing Business 201 6 STARTING A BUSINESS Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to st art a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability c ompanies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more go od jobs and generating more revenue for the government. What do the indicators cover? Doing Business records all procedures officially required, or commonly done in practice, for an entrepreneur to start up and formally operate an industrial or commercial business, as well as the time and cost to complete these procedures and the paid - in minimum capital requirement. These procedures include obtaining all necessary licenses and permits and completing any required notifications, verifications or inscriptions for the company and employees with relevant authorities. 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 . To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepren eur will pay no bribes. Assumptions about the business:  Is a limited liability company (or its legal equivalent) , located in t he largest business city and is 100% domestically owned 1 with five owners, none of whom is a legal entity .  Has at least 10 and up to 50 employees, all of them domestic nationals.  Performs general commercial or industrial activities. WHAT THE STARTING A BUSINESS INDICATORS MEASURE Procedures to legally start and operate a company (number) Preregistration (for example, name verification or reservation, notarization) Registration in the economy’s largest business city 1 Postregistration (for example, social security registration, company seal) Time required to complete each procedure (calendar days) Does not include time spent gathering information Each procedure starts on a separate day (2 procedures cannot start on the same day). Procedures that can be fully completed online are recorded as ½ day . Procedure completed once final document is received No prior contact with offic ials Cost required to complete each procedure (% of income per capita) Official costs only, no bribes No professional fees unless services required by law or commonly used in practice Paid - in minimum capital (% of income per capita) Deposited in a bank o r with a notary before registration (or within 3 months)  Has a start - up capita l of 10 times income per capita and a turnover of at least 100 times income per capita .  Has a company deed 10 pages long .  Does not qualify f or any special benefits.  Leases the commercial plant or offices and is not a proprietor of real estate . 1 For 11 economies the data are also collected for the second largest business city . 18 Haiti Doing Business 201 6 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Haiti? According to data collected by Doing Business , starting a business there requires 12.00 procedures, takes 97.00 days, costs 235.30% of income per capita and requires paid-in minimum capital of 16.70% of income per capita (figure 2.1). Most indicator sets refer to a case scenario in the largest business city of an economy, except for 1 1 economies for which the data are a population - weighted average of the 2 largest business cities. See the chapter on distance to frontier and ease of doing business ranking at the end of this profile for more details. Figure 2.1 What it takes to start a business in Haiti Paid-in minimum capital (% of income per capita): 16.70 Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. 19 Haiti Doing Business 201 6 STARTING A BUSINESS Globally, Haiti stands at 188 in the ranking of 18 9 economies on the ease of starting a business (figure 2.2). The rankings for comparator economies and the regional average ranking provide other useful information for assessing how easy it is for an en trepreneur in Haiti to start a business. Figure 2.2 How Haiti and comparator economies rank on the ease of starting a business Source: Doing Business database. 20 Haiti Doing Business 201 6 STARTING A BUSINESS Economies around the world have taken steps making it easier to start a business — streamlining procedures by setting up a one-stop shop, making procedures simpler or faster by introducing technology and reducing or eliminating minimum capital requirements. Many have undertaken business registration reforms in stages — and they often are part of a larger regulatory reform program. Among the benefits have been greater firm satisfaction and savings and more registered businesses, financial resources and job opportunities. What business registration reforms has Doing Business recorded in Haiti (table 2. 1 )? Table 2.1 How has Haiti made starting a business easier — or not? By Doing Business report year from DB2011 to DB2016 DB y ear Reform DB2011 Haiti eased business start-up by eliminating the review by the president’s or the prime minister’s office of the incorporation act submitted for publication. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. 21 Haiti Doing Business 201 6 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for Haiti is a set of specific procedures — the bureaucratic and legal steps that an entrepreneur must complete to inco rporate and register a new firm. These are identified by Doing Business through collaboration with relevant local professionals and the study of laws, regulations and publicly available information on business entry in that economy. Following is a detailed summary of those procedures, along wi th the associated time and cost. These procedures are those that apply to a company matching the standard assumptions (the “standardized company”) used by Doing Busine s s in collecting the data (see the section in this chapter on what the indicators measure ). STANDARDIZED COMPANY Legal form: Société Anonyme Paid - in minimum capital requirement: HTG 6,250 City: Port au Prince Start - up C apital : 10 times GNI per capita Table 2.2 Summary of time, cost and procedures for starting a business in Haiti No. Procedure Time to complete Cost to complete 1 Prepare the company statutes ( Articles and Memorandum of Association) The lawyer charges approximately HTG 30,000 for the drafting of the company statutes in the case of a Société Anonyme. Prices can vary depending on the notary. Agency: Lawyer 10 days included in the notary fees 2 Notarize the company deeds and articles of association The notary public must handwrite and notarize the documents at a fee of between 15,000 and 25,000 depending on the co mplexity of the service. Agency: Notary 7 days HTG 15,000 - HTG 25,000 3 Deposit the legally required initial capital in the National Bank and obtain deposit evidence The notary deposits the legally required initial capital in the National Bank (Ban que Nationale de Credit) and obtains proof of deposit. A certified check need to be used to pay in the National Bank, where proof of payment is provided. Agency: National Bank 1 day no charge 22 Haiti Doing Business 201 6 No. Procedure Time to complete Cost to complete 4 Register the statutes with the Direction Générale des Impô ts (DGI) The notary pays the registration fees at the Tax Office (DGI) and proof of payment is obtained. Agency: Direction Générale des Impôts (DGI) 1 day included in the notary fees 5 Registration with the Commercial Registry at the Ministry of Comm erce and Industry and obtain the authorization of operations (Droit de fonctionnement) Lawyer submits the dossier for registration at the Ministry of Commerce and a request for the ‘avis de fonctionnement’. When the Ministry of Commerce has processed the application and registered the company, it forwards the file to the Moniteur for publication. Firms can begin operations before the publication, as soon as they receive authorization from the Ministry of Commerce. Since May 2009, the company’s articles of incorporation do not need to be approved by the Prime Minister’s office and the Presidency before they can be published in the Official Journal. This process takes about 60 days. The cost depends on the number of pages of the act of constitution: 2 to 9 p ages: HTG 5,000 10 to 25 pages: HTG 20,000 26 to x pages: HTG 35,000. Agency: Ministry of Commerce and Industry and Le Moniteur (Journal Officiel) 78 days on average HTG 1,500 for registration + HTG 250 (frais de dossier) + HTG 25 (vignette bleue) + HT G 20,000 for publication in Le Moniteur (10 - 25 pages) 6 * Obtain the Tax ID number (numero d’identification fiscale - NIF) from the Tax authorities (DGI), pay fees, and obtain certificate of patente The company must file a form at the Tax Bureau (DGI) and provide an opening balance sheet on which corporate taxes will be based. A 2% tax is levied on a corporation’s initial capital, payable annually. A company must pay the “tax on share” (taxe sur action) of 0.3% per share, which will be assessed each year, and a "right of operating" tax (droit de fonctionnement) of HTG 1500 payable annually, and HTG 1500 5 to obtain the professional identity card ("carte d’identite professionelle"). Agency: DGI 15 days (simultaneous with previous procedure) HTG 50 (tax ID card) + 2% of initial capital + 0.3% per share + HTG 102 (droit de fonctionnement) + HTG 5 (taxe carte d’identite professionelle) 23 Haiti Doing Business 201 6 No. Procedure Time to complete Cost to complete 7 * Obtain the “Carte d’Identite Professionelle” from the Ministry of Commerce According to Article 2 of the “Décret du 26 septembre 1960 réglementant l’exercice de la profession de commercant”, all commercial entities are required to hold a “carte d’identité professionnelle”. After the payment of fees at the DGI and obtaining the business permit ("certificat de patente"), the entrepreneur will obtain the “carte d’identité professionnelle” at the Ministry of Commerce. Agency: Ministry of Commerce 17 days on average (simultaneous with previous procedure) cost included in procedure 5 8 * Obtain special commercial books The s pecial commercial books are purchased and prepared by an accountant. Agency: Commercial Registry 2 days (simultaneous with previous procedure) HTG 5,000 9 * Notification to the Labor Ministry about hiring Companies must submit a declaration on the hir ing of personnel to the Labor Direction within 8 days of opening. In practice, this formality is rarely respected. Agency: Labor Ministry 1 day (simultaneous with previous procedure) no charge 10 * Legalize the commercial books Books are legalized b y the Dean of the first instance court (Doyen du Tribunal). Each page must be sealed by the Dean of the civil court and the books must be sealed at the DGI (Direction Generale des Impots). Agency: Court 7 days (simultaneous with previous procedure) HTG 1,000 11 * Register for social security (OFATMA) The company must register with the Insurance Office for Occupational Injury, Sickness, and Maternity (OFATMA) within 15 days of opening and provide the names of all its employees (up to 6% of monthly salar y is contributed by the employer to social security). Agency: Insurance Office 1 day (simultaneous with previous procedure) no charge 24 Haiti Doing Business 201 6 No. Procedure Time to complete Cost to complete 12 * Register for Retirement Insurance Office (ONA) The company must register with the Retirement Insurance Office (O NA) within 15 days of opening and provide the name of all its employees. Agency: Retirement Office 1 day (simultaneous with previous procedure) no charge * Takes place simultaneously with another procedure. Source: Doing Business database. Note: Online procedures account for 0.5 days in the total time calculation. 25 Haiti Doing Business 201 6 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the public. But it needs to be efficient, to avoid excessive constraints on a sector that plays an imp ortant part in every economy. Where complying with building regulations is excessively costly in time and money, many builders opt out. They may pay bribes to pass inspections or simply build illegally, leading to hazardous construction that puts public sa fety at risk. Where compliance is simple, straightforward and inexpensive, everyone is better off. What do the indicators cover? Doing Business records all procedures required for a business in the construction industry to build a warehouse along with the time and cost to complete each procedure. In addition, this year Doing Business introduces a new measure, the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability a nd insurance regimes, and professional certification requirements. 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 . To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. Ass umptions about the construction company The construction company (BuildCo):  Is a limited liability company (or its legal equivalent).  Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest bus iness city.  Is 100% domestically and privately owned.  Has five owners, none of whom is a legal entity.  Is fully licensed and insured to carry out construction projects, such as building warehouses. WHAT THE DEALING WITH CONSTRUCTION PERMITS INDICATORS MEASURE Procedures t o legally build a warehouse (number) Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates Submitting all required notifications and receiving all necessary inspections Obtaining utility connections fo r water and sewerage Registering and selling the warehouse after its completion Time required to complete each procedure (calendar days) Does not include time spent gathering information Each procedure starts on a separate day . Procedures that can be full y completed online are recorded as ½ day Procedure considered completed once final document is received No prior contact with officials Cost required to complete each procedure (% of warehouse value ) Official costs only, no bribes Building q uality c ontrol index (0 - 15) Sum of the scores of six component indices: Quality of building regulations (0 - 2) Quality control before construction (0 - 1) Quality control during construction (0 - 3) Quality control after construction (0 - 3) Liability and insurance regimes (0 - 2) Professional certifications (0 - 4) 26 Haiti Doing Business 201 6 The construction company (BuildCo) ( continued ) :  Has 6 0 builders and other employees, all of them nationals with the technical expertise and professional experience necessary to obtain construction permits and approvals.  Has at least one employee who is a licensed architect or engineer and registered with th e local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.  Has paid all taxes and taken out all necessary insurance applicable to i ts general business activity (for example, accidental insurance for construction workers and third - person liability).  Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.  Is valued at 50 times income per capi ta. Assumptions about the warehouse The warehouse:  Will be used for general storage activities, such as storage of books or stationery. The warehouse will not be used for any goods requiring special conditions, such as food, chemicals or pharmaceuticals.  Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high.  Will have road access and be located in the periurban area of the e conomy’s largest business city (that is, on the fringes of the city but still within its official limits). For 11 economies the data are also collected for the second largest business city.  Will not be located in a special economic or industrial zone. Wil l be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo and is accurately registered in the cadastre and land registry.  Will be a new construction (there was no previous construction on the land), with no trees, natural water sources, natural reserves or historical monuments of any kind on the plot.  Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.  Will include all technical equipm ent required to be fully operational.  Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). Assumptions about the utility connections The water and sewerage connections:  Will be 150 meters (492 feet) f rom the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.  Will not req uire water for fire protection reasons; a fire extinguishing system (dry system) will be used instead. If a wet fire protection system is required by law, it is assumed that the water demand specified below also covers the water needed for fire protection.  Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow 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 flow of 1,136 liters (300 gallons) a d ay.  Will have a constant level of water demand and wastewater flow throughout the year.  Will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. 27 Haiti Doing Business 201 6 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build a warehouse in Haiti? According to data collected by Doing Business , dealing with construction permits there requires 12.00 procedures, takes 80.00 days and costs 15.70% of the warehouse value (figure 3.1). Most indicator sets refer to a case scenario in the largest business city of an economy, except for 11 economies for which the data are a population - weighted average of the 2 largest business cities. See the chapter on distance to fr ontier and ease of doing business ranking at the end of this profile for more details. Figure 3.1 What it takes to comply with formalities to build a warehouse in Haiti Source: Doing Business database. Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. . 28 Haiti Doing Business 201 6 DEALING WITH CONSTRUCTION PERMITS Globally, Haiti stands at 167 in the ranking of 18 9 economies on the ease of dealing with construction permits (figure 3.2). The rankings for comparator economies and the regional average ranking provide other useful information for assessing how easy it is for an entrepreneur in Haiti to legally build a warehouse. Figure 3.2 How Haiti and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. 29 Haiti Doing Business 201 6 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while making compliance easy and accessible to all. Coherent and transparent rules, efficient proc esses and adequate allocation of resources are especially important in sectors where safety is at stake. Construction is one of them. In an effort to ensure building safety while keeping compliance costs reasonable, governments around the world have worke d on consolidating permitting requirements. What construction permitting reforms has Doing Business recorded in Haiti (table 3. 1 )? Table 3.1 How has Haiti made dealing with construction permits easier — or not? By Doing Business report year from DB2011 to DB2016 DB y ear Reform DB2012 Haiti made dealing with construction permits costlier by increasing the fees to obtain a building permit. Source: Doing Business database. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. 30 Haiti Doing Business 201 6 DEALING WITH CONSTRUCTION PERMITS What are the details? Th