Haïti Doing Business 2015: Profil Économique

Haiti Doing Business 201 5 Economy Profile 2015 Haiti 92035 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized 2 Haiti Doing Business 201 5 © 2014 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org All rights reserved. 1 2 3 4 17 16 15 14 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. 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ISBN (paper): 978-1-4648-0351-2 ISBN (electronic): 978-1-4648-0352-9 DOI: 10.1596/978-1-4648-0351-2 ISSN: 1729-2638 Cover design: Corporate Visions, Inc. 3 Haiti Doing Business 201 5 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 31 Registering property .................................................................................................................. 36 Getting credit .............................................................................................................................. 42 Protecting minority investors ................................................................................................... 49 Paying taxes ................................................................................................................................ 57 Trading across borders .............................................................................................................. 61 Enforcing contracts .................................................................................................................... 66 Resolving insolvency .................................................................................................................. 72 Labor market regulation ........................................................................................................... 66 Distance to frontier and ease of doing business ranking ...................................................... 80 Resources on the Doing Business website .............................................................................. 83 4 Haiti Doing Business 201 5 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, enforcing contracts, resolving insolvency and labor market regulation. 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, 26 in Eastern Europe and Central Asia, 20 in the Middle East and North Africa and 8 in South Asia, as well as 31 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, 2014 (except for the paying taxes indicators, which cover the period January–December 2013). 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 2015 presents the indicators, analyzes their relationship with economic outcomes and presents business regulatory reforms. The data, along with information on ordering Doing Business 2015 , are available on the Doing Business website at http://www.doingbusiness.org. 5 Haiti Doing Business 201 5 CHANGES IN DOING BUSINESS 2015 As part of a 2-year update in methodology, Doing Business 2015 incorporates 7 important changes. First, the ease of doing business ranking as well as all topic- level rankings are now computed on the basis of distance to frontier scores (see the chapter on the distance to frontier and ease of doing business ranking). Second, for the 11 economies with a population of more than 100 million, data for a second city have been added to the data set and the ranking calculation. These economies are Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States. Third, for getting credit, the methodology has been revised for both the strength of legal rights index and the depth of credit information index. The number of points has been increased in both indices, from 10 to 12 for the strength of legal rights index and from 6 to 8 for the depth of credit information index. In addition, only credit bureaus and registries that cover at least 5% of the adult population can receive a score on the depth of credit information index. Fourth, the name of the protecting investors indicator set has been changed to protecting minority investors to better reflect its scope—and the scope of the indicator set has been expanded to include shareholders’ rights in corporate governance beyond related-party transactions. Fifth, the resolving insolvency indicator set has been expanded to include an index measuring the strength of the legal framework for insolvency. Sixth, the calculation of the distance to frontier score for paying taxes has been changed. The total tax rate component now enters the score in a nonlinear fashion, in an approach different from that used for all other indicators (see the chapter on the distance to frontier and ease of doing business ranking). Finally, the name of the employing workers indicator set has been changed to labor market regulation, and the scope of this indicator set has also been changed. The indicators now focus on labor market regulation applying to the retail sector rather than the manufacturing sector, and their coverage has been expanded to include regulations on labor disputes and on benefits provided to workers. The labor market regulation indicators continue to be excluded from the aggregate distance to frontier score and ranking on the ease of doing business. Beyond these changes there are 3 other updates in methodology. For paying taxes, the financial statement variables have been updated to be proportional to 2012 income per capita; previously they were proportional to 2005 income per capita. For enforcing contracts, the value of the claim is now set at twice the income per capita or $5,000, whichever is greater. For dealing with construction permits, the cost of construction is now set at 50 times income per capita (before, the cost was assessed by the Doing Business respondents). In addition, this indicator set no longer includes the procedures for obtaining a landline telephone connection. For more details on the changes, see the “What is changing in Doing Business ?” chapter starting on page 24 of the Doing Business 2015 report. For more details on the data and methodology, please see the “Data Notes” chapter starting on page 114 of the Doing Business 2015 report. For more details on the distance to frontier metric, please see the “Distance to frontier and ease of doing business ranking” chapter in this profile. 6 Haiti Doing Business 201 5 THE BUSINESS ENVIRONMENT For policy makers trying to improve their econom y’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. This year's report 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 (DTF) scores. 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. (See the chapter on the distance to frontier and ease of doing business). The 10 topics included in the ranking in Doing Business 2015 : 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 (formerly employing workers) are not included in this year’s aggregate ease of doing business ranking, but the data are presented in this year’s economy profile. The aggregate ranking on the ease of doing business benchmarks each economy’s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. ECONOMY OVERVIEW Region: Latin America & Caribbean Income category: Low income Population: 10,317,461 GNI per capita (US$): 810 DB2015 rank: 180 DB2014 rank: 181* Change in rank: 1 DB 2015 DTF: 42.2 DB 2014 DTF: 41.5 Change in DTF: 0.7 * DB2014 ranking shown is not last year’s published ranking but a comparable ranking for DB2014 that captures the effects of such factors as data corrections and the changes in methodology. See the data notes starting on page 114 of the Doing Business 2015 report for sources and definitions. Haiti Doing Business 201 5 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 5 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 2014 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 5 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 (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2014 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. 10 Haiti Doing Business 201 5 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 economy’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 since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for more details on the distance to frontier score. Source: Doing Business database. 11 Haiti Doing Business 201 5 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 DB2015 Haiti DB2014 Dominican Republic DB2015 Guyana DB2015 Jamaica DB2015 Mexico DB2015 Puerto Rico (U.S.) DB2015 Suriname DB2015 Best performer globally DB2015 Starting a Business (rank) 188 187 113 99 20 67 48 181 New Zealand (1) Starting a Business (DTF Score) 33.48 33.39 81.60 83.62 94.13 88.85 91.17 48.05 New Zealand (99.96) Procedures (number) 12.0 12.0 7.0 8.0 2.0 6.0 6.0 13.0 New Zealand (1.0)* Time (days) 97.0 97.0 19.5 19.0 15.0 6.3 6.0 84.0 New Zealand (0.5) Cost (% of income per capita) 246.7 264.8 16.9 11.5 6.0 18.6 0.8 106.4 Slovenia (0.0) Paid-in min. capital (% of income per capita) 17.6 19.1 43.0 0.0 0.0 0.0 0.0 0.3 112 Economies (0.0)* Dealing with Construction Permits (rank) 132 138 96 38 26 108 158 79 Hong Kong SAR, China (1) Dealing with Construction Permits (DTF Score) 64.42 62.35 70.88 80.06 83.17 68.43 56.28 74.13 Hong Kong SAR, China (95.53) 12 Haiti Doing Business 201 5 Indicator Haiti DB2015 Haiti DB2014 Dominican Republic DB2015 Guyana DB2015 Jamaica DB2015 Mexico DB2015 Puerto Rico (U.S.) DB2015 Suriname DB2015 Best performer globally DB2015 Procedures (number) 8.0 8.0 13.0 7.0 7.0 11.3 20.0 10.0 Hong Kong SAR, China (5.0) Time (days) 71.0 71.0 184.0 195.0 135.0 87.6 165.0 223.0 Singapore (26.0) Cost (% of warehouse value) 16.4 17.6 2.0 0.6 2.2 10.3 6.2 0.2 Qatar (0.0)* Getting Electricity (rank) 94 95 119 155 111 116 32 69 Korea, Rep. (1) Getting Electricity (DTF Score) 73.97 72.72 67.36 57.21 70.36 68.47 85.41 78.68 Korea, Rep. (99.83) Procedures (number) 4.0 4.0 7.0 8.0 6.0 6.8 5.0 4.0 12 Economies (3.0)* Time (days) 60.0 60.0 82.0 109.0 96.0 78.9 32.0 113.0 Korea, Rep. (18.0)* Cost (% of income per capita) 3,495.8 3,800.1 276.9 442.9 406.3 346.1 352.9 486.1 Japan (0.0) Registering Property (rank) 175 176 82 103 126 110 163 178 Georgia (1) Registering Property (DTF Score) 39.79 39.64 69.90 64.08 59.36 62.45 47.90 38.92 Georgia (99.88) Procedures (number) 5.0 5.0 6.0 6.0 6.0 6.8 8.0 6.0 4 Economies (1.0)* Time (days) 312.0 312.0 51.0 75.0 36.0 63.6 193.5 106.0 3 Economies (1.0)* Cost (% of property value) 7.1 7.2 3.7 4.6 9.5 5.1 0.9 13.7 4 Economies (0.0)* Getting Credit (rank) 171 169 89 165 12 12 7 171 New Zealand (1) Getting Credit (DTF Score) 10.00 10.00 45.00 15.00 80.00 80.00 85.00 10.00 New Zealand (100) Strength of legal rights index (0-12) 2 2 1 3 10 8 10 2 3 Economies (12)* 13 Haiti Doing Business 201 5 Indicator Haiti DB2015 Haiti DB2014 Dominican Republic DB2015 Guyana DB2015 Jamaica DB2015 Mexico DB2015 Puerto Rico (U.S.) DB2015 Suriname DB2015 Best performer globally DB2015 Depth of credit information index (0-8) 0 0 8 0 6 8 7 0 23 Economies (8)* Credit registr y coverage (% of adults) 1.1 1.1 38.1 0.0 0.0 0.0 0.0 0.0 Portugal (100.0) Credit bureau coverage (% of adults) 0.0 0.0 63.1 0.0 10.1 100.0 100.0 0.0 23 Economies (100.0)* Protecting Minority Investors (rank) 187 187 83 135 71 62 78 171 New Zealand (1) Protecting Minority Investors (DTF Score) 20.00 20.00 54.17 44.17 56.67 57.50 55.00 34.17 New Zealand (81.67) 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 (9.3)* Extent of shareholder governance index (0- 10) 1.0 1.0 5.5 3.5 5.7 5.5 4.0 4.5 France (7.8)* Strength of minority investor protection index (0-10) 2.0 2.0 5.4 4.4 5.7 5.8 5.5 3.4 New Zealand (8.2) Paying Taxes (rank) 142 137 80 115 147 105 133 71 United Arab Emirates (1)* Paying Taxes (DTF Score) 61.87 61.87 74.24 68.69 59.01 71.17 63.83 76.45 United Arab Emirates (99.44)* Payments (number per year) 47.0 47.0 9.0 35.0 36.0 6.0 16.0 30.0 Hong Kong SAR, China (3.0)* Time (hours per year) 184.0 184.0 324.0 256.0 368.0 334.0 218.0 199.0 Luxembourg (55.0) Trading Across Borders (rank) 142 147 24 82 115 44 84 106 Singapore (1) Trading Across Borders 59.98 56.35 85.56 74.63 68.22 81.26 74.53 69.42 Singapore (96.47) 14 Haiti Doing Business 201 5 Indicator Haiti DB2015 Haiti DB2014 Dominican Republic DB2015 Guyana DB2015 Jamaica DB2015 Mexico DB2015 Puerto Rico (U.S.) DB2015 Suriname DB2015 Best performer globally DB2015 (DTF Score) Documents to export (number) 8 8 4 6 6 4 5 8 Ireland (2)* Time to export (days) 28.0 33.0 8.0 19.0 20.0 12.0 15.0 22.0 5 Economies (6.0)* Cost to export (US$ per container) 1,200.0 1,200.0 1,040.0 730.0 1,580.0 1,499.3 1,300.0 1,050.0 Timor-Leste (410.0) Cost to export (deflated US$ per container) 1,200.0 1,274.3 1,040.0 730.0 1,580.0 1,499.3 1,300.0 1,050.0 Documents to import (number) 9 9 5 7 7 4 8 6 Ireland (2)* Time to import (days) 26.0 31.0 10.0 22.0 17.0 11.2 15.0 19.0 Singapore (4.0) Cost to import (US$ per container) 1,555.0 1,555.0 1,145.0 720.0 2,180.0 1,887.6 1,350.0 1,190.0 Singapore (440.0) Cost to import (deflated US$ per container) 1,555.0 1,651.2 1,145.0 720.0 2,180.0 1,887.6 1,350.0 1,190.0 Enforcing Contracts (rank) 89 89 73 71 117 57 92 184 Singapore (1) Enforcing Contracts (DTF Score) 58.28 58.28 61.87 62.37 53.74 64.61 58.03 28.84 Singapore (89.54) Time (days) 530.0 530.0 460.0 581.0 655.0 388.9 620.0 1,715.0 Singapore (150.0) Cost (% of claim) 42.6 42.6 40.9 25.2 45.6 30.9 25.6 37.1 Iceland (9.0) Procedures (number) 35.0 35.0 34.0 36.0 35.0 36.8 39.0 44.0 Singapore (21.0)* Resolving Insolvency (rank) 189 189 158 150 59 27 7 130 Finland (1) Resolving Insolvency (DTF Score) 0.00 0.00 23.75 28.50 53.29 72.59 86.37 34.27 Finland (93.85) 15 Haiti Doing Business 201 5 Indicator Haiti DB2015 Haiti DB2014 Dominican Republic DB2015 Guyana DB2015 Jamaica DB2015 Mexico DB2015 Puerto Rico (U.S.) DB2015 Suriname DB2015 Best performer globally DB2015 Time (years) no practice no practice 3.5 3.0 1.1 1.8 2.5 5.0 Ireland (0.4) Cost (% of estate) no practice no practice 38.0 28.5 18.0 18.0 8.0 30.0 Norway (1.0) Outcome (0 as piecemeal sale and 1 as going concern) 0 0 0 0 1 1 1 0 Recovery rate (cents on the dollar) 0.0 0.0 9.3 18.1 64.2 68.1 73.4 8.5 Japan (92.9) Strength of insolvency framework index (0-16) no practice no practice 6.0 6.0 6.0 11.5 15.0 9.5 5 Economies (15.0)* Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2015 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” or “not possible” 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 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). Source: Doing Business database. 16 Haiti Doing Business 201 5 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 start 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 companies. 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 good jobs and generating more revenue for the government. What do the indicators cover? Doing Business measures the ease of starting a business in an economy by recording all procedures officially required or commonly done in practice by an entrepreneur to start up and formally operate an industrial or commercial business—as well as the time and cost required to complete these procedures. It also records the paid-in minimum capital that companies must deposit before registration (or within 3 months). 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, Doing Business uses several assumptions about the business and the procedures. It assumes that all information is readily available to the entrepreneur and that there has been no prior contact with officials. It also assumes that the entrepreneur will pay no bribes. And it assumes that the business: • Is a limited liability company, located in the largest business city and is 100% domestically owned 1 . • Has between 10 and 50 employees. • Conducts 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 officials Cost required to complete each procedure (% of income per capita) Official costs only, no bribes No professional fees unless services required by law Paid-in minimum capital (% of income per capita) Deposited in a bank or with a notary before registration (or within 3 months) • Has a start-up capital of 10 times income per capita. • Has a turnover of at least 100 times income per capita. • Does not qualify for any special benefits. • Does not own real estate. 1 For the 11 economies with a population of more than 100 million, data for a second city have been added. 17 Haiti Doing Business 201 5 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 12.0 procedures, takes 97.0 days, costs 246.7% of income per capita and requires paid-in minimum capital of 17.6% 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 11 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): 17.6 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. Source: Doing Business database. 18 Haiti Doing Business 201 5 STARTING A BUSINESS Globally, Haiti stands at 188 in the ranking of 189 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 entrepreneur 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. 19 Haiti Doing Business 201 5 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 DB2010 to DB2015 DB year 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. 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. Source: Doing Business database. 20 Haiti Doing Business 201 5 STARTING A BUSINESS What are the details? Underlying the indicators shown in this c hapter for Haiti is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate 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 with the associated time and cost. These procedures are those that apply to a company matching the standard assumptions (the “standardized company”) used by Doing Business 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 Capital: 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 an d 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 complexity of the service. Agency: Notary 7 days HTG 15,000-HTG 25,000 3 Deposit the leg ally required initial capital in the National Bank and obtain deposit evidence The notary deposits the legally required initial capital in the National Bank (Banque 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. 1 day no charge 21 Haiti Doing Business 201 5 No. Procedure Time to complete Cost to complete Agency: National Bank 4 Register the statutes with the Direction Générale des Impôts (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 HTG 250 (frais de dossier) + HTG 25 (vignette bleue) 5 Registration with the Commercial Registry at the Ministry of Commerce 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 pages: 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) + HTG 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 ba sed. 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) 22 Haiti Doing Business 201 5 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 special 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 hiring 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 by the Dean of the first instance court (Doyen du Tribunal). Each page must be sealed by the Dean of the civil court. . 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 salary is contributed by the employer to social security). Agency: Insurance Office 1 day (simultaneous with previous procedure) no charge 23 Haiti Doing Business 201 5 No. Procedure Time to complete Cost to complete 12 * Register for Retirement Insurance Office (ONA) The company must register with the Retirement Insurance Office (ONA) within 15 days of opening and provide the name of all its employees (up to 6% of monthly salary is contributed by the employer to retirement insurance). Agency: Retirement Office 1 day (simultaneous with previous procedure) no charge * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. 24 Haiti Doing Business 201 5 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 important 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 safety at risk. Where compliance is simple, straightforward and inexpensive, everyone is better off. What do the indicators cover? Doing Business records the procedures, time and cost for a business in the construction industry to obtain all the necessary approvals to build a warehouse in the economy’s largest business city, connect it to basic utilities and register the warehouse so that it can be used as collateral or transferred to another entity. 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, Doing Business uses several assumptions about the business and the warehouse, including the utility connections. The business: • Is a limited liability company operating in the construction business and located in the largest business city. For the 11 economies with a population of more than 100 million, data for a second city have been added. Is domestically owned and operated. • Has 60 builders and other employees. The warehouse: • Is valued at 50 times income per capita. • Is a new construction (there was no previous construction on the land). WHAT THE DEALING WITH CONSTRUCTION PERMITS INDICATORS MEASURE Procedures to 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 for water and sewerage Registering the warehouse after its completion (if required for use as collateral or for transfer of the warehouse) 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 fully 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 • Will have complete architectural and technical plans prepared by a licensed architect or engineer. • Will be connected to water and sewerage (sewage system, septic tank or their equivalent). The connection to each utility network will be 150 meters (492 feet) long. • Will be used for general storage, such as of books or stationery (not for goods requiring special conditions). • Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). 25 Haiti Doing Business 201 5 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 8.0 procedures, takes 71.0 days and costs 16.4% 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 frontier 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 - 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. Source: Doing Business database. 26 Haiti Doing Business 201 5 DEALING WITH CONSTRUCTION PERMITS Globally, Haiti stands at 132 in the ranking of 189 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. 27 Haiti Doing Business 201 5 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while making compliance easy and accessible to all. Coherent and transparent rules, efficient processes 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 worked 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 DB2010 to DB2015 DB year Reform DB2012 Haiti made dealing with construction permits costlier by increasing the fees to obtain a building permit. 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. Source: Doing Business database. 28 Haiti Doing Business 201 5 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Haiti are based on a set of specific procedures—the steps that a company must complete to legally build a warehouse— identified by Doing Business through information collected from experts in construction licensing, including architects, civil engineers, construction lawyers, construction firms, utility service providers and public officials who deal with building regulations. These procedures are those that apply to a company and structure matching the standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). BUILDING A WAREHOUSE Estimated cost of construction : HTG 1,772,250 City : Port au Prince The procedures, along with the associated time and cost, are summarized below. Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Haiti - No. Procedure Time to complete Cost to complete 1 Request building permit The Ministry of Public Works does not issue the building permit, but studies the file and provides technical advice/approval of the plans. The Engineering Department will merely give its advice on the feasibility of the project. The building permit is issued by the Municipality. According to the law, the building permit fee for a commercial warehouse is HTG 75.00 for the length of the building facing the road multiplied by the number of floors. If the building has 2 sides facing the road, then both sides are taken into account and charged accordingly. However, in practice, this is not followed. The Municipality generally charges between HTG 125.00 -- HTG 175.00 per sq. m. Thus, the fee for the Doing Business case study warehouse would be approximately HTG 150.00 x 1,300.6 sq. m. -- this is called “le droit d’alignement.” BuildCo must submit the following documents when requesting the permit: • Survey plan and title of ownership (3 copies) • Location plan (3 copies) • Facade plan (3 copies) • Construction (foundation, electricity, plumbing) (3 copies) • Specifications sheet • License of the engineers or Corporate Income Tax (1 copy) – proof that the engineer or the construction company has no outstanding taxes • Letter of Authorization Request (1 copy) Agency: Municipality and the Ministry of P ublic Works 30 days HTG 195,090 29 Haiti Doing Business 201 5 No. Procedure Time to complete Cost to complete 2 Obtain site inspection by engineer from the Municipality A request is made for a site inspection. The owner or the engineer must be at the site for the inspection. After this inspection and within 15 days, the Municipality will issue a “Bordereau de paiement” to be paid at the tax authority (DGI). If the amount is over HTG 15,000.00, it must be paid by certified check. Agency: Municipality 1 day no charge 3 Pay fees to the Direction Generale des Impots Payment is made at the DGI and proof of payment is delivered back to the Municipality. The fees for the building permit are recorded in procedure 1. Agency: Direction Generale des Impots 15 days no charge 4 Obtain building permit Once the application has been reviewed by the Mayor, payment of the alignment rights is made and the proof of payment submitted to the Mayor, and if the file meets all the requirements, the City will issue the building permit. Agency: Municipality 1 day no charge 5 Receive municipal inspection Municipal inspections at