Doing Business 2018 Lithuania Economy Pro le of Lithuania Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Lithuania Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Lithuania Income Category High income 16 Population 2,872,298 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 14,770 0 100 79.87 City Covered Vilnius DB 2018 Distance to Frontier (DTF) 0 100 84.06: Denmark (Rank: 3) 82.16: Norway (Rank: 8) 80.37: Finland (Rank: 13) 79.87: Lithuania (Rank: 16) 79.26: Latvia (Rank: 19) Page 3   71.33: Regional Average (Europe & Central Asia) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Lithuania Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Lithuania Income Category High income 16 Population 2,872,298 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 14,770 0 100 79.87 City Covered Vilnius DB 2018 Distance to Frontier (DTF) 0 100 84.06: Denmark (Rank: 3) 82.16: Norway (Rank: 8) 80.37: Finland (Rank: 13) 79.87: Lithuania (Rank: 16) 79.26: Latvia (Rank: 19) 71.33: Regional Average (Europe & Central Asia) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Lithuania 3 4 1 12 18 19 27 28 33 42 43 55 70 82 Rank 109 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Lithuania 97.70 100 93.05 92.94 87.81 84.25 81.43 78.80 80 70.00 63.33 60 DTF 49.37 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+4.17 Change:+0.01 Change:0.00 Investors Change:+2.36 Borders Change:0.00 Change:+0.14 Change:+0.07 Permits Change:+1.66 Change:0.00 Change:+2.10 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+4.17 Change:+0.01 Change:0.00 Investors Change:+2.36 Borders Change:0.00 Change:+0.14 Change:+0.07 Permits Change:+1.66 Change:0.00 Doing Business 2018 Lithuania Change:+2.10 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Lithuania Standardized Company Legal form Private Limited Liability Company (UAB) Paid-in minimum capital requirement EUR 2,500 City Covered Vilnius Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Procedure – Men (number) 4 5.2 4.9 1.00 (New Zealand) Time – Men (days) 5.5 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 0.6 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 4 5.2 4.9 1.00 (New Zealand) Time – Women (days) 5.5 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 0.6 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 19.3 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 94.30: Norway (Rank: 19) 94.11: Latvia (Rank: 21) 93.15: Finland (Rank: 26) 93.05: Lithuania (Rank: 27) 92.50: Denmark (Rank: 34) 90.62: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Lithuania – Procedure, Time and Cost Time Cost 0.5 5 0.4 ost (% of income per capita) 4 Time (days) 0.3 3 0.2 2 Page 6   starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Lithuania Figure – Starting a Business in Lithuania – Procedure, Time and Cost Time Cost 0.5 5 0.4 Cost (% of income per capita) 4 Time (days) 0.3 3 0.2 2 1 0.1 0 0 1 2 3 4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Open bank account and deposit minimum capital requirement 1 day no charge Agency : Commercial Bank Some banks apply charges for issuing a bank certi cate, which evidences payment of share capital. Accumulation bank account can be opened online in most large banks of Lithuania, for example, DNB bank, Dankske bank, Citadele, Šiaulių bank, Swedbank and Seb bank. However, it requires e- signature, and thus is not widely used. 2 Obtain a con rmed electronic signature 1 day EUR 0.5 Agency : Centre of Registers, Mobile operator In order to check and reserve company name online as well as register employees with SODRA, a company must have electronic signature. Electronic signature in USB form costs about EUR 44,00 plus about EUR 7.00 annual fee. Almost all Mobile operators provide electronic key for symbolical price in amount of EUR 0,50 plus monthly fee in amount of EUR 0.30 – 0.50 . At this moment in Lithuania are three types of electronic signatures. 1) Electronic signature issued by state Centre of Registers. Costs – 43.33 EUR. Certi cate of electronic signature is valid for 2 years. After 2 years certi cate must be updated. Costs – 8.23 EUR. 2) Electronic signature issued by mobile operators. Costs depends on mobile operator and range from 0.29 EUR to 4.34 EUR. Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Lithuania Details – Starting a Business in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Open bank account and deposit minimum capital requirement 1 day no charge Agency : Commercial Bank Some banks apply charges for issuing a bank certi cate, which evidences payment of share capital. Accumulation bank account can be opened online in most large banks of Lithuania, for example, DNB bank, Dankske bank, Citadele, Šiaulių bank, Swedbank and Seb bank. However, it requires e- signature, and thus is not widely used. 2 Obtain a con rmed electronic signature 1 day EUR 0.5 Agency : Centre of Registers, Mobile operator In order to check and reserve company name online as well as register employees with SODRA, a company must have electronic signature. Electronic signature in USB form costs about EUR 44,00 plus about EUR 7.00 annual fee. Almost all Mobile operators provide electronic key for symbolical price in amount of EUR 0,50 plus monthly fee in amount of EUR 0.30 – 0.50 . At this moment in Lithuania are three types of electronic signatures. 1) Electronic signature issued by state Centre of Registers. Costs – 43.33 EUR. Certi cate of electronic signature is valid for 2 years. After 2 years certi cate must be updated. Costs – 8.23 EUR. 2) Electronic signature issued by mobile operators. Costs depends on mobile operator and range from 0.29 EUR to 4.34 EUR. 3) Electronic signature issued by Migration Board with the personal identity card. Electronic signature does not cost anything but costs of personal identity card range from 8.6 EUR to 31.6 EUR. 3 Check and reserve the name of the company (limited liability company) Less than one day EUR 16.22 Agency : Register of Legal Entities (online procedure) Reservation of the new company name is compulsory for online registration of business. Checking of the name is free of charge, and reservation costs EUR 16.22. As of May 2013, the changes of the Regulations of the Register of legal persons came into e ect. Now the State Commission of the Lithuanian Language must check every new company name and give its consent on the use of a particular name.  Lithuanian Government by decision No. 1292 adopted on 09 12 2015 amended Regulations of the Register of Legal Entities. Nothing has changed how is related with reservation of company name, just new wording of Regulation has been adopted. https://www.e-tar.lt/portal/legalAct.html? documentId=a02cbd30a40011e58fd1fc0b9bba68a7 4 Register at the Company Register, including registration with State Tax 3 days EUR 57.34 Page 8   Inspectorate (the Lithuanian Revenue Authority) for corporate tax, VAT, documentId=a02cbd30a40011e58fd1fc0b9bba68a7 Doing Business 2018 Lithuania 4 Register at the Company Register, including registration with State Tax 3 days EUR 57.34 Inspectorate (the Lithuanian Revenue Authority) for corporate tax, VAT, and State Social Insurance Fund Board (SODRA) Agency : Register of Legal Entities According to Article 35 and 36 of the Regulations of the Register of Legal Entities, before the application for registration of a company is submitted to the Register of Legal Entities, notary public must verify the correctness of the particulars entered into the application, the compliance of the statutes with the statutory requirements and the fact that the company is eligible for registration. Article 36-1 of the Regulations provides a possibility to submit the documents electronically directly to the Register of Legal Entities, without veri cation of a notary (certain conditions apply, such as using only standard forms of incorporation documents, using electronic signatures, etc.). The following documents must be submitted when incorporating a private limited liability company: 1. Application for registration; 2. Founding act/Founding agreement; 3. Articles of association; 4. Consent use of address (if the founder is not an owner of premises). Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering Page 9   information Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Lithuania Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 10   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Lithuania Standardized Warehouse Estimated value of warehouse EUR 647,295.60 City Covered Vilnius Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Procedures (number) 13 16.0 12.5 7.00 (Denmark) Time (days) 75 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 0.3 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 86.79: Denmark (Rank: 1) 81.43: Lithuania (Rank: 12) 78.83: Norway (Rank: 21) 75.74: Finland (Rank: 37) 73.41: Latvia (Rank: 49) 68.09: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Lithuania – Procedure, Time and Cost Time Cost 0.14 70 0.12 60 Cost (% of warehouse value) 0.1 50 Time (days) 0.08 40 0.06 30 20 0.04 10 0.02 0 0 1 2 *3 *4 5 6 7 8 9 10 11 12 13 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 11   component indicators. Doing Business 2018 Lithuania Figure – Dealing with Construction Permits in Lithuania – Procedure, Time and Cost Time Cost 0.14 70 0.12 60 Cost (% of warehouse value) 0.1 50 Time (days) 0.08 40 0.06 30 20 0.04 10 0.02 0 0 1 2 *3 *4 5 6 7 8 9 10 11 12 13 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Lithuania and comparator economies – Measure of Quality 12.5 12.0 12 11.4 11.5 Index score 11.0 11.0 11 10.5 10.0 10.0 10 9.5 9 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Dealing with Construction Permits in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain certi cate of ownership of the land plot 0.5 days EUR 3 Agency : Center of Registers Documents evidencing ownership or any other right allowing construction activities on the land plot should be requested from the Center of Registers, Land and Real Property Registry. The Extract from the Register of Immovable Property proving the ownership of the land plot should be submitted to the Municipality in order to obtain a set of design conditions for the construction works. 2 Obtain topographic survey of land plot 21 days EUR 175 Agency : Private company Page 12   Lithuania Denmark Finland Latvia Norway Europe & Central Asia Doing Business 2018 Lithuania Details – Dealing with Construction Permits in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Request and obtain certi cate of ownership of the land plot 0.5 days EUR 3 Agency : Center of Registers Documents evidencing ownership or any other right allowing construction activities on the land plot should be requested from the Center of Registers, Land and Real Property Registry. The Extract from the Register of Immovable Property proving the ownership of the land plot should be submitted to the Municipality in order to obtain a set of design conditions for the construction works. 2 Obtain topographic survey of land plot 21 days EUR 175 Agency : Private company Before developing the architectural plans of the warehouse, BuildCo must obtain a topographic survey of the land plot. The cost is de ned by each private licensed company, with the average being around EUR 175. The time it takes to complete the survey is three weeks. 3 Request and obtain special architectural requirements for construction 21 days no charge works Agency : Municipality BuildCo must obtain special architectural requirements from the municipal administration. The Municipality shall issue these Requirements within 15 working days from the receipt of builder's request. These Requirements shall be followed while preparing the Design Documentation. 4 Request and obtain design requirements for water and sewage 14 days no charge connection Agency : Vilnius Water (“Vilniaus vandenys”) BuildCo shall submit an application together with a certi cate proving its ownership of the land to Lithuania Water Company personally or via e-mail at info@vv.lt. Lithuania Water Company will issue the requirements for water and sewage connection within 15 days from the submission of the request. After Requirements for water and sewage are issued, the builder should start preparing a project for water and sewage connection under the issued Requirements. This project is submitted together with Design Documents. 5 Request and obtain approval of the design documentation and obtain 14 days EUR 72 the building permit Agency : Architectural and Engineering Commissions of the City Development Department The builder shall submit Design Documentation and other supplementary documents, which are necessary for obtaining construction permit, by submitting hard copy or via internet using "Infostatyba" (www.planuojustatyti.lt). Competent agencies, as prescribed by laws, shall verify and approve the Design Documentation and other supplementary documents. After that, the construction permit is issued. The entire process shall take 30 working days. 6 Request and obtain water and sewerage connection approval and sign 7 days EUR 348 contract Agency : Vilnius Water (“Vilniaus vandenys”) Page 13   documents. After that, the construction permit is issued. The entire process Doing shall working Lithuania take 302018 Business days. 6 Request and obtain water and sewerage connection approval and sign 7 days EUR 348 contract Agency : Vilnius Water (“Vilniaus vandenys”) After the construction permit is issued, the construction company shall install water and sewerage connection according to the project prepared and approved earlier. After that, the builder shall submit the request for signing a contract with Lithuanian Water Company. 7 Request and obtain deeds of inspection and testing of engineering 5 days no charge networks for water and sewage connection Agency : Operators of Engineering Networks and Systems The inspection and test are performed by operators of the corresponding engineering networks and systems. The inspection veri es that the engineering networks for water and sewage connections are connected appropriately and issues a certi cate con rming the proper connection. 8 Connect to water services 5 days no charge Agency : Vilnius Water (“Vilniaus vandenys”) 9 Hire private cadastre company and obtain cadastral measurement of 5 days EUR 579 the structure Agency : Private Company The le is prepared by private companies licensed to carry out cadastral measurements and approved by the SE Center of Registers. This procedure is necessary for registering with the Land and Real Property Registry. 10 Request certi cate of completion of construction 0.5 days no charge Agency : State Territorial Planning and Construction Inspectorate under the Ministry of Environment BuildCo must submit the request along with other supplementary documents necessary to obtain the certi cate of completion of construction from the subdivision of The State Territorial Planning and Construction Inspectorate under The Ministry of Environment of the Republic of Lithuania. BuildCo can submit a hard copy of the request or via internet using “Infostatyba” (www.planuojustatyti.lt). A Commission of Completion of Construction is then formed to carry out an on-site inspection. 11 Receive nal inspection 1 day no charge Agency : State Territorial Planning and Construction Inspectorate under the Ministry of Environment After the successful completion of the nal inspection, the Commission issues the approval. 12 Obtain the certi cate of completion of construction 14 days no charge Agency : State Territorial Planning and Construction Inspectorate under the Ministry of Environment The Certi cate of Completion of Construction shall be issued within 10 working days from the submission of the request and other supplementary documents. 13 Register with the Land and Real Property Registry 1 day EUR 749 Agency : Land and Real Property Registry Upon completion and approval of construction, the building must be Page 14   registered with the Land and Real Property Registry. The general term for working days from the submission of the request and other supplementary Doing documents. Business 2018 Lithuania 13 Register with the Land and Real Property Registry 1 day EUR 749 Agency : Land and Real Property Registry Upon completion and approval of construction, the building must be registered with the Land and Real Property Registry. The general term for the registering of warehouse is 10 working days, but it is possible to register it in 1 working day if a supplementary fee is paid. The price for the building registration depends on whether natural or legal person registers the building and on the average market value of the building. The terms and conditions of payment for the registering services were settled by the 2007-06-06 Legal Act of the Government of the Republic of Lithuania, which came into force on June 17, 2007. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Lithuania – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Page 15   Takes place simultaneously with previous procedure. Doing Business 2018 Lithuania Details – Dealing with Construction Permits in Lithuania – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Page 16   Liability Insurance or Decennial Insurance)? (0-1) to obtain Construction Doing Business 2018 Lithuania company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 2.0 What are the quali cation requirements for the professional responsible for verifying Minimum 1.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering. What are the quali cation requirements for the professional who supervises the Minimum 1.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhe ad or Page 17   income per capita) underground, whichever is more common in the area where the construction management. Doing Business 2018 Lithuania Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 18   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Lithuania Standardized Connection Price of electricity (US cents per kWh) 9.1 Name of utility AB ESO City Covered Vilnius Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Procedures (number) 5 5.4 4.7 2 (United Arab Emirates) Time (days) 85 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 42 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 8 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.21: Denmark (Rank: 16) 88.97: Finland (Rank: 20) 87.46: Norway (Rank: 23) 84.25: Lithuania (Rank: 33) 79.05: Latvia (Rank: 62) 70.35: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Lithuania – Procedure, Time and Cost Time Cost 45 80 40 70 Cost (% of income per capita) 35 60 30 Time (days) 50 25 40 20 30 15 20 10 10 Page 19   5 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Lithuania Figure – Getting Electricity in Lithuania – Procedure, Time and Cost Time Cost 45 80 40 70 Cost (% of income per capita) 35 60 30 Time (days) 50 25 40 20 30 15 20 10 10 5 0 0 1 2 *3 *4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Lithuania and comparator economies – Measure of Quality 9 8 8 8 7 7 7 6 6 Index score 5.3 5 4 3 2 1 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Getting Electricity in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to AB Lesto and receive estimate and technical 7 calendar days EUR 0 conditions Agency : AB ESO The customer submits an application for a connection to the utility. The utility issues technical conditions and estimate of costs. 2 Sign connection service agreement with AB ESO and await design and 75 calendar days EUR 5,436.2 completion of external works Agency : AB ESO Customer signs the agreement either via online e-services portal www.manogile. It or in Customer service center. After the customer pays the Page 20   Lithuania Denmark Finland Latvia Norway Europe & Central Asia Doing Business 2018 Lithuania Details – Getting Electricity in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to AB Lesto and receive estimate and technical 7 calendar days EUR 0 conditions Agency : AB ESO The customer submits an application for a connection to the utility. The utility issues technical conditions and estimate of costs. 2 Sign connection service agreement with AB ESO and await design and 75 calendar days EUR 5,436.2 completion of external works Agency : AB ESO Customer signs the agreement either via online e-services portal www.manogile. It or in Customer service center. After the customer pays the estimate to AB ESO via e-services portal www.manogile.lt or by bank transfer, the following steps are carried out by the Utility: - preparation of the design of the external electricity network; - assignment of the work order to the annual contractor. In most of the cases, annual contractors are selected once a year by the public tender and no addition procurements are carried out after the customer signs The New Connection Service Agreement; - construction work for the electricity network of AB ESO. All the necessary material is provided by the Utility and Customer does not need to buy any material for the construction of external electricity network. 3 Obtain internal wiring inspection and certi cate from State Energy 7 calendar days EUR 0 Inspection Agency : State Energy Inspection An internal inspection can be done in parallel with AB Lesto works (the external connection works). The customer must apply to the State Energy Inspection, a Division of the Ministry of Economy, and request a Certi cate of Completion. The customer can request the internal inspection already when the Construction Permit is obtained. The internal wiring is the responsibility of the customer and someone from the customer's party is requested to be present during the inspection. The State Inspection examines the constructed warehouse and its documentation and signs the certi cate “Completion of Works”. 4 Sign supply contract with electricity retailer 2 calendar days EUR 0 Agency : Electricity supplier The agreement with an electricity supplier is signed. Regulation requires that consumer who enters energy sale–purchase agreement for the rst time should provide notice to the distribution operator about preferred supplier before connecting the facilities to the power grid, but no later than the electric meter installation date. 5 Obtain installation and opening of meter by AB ESO 3 calendar days EUR 0 Agency : AB ESO The meter is installed after the electricity supply agreement has been signed and after the utility receives the Certi cate from the State Energy Inspection which indicates that the internal wiring is successfully completed and that the utility works up to the meter are completed as well. The meter is installed by AB Lesto and by the same department that is doing the connection works. Page 21   There is also an inspection done of the utility’s external connection work by operator about preferred supplier before connecting the facilities to the Doing power grid, but Business 2018no later than the electric meter installation date. Lithuania 5 Obtain installation and opening of meter by AB ESO 3 calendar days EUR 0 Agency : AB ESO The meter is installed after the electricity supply agreement has been signed and after the utility receives the Certi cate from the State Energy Inspection which indicates that the internal wiring is successfully completed and that the utility works up to the meter are completed as well. The meter is installed by AB Lesto and by the same department that is doing the connection works. There is also an inspection done of the utility’s external connection work by the State Energy Inspection. The utility independently requests the State Energy Inspection to inspect the utility work (external inspection). This is the sole responsibility of the utility and the customer does not have to be present. Takes place simultaneously with previous procedure. Details – Getting Electricity in Lithuania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.5 System average interruption frequency index (SAIFI) 0.4 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.lesto.lt/e n/for- businesses/electricit y-rates-and- payment- plans/distribution- Page 22   service-rates-in-eur- Takes place simultaneously with previous procedure. Doing Business 2018 Lithuania Details – Getting Electricity in Lithuania – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 8 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.5 System average interruption frequency index (SAIFI) 0.4 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.lesto.lt/e n/for- businesses/electricit y-rates-and- payment- plans/distribution- service-rates-in-eur- as-of-egb5.html Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the Page 23   quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Lithuania Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value EUR 647,295.60 City Covered Vilnius Page 24   Europe & OECD high Doing Business 2018 Lithuania Standard Property Transfer Property value EUR 647,295.60 City Covered Vilnius Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Procedures (number) 3 5.3 4.6 1.00 (4 Economies) Time (days) 3.5 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 0.8 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 28.5 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.94: Lithuania (Rank: 3) 89.88: Denmark (Rank: 11) 87.26: Norway (Rank: 14) 81.87: Latvia (Rank: 22) 80.73: Finland (Rank: 27) 76.02: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Lithuania – Procedure, Time and Cost Time Cost 3.5 0.5 3 0.4 Cost (% of property value) 2.5 Time (days) 0.3 2 1.5 0.2 1 0.1 0.5 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 25   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Lithuania Figure – Registering Property in Lithuania – Procedure, Time and Cost Time Cost 3.5 0.5 3 0.4 Cost (% of property value) 2.5 Time (days) 0.3 2 1.5 0.2 1 0.1 0.5 0 0 1 2 3 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Lithuania and comparator economies – Measure of Quality 35 30 28.5 26.5 24.5 25 22.0 Index score 20.0 19.8 20 15 10 5 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Registering Property in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Notary order veri cation and clari cation of the property data Less than a day EUR 3.62 is a fee Agency : Information system of the Real Estate Agency (online procedure) payable to the Center of Registers Resolution No. 527 of the Government of the Republic of Lithuania as of May for verification and 4, 2011 On the amendment of Resolution No. 1129 of the Government of the revision of cadastral Republic of Lithuania of July 12, 2002 On the approval of the Real Estate and registration data Cadastre regulations stipulates that a notary public, at the initial stage of of an immovable preparing an immovable property transaction, is required to order veri cation and revision of cadastral and registration data of an immovable item as well as for item that are necessary for the execution of the immovable property the making of data contract. The Information System of Public E-Services for Immovable revision notes (by Property Transactions shall generate a notice on the future transaction and the Center of Page 26   submit it to the Registrar of Real Estate. Having received the notice, the Registers) Lithuania Denmark Finland Latvia Norway Europe & Central Asia Doing Business 2018 Lithuania Details – Registering Property in Lithuania – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Notary order veri cation and clari cation of the property data Less than a day EUR 3.62 is a fee Agency : Information system of the Real Estate Agency (online procedure) payable to the Center of Registers Resolution No. 527 of the Government of the Republic of Lithuania as of May for verification and 4, 2011 On the amendment of Resolution No. 1129 of the Government of the revision of cadastral Republic of Lithuania of July 12, 2002 On the approval of the Real Estate and registration data Cadastre regulations stipulates that a notary public, at the initial stage of of an immovable preparing an immovable property transaction, is required to order veri cation and revision of cadastral and registration data of an immovable item as well as for item that are necessary for the execution of the immovable property the making of data contract. The Information System of Public E-Services for Immovable revision notes (by Property Transactions shall generate a notice on the future transaction and the Center of submit it to the Registrar of Real Estate. Having received the notice, the Registers) Registrar of Real Estate shall verify and, if necessary, revise the cadastral and registration data of the immovable item that are necessary for the execution of the immovable property transaction (or, in certain cases, refuse to revise the data due to speci c reasons) and make a relevant note of the data revision with the Real Estate Register. The note shall be valid for 30 calendar days after the data revision. Data of the Real Estate Cadastre and Register required for the execution of the immovable property transaction must be veri ed and the notes of data revision or refusal to revise them must be made latest in 8 working hours or, in certain cases subject to the status of cadastral and registration data of the immovable item held by the Real Estate Register, latest in 3 working days from the receipt of notice of pending transaction from the Information System of Public E-Services for Immovable Property Transactions. 2 Notarization of the sale-purchase agreement 1 calendar day Notary fees: 0.45% of Agency : Notary Public property price, but not less than € 28.96 Pursuant to the Resolution No. 1129 of the Government of the Republic of and not exceeding € Lithuania from July 12, 2002 "On the approval of the Real Property Register 5,792.40 (€ 14,481, if Regulations", Civil Code, Law on Land and Law on Companies of the Republic more than one of Lithuania with later amendments thereof, a contract of purchase and sale object is transferred) of an immovable item must be made in a notarial form. Failure to comply with the requirements of the form shall render the contract invalid. The contract of purchase and sale of an immovable item may be used against In addition, EUR 3.62 third parties and have legal implications for them only in case it is registered is a fee payable to with the public register in the statutory Procedure (procedure 3). The title the Center of (right of ownership) to the immovable item shall devolve to the buyer from Registers for the moment of transfer of the item. The transfer and acceptance of the verification and immovable item shall be documented in a statement of transfer and revision of cadastral acceptance signed by the seller and the buyer or in another document and registration data speci ed in the contract of purchase and sale. Likewise, the provisions of an immovable regarding the transfer and acceptance of the immovable item may be item as well as for inserted in the contract of purchase and sale. In such a case, the item and the making of data the title thereto shall transfer to the buyer at the moment of signing the revision notes (by contract. the Center of Registers) The Directive 2010/31/EU of European Parliament and Council of 19 May 2010 on the energy performance of buildings was enforced in Lithuania. Respective amendments to the Republic of Lithuania Law on Construction as from 9 January 2013 came into force. The energy e ciency certi cation is mandatory in case of sale of the property. The seller of a building being sold Page 27   The Directive 2010/31/EU of European Parliament and Council of 19 May 2010 on the energy performance of buildings was enforced in Lithuania. Businessamendments Doing Respective 2018 Lithuania to the Republic of Lithuania Law on Construction as from 9 January 2013 came into force. The energy e ciency certi cation is mandatory in case of sale of the property. The seller of a building being sold must provide the buyer with a valid energy e ciency certi cate of a building or part thereof, save as in cases established by the Law on Construction (e.g., the energy e ciency certi cation shall not be mandatory for non-residential buildings of low energy consumption used for industrial, warehousing and agricultural management purposes). The list of documents to be submitted to notaries include: • Articles of association of private limited liability companies; • Power-of-Attorney issued by the CEO of a private limited liability company, if another authorized person, instead of the CEO, is acting on behalf of the company; • Personal ID of the representatives of the parties to the contract • Resolution of the board of a private limited liability company (if this body has been formed) in cases when the book value of the immovable property to be sold exceeds 1/20 of the authorized capital of the company or any other value established in the articles of association of the company. Where no board is formed in the company, such resolution shall be passed by the CEO of the company. • Where so is speci ed in the articles of association of a private limited liability company, approval of the aforementioned resolutions of the board or CEO (if the board is not formed) by the general meeting of shareholders; • Land plot plan; • Documentary proof of seller's title to immovable items (legal basis for the acquisition of the immovable item, for example, a contract of exchange, a contract of purchase and sale, etc., on which basis the title to the immovable item has been registered); • Energy Performance Certi cate (an original document or a copy) shall be submitted to a notary. In case if the energy consumption of the building is low/the building is not heated, the provision of the energy certi cate is not required; • Other documents, if requested subject to factual circumstances. 3 Register the transfer of title to the property in the Real Estate Register 1 business day (2 Depends on the Agency : Notary Public / State Enterprise Center of Registers calendar days) market value of the real estate and the Due to revisions of Law on Real Property Register of the Republic of desirable term of the Lithuania and Regulations of the Real Property Register mentioned registration (see previously, one-stop-shop principle was fully implemented in the immovable Notes in comments property transfer process, i.e. a buyer and a seller visit only notary public for more details) o ce in order to conclude property transfer and register ownership rights. After notarisation of the sale-purchase agreement, the notary online immediately orders registration of new ownership rights in the Real Property Register. The registration of ownership rights under fast-track procedure (1 business day) can be done on the same day when notarisation of sale- purchase agreement takes place in case of a simple property transaction which is described in the current questionnaire. Due to introduction of euro in Lithuania on 1 January 2015, registration fees remained the same, only ranges of average market value for calculation of registration fees of buildings and land plots were adjusted. Therefore, the corrections are given below: Average market value of building - registration fee: Up to EUR 14,500 = EUR 37.65 From EUR 14,501 to EUR 232,000 = EUR 37.65 + 0.05% di erence between building's average market value and EUR 14,500 From EUR 232,001 to EUR 870,000 = EUR 146,26 + 0.055% di erence between Page 28   required; Other documents, Doing •Business requested subject to factual circumstances. 2018 ifLithuania 3 Register the transfer of title to the property in the Real Estate Register 1 business day (2 Depends on the Agency : Notary Public / State Enterprise Center of Registers calendar days) market value of the real estate and the Due to revisions of Law on Real Property Register of the Republic of desirable term of the Lithuania and Regulations of the Real Property Register mentioned registration (see previously, one-stop-shop principle was fully implemented in the immovable Notes in comments property transfer process, i.e. a buyer and a seller visit only notary public for more details) o ce in order to conclude property transfer and register ownership rights. After notarisation of the sale-purchase agreement, the notary online immediately orders registration of new ownership rights in the Real Property Register. The registration of ownership rights under fast-track procedure (1 business day) can be done on the same day when notarisation of sale- purchase agreement takes place in case of a simple property transaction which is described in the current questionnaire. Due to introduction of euro in Lithuania on 1 January 2015, registration fees remained the same, only ranges of average market value for calculation of registration fees of buildings and land plots were adjusted. Therefore, the corrections are given below: Average market value of building - registration fee: Up to EUR 14,500 = EUR 37.65 From EUR 14,501 to EUR 232,000 = EUR 37.65 + 0.05% di erence between building's average market value and EUR 14,500 From EUR 232,001 to EUR 870,000 = EUR 146,26 + 0.055% di erence between building's average market value and EUR 232,000 More than EUR 870,000 = EUR 496,70 + 0,05% di erence between building's average market value and 870,000, but not more than EUR 1448,10 (the ultimate cap fee for registration Average market value of land plot - registration fee: Up to EUR 2,900 = EUR 23.17 From EUR 2,901 to EUR 29,000 = EUR 23.17 + 0.3% of the di erence between land plot's average market value and EUR 2,900 From EUR 29,001 to EUR 290,000 = EUR 101.37 + 0.3% of the di erence between land plot's average market value and EUR 29,000 More than EUR 290,000 = EUR 883.34 + 0.2% of the di erence between land plot's average market value and EUR 290,000, but not more than EUR 1448.10 (the ultimate cap fee for registration) Legal basis: Law Amending Articles 17, 23, 26 and Invalidating Article 25 of the Law on Real Property Register No I-1539 of the Republic of Lithuania as of 23 June 2015 No XII-1833; Resolution No 1194 of the Government of the Republic of Lithuania as of 18 November 2015 on Amendment to Resolution No 379 of the Government of the Republic of Lithuania as of 23 April 2014 on Approval of the Real Property Register Regulations Takes place simultaneously with previous procedure. Details – Registering Property in Lithuania – Measure of Quality Answer Score Quality of the land administration index (0-30) 28.5 Reliability of infrastructure index (0-8) 8.0 What is the institution in charge of immovable property registration? The State Page 29   Enterprise Takes place simultaneously with previous procedure. Doing Business 2018 Lithuania Details – Registering Property in Lithuania – Measure of Quality Answer Score Quality of the land administration index (0-30) 28.5 Reliability of infrastructure index (0-8) 8.0 What is the institution in charge of immovable property registration? The State Enterprise Centre of Registers In what format are the majority of title or deed records kept in the largest business city Computer/Fully 2.0 —in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: The State Enterprise Centre of Registers In what format are the majority of maps of land plots kept in the largest business city— Computer/Fully 2.0 in a paper format or in a computerized format (scanned or fully digital)? digital Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Single database 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use Yes 1.0 the same identi cation number for properties? Transparency of information index (0–6) 4.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://info.registr ucentras.lt/ Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://www.regist rucentras.lt/p/85 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 30   Link for online access: http://www.regist Doing Business 2018 Lithuania rucentras.lt/p/85 Does the agency in charge of immovable property registration commit to delivering a Yes, online 0.5 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: http://www.regist rucentras.lt/p/86 Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: 39781 property transfers Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.regist rucentras.lt/p/77 3 Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5 speci c time frame—and if so, how does it communicate the service standard? Link for online access: http://www.regist rucentras.lt/p/77 3 Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 8.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 8.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Page 31   Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property Doing registry Business them opposable to third parties? to makeLithuania 2018 Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Notary. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Notary. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a Vilnius County property worth 50 times gross national income (GNI) per capita and located in the Court (Vilniaus largest business city, what court would be in charge of the case in the rst instance? apygardos teismas) How long does it take on average to obtain a decision from the rst-instance court for Less than a year 3.0 such a case (without appeal)? Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: In 2016, there were 549 disputes on the land lease heard in Lithuania in total (in rst instance courts) Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) Page 32   credit bureau. The strength of legal rights index measures the degree to Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Lithuania Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.3 6.6 8.00 (34 Economies) Page 33   Credit registry coverage (% of adults) 45.3 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Lithuania Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Strength of legal rights index (0-12) 6 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 8 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 45.3 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.00: Latvia (Rank: 12) 70.00: Denmark (Rank: 42) 70.00: Lithuania (Rank: 42) 65.00: Finland (Rank: 55) 64.58: Regional Average (Europe & Central Asia) 55.00: Norway (Rank: 77) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Lithuania and comparator economies 10 9 9 8 8 7 7 6.6 6 Index score 6 5 5 4 3 2 1 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Legal Rights in Lithuania Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 34   Lithuania Denmark Finland Latvia Norway Europe & Central Asia Doing Business 2018 Lithuania Details – Legal Rights in Lithuania Strength of legal rights index (0-12) 6 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds Yes or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency Yes procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Lithuania and comparator economies 10 8 8 8 6.3 Index score 6 6 6 6 4 2 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Credit Information in Lithuania Page 35   0 Lithuania Doing Business 2018 Denmark Lithuania Finland Latvia Norway Europe & Central Asia Details – Credit Information in Lithuania Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes Yes 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes Yes 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 8 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 1,772,715 831,092 Number of firms 158,517 32,760 Total 1,931,232 863,852 Percentage of adult population 100.0 45.3 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 36   transactions; Available legal remedies (damages, Percentage of adult population 100.0 45.3 Doing Business 2018 Lithuania Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 6.6 6.4 Page 37   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Lithuania Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 6.7 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Norway (Rank: 10) 66.67: Denmark (Rank: 33) 64.31: Regional Average (Europe & Central Asia) 63.33: Lithuania (Rank: 43) 63.33: Latvia (Rank: 43) 58.33: Finland (Rank: 62) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Lithuania and comparator economies – Measure of Quality Lithuania 8 4 7 6 6 7 Denmark 9 5 7 5 6 8 Finland 9 4 6 2 6 8 Latvia 8 4 5 5 7 9 Norway 10 5 7 8 7 8 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Lithuania – Measure of Quality Answer Score Page 38   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Lithuania Details – Protecting Minority Investors in Lithuania – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6 Extent of disclosure index (0-10) 7 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- Disclosure on 2.0 2) the transaction and on the con ict of interest Extent of director liability index (0-10) 4 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by No 0.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Only in case of 0.0 fraud or bad faith Ease of shareholder suits index (0-10) 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Page 39   shareholder Ease ofBusiness Doing suits index 2018 (0-10) Lithuania 7 Before suing can shareholders representing 10% of Buyer's share capital inspect the No 0.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 6.7 Extent of shareholder rights index (0-10) 6 Does the sale of 51% of Buyer's assets require shareholder approval? No 0.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected No 0.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 6 Is it forbidden to appoint the same individual as CEO and chair of the board of No 0.0 directors? Must the board of directors include independent and nonexecutive board members? No 0.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 Page 40   of Buyer? Must the board of directors include a separate audit committee exclusively comprising No 0.0 board Doing members? Business 2018 Lithuania Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 8 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on Yes 1.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 41   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Lithuania Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Payments (number per year) 11 16.5 10.9 3 (Hong Kong SAR, China) Page 42   return, but within the tax assessment period. Doing Business 2018 Lithuania Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Payments (number per year) 11 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 109.3 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 42.7 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 97.52 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.22: Denmark (Rank: 8) 90.14: Finland (Rank: 12) 89.79: Latvia (Rank: 13) 87.81: Lithuania (Rank: 18) 85.18: Norway (Rank: 28) 75.78: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Lithuania and comparator economies – Measure of Quality 120 97.52 98.11 100 89.06 93.09 80 Index score 63.69 65.20 60 40 20 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Paying Taxes in Lithuania Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) TTR onPage 43   Doing Business 2018 Lithuania Figure – Paying Taxes in Lithuania and comparator economies – Measure of Quality 120 97.52 98.11 100 89.06 93.09 80 Index score 63.69 65.20 60 40 20 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Paying Taxes in Lithuania Total tax and contribution Tax or mandatory Payments Notes on Time rate (% of Notes contribution (number) Payments (hours) Statutory tax rate Tax base profit) on TTR Social security 1 online 34 30.98% gross salaries 34.95 contributions Corporate income 1 online 18 15% taxable profit 5.90 tax Real estate tax 1 online 1% assessed 0.98 property value Environmental tax 1 online 39.77 Eur/ton in January - ton of waste 0.25 April 2016 71.13 Eur/ton in May - December 2016 Contributions to 1 online 0.2% gross salaries 0.23 guarantee fund Land tax 1 online 0.01% - 4% assessed land 0.20 value Vehicle tax 1 online EUR 286 + EUR 753 fixed fee 0.17 depending on type of vehicle Value added tax 1 online 57 21% value added 0.00 not (VAT) included Fuel tax 1 included into 0.00 small fuel price amount Employee paid - 0 jointly 9% gross salaries 0.00 withheld Social security contributions Tax on pollution 1 online various rates fuel 0.00 from mobile consumption sources Page 44   Social security contributions Doing Business 2018 Lithuania Tax on pollution 1 online various rates fuel 0.00 from mobile consumption sources Tax on pollution 1 online various rates packaging use 0.00 small from packaging amount Totals 11 109.3 42.7 Details – Paying Taxes in Lithuania – Tax by Type Taxes by type Answer Profit tax (% of profit) 5.9 Labor tax and contributions (% of profit) 35.2 Other taxes (% of profit) 1.6 Details – Paying Taxes in Lithuania – Measure of Quality Answer Score Post ling index (0-100) 97.52 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 0% - 24% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 2.1 95.8 Time to obtain a VAT refund (weeks) 6.2 94.27 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 0% - 24% Time to comply with a corporate income tax audit (hours) 1.5 100 Time to complete a corporate income tax audit (weeks) No tax audit per 100 case study scenario Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. Page 45   The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named Doing Business corporate income tax2018 Lithuania in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Page 46   Relevant government agencies include customs, port authorities, road a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Lithuania Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each shipment is en route economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 47   of agriculture or industry, national security agencies and any other Doing Business 2018 Lithuania government authorities. Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Time to export: Border compliance (hours) 9 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 58 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 3 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 28 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 0 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 0 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 1 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 0 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 97.70: Lithuania (Rank: 19) 96.97: Norway (Rank: 22) 95.26: Latvia (Rank: 25) 92.44: Finland (Rank: 34) 83.96: Regional Average (Europe & Central Asia) 100.00: Denmark (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Lithuania – Time and Cost Time Cost 10 70 9 58 60 8 50 Time (hours) Cost (USD) 6 40 28 30 4 3 20 2 1 10 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 48   Doing Business 2018 Lithuania Figure – Trading across Borders in Lithuania – Time and Cost Time Cost 10 70 9 58 60 8 50 Time (hours) Cost (USD) 6 40 28 30 4 3 20 2 1 10 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Lithuania Characteristics Export Import Product HS 87 : Vehicles other than railway or tramway rolling-stock, and HS 8708: Parts and accessories of parts and accessories thereof motor vehicles Trade partner Russian Federation Germany Border Medininkai border crossing Poland-Lithuania border crossing Distance (km) 35 160 Domestic transport 1 4 time (hours) Domestic transport 73 290 cost (USD) Details – Trading across Borders in Lithuania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.7 58.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.3 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.0 0.0 Details – Trading across Borders in Lithuania – Trade Documents Export Import Page 49   cost (USD) Doing Business 2018 Lithuania Details – Trading across Borders in Lithuania – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 4.7 58.0 Export: Clearance and inspections required by agencies other than customs 0.0 0.0 Export: Port or border handling 4.3 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.0 0.0 Import: Port or border handling 0.0 0.0 Details – Trading across Borders in Lithuania – Trade Documents Export Import CMR waybill CMR waybill Certificate of origin Commercial invoice Certificate of conformity Packing list Customs Export Declaration Intrastat Commercial invoice Packing list Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction Page 50   over Packing list Doing Business 2018 Lithuania Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value EUR 24,570.00 Court name Vilnius District Court City Covered Vilnius Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Time (days) 370 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 23.6 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 15.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.80: Lithuania (Rank: 4) 75.71: Norway (Rank: 8) 71.66: Latvia (Rank: 20) Page 51   of judicial processes Quality Business Doing index (0-18) 2018 Lithuania 15.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.80: Lithuania (Rank: 4) 75.71: Norway (Rank: 8) 71.66: Latvia (Rank: 20) 68.37: Denmark (Rank: 32) 66.40: Finland (Rank: 46) 65.38: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Lithuania – Time and Cost Time Cost 700 30 26.2 577.8 600 23.3 23.1 23.6 25 Cost (% of claim value) 485 489.9 485 21.5 500 469 20 Time (days) 16.2 400 400 370 15 300 9.9 10 200 100 5 0 0 Denmark Europe & Finland Latvia Lithuania Norway OECD high income Central Asia Figure – Enforcing Contracts in Lithuania and comparator economies – Measure of Quality Lithuania 3 4.5 4 3.5 Denmark 2.5 2.5 2.5 3.5 Finland 2.5 2 2.5 1.5 Latvia 3 4.5 2 3 Norway 2.5 2 3 3.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 52   16 Denmark Europe & Finland Latvia Lithuania Norway OECD high income Central Asia Doing Business 2018 Lithuania Figure – Enforcing Contracts in Lithuania and comparator economies – Measure of Quality Lithuania 3 4.5 4 3.5 Denmark 2.5 2.5 2.5 3.5 Finland 2.5 2 2.5 1.5 Latvia 3 4.5 2 3 Norway 2.5 2 3 3.5 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Lithuania Indicator Time (days) 370 Filing and service 40 Trial and judgment 240 Enforcement of judgment 90 Cost (% of claim value) 23.6 Attorney fees 8.6 Court fees 6 Enforcement fees 9 Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 3.5 Case management (0-6) 4.5 Court automation (0-4) 4.0 Alternative dispute resolution (0-3) 3.0 Details – Enforcing Contracts in Lithuania – Measure of Quality Page 53   Alternative dispute resolution (0-3) 3.0 Doing Business 2018 Lithuania Details – Enforcing Contracts in Lithuania – Measure of Quality Answer Score Quality of judicial processes index (0-18) 15.0 Court structure and proceedings (-1-5) 3.5 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.5 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by lawyers? Court automation (0-4) 4.0 1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? Page 54   1. Can the initial complaint be led electronically through a dedicated platform within Yes 1.0 Businesscourt? the competent Doing 2018 Lithuania 2. Is it possible to carry out service of process electronically for claims led before the Yes 1.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 3.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., Yes if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 55   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Lithuania Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 45.3 38.0 71.2 93.1 (Norway) Time (years) 2.3 2.3 1.7 0.4 (Ireland) Page 56   Cost (% of estate) 10.0 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Lithuania Europe & OECD high Indicator Lithuania Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 45.3 38.0 71.2 93.1 (Norway) Time (years) 2.3 2.3 1.7 0.4 (Ireland) Cost (% of estate) 10.0 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 8.0 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Lithuania and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 92.82: Finland (Rank: 2) 85.94: Norway (Rank: 6) 84.93: Denmark (Rank: 7) 59.10: Latvia (Rank: 53) 54.19: Regional Average (Europe & Central Asia) 49.37: Lithuania (Rank: 70) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Lithuania – Time and Cost Time Cost 2.5 2.3 13.1 2.3 14 12 2 10.0 10.0 1.7 9.1 10 Cost (% of estate) Time (years) 1.5 1.5 8 1.0 1 0.9 0.9 6 4.0 3.5 4 0.5 1.0 2 0 0 Denmark Europe & Finland Latvia Lithuania Norway OECD high income Central Asia Figure – Resolving Insolvency in Lithuania and comparator economies – Measure of Quality Lithuania 4 2.5 1 0.5 Page 57   Denmark 6 3 2 1 Denmark Europe & Finland Latvia Lithuania Norway OECD high income Central Asia Doing Business 2018 Lithuania Figure – Resolving Insolvency in Lithuania and comparator economies – Measure of Quality Lithuania 4 2.5 1 0.5 Denmark 6 3 2 1 Finland 6 3 3 2.5 Latvia 5 2.5 2 2.5 Norway 5 2.5 3 1 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Lithuania and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 100 93.1 88.1 88.3 90 80 70 60 50 45.3 40.1 38.0 40 30 20 10 0 Lithuania Denmark Finland Latvia Norway Europe & Central Asia Details – Resolving Insolvency in Lithuania Indicator Answer Explanation Proceeding liquidation Mirage management is interested in saving the business. Additionally, if the management (after an does not initiates reorganization, BizBank will start recovery procedure and this will lead the attempt at company to liquidation. However, reorganization is likely to fail, because BizBank will be reorganization) interested in getting paid as soon as possible and will not approve the reorganization plan. If reorganization plan is not approved, the court will terminate reorganization proceedings and initiate liquidation. Outcome piecemeal sale Upon declaring the enterprise bankrupt and adopting a resolution to put the enterprise into liquidation by reason of bankruptcy, the court shall confirm the amount of revised claims of each creditor, the procedure of liquidation, other orders and instructions necessary for carrying out the liquidation procedure. In this stage pledged assets – the real estate - shall be sold at an auction. Page 58   Lithuania Denmark Finland Latvia Norway Europe & Central Asia Doing Business 2018 Lithuania Details – Resolving Insolvency in Lithuania Indicator Answer Explanation Proceeding liquidation Mirage management is interested in saving the business. Additionally, if the management (after an does not initiates reorganization, BizBank will start recovery procedure and this will lead the attempt at company to liquidation. However, reorganization is likely to fail, because BizBank will be reorganization) interested in getting paid as soon as possible and will not approve the reorganization plan. If reorganization plan is not approved, the court will terminate reorganization proceedings and initiate liquidation. Outcome piecemeal sale Upon declaring the enterprise bankrupt and adopting a resolution to put the enterprise into liquidation by reason of bankruptcy, the court shall confirm the amount of revised claims of each creditor, the procedure of liquidation, other orders and instructions necessary for carrying out the liquidation procedure. In this stage pledged assets – the real estate - shall be sold at an auction. Time (in years) 2.3 Mirage management will file a petition for commencement of reorganization proceedings and send a notice of it to the creditors and to the Authority of Audit, Accounting, Property valuation and Insolvency Management under the Ministry of Finance of the Republic of Lithuania. The court will decide whether to initiate reorganization proceedings within 1 month of receiving the petition. Decision of the court to initiate reorganization proceedings stays all other enforcement actions against the debtor. An administrator will be appointed and creditors must submit their claims within specified period (usually 30 to 45 days). The claims must be approved by the court in order for the creditors to vote on the reorganization plan. A creditors' meeting will be held 30 days after the creditors' claims are approved, creditors will elect a creditors' committee. Mirage management must submit a reorganization plan within 6 months of the date when the decision on the opening of reorganization proceedings is made. Creditors representing at least 2/3 of the aggregate amount of certified claims must vote in favor of the plan, in order for it to be approved. If the creditors fail to approve the plan, reorganization proceedings will be terminated. After reorganization proceedings are terminated, there is no automatic conversion of proceedings into liquidation. However, BizBank will be able to petition the court to open liquidation proceedings. The court will issue a liquidation order and liquidation proceedings will commence. A bankruptcy administrator will be appointed, who must sell the assets to satisfy the creditors' claims. Immovable property must be sold at a public auction. Movable property and immovables not sold at an auction will be sold in accordance with the decision of the creditors. Claims of secured creditors have priority over all other claims, including employment and tax claims, and will be paid first from the proceedings of the sale. Cost (% of 10.0 Major expenses will include remuneration of the administrator (around 5%), attorneys' fees estate) (up to 5%), and fees of other professionals involved in the insolvency proceedings, such as accountants and assessors (up to 5%). Recovery rate (cents on the 45.3 dollar) Details – Resolving Insolvency in Lithuania – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 2.5 Page 59   What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 dollar) Doing Business 2018 Lithuania Details – Resolving Insolvency in Lithuania – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 8.0 Commencement of proceedings index (0-3) 2.5 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Page 60   Creditor Doing participation Business 2018 index (0-4) Lithuania 1.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for Page 61   work of equal value and nondiscrimination based on the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Lithuania Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Lithuania Answer Hiring Page 62   Fixed-term contracts prohibited for permanent tasks? No days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Lithuania Details – Labor Market Regulation in Lithuania Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single xed-term contract (months) 60.0 Maximum length of xed-term contracts, including renewals (months) 60.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 433.5 Ratio of minimum wage to value added per worker 0.2 Maximum length of probationary period (months) 3.0 Working hours Standard workday 8.0 Maximum number of working days per week 5.5 Premium for night work (% of hourly pay) 50.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 22.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.7 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? Yes Page 63   Third-party Doing approval Business 2018 if nine workers are dismissed? Lithuania No Retraining or reassignment obligation before redundancy? Yes Priority rules for redundancies? Yes Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 8.7 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure 8.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 8.7 Severance pay for redundancy dismissal for a worker with 1 year of tenure 8.7 Severance pay for redundancy dismissal for a worker with 5 years of tenure 17.3 Severance pay for redundancy dismissal for a worker with 10 years of tenure 21.7 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 15.9 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 126.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? 18.0 Business Reforms in Lithuania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Lithuania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Lithuania made dealing with construction permits easier by reducing the time needed to obtain technical conditions and the building permit. Getting Electricity: Lithuania made getting electricity easier by streamlining procedures and imposing deadlines for issuing internal wiring inspection certi cates. Protecting Minority Investors: Lithuania strengthened minority investor protections by increasing corporate transparency. Paying Taxes: Lithuania made paying taxes easier by introducing electronic system for ling and paying VAT, CIT and socialPage 64   security contributions. On the other hand, the environmental tax was increased. Minimum contribution period for unemployment protection (months)? 18.0 Doing Business 2018 Lithuania Business Reforms in Lithuania In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Lithuania implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Lithuania made dealing with construction permits easier by reducing the time needed to obtain technical conditions and the building permit. Getting Electricity: Lithuania made getting electricity easier by streamlining procedures and imposing deadlines for issuing internal wiring inspection certi cates. Protecting Minority Investors: Lithuania strengthened minority investor protections by increasing corporate transparency. Paying Taxes: Lithuania made paying taxes easier by introducing electronic system for ling and paying VAT, CIT and social security contributions. On the other hand, the environmental tax was increased. DB2017 Getting Electricity: Lithuania made getting electricity faster by introducing time limits on the utility to conduct necessary connection procedures and lowering the connection tari . DB2016 Starting a Business: Lithuania made starting a business easier by introducing online VAT registration. Getting Electricity: The utility in Lithuania has reduced the time of the connection works by enforcing the legal time limit to perform the external connection works. Protecting Minority Investors: Lithuania strengthened minority investor protections by prohibiting subsidiaries from acquiring shares issued by their parent company. DB2015 Starting a Business: Lithuania made starting a business easier by eliminating the need to have a company seal and speeding up the value added tax (VAT) registration at the State Tax Inspectorate. Dealing with Construction Permits: Lithuania made dealing with construction permits easier by reducing the time required for processing building permit applications. Enforcing Contracts: Lithuania made enforcing contracts easier by introducing an electronic ling system for court users. DB2014 Getting Credit: Lithuania strengthened its secured transactions system by broadening the range of movable assets that can be used as collateral, allowing a general description in the security agreement of the assets pledged as collateral and permitting out-of- court enforcement. DB2013 Starting a Business: Lithuania made starting a business easier by introducing online registration for limited liability companies and eliminating the notarization requirement for incorporation documents. Resolving Insolvency: Lithuania made resolving insolvency easier by establishing which cases against the company’s property shall be taken to the bankruptcy court, tightening the time frame for decisions on appeals, abolishing the court’s obligation to individually notify creditors and other stakeholders about restructuring proceedings and setting new time limits for creditors to le claims. DB2012 Page 65   Getting Electricity: Lithuania made getting electricity more di cult by abolishing the one-stop shop for obtaining technical individually notify creditors and other stakeholders about restructuring proceedings and setting new time limits for creditors to le claims. Doing Business 2018 Lithuania DB2012 Getting Electricity: Lithuania made getting electricity more di cult by abolishing the one-stop shop for obtaining technical conditions for utility services. Protecting Minority Investors: Lithuania strengthened investor protections by introducing greater requirements for corporate disclosure to the public and in the annual report. Resolving Insolvency: Lithuania amended its reorganization law to simplify and shorten reorganization proceedings, grant priority to secured creditors and introduce professional requirements for insolvency administrators. Labor Market Regulation: Lithuania allowed xed-term contracts to be concluded for permanent tasks (until 31 July 2012). DB2011 Starting a Business: Lithuania tightened the time limit for completing the registration of a company. Getting Credit: Lithuania’s private credit bureau now collects and distributes positive information on borrowers. Paying Taxes: Lithuania reduced corporate tax rates. Trading across Borders: Lithuania reduced the time to import by introducing, in compliance with EU law, an electronic system for submitting customs declarations. Resolving Insolvency: Lithuania introduced regulations relating to insolvency administrators that set out clear rules of liability for violations of law. DB2010 Paying Taxes: Lithuania made paying taxes more costly for companies by increasing the corporate income tax rate. Resolving Insolvency: Lithuania made resolving insolvency easier through amendments to the Enterprise Bankruptcy Law. DB2009 Registering Property: Lithuania made registering property easier by merging the procedure for obtaining the real estate transaction certi cate with the notarization procedure. Page 66   Registering Property: Lithuania made registering property easier by merging the procedure for obtaining the real estate transaction certi cate Doing Business with the 2018 notarization procedure. Lithuania Page 67