DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
DOING BUSINESS 2009 - JOHN J. HADDAD, Ph.D.
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26 Doing Business <strong>2009</strong>East Asia& Pacific(24 economies)2FIGURE 5.1Top 10 reformers in registering propertyFIGURE 5.3Madagascar was another reformer inEasing property registration in Rwanda Average improvementthe region. A new financial law abolishedReduction in time and cost, 2007–082007the mandatory stamp duty and 2 taxes,NO21%26%CHANGETime per procedure (days)reducing the cost of 46% transferring propertyfrom 11.6% of the property value to2008240Total timecut from7.5%. Madagascar did not stop there. It180371 days to 315reorganized its registry by expanding thenumber of offices, purchasing new computersand hiring more staff. Transfer-120Time cut35-dayfrom 60 days ring property in Antananarivo now takes60procedureto 108 weeks less than it did a year before.NO eliminatedCHANGENOBurkina Faso abolished the requirementCHANGEProcedures Time Costto obtain the municipality’s approval for1 2 3 4 5Proceduresproperty transactions, cutting the timeCostby 46 days, from 182 to 136.(% of property value)In the Middle East and North Africa,8Egypt and Saudi Arabia reformed. EgyptCost cut from6.1% to 0.3%Total cost simplified administrative procedures andcut from69.4% to 0.6% introduced time limits. That cut the timeProcedure 2007to register property by 4 months, from42and costeliminated193 days to 72. Saudi Arabia introduceda comprehensive electronic system toregister title deeds at the First Notary2008Public Department in Riyadh, making it1 2possible to transfer property in 2 proceduresand 2 days.3 4 5ProceduresSource: Doing Business database.Here is how the process works: Anotary public at the First Notary Publicthe process at the cadastre by addingstaff. Lithuania cut a procedure by introducingspecial software that allowsnotaries to obtain the real estate transactioncertificate from their office. Before,the buyer had to pick up this certificateDepartment, in the presence of thelegal representatives of the buyer andseller, first verifies that all documents arecomplete. The notary public then transfersthem electronically to the RecordsDepartment, which prepares a new titleat the registry.deed showing the buyer as the owner ofFIGURE 5.4Africa Africa has reformed saw the second the most largest numberof reforms. The Republic Number of of Congo reforms easing diately property added registration to the electronic records ofthe property. The new title deed is imme-adopted a new law on May 11, 2007, thatby Doing Businessall titlereportdeedsyearin Riyadh. After a few hourscut the registration DB2006 fee by DB2007 10 percentage the representatives DB2008 of the DB<strong>2009</strong> buyer and sellerSub-SaharanAfrica points. Transferring property used to take appear a second time before the notary 31(46 economies)137 days and cost 27% of the propertyEastern value. Europe Now it takes 116 days and costspublic, who prints a copy of the new titledeed and asks the representatives and& about Central 17% Asia23of the property value. Senegal 2 witnesses to sign the sale agreement,(28 economies)introduced time limits at the Land RegistryCaribbean to speed the delivery of certificates 13agreement is scanned and saved in thewhich is a standard form. The signed saleLatin America&(32andeconomies)the registration of property transactions.electronic records, while the original isEast That & reduced the time to register kept in the notary public’s files.MiddleNorth Africa9(19propertyeconomies)from 145 days to 124.In South Asia, Bangladesh halvedZambia computerized its land registryincome and set up a customer 8serviceMunicipal Deed Registry Office, fromthe time to apply for registration at theOECDhigh(24 economies)center to eliminate the backlog of registration360 days to 180. The total time to registerAsia requests. The time to register property dropped from 425 days to 245.South(8 economies)5property fell from 70 days to 39.In Latin America and the Caribbean,Jamaica introduced a new law inMay 2008 reducing the transfer tax from7.5% 1. Belarus of the property value to 6%, andthe 2. stamp Rwandaduty from 5.5% to 4.5%. Thecost 3. Azerbaijan to transfer property dropped from4. Kazakhstan13.5% of the property value to 11%. The5. HungaryDominican Republic reduced the transfer7. tax Mauritius from 4.3% to 3%. Transferring6. Zambiaproperty 8. Burkina now Faso costs 3.8% of the propertyvalue, 9. Madagascar down from 5.1%.10. In Egypt East Asia and Pacific, Thailandreduced the transfer fee from 2% to0.01% and the specific business tax fromSource: 3.3% Doing to Business 0.11%, database. cutting the overall costto transfer property from 6.3% of theproperty value to 1.13%. Thailand nowranks among the top 10 economies onthe ease of registering property. The costreductions FIGURE 5.2 are provisional and valid forone Rankings year from on registering March 2008, property to allow theThai are based government on 3 subindicatorsassess the results ofthe Days reform to transfer in property April <strong>2009</strong>.between 2 companiesno bribes includedin main cityWhat are the reform trends?33.3% 33.3%Time CostAlmost 60% of all property registrationreforms recorded by Doing Business in33.3%the past 4 years took place in 2 regions:ProceduresAfrica and Eastern Europe and CentralAsia (figure 5.4). In 2005 Eastern Europeand Steps Central for encumbrance Asia checking, had the deed most and title reforms. transferuntil property can be sold again or used as collateralIn 2006 and 2007 Africa took the lead.In Note: 2007/08 See Data notes Eastern for details. Europe and CentralAsia led with 9 reforms, closely followedby Africa with 8.FIGURE 5.5Top 5 reform featuresLowering registering costs propertyReforms Across including regions, feature the since most DB2006 popular (%) reformfeature has been reducing property 47%Reduced transfer taxes or and feesfees—registration fees,notary fees and stamp duties (figure 5.5).In 2005 and 19% 2006 such reductions wereComputerized made by 7 procedures of 10 reforming economies.Big cuts were made in Africa. In 2004 the19%region had the highest average cost forIncreased administrative efficiencyproperty transfer, at around 13% of theproperty value. Today the average cost16%Combined is 10.5% and of reduced the property procedures value—muchlower, though still higher than the 6%in Latin 12% America, the region with theIntroduced second highest fast-track cost. procedures or time limitsMany economies have reduced theNote: cost A reform of property may include several registration reform features. by estab-Source: Doing Business database.(c) The International Bank for Reconstruction and Development / The World BankAs % of property value,