Profil économique: Haïti Doing Business 2013

Economy Profile: Haiti 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 3 © 2013 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 15 14 13 12 A copublication of The World Bank and the International Finance Corporation. This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. 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Under the Creative Commons Attribution license, you are free 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. 2013. Doing Business 2013: Smarter Regulations for Small and Medium-Size Enterprises. Washington, DC: World Bank Group. DOI: 10.1596/978-0-8213-9615-5. License: Creative Commons Attribution CC BY 3.0 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 . All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org. 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Cover design: Corporate Visions, Inc. 3 Haiti Doing Business 201 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 33 Registering property .................................................................................................................. 40 Getting credit .............................................................................................................................. 50 Protecting investors ................................................................................................................... 57 Paying taxes ................................................................................................................................ 66 Trading across borders .............................................................................................................. 74 Enforcing contracts .................................................................................................................... 83 Resolving insolvency .................................................................................................................. 93 Employing workers .................................................................................................................... 99 Data notes ................................................................................................................................. 106 Resources on the Doing Business website ............................................................................ 111 4 Haiti Doing Business 201 3 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 investors, paying taxes, trading across borders, enforcing contracts, resolving insolvency and employing workers. 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 185 economies, from Afghanistan to Zimbabwe, over time. The data set covers 46 economies in Sub- Saharan Africa, 33 in Latin America and the Caribbean, 24 in East Asia and the Pacific, 24 in Eastern Europe and Central Asia, 19 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, 2012 (except for the paying taxes indicators, which cover the period January – December 2011). 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 2013 presents the indicators, analyzes their relationship with economic outcomes and presents business regulatory reforms. The data, along with information on ordering Doing Business 2013 , are available on the Doing Business website at http://www.doingbusiness.org. 5 Haiti Doing Business 201 3 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 185 by the ease of doing business index. For each economy the index is calculated as the ranking on the simple average of its percentile rankings on each of the 10 topics included in the index in Doing Business 201 3 : starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. The ranking on each topic is the simple average of the percentile rankings on its component indicators (see the data notes for more details). The employing workers indicators are n ot 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 : 10,123,787 GNI per capita (US$) : 700 DB201 3 rank : 174 DB2012 rank : 173 * Change in ran k : - 1 * DB2012 ranking shown is no t last year‘s published ranking but a compa rable ranking for DB2012 that capture s the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. See the data notes for sources and definitions . 6 Haiti Doing Business 201 3 THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. 7 Haiti Doing Business 201 3 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 on the topics included in the ease of doing business index provide another perspective (figure 1.3). Figure 1.2 How Haiti and comparator economies rank on the ease of doing business Source: Doing Business database. 8 Haiti Doing Business 201 3 THE BUSINESS ENVIRONMENT Figure 1.3 How Haiti ranks on Doing Business topics Source: Doing Business database. 9 Haiti Doing Business 201 3 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 r elative. An economy‘s ranking might change because of developments in other economies. An economy that implemented business regulation reforms may fail to rise in the rankings (or may even drop) if it is passed by others whose business regulation reforms had a more significant impact as measured by Doing Business . 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, last year Doing Business introduced the distance to frontier measure. This measure shows how far each economy is from the best performance achieved by any economy since 2005 on each indicator in 9 Doing Business indicator sets. 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 1.4). The results may show that the pace of change varies widely across the areas measured. They also may show that an economy is relatively close to the frontier in some areas and relatively far from it in others. Figure 1.4 How far has Haiti come in the areas measured by Doing Business ? Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to frontier is the average of the distance to frontier in the 9 indicator sets shown in the figure. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. 10 Haiti Doing Business 201 3 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 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Sta rting a Business (rank) 183 182 137 89 21 12 178 New Zealand (1) Procedures (number) 12 12 7 8 6 6 13 New Zealand (1)* Time (days) 105 105 19 20 7 6 694 New Zealand (1) Cost (% of income per capita) 286.6 314.2 17.3 13.9 6.7 0.9 110.9 Slovenia (0.0) Pa id - in Min. Capital (% of income per capita) 21.0 23.2 49.3 0.0 0.0 0.0 0.4 91 Economies (0.0)* Dealing with Construction Permits (rank) 136 136 108 29 50 156 92 Hong Kong SAR, China (1) Procedures (number) 9 9 14 8 8 18 11 Hong Kong SAR, China (6)* Time (days) 1,129 1,129 216 195 145 189 461 Singapore (26) Cost (% of income per capita) 692.0 764.5 72.7 18.3 212.4 361.3 60.4 Qatar (1.1) 11 Haiti Doing Business 201 3 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Getting Electricity (rank) 71 73 122 148 123 37 39 Iceland (1) Procedures (number) 4 4 7 7 6 5 4 Germany (3)* Time ( days) 60 66 87 109 96 32 58 Germany (17) Cost (% of income per capita) 4,599.0 4,032.8 322.3 542.9 557.0 384.0 634.4 Japan (0.0) Registering Property (rank) 130 130 110 114 105 128 171 Georgia (1) Procedures (number) 5 5 7 6 6 8 6 Georgia (1)* Time (da ys) 301 301 60 75 37 194 197 Portugal (1) Cost (% of property value) 6.6 6.6 3.7 4.6 7.5 0.9 13.7 Belarus (0.0)* Getting Credit (rank) 159 158 83 167 104 12 159 United Kingdom (1)* Strength of legal rights index (0 - 10) 3 3 3 4 8 9 5 Malaysia (10)* Dep th of credit information index (0 - 6) 2 2 6 0 0 5 0 United Kingdom (6)* Public registry coverage (% of adults) 0.7 0.7 44.1 0.0 0.0 0.0 0.0 Portugal (90.7) Private bureau coverage (% of adults) 0.0 0.0 60.0 0.0 0.0 81.5 0.0 United Kingdom (100.0)* Protec ting Investors (rank) 169 167 100 82 82 19 183 New Zealand (1) Extent of disclosure index (0 - 10) 2 2 5 5 4 7 1 Hong Kong SAR, China (10)* 12 Haiti Doing Business 201 3 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Extent of director liability index (0 - 10) 3 3 4 5 8 6 0 Singapore (9)* Ease of shareholder suits index (0 - 10) 4 4 6 6 4 8 5 New Zealand (10)* Strength of investor protection index (0 - 10) 3.0 3.0 5.0 5.3 5.3 7.0 2.0 New Zealand (9.7) Paying Taxes (rank) 123 116 98 118 163 104 49 United Arab Emirates (1) Payments (number per year) 46 46 9 35 36 16 29 Hong Kong SAR, Ch ina (3)* Time (hours per year) 184 184 324 263 368 218 199 United Arab Emirates (12) Trading Across Borders (rank) 149 146 46 84 106 96 97 Singapore (1) Documents to export (number) 8 8 6 7 6 6 8 France (2) Time to export (days) 33 33 8 19 20 15 23 Sin gapore (5)* Cost to export (US$ per container) 1,185 1,185 1,040 730 1,500 1,300 1,000 Malaysia (435) Documents to import (number) 10 10 7 8 7 9 6 France (2) Time to import (days) 31 31 10 22 17 15 21 Singapore (4) Cost to import (US$ per container) 1, 545 1,545 1,150 745 1,560 1,350 1,165 Malaysia (420) Enforcing Contracts (rank) 97 95 84 75 129 101 180 Luxembourg (1) 13 Haiti Doing Business 201 3 Indicator Haiti DB 20 1 3 Haiti DB201 2 Dominican Republic DB201 3 Guyana DB201 3 Jamaica DB201 3 Puerto Rico (U.S.) DB201 3 Suriname DB201 3 Best performer g lobally DB201 3 Time (days) 530 530 460 581 655 620 1,715 Singapore (150) Cost (% of claim) 42.6 42.6 40.9 25.2 45.6 25.6 37.1 Bhutan (0.1) Procedure s (number) 35 35 34 36 35 39 44 Ireland (21)* Resolving Insolvency (rank) 160 165 156 138 32 24 158 Japan (1) Time (years) 5.7 5.7 3.5 3.0 1.1 2.5 5.0 Ireland (0.4) Cost (% of estate) 30 30 38 29 18 8 30 Singapore (1)* Outcome (0 as piecemeal sale and 1 as going concern) 0 0 0 1 1 0 Recovery rate (cents on the dollar) 8.3 5.8 8.7 17.6 63.1 73.4 8.6 Japan (92.8) Note: DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. The ranking methodology for the paying taxes indicators changed in Doing Business 2013 ; see the data notes for details. For more information on “no practice” marks , see the data notes. Data for the outcome of the resolving insolvency indicator are not available for DB2012. * 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. 14 Haiti Doing Business 201 3 STARTING A BUSINESS Formal registration of companies has many immediate ben efits 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 fr om 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? D oing 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 a nd 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 on the ease of starting a business is the simple average of the percentile rankings on the 4 component indicators: procedures, time, cost and paid - in minimum capital requirement. 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 o fficials. It also assumes that the entrepreneur will pay no bribes . And it assumes that the business:  Is a limited liability company, located in t he largest business city .  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 r eservation, notarization) Registration in the economy‘s largest business city Postregistration (for example, social security registration, company seal) Time required to complete each procedure (calendar days) Does not include time spent gathering informat ion Each procedure starts on a separate 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 se rvices 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 ca pita.  Does not qualify for any special benefits.  Does not own real estate.  Is 100% domestically owned. 15 Haiti Doing Business 201 3 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 procedures, takes 105 days, costs 286.6% of income per capita and requires paid-in minimum capital of 21.0% of income per capita (figure 2.1). Figure 2.1 What it takes to start a business in Haiti Paid-in minimum capital (% of income per capita): 21.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. 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. 16 Haiti Doing Business 201 3 STARTING A BUSINESS Globally, Haiti stands at 183 in the ranking of 185 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. 17 Haiti Doing Business 201 3 STARTING A BUSINESS What are the changes over time? While the most recent Doing Business data reflect how easy (or difficult) it is to start a business in Haiti today, data over time show which aspects of the process have changed — and which have not (table 2.1). That can help identify where the potential for improvement is greatest. Table 2.1 The ease of starting a business in Haiti over time By Doing Business report year Indicator DB2004 DB2005 DB20 06 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. .. .. 182 183 Procedures (number) 13 13 13 13 13 13 13 12 12 12 Time (days) 202 202 202 202 202 195 195 105 105 105 Cost (% of income per capita) 415.4 358.5 308.1 252.4 262.8 266.0 204.0 250.9 314.2 286.6 Paid - in Min. Capital (% of income per capita) 53.6 45.6 38.7 31.2 32.2 26.6 19.8 20.7 23.2 21.0 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last ye ar‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and t he addition of 2 economies (Barbados and Malta) to the sample this year. Source: Doing Business database. 18 Haiti Doing Business 201 3 STARTING A BUSINESS Equally helpful may be the benchmarks provided by the economies that over time have had the best performance regionally or globally on the procedures, time, cost or paid-in minimum capital required to start a business (figure 2.3). These benchmarks help show what is possible in making it easier to start a business. And changes in regional averages can show where Haiti is keeping up — and where it is falling behind. Figure 2.3 Has starting a business become easier over time? Procedures (number) Time (days) 19 Haiti Doing Business 201 3 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: Ninety-one economies globally have no paid-in minimum capital requirement. Source: Doing Business database. 20 Haiti Doing Business 201 3 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 2.2)? Table 2.2 How has Haiti made starting a business easier — or not? By Doing Business report year DB y ear Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. 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. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. 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. 21 Haiti Doing Business 201 3 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 r egister 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 t hose 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 Busine s s in collecting the data (see the section in this chapter on wh at the indicators measure). STANDARDIZED COMPANY City: Port au Prince Legal Form: Société Anonyme Paid in Minimum Capital Requirement: HTG 6,250 Start - up C apital : 10 times GNI per capita Summary of procedures for starting a business in Haiti — and the time and cost No. Procedure Time to complete Cost to complete 1 Deposit the legally required initial capital in the National Bank and obtain deposit evidence The entrepreneur or his/her representative deposits the legally required initial capital i n the National Bank (Banque Nationale de Credit) and obtain the proof of deposit. A certified check needs to be used to pay in the National Bank, where proof of payment is provided. 1 day no charge 2 Prepare of company statutes ( Articles and Memorundum o f Association) The lawyer charges approximately HTG 30,000 for the drafting of the company statutes in the case of a limited liability company (SARL) and HTG 90,000 in the case of a Société Anonyme. 10 days HTG 25000 - 35000 3 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. 15 days HTG 15000 - 25000 notary fees 4 Pay the registration fee at the Direction Gé nérale des Impôts (DGI) The notary pays the registration fees at the Tax Office (DGI) and proof of payment is obtained. 1 day HTG 250 (frais de dossier) + HTG 25 (vignette bleue) 5 Registration with the Commercial Registry at the Ministry of Commerce an d Industry and obtain the authorization of operations (Droit de fonctionnement) Lawyer submits the dossier for registration at the Ministry of Commerce 2 - 3 weeks for registration and 60 days for publication HTG 1500 for registration + HTG 20000 for publication in Le Moniteur (10 - 25 22 Haiti Doing Business 201 3 No. Procedure Time to complete Cost to complete and a request for the ‗droit de fonctionnement‘. When the Ministry of Commerce has processed the applic ation 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 incor poration 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 pag es: HTG 5,000 • 10 to 25 pages: HTG 20,000 • 26 to x pages: HTG 35,000 pages) 6 * Obtain the Tax ID number (numero d’ident ification 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 c orporation‘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 102 payable annually, and a HTG 5 t ax on the carte d‘identite professionelle. 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) 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 certificate de patente, the entrepreneur should submit the request to obtain the ―carte d‘identité professionnelle‖ at the Ministry of Commerce. 15 - 20 days HTG 300 - 500 8 Obtain special commercial boo ks The special commercial books are purchased and prepared by an accountant. 2 days HTG 5000 9 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 civ il court. 7 days HTG 1000 10 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 1 day no charge 23 Haiti Doing Business 201 3 No. Procedure Time to complete Cost to complete rarely respected. 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 co ntributed by the employer to social security). 1 day no charge 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). 1 day no charge * Takes place simultaneously with another procedure. Source: Doing Business database. 24 Haiti Doing Business 201 3 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is crit ical 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. Th ey 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 Bus iness records the procedures, time and cost for a business to obtain all the necessary approvals to build a simple commercial warehouse in the economy‘s largest business city, connect it to basic utilities and register the property so that it can be used a s collateral or transferred to another entity. The ranking on the ease of dealing with construction permits is the simple average of the percentile rankings on its component indicators: procedures, time and cost. To make the data comparable across economi es, 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.  Is domestical ly owned and operated.  Has 6 0 builders and other employees. The warehouse:  Is a new construction (there was no previous construction on the land).  Has complete architectural and technical plans prepared by a licensed architect. WHAT THE DEALING WITH CONS TRUCTION PERMITS INDICATORS MEASURE Procedures to legally build a warehouse (number) Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates Completing all required notifications and receiving all nece ssary inspections Obtaining utility connections for water, sewerage and a fixed telephone line Registering the warehouse after its completion (if required for use as collateral or for transfer of the warehouse) Time required to complete each procedure (ca lendar days) Does not include time spent gathering information Each procedure starts on a separate day Procedure completed once final document is received No prior contact with officials Cost required to complete each procedure (% of income per capita) Off icial costs only, no bribes  Will be connected to water, sewerage (sewage system, septic tank or their equivalent) and a fixed tele phone line. The connection to each utility network will be 10 meters (32 feet, 10 inches) long.  Will be used for general stor age, 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 3 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 9 procedures, takes 1129 days and costs 692.0% of income per capita (figure 3.1). 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. 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 3 DEALING WITH CONSTRUCTION PERMITS Globally, Haiti stands at 136 in the ranking of 185 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 3 DEALING WITH CONSTRUCTION PERMITS What are the changes over time? While the most recent Doing Business data reflect how easy (or difficult) it is to deal with construction permits in Haiti today, data over time show which aspects of the process have changed — and which have not (table 3.1). That can help identify where the potential for improvement is greatest. Table 3.1 The ease of dealing with construction permits in Haiti over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 Rank .. .. .. .. .. .. 136 136 Procedures (number) 9 9 9 9 9 9 9 9 Time (days) 1,179 1,179 1,179 1,179 1,179 1,179 1,129 1,129 Cost (% of income per capita) 871.8 701.5 725.0 598.6 504.9 465.7 764.5 692.0 Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2012 rankings shown are not last year‘s published rankings but comparable rankings for DB2012 that capture the effects of such factors as data corrections and the addition of 2 economies (Barbados and Malta) to the sample this year. For more information on ―no practice‖ marks, see the data notes. Source: Doing Business database. 28 Haiti Doing Business 201 3 DEALING WITH CONSTRUCTION PERMITS Equally helpful may be the benchmarks provided by the economies that over time have had the best performance regionally or globally on the procedures, time or cost required to deal with construction permits (figure 3.3). These benchmarks help show what is possible in making it easier to deal with construction permits. And changes in regional averages can show where Haiti is keeping up — and where it is falling behind. Figure 3.3 Has dealing with construction permits become easier over time? Procedures (number) Time (days) 29 Haiti Doing Business 201 3 DEALING WITH CONSTRUCTION PERMITS Cost (% of income per capita) Source: Doing Business database. 30 Haiti Doing Business 201 3 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 3.2)? Table 3.2 How has Haiti made dealing with construction permits easier — or not? By Doing Business report year DB y ear Reform DB2008 No reform as measured by Doing Business. DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 Haiti made dealing with construction permits costlier by increasing the fees to obtain a building permit. DB2013 No reform as measured by Doing Business. 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. 31 Haiti Doing Business 201 3 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, includ ing architects, 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 Bu siness in collecting the data (see the section in this chapter on what the indicators cover). BUILDING A WAREHOUSE City : Port au Prince Estimated Warehouse Value : HTG 11,039,435 The procedures, along with the associated time and cost, are summarize d below. Summary of procedures for dealing with construction permits in Haiti — and the time and cost No. Procedure Time to complete Cost to complete 1 Request building permit The Ministry of Public Works does not deliver directly 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 this project and nothing else. The building permit will be delivered by the Municipality. According to the law, a commercial warehouse should be charged at HTG 75.00 for the length of the building facing the road, and multiply by the number of floors. And if the building has 2 sides facing the road, then both sides will be counted and charged accordingly. However, in practice, this is not done. The Municipality charges between HTG 125.00 -- HTG 175.00 per sq. m. For a warehouse as the one being constructed by BuildCo it will be around HTG 150.00 X 1300.6 square meters for the building permit -- this is called ―le droit d‘alignement‖. The company requesting the permit must submit the following documents: • Plan and acte d‘arpentage, titre de propriete (3 copies) • Plan de localisation (3 copies) • Plan d‘ensemble, plan de la facade (3 copies) • Plan de construction (fondation, electricite, plomberie) (3 copies) • Cahier de charge • Pantente de l‘ingenieur ou le Quittus fiscale de l‘entreprise (1 copy); this basically shows that the engineer or the construction company has no pending tax obligations • Lettre de demande d‘autorisation (1 copy) 30 days HTG 195,090 2 Obtain site inspection by engineer from the municipality 1 day no charge 32 Haiti Doing Business 201 3 No. Procedure Time to complete Cost to complete A request is made for a site inspection. The owner or the engineer must be at the site for the inspection. After this inspection a nd within 15 days, the Municipality will issue a ―Bordereau de paiement‖ to be paid at the DGI. If the amount is over HTG 15,000.00, it must be by certified Check to the order of the DGI. 3 Obtain and pay to the Direction Generale des Imp ots Payment is made at the DGI and proof of payment is delivered back to the Municipality. 15 days no charge 4 Obtain building permit A building permit is delivered to the party. 1 day no charge 5 Receive municipal inspection Municipal inspections at the completion of construction are rare, though they are authorized by law. 1 day no charge 6 Request phone connection from TELECO Telephone connections over the network of Haiti‘s public telephone company, TELECO, are poor. The application form can be f illed out and submitted within a day, but it takes longer in practice to obtain the connection. A wireless telephone connection from a private company such as HAITEL can be obtained immediately upon presentation of personal identification documents by the user. 1 day no charge 7 Obtain phone connection from TELECO It may take 3 -- 4 years to obtain a new telephone line; at present, none are available, and they do not function. 1080 days HTG 5,000 8 * Request water connection from the National Direction o f Potable Water and Sewage (Direction Nationale de l’Eau Potable et de l'Assainissement - DINEPA) The water connection is requested directly by the owner as the contract must be made in his name. It is quite easy to get a water connection. 14 days HTG 5,5 70 9 * Obtain water connection from the National Direction of Potable Water and Sewage (Direction Nationale de l’Eau Potable et de l'Assainissement - DINEPA) 1 day no charge * Takes place simultaneously with another procedure. Source: Doing Business database. 33 Haiti Doing Business 201 3 G ETTING ELECTRICIT Y Access to reliable and affordable electricity is vital for businesses. To counter weak electricity supply, many firms in developing economies have to rely on self - supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the first step for a customer is always to gain access by obtaining a connection. What do the indicators cover? Doing Business records all procedures required for a local business to obtain a permanent electricity connection a nd supply for a standardized warehouse, as well as the time and cost to complete them. These procedures include applications and contracts with electricity utilities, clearances from other agencies and the external and final connection works. The ranking o n the ease of getting electricity is the simple average of the percentile rankings on its component indicators: procedures, time and cost. To make the data comparable across economies, several assumptions are used. The warehouse:  Is located in the economy‘ s largest business city, in an area where other warehouses are located.  Is not in a special economic zone where the connection would be eligible for subsidization or faster service.  Has road access. The connection works involve the crossing of a road or r oads but are carried out on public land.  Is a new construction being connected to electricity for the first time.  Has 2 stories, both above ground, with a total surface of about 1,300.6 square meters (14,000 square feet), and is built on a plot of 929 sq uare meters (10,000 square feet). The electricity connection:  Is a 3 - phase, 4 - wire Y, 140 - kilovolt - ampere (kVA) (subscribed capacity) connection. WHAT THE GETTING ELECTRICITY INDICATORS MEASURE Procedures to obtain an electricity connection (nu mber) Submitting all relevant documents and obtaining all necessary clearances and permits Completing all required notifications and receiving all necessary inspections Obtaining external installation works and possibly purchasing material for these works Concluding any necessary supply contract and obtaining final supply Time required to complete each procedure (calendar days) Is at least 1 calendar day Each procedure starts on a separate day Does not include time spent gathering information Reflects the t ime spent in practice, with little follow - up and no prior contact with officials Cost required to complete each procedure (% of income per capita) Official costs only, no bribes Excludes value added tax  Is 150 meters long.  Is to either the low - voltage or the medium - voltage distribution network and either overhead or underground, whichever is more common in the economy and in the area where the warehouse is located. The length of any connection in the customer‘s private domain is negligible.  Involves inst alling one electricity meter. The monthly electricity consumption will be 0.07 gigawatt - hour (GWh). The internal electrical wiring has been completed. 34 Haiti Doing Business 201 3 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity connection in Haiti? According to data collected by Doing Business, getting electricity there requires 4 procedures, takes 60 days and costs 4599.0% of income per capita (figure 4.1). Figure 4.1 What it takes to obtain an electricity connection in Haiti Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity 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. 35 Haiti Doing Business 201 3 GETTING ELECTRICITY Globally, Haiti stands at 71 in the ranking of 185 economies on the ease of getting electricity (figure 4.2). The rankings for comparator economies and the regional average ranking provide another perspective in assessing how easy it is for an entrepreneur in Haiti to connect a warehouse to electricity. Figure 4.2 How Haiti and comparator economies rank on the ease of getting electricity Source: Doing Business database. 36 Haiti Doing Business 201 3 GETTING ELECTRICITY Even more helpful than rankings on the ease of getting electricity may be the indicators underlying those rankings (table 4.1). And regional and global best performers on these indicators may provide useful benchmarks. Table 4.1 The ease of getting electricity in Haiti Indicator Haiti DB 2013 Haiti DB 2012 Best performer in Latin America & Caribbean DB2013 B est performer globally DB2013 Rank 71 73 Trinidad and Tobago (11)