92026 Doing Business 2015 Greece Economy Profile 2015 Greece Doing Business 2015 Greece 2 © 2014 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org All rights reserved. 1 2 3 4 17 16 15 14 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Doing Business 2015 Greece 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 23 Getting electricity ....................................................................................................................... 33 Registering property .................................................................................................................. 40 Getting credit .............................................................................................................................. 48 Protecting minority investors ................................................................................................... 55 Paying taxes ................................................................................................................................ 64 Trading across borders .............................................................................................................. 69 Enforcing contracts .................................................................................................................... 74 Resolving insolvency .................................................................................................................. 82 Labor market regulation ........................................................................................................... 87 Distance to frontier and ease of doing business ranking ...................................................... 94 Resources on the Doing Business website .............................................................................. 97 Doing Business 2015 Greece 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is 1, 2014 (except for the paying taxes indicators, which for a local entrepreneur to open and run a small to cover the period January–December 2013). medium-size business when complying with relevant The Doing Business methodology has limitations. Other regulations. It measures and tracks changes in areas important to business—such as an economy’s regulations affecting 11 areas in the life cycle of a proximity to large markets, the quality of its business: starting a business, dealing with construction infrastructure services (other than those related to permits, getting electricity, registering property, getting trading across borders and getting electricity), the credit, protecting minority investors, paying taxes, security of property from theft and looting, the trading across borders, enforcing contracts, resolving transparency of government procurement, insolvency and labor market regulation. macroeconomic conditions or the underlying strength of In a series of annual reports Doing Business presents institutions—are not directly studied by Doing Business. quantitative indicators on business regulations and the The indicators refer to a specific type of business, protection of property rights that can be compared generally a local limited liability company operating in across 189 economies, from Afghanistan to Zimbabwe, the largest business city. Because standard assumptions over time. The data set covers 47 economies in Sub- are used in the data collection, comparisons and Saharan Africa, 32 in Latin America and the Caribbean, 25 benchmarks are valid across economies. The data not in East Asia and the Pacific, 26 in Eastern Europe and only highlight the extent of obstacles to doing business; Central Asia, 20 in the Middle East and North Africa and they also help identify the source of those obstacles, 8 in South Asia, as well as 31 OECD high-income supporting policy makers in designing regulatory reform. economies. The indicators are used to analyze economic More information is available in the full report. Doing outcomes and identify what reforms have worked, where Business 2015 presents the indicators, analyzes their and why. relationship with economic outcomes and presents This economy profile presents the Doing Business business regulatory reforms. The data, along with indicators for Greece. To allow useful comparison, it also information on ordering Doing Business 2015, are provides data for other selected economies (comparator available on the Doing Business website at economies) for each indicator. The data in this report are http://www.doingbusiness.org. current as of June Doing Business 2015 Greece 5 CHANGES IN DOING BUSINESS 2015 As part of a 2-year update in methodology, Doing Finally, the name of the employing workers indicator set Business 2015 incorporates 7 important changes. First, has been changed to labor market regulation, and the the ease of doing business ranking as well as all topic- scope of this indicator set has also been changed. The level rankings are now computed on the basis of indicators now focus on labor market regulation distance to frontier scores (see the chapter on the applying to the retail sector rather than the distance to frontier and ease of doing business ranking). manufacturing sector, and their coverage has been Second, for the 11 economies with a population of more expanded to include regulations on labor disputes and than 100 million, data for a second city have been added on benefits provided to workers. The labor market to the data set and the ranking calculation. These regulation indicators continue to be excluded from the economies are Bangladesh, Brazil, China, India, aggregate distance to frontier score and ranking on the Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian ease of doing business. Federation and the United States. Third, for getting Beyond these changes there are 3 other updates in credit, the methodology has been revised for both the methodology. For paying taxes, the financial statement strength of legal rights index and the depth of credit variables have been updated to be proportional to 2012 information index. The number of points has been income per capita; previously they were proportional to increased in both indices, from 10 to 12 for the strength 2005 income per capita. For enforcing contracts, the of legal rights index and from 6 to 8 for the depth of value of the claim is now set at twice the income per credit information index. In addition, only credit bureaus capita or $5,000, whichever is greater. For dealing with and registries that cover at least 5% of the adult construction permits, the cost of construction is now set population can receive a score on the depth of credit at 50 times income per capita (before, the cost was information index. assessed by the Doing Business respondents). In addition, Fourth, the name of the protecting investors indicator set this indicator set no longer includes the procedures for has been changed to protecting minority investors to obtaining a landline telephone connection. better reflect its scope—and the scope of the indicator For more details on the changes, see the “What is set has been expanded to include shareholders’ rights in changing in Doing Business?” chapter starting on page corporate governance beyond related-party transactions. 24 of the Doing Business 2015 report. For more details Fifth, the resolving insolvency indicator set has been on the data and methodology, please see the “Data expanded to include an index measuring the strength of Notes” chapter starting on page 114 of the Doing the legal framework for insolvency. Sixth, the calculation Business 2015 report. For more details on the distance to of the distance to frontier score for paying taxes has frontier metric, please see the “Distance to frontier and been changed. The total tax rate component now enters ease of doing business ranking” chapter in this profile. the score in a nonlinear fashion, in an approach different from that used for all other indicators (see the chapter on the distance to frontier and ease of doing business ranking). Doing Business 2015 Greece 6 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s regulatory environment for business, a good place to start ECONOMY OVERVIEW is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business Region: OECD high income based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size Income category: High income businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking. This Population: 11,032,328 year's report presents results for 2 aggregate measures: the distance to frontier score and the ease of doing GNI per capita (US$): 22,530 business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 61 The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute DB2014 rank: 65* distance to the best performance in each Doing Business Change in rank: 4 indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the DB 2015 DTF: 66.7 worst performance and 100 the frontier. (See the chapter on the distance to frontier and ease of doing business). DB 2014 DTF: 65 The 10 topics included in the ranking in Doing Business 2015: starting a business, dealing with construction Change in DTF: 1.7 permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading * DB2014 ranking shown is not last year’s published across borders, enforcing contracts and resolving ranking but a comparable ranking for DB2014 that insolvency. The labor market regulation indicators captures the effects of such factors as data (formerly employing workers) are not included in this corrections and the changes in methodology. See year’s aggregate ease of doing business ranking, but the the data notes starting on page 114 of the Doing data are presented in this year’s economy profile. Business 2015 report for sources and definitions. The aggregate ranking on the ease of doing business benchmarks each economy’s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. Doing Business 2015 Greece THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2015 Greece THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy regional average (figure 1.2). The economy’s rankings stands in the aggregate ranking on the ease of doing (figure 1.3) and distance to frontier scores (figure 1.4) business is useful. Also useful is to know how it ranks on the topics included in the ease of doing business relative to comparator economies and relative to the ranking provide another perspective. Figure 1.2 How Greece and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2015 Greece 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Greece (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Greece (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2015 Greece 10 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business tells Doing Business introduced the distance to frontier score. This only part of the story, so do changes in that ranking. Yearly measure shows how far on average an economy is from the movements in rankings can provide some indication of best performance achieved by any economy on each Doing changes in an economy’s regulatory environment for firms, Business indicator. but they are always relative. Comparing the measure for an economy at 2 points in time Moreover, year-to-year changes in the overall rankings do allows users to assess how much the economy’s regulatory not reflect how the business regulatory environment in an environment as measured by Doing Business has changed economy has changed over time—or how it has changed in over time—how far it has moved toward (or away from) the different areas. To aid in assessing such changes, most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.5). Figure 1.5 How far has Greece come in the areas measured by Doing Business? Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for more details on the distance to frontier score. Source: Doing Business database. Doing Business 2015 Greece 11 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of regulation—such as a regulatory process that can be the story (table 1.1). The indicators, on their own or in completed with a small number of procedures in a few comparison with the indicators of a good practice days and at a low cost. Comparison of the economy’s economy or those of comparator economies in the indicators today with those in the previous year may region, may reveal bottlenecks reflected in large numbers show where substantial bottlenecks persist—and where of procedures, long delays or high costs. Or they may they are diminishing. reveal unexpected strengths in an area of business Table 1.1 Summary of Doing Business indicators for Greece Best performer globally Germany DB2015 Belgium DB2015 Austria DB2015 Greece DB2015 Greece DB2014 Indicator France DB2015 Spain DB2015 Italy DB2015 DB2015 Starting a Business 52 57 101 14 28 114 46 74 New Zealand (1) (rank) Starting a Business (DTF 90.71 89.22 83.42 94.42 93.00 81.38 91.22 88.08 New Zealand (99.96) Score) Procedures (number) 5.0 5.0 8.0 3.0 5.0 9.0 5.0 6.0 New Zealand (1.0)* Time (days) 13.0 14.0 22.0 4.0 4.5 14.5 5.0 13.0 New Zealand (0.5) Cost (% of income per 2.2 12.1 0.3 5.0 0.9 8.8 14.1 4.6 Slovenia (0.0) capita) Paid-in min. capital (% 0.0 0.0 13.6 18.2 0.0 35.8 0.0 13.8 112 Economies (0.0)* of income per capita) Dealing with Hong Kong SAR, Construction Permits 88 90 78 82 86 8 116 105 China (1) (rank) Dealing with Hong Kong SAR, Construction Permits 72.31 72.36 74.25 73.68 73.14 87.42 67.35 69.18 China (95.53) (DTF Score) Doing Business 2015 Greece 12 Best performer globally Germany DB2015 Belgium DB2015 Austria DB2015 Greece DB2015 Greece DB2014 Indicator France DB2015 Spain DB2015 Italy DB2015 DB2015 Hong Kong SAR, Procedures (number) 18.0 18.0 11.0 10.0 8.0 8.0 10.0 7.0 China (5.0) Time (days) 124.0 124.0 192.0 212.0 183.0 96.0 233.0 229.0 Singapore (26.0) Cost (% of warehouse 0.6 0.5 1.1 1.1 4.7 1.1 3.7 5.2 Qatar (0.0)* value) Getting Electricity 80 73 24 99 60 3 102 74 Korea, Rep. (1) (rank) Getting Electricity (DTF 76.67 76.68 87.75 72.81 79.87 98.37 72.65 78.18 Korea, Rep. (99.83) Score) Procedures (number) 6.0 6.0 5.0 6.0 5.0 3.0 5.0 5.0 12 Economies (3.0)* Time (days) 62.0 62.0 23.0 88.0 79.0 28.0 124.0 85.0 Korea, Rep. (18.0)* Cost (% of income per 69.7 66.7 101.6 92.3 42.9 44.4 212.6 242.0 Japan (0.0) capita) Registering Property 116 170 35 171 126 89 41 66 Georgia (1) (rank) Registering Property 61.16 43.14 81.07 42.27 59.36 67.78 79.44 73.57 Georgia (99.88) (DTF Score) Procedures (number) 10.0 11.0 3.0 8.0 8.0 5.0 4.0 5.0 4 Economies (1.0)* Time (days) 20.0 20.0 20.5 64.0 49.0 40.0 16.0 12.0 3 Economies (1.0)* Cost (% of property 4.9 11.7 4.6 12.7 6.1 6.7 4.4 6.1 4 Economies (0.0)* value) Getting Credit (rank) 71 67 52 89 71 23 89 52 New Zealand (1) Getting Credit (DTF 50.00 50.00 60.00 45.00 50.00 70.00 45.00 60.00 New Zealand (100) Score) Strength of legal rights 3 3 5 4 4 6 2 5 3 Economies (12)* index (0-12) Doing Business 2015 Greece 13 Best performer globally Germany DB2015 Belgium DB2015 Austria DB2015 Greece DB2015 Greece DB2014 Indicator France DB2015 Spain DB2015 Italy DB2015 DB2015 Depth of credit 7 7 7 5 6 8 7 7 23 Economies (8)* information index (0-8) Credit registry coverage 0.0 0.0 2.0 96.4 44.5 1.3 24.6 50.0 Portugal (100.0) (% of adults) Credit bureau coverage 82.5 84.4 53.2 0.0 0.0 100.0 100.0 15.3 23 Economies (100.0)* (% of adults) Protecting Minority 62 61 32 40 17 51 21 30 New Zealand (1) Investors (rank) Protecting Minority 57.50 57.50 63.33 61.67 67.50 59.17 66.67 64.17 New Zealand (81.67) Investors (DTF Score) Extent of conflict of interest regulation 5.3 5.3 5.3 7.0 5.7 5.0 6.0 5.3 Singapore (9.3)* index (0-10) Extent of shareholder governance index (0- 6.2 6.2 7.3 5.3 7.8 6.8 7.3 7.5 France (7.8)* 10) Strength of minority investor protection 5.8 5.8 6.3 6.2 6.8 5.9 6.7 6.4 New Zealand (8.2) index (0-10) United Arab Emirates Paying Taxes (rank) 59 41 72 81 95 68 141 76 (1)* Paying Taxes (DTF United Arab Emirates 78.30 81.29 76.36 74.18 72.12 77.02 62.13 75.25 Score) (99.44)* Payments (number per Hong Kong SAR, 8.0 8.0 12.0 11.0 8.0 9.0 15.0 8.0 year) China (3.0)* Time (hours per year) 193.0 193.0 166.0 160.0 137.0 218.0 269.0 167.0 Luxembourg (55.0) Trading Across Borders 48 50 19 26 10 18 37 30 Singapore (1) (rank) Trading Across Borders 80.80 80.30 87.66 85.55 90.18 87.67 83.44 84.68 Singapore (96.47) Doing Business 2015 Greece 14 Best performer globally Germany DB2015 Belgium DB2015 Austria DB2015 Greece DB2015 Greece DB2014 Indicator France DB2015 Spain DB2015 Italy DB2015 DB2015 (DTF Score) Documents to export 4 4 3 4 2 4 3 4 Ireland (2)* (number) Time to export (days) 15.0 16.0 10.0 9.0 10.0 9.0 19.0 10.0 5 Economies (6.0)* Cost to export (US$ per 1,040.0 1,040.0 1,150.0 1,240.0 1,335.0 1,015.0 1,195.0 1,310.0 Timor-Leste (410.0) container) Cost to export (deflated 1,040.0 1,023.0 1,150.0 1,240.0 1,335.0 1,015.0 1,195.0 1,310.0 US$ per container) Documents to import 6 6 4 4 2 4 3 4 Ireland (2)* (number) Time to import (days) 14.0 15.0 9.0 8.0 11.0 7.0 18.0 9.0 Singapore (4.0) Cost to import (US$ per 1,135.0 1,135.0 1,215.0 1,400.0 1,445.0 1,050.0 1,145.0 1,400.0 Singapore (440.0) container) Cost to import (deflated 1,135.0 1,116.4 1,215.0 1,400.0 1,445.0 1,050.0 1,145.0 1,400.0 US$ per container) Enforcing Contracts 155 155 5 10 10 13 147 69 Singapore (1) (rank) Enforcing Contracts 43.60 43.65 81.55 77.67 77.67 76.74 45.61 62.65 Singapore (89.54) (DTF Score) Time (days) 1,580.0 1,300.0 397.0 505.0 395.0 394.0 1,185.0 510.0 Singapore (150.0) Cost (% of claim) 14.4 14.4 18.0 17.7 17.4 14.4 23.1 18.5 Iceland (9.0) Procedures (number) 38.0 39.0 25.0 26.0 29.0 31.0 37.0 40.0 Singapore (21.0)* Resolving Insolvency 52 51 16 11 22 3 29 23 Finland (1) (rank) Resolving Insolvency 55.98 55.78 78.84 83.87 75.94 91.78 71.29 75.89 Finland (93.85) (DTF Score) Doing Business 2015 Greece 15 Best performer globally Germany DB2015 Belgium DB2015 Austria DB2015 Greece DB2015 Greece DB2014 Indicator France DB2015 Spain DB2015 Italy DB2015 DB2015 Time (years) 3.5 1.1 0.9 1.9 1.2 1.8 1.5 Ireland (0.4) Cost (% of estate) 9.0 9.0 10.0 3.5 9.0 8.0 22.0 11.0 Norway (1.0) Outcome (0 as piecemeal sale and 1 as 0 0 1 1 1 1 1 1 going concern) Recovery rate (cents on 34.3 34.0 82.6 89.1 77.2 83.4 62.8 71.3 Japan (92.9) the dollar) Strength of insolvency 12.0 12.0 11.0 11.5 11.0 15.0 12.0 12.0 5 Economies (15.0)* framework index (0-16) Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of s uch factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2015 Greece 16 STARTING A BUSINESS Formal registration of companies has many WHAT THE STARTING A BUSINESS immediate benefits for the companies and for business owners and employees. Legal entities can INDICATORS MEASURE outlive their founders. Resources are pooled as several shareholders join forces to start a company. Procedures to legally start and operate a Formally registered companies have access to company (number) services and institutions from courts to banks as well Preregistration (for example, name as to new markets. And their employees can benefit verification or reservation, notarization) from protections provided by the law. An additional benefit comes with limited liability companies. These Registration in the economy’s largest limit the financial liability of company owners to their business city 1 investments, so personal assets of the owners are not Postregistration (for example, social security put at risk. Where governments make registration registration, company seal) easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and Time required to complete each procedure generating more revenue for the government. (calendar days) What do the indicators cover? Does not include time spent gathering information Doing Business measures the ease of starting a business in an economy by recording all procedures Each procedure starts on a separate day (2 officially required or commonly done in practice by procedures cannot start on the same day). an entrepreneur to start up and formally operate an Procedures that can be fully completed industrial or commercial business—as well as the online are recorded as ½ day. time and cost required to complete these procedures. Procedure completed once final document is It also records the paid-in minimum capital that received companies must deposit before registration (or within 3 months). The ranking of economies on the No prior contact with officials ease of starting a business is determined by sorting Cost required to complete each procedure their distance to frontier scores for starting a (% of income per capita) business. These scores are the simple average of the distance to frontier scores for each of the component Official costs only, no bribes indicators. No professional fees unless services required To make the data comparable across economies, by law Doing Business uses several assumptions about the Paid-in minimum capital (% of income business and the procedures. It assumes that all per capita) information is readily available to the entrepreneur and that there has been no prior contact with Deposited in a bank or with a notary before officials. It also assumes that the entrepreneur will registration (or within 3 months) pay no bribes. And it assumes that the business:  Is a limited liability company, located in the  Has a start-up capital of 10 times income per largest business city and is 100% domestically capita. owned . 1  Has a turnover of at least 100 times income per  Has between 10 and 50 employees. capita.  Conducts general commercial or industrial  Does not qualify for any special benefits. activities.  Does not own real estate. 1 For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2015 Greece 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Greece? largest business city of an economy, except for 11 According to data collected by Doing Business, starting a economies for which the data are a population-weighted business there requires 5.0 procedures, takes 13.0 days, average of the 2 largest business cities. See the chapter costs 2.2% of income per capita and requires paid-in on distance to frontier and ease of doing business minimum capital of 0.0% of income per capita (figure ranking at the end of this profile for more details. 2.1). Most indicator sets refer to a case scenario in the Figure 2.1 What it takes to start a business in Greece - Paid-in minimum capital (% of income per capita): 0.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Greece 18 STARTING A BUSINESS Globally, Greece stands at 52 in the ranking of 189 average ranking provide other useful information for economies on the ease of starting a business (figure 2.2). assessing how easy it is for an entrepreneur in Greece to The rankings for comparator economies and the regional start a business. Figure 2.2 How Greece and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2015 Greece 19 STARTING A BUSINESS Economies around the world have taken steps making it they often are part of a larger regulatory reform easier to start a business—streamlining procedures by program. Among the benefits have been greater firm setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses, or faster by introducing technology and reducing or financial resources and job opportunities. eliminating minimum capital requirements. Many have What business registration reforms has Doing Business undertaken business registration reforms in stages—and recorded in Greece (table 2.1)? Table 2.1 How has Greece made starting a business easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece made starting a business easier by implementing an DB2012 electronic platform that interconnects several government agencies. Greece made starting a business easier by introducing a DB2014 simpler form of limited liability company and abolishing the minimum capital requirement for such companies. Greece made starting a business easier by lowering DB2015 registration costs. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 20 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Greece is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new Legal form: Private Company (IKE) firm. These are identified by Doing Business through collaboration with relevant local professionals and Paid in minimum capital requirement: EUR 0 the study of laws, regulations and publicly available City: Athens information on business entry in that economy. Following is a detailed summary of those procedures, Start-up Capital: 10 times GNI per capita along with the associated time and cost. These procedures are those that apply to a company matching the standard assumptions (the “standardized company”) used by Doing Business in collecting the data (see the section in this chapter on what the indicators measure). Table 2.2 Summary of time, cost and procedures for starting a business in Greece - Time to No. Procedure Cost to complete complete Obtain Tax Clearance form A7 from Tax Authority Before applying for a new company at GEMI, entrepreneurs need to obtain tax clearance form A7 with any Tax Authority Office. This form Less than one day shows that the founders do not have any outstanding taxes and are (online procedure) no charge 1 able to start a company. Agency: Tax Authority Submit with GEMI the application of establishment and its forms The costs associated with the application for establishment are as follows: • Fixed fee for the incorporation of IKE (for 5 shareholders): €80 • Fee for the submission of documents with GEMI: €10 • Fee for the registration of IKE with the Chamber of Commerce: €10 • First year subscription fee with the Athens Chamber of Commerce: €100 (Different fees may apply for different Chambers) see procedure 2 • Fee for the Lawyers’ Social Security Institution: €5.80 10 days details The Articles of Association of the company shall contain: a) the full trade name of the IKE; b) the domicile or an electronic address of the partners; c) the seal of the company; d) the objective of the company; e) verification that the company is private; f) the contributors of the partners by category and their value, in accordance with Articles 77 to 79, as well as the capital of the company; Doing Business 2015 Greece 21 Time to No. Procedure Cost to complete complete g) the sum of the company’s parts; h) the initial number of the parts of each partner and the category of contribution to which the parts correspond; I) how the company is managed and represented; and k) the duration of the company. Business founders need to submit a certified copy or copies of their IDs. Business founders also need to request to send notice to the Insurance Organization (OAEE) with regard to the company’s establishment. Agency: Chamber of Commerce and Industry office at One-Stop Shop Make a company seal All company books and records must be sealed before they are certified. The company seal must also contain the company’s tax registration number and competent tax office. On May 31, 2013 the Government of Greece adopted the Law 3 4156/2013 abolishing the requirement to make and affix the company 1 day EUR 40 seal for corporations. However, it is still used in practice by banks, as the Bank of Greece has not issued a circular asking the banks to not require it. Thus, companies are still required to make a company seal in their daily practice. Agency: Seal Maker * Register the employees with IKA (Social Security Organization) The entrepreneur has to register the employees with IKA once the Less than one day company has been created. This is done via email. (online procedure, simultaneous with 4 no charge previous Agency: IKA (Social Security Organization) procedure) * Register with OAEE (Insurance Organization for the Self- Employed) According to Circular OAEE No. 44/27.7.2012, the Director of IKE is legally obliged to registered with OAEE (Insurance Organization for the 1 day, Self-Employed) while the registration of other members of IKE is simultaneous with 5 optional. Registering more members of the IKE costs an additional EUR EUR 111.10 previous 111.10 per person. procedure Agency: OAEE (Insurance Organization for the Self-Employed) Doing Business 2015 Greece 22 * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Greece 23 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid excessive PERMITS INDICATORS MEASURE constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in time and money, Procedures to legally build a warehouse many builders opt out. They may pay bribes to pass (number) inspections or simply build illegally, leading to Submitting all relevant documents and hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses, Where compliance is simple, straightforward and permits and certificates inexpensive, everyone is better off. Submitting all required notifications and What do the indicators cover? receiving all necessary inspections Doing Business records the procedures, time and cost Obtaining utility connections for water and for a business in the construction industry to obtain sewerage all the necessary approvals to build a warehouse in Registering the warehouse after its the economy’s largest business city, connect it to completion (if required for use as collateral or basic utilities and register the warehouse so that it for transfer of the warehouse) can be used as collateral or transferred to another Time required to complete each procedure entity. (calendar days) The ranking of economies on the ease of dealing with Does not include time spent gathering construction permits is determined by sorting their information distance to frontier scores for dealing with Each procedure starts on a separate day. construction permits. These scores are the simple Procedures that can be fully completed online average of the distance to frontier scores for each of are recorded as ½ day. the component indicators. Procedure considered completed once final To make the data comparable across economies, document is received Doing Business uses several assumptions about the business and the warehouse, including the utility No prior contact with officials connections. Cost required to complete each procedure (% The business: of warehouse value) Official costs only, no bribes  Is a limited liability company operating in the construction business and located in  Will have complete architectural and the largest business city. For the 11 technical plans prepared by a licensed economies with a population of more than architect or engineer. 100 million, data for a second city have  Will be connected to water and sewerage been added. Is domestically owned and (sewage system, septic tank or their operated. equivalent). The connection to each utility  Has 60 builders and other employees. network will be 150 meters (492 feet) long. The warehouse:  Will be used for general storage, such as of books or stationery (not for goods requiring  Is valued at 50 times income per capita. special conditions).  Is a new construction (there was no  Will take 30 weeks to construct (excluding all previous construction on the land). delays due to administrative and regulatory requirements). Doing Business 2015 Greece 24 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build an economy, except for 11 economies for which the data a warehouse in Greece? According to data collected by are a population-weighted average of the 2 largest Doing Business, dealing with construction permits there business cities. See the chapter on distance to frontier requires 18.0 procedures, takes 124.0 days and costs and ease of doing business ranking at the end of this 0.6% of the warehouse value (figure 3.1). Most indicator profile for more details. sets refer to a case scenario in the largest business city of Figure 3.1 What it takes to comply with formalities to build a warehouse in Greece - Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Greece 25 DEALING WITH CONSTRUCTION PERMITS Globally, Greece stands at 88 in the ranking of 189 economies and the regional average ranking provide economies on the ease of dealing with construction other useful information for assessing how easy it is for permits (figure 3.2). The rankings for comparator an entrepreneur in Greece to legally build a warehouse. Figure 3.2 How Greece and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2015 Greece 26 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while an effort to ensure building safety while keeping making compliance easy and accessible to all. Coherent compliance costs reasonable, governments around the and transparent rules, efficient processes and adequate world have worked on consolidating permitting allocation of resources are especially important in sectors requirements. What construction permitting reforms has where safety is at stake. Construction is one of them. In Doing Business recorded in Greece (table 3.1)? Table 3.1 How has Greece made dealing with construction permits easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece reduced the time required to obtain a construction DB2013 permit by introducing strict time limits for processing permit applications at the municipality. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 27 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Greece are based on BUILDING A WAREHOUSE a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified by Doing Business through Estimated cost of information collected from experts in construction EUR 824,204 construction : licensing, including architects, civil engineers, construction lawyers, construction firms, utility City : Athens service providers and public officials who deal with building regulations. These procedures are those The procedures, along with the associated time and cost, that apply to a company and structure matching the are summarized below. standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Greece - Time to No. Procedure Cost to complete complete Submit a petition for an archaeological clearance certificate It is mandatory for all regions to obtain approval from the Archaeology Supervisory Authority for all the areas of Acharnes. BuildCo must submit a petition along with the required documentation. Within 10 – 1 15 days, there is an inspection to verify that there are no archaeological 1 day no charge artifacts on the land. A clearance certificate is issued after that visit. Agency: Archaeology Supervisory Authority Obtain archaeological clearance certificate 2 12 days no charge Agency: Archaeology Supervisory Authority * Obtain active fire protection approval In order to obtain the fire protection approval, a certified engineer must complete a study stating what needs to be done and this study must be accompanied by technical drawings of the warehouse. According to legislation 4156/2013, the building engineer is entirely responsible for the fire safety of the new building, but in practice, the 3 Fire Department still reviews the plans and issues the fire safety 10 days no charge certificate. According to the Doing Business case study, it is assumed that BuildCo has an engineer among its staff; therefore no additional cost is paid. Agency: Fire Brigade Doing Business 2015 Greece 28 Time to No. Procedure Cost to complete complete * Obtain copy of land registry certificate 4 2 days EUR 25 Agency: Land Registry * Obtain verification by EYDAP of the feasibility of the project EYDAP verifies that the building can be connected to a local water supply and sewerage network. There is no need for an official Environmental Impact Study in Greece for a small warehouse that does not store dangerous or toxic materials. However, there is a consideration that must be addressed regarding proper road 1 day no charge 5 availability for the warehouse operation. A traffic control study in the initial phase might be required to ensure that the warehouse operation will not burden the traffic. Agency: Athens Water and Sewerage Company (EYDAP) * Obtain proof of advanced payment to the Social Security Social security is based on the size of the building which will provide for an approximate number of working days and the minimum pay for each worker. The law requires each individual building project to be subjected to a pre-assessment and payment of expected social security expenses as a pre-condition to apply for a building permit. This rule often involves 6 repeated transactions with the Social Security until the proof of 2 days no charge payment is obtained and the investor can move on with the project. In the Doing Business case study, the minimum pay is estimated at EUR 61.00 for 693 working days. The estimated cost of Social Security to be paid by the owner of the company is around EUR 25,000.00. Agency: Social Security (IKA) Request and obtain initial permit/approval from the Municipality At this point the builder’s architect submits general drawings of the building, topographic plan, and ownership documents to the Municipality. The Municipality’s engineer reviews the drawings and if 16 days no charge 7 everything is in order, the Municipality issues an initial permit/approval to the builder. This permit does not allow the builder to start construction. The permit is valid for one year, during which the builder must submit detailed engineering drawings. Doing Business 2015 Greece 29 Time to No. Procedure Cost to complete complete Agency: Municipality Request and obtain building permit from the Municipality BuildCo submits detailed architectural, mechanical, structural drawings to the Municipality. The Municipality simply checks that all plans have been submitted and files them but does not review them for accuracy because under the amended regulations, the responsibility for the plans lies with the engineer. The Municipality simply accepts the documentation for their records. At this point, the municipal tax of about 0.5% of warehouse value must be paid as well as other fees such as the health insurance of the workers. The proof of payment of the Social Security must be submitted when requesting the permit. Once the Municipality checks that all plans are submitted and all fees have been paid, the building permit is issued to the applicant. Under Law Act 3919/2011 (Principle of professional freedom, abolition of unjustified restrictions on access to and pursuit of professions) 15 days EUR 1,790 8 Article 7, there is no minimum pay for any work or design performed by an engineer. It is up to the discretion of the engineer to charge whatever fee he wants for his work. Based on this law, the estimated fee for the design and the supervision according to the minimum pay is around EUR 35,000.00. With a 20% discount the final fee is EUR 28,000.00. However, according to the Doing Business case study assumptions, BuildCo has an architect, a civil engineer and a mechanical engineer as part of its staff. Therefore, no additional cost is recorded. Under the new law, ACT 7533/2013, Article 2, the municipality mus issue the building permit within two days if all of the documents have been correctly submitted. In practice, this takes up to 30 days. Agency: Municipality Notify Archaeology Supervisory Authority of commencement of works The Archaeology Supervisory Authority must be informed one week prior to the commencement of excavation work. And on the first day of excavation, a representative from the Archaeology Supervisory 7 days no charge 9 Authority will be on the construction site to verify once more that no archaeological artifacts have been discovered during excavation. Agency: Archaeology Supervisory Authority Doing Business 2015 Greece 30 Time to No. Procedure Cost to complete complete * Notify the police of the commencement of works A representative from BuildCo will visit the police department to receive a stamp on the final building permit. 1 day no charge 10 Agency: Police * Notify the Municipality of the commencement of works The Municipality is informed that construction will begin. Some municipalities demand a good performance guarantee that no damage will be done to the pavement or to adjoining municipal facilities. This 11 financial guarantee is returned after construction if no damage was 1 day EUR 350 made. Agency: Municipality Request and obtain foundation work inspection The first inspection is at the foundation level right after the excavation is done. Inspections are requested in person at the Municipality by the builder (or the builder’s architect or engineer). It is possible to request the inspections electronically as the application is available online and can be sent to the Municipality via email; however, the current practice is a visit to the Municipality. BuildCo completes a form with basic information (e.g. location, total 12 area of the building, etc.) and submits it to an employee at the 1 day EUR 300 Municipality. Usually it is the same person who issued the building permit; there are several persons in charge and they are assigned to different areas of the city. The Municipality then sends the file to the Ministry of Environment, Energy and Climate Change, which conducts a lottery among the certified engineers they have on file, and gives the name of the inspector to the Municipality. The Municipality then informs BuildCo about who the inspector will be. Agency: Municipality Request and obtain structural inspection The second inspection is at the structural level, after the metal or concrete frame has been put into place. Inspections are requested in person at the Municipality by the builder 1 day EUR 450 13 (or the builder’s architect or engineer). It is possible to request the inspections electronically as the application is available online and can be sent to the Municipality via email; however, the current practice is a visit to the Municipality. BuildCo completes a form with basic information (e.g. location, total Doing Business 2015 Greece 31 Time to No. Procedure Cost to complete complete area of the building, etc.) and submits it to an employee at the Municipality. Usually it is the same person who issued the building permit; there are several persons in charge and they are assigned to different areas of the city. The Municipality then sends the file to the Ministry of Environment, Energy and Climate Change, which conducts a lottery among the certified engineers they have on file, and gives the name of the inspector to the Municipality. The Municipality then informs BuildCo about who the inspector will be. Agency: Municipality Receive final inspection from independent engineer and receive sealed construction permit There is a last mandatory inspection to be performed by the independent engineer. Once the engineer has submitted the report of the final inspection, the construction permit is stamped and a copy is given to the owner to attest that the building was completed in 14 conformity with the approved plan. 5 days EUR 600 This stamped construction permit is needed in order to be connected to electricity. Agency: Municipality * Apply for water and sewage connection BuildCo submits a request for a new connection and pays a fee of EUR 60.57. 15 1 day EUR 61 The request must be accompanied by a recent copy of the building permit, coverage diagram, and identification of the owner of the lot. Agency: Athens Water and Sewerage Company (EYDAP) Undergo investigation by EYDAP on the feasibility of the project EYDAP investigates the possibility of constructing the connection (checks network availability and determines meter size and the number of meters necessary) and informs BuildCo if extra costs are involved. Most connections cost EUR 470 (not including VAT tax and possible 16 network extension). The investigation phase according to EYDAP 21 days EUR 470 regulations must be completed within one month. Once the customer pays the EUR 470, the connection work begins. Agency: Athens Water and Sewerage Company (EYDAP) Doing Business 2015 Greece 32 Time to No. Procedure Cost to complete complete Obtain water and sewage connection The water connection phase can be completed within 10-15 days but usually lasts about 3 months. This is because independent contractors construct the connections for EYDAP and they try to group the new connection requests and send personnel and heavy equipment out to construct multiple connections in a specific area at a time. It is not financially viable for them to construct connections according to the order in which they are requested. In Greece sewage connections are constructed by the Municipality and 17 turned over to EYDAP for operation. According to article 13 of Law 45 days EUR 600 1068/80, the customer must pay a fee for the network construction and a fee for the house connection. House connections cost on average EUR 600 - 1500 per lot and this amount is divided by all the stakeholders. Hence for an apartment building with many apartments the cost is divided among all the apartment owners while in the example of the warehouse the amount will be paid in full by the owner of the building. Agency: Athens Water and Sewerage Company (EYDAP) * Register the building with the Municipality 18 1 day no charge Agency: Municipality * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Greece 33 GETTING ELECTRICITY Access to reliable and affordable electricity is vital for WHAT THE GETTING ELECTRICITY businesses. To counter weak electricity supply, many firms in developing economies have to rely on self- INDICATORS MEASURE supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the first step for Procedures to obtain an electricity a customer is always to gain access by obtaining a connection (number) connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for a Completing all required notifications and local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized warehouse, as well as the time and cost to complete them. These Obtaining external installation works and procedures include applications and contracts with possibly purchasing material for these works electricity utilities, clearances from other agencies Concluding any necessary supply contract and and the external and final connection works. The obtaining final supply ranking of economies on the ease of getting electricity is determined by sorting their distance to Time required to complete each procedure frontier scores for getting electricity. These scores are (calendar days) the simple average of the distance to frontier scores Is at least 1 calendar day for each of the component indicators. To make the data comparable across economies, several Each procedure starts on a separate day assumptions are used. Does not include time spent gathering The warehouse: information  Is owned by a local entrepreneur, located Reflects the time spent in practice, with little in the economy’s largest business city, in follow-up and no prior contact with officials an area where other warehouses are Cost required to complete each procedure located. For the 11 economies with a (% of income per capita) population of more than 100 million, data Official costs only, no bribes for a second city have been added. Excludes value added tax  Is not in a special economic zone where the connection would be eligible for subsidization or faster service.  Is to either the low-voltage or the medium- voltage distribution network and either  Is located in an area with no physical overhead or underground, whichever is more constraints (ie. property not near a railway). common in the area where the warehouse is  Is a new construction being connected to located. Included only negligible length in the electricity for the first time. customer’s private domain.  Is 2 stories, both above ground, with a total  Requires crossing of a 10-meter road but all surface of about 1,300.6 square meters the works are carried out in a public land, so (14,000 square feet), is built on a plot of there is no crossing into other people's 929 square meters (10,000 square feet), is private property. used for storage of refrigerated goods  Involves installing one electricity meter. The The electricity connection: monthly electricity consumption will be 26880 kilowatt hour (kWh). The internal  Is 150 meters long and is a 3-phase, 4-wire electrical wiring has been completed. Y, 140-kilovolt-ampere (kVA) (subscribed capacity) connection. Doing Business 2015 Greece 34 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity connection Most indicator sets refer to a case scenario in the largest in Greece? According to data collected by Doing business city of an economy, except for 11 economies for Business, getting electricity there requires 6.0 procedures, which the data are a population-weighted average of the takes 62.0 days and costs 69.7% of income per capita 2 largest business cities. See the chapter on distance to (figure 4.1). frontier and ease of doing business ranking at the end of this profile for more details. Figure 4.1 What it takes to obtain an electricity connection in Greece - Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Greece 35 GETTING ELECTRICITY Globally, Greece stands at 80 in the ranking of 189 average ranking provide another perspective in assessing economies on the ease of getting electricity (figure 4.2). how easy it is for an entrepreneur in Greece to connect a The rankings for comparator economies and the regional warehouse to electricity. Figure 4.2 How Greece and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2015 Greece 36 GETTING ELECTRICITY What are the details? The indicators reported here for Greece are based on a OBTAINING AN ELECTRICITY CONNECTION set of specific procedures—the steps that an entrepreneur must complete to get a warehouse connected to electricity by the local distribution utility— Name of utility: HEDNO S.A. identified by Doing Business. Data are collected from the distribution utility, then completed and verified by City: Athens electricity regulatory agencies and independent professionals such as electrical engineers, electrical The procedures are those that apply to a warehouse and contractors and construction companies. The electricity electricity connection matching the standard distribution utility surveyed is the one serving the area assumptions used by Doing Business in collecting the (or areas) in which warehouses are located. If there is a data (see the section in this chapter on what the choice of distribution utilities, the one serving the largest indicators cover). The procedures, along with the number of customers is selected. associated time and cost, are summarized below. Table 4.2 Summary of time, cost and procedures for getting electricity in Greece - Time to No. Procedure Cost to complete complete The client applies for electricity connection and awaits estimate of connection fees from the utility HEDNO S.A. In addition to the application form, the client needs to submit the following documents to request an electricity connection: • Copy of the building permit authenticated by the Town Planning Agency. This is necessary to obtain the final connection, but to initiate the process a simple copy of the permit is enough. • Certificate of commitment or exemption from the obligation to construct an indoor substation issued by the competent PPC Service for constructions greater than 2,500 m3 or Sworn Statement of a licensed Engineer for constructions smaller than 2,500 m3 , having used the maximum floor area ratio, where necessary. In cases where the installation of an indoor substation is compulsory, the concession contract (buy or lease contract) must be signed prior to service 1 connection. 25 calendar days EUR 0 • Installations permit from the Prefecture, according to Law 3325/2005 (to install and operate certain equipment, such as refrigerators. The installation permit is usually obtained before the building permit and constitutes one of its requirements). Law 982/17/11/2011 updates and completes Law 3325/2005. • Statement from the electrician in charge of internal wiring on details of the requested load A technical designer from PPC will then visit the building and elaborate a plan for the method to connect it with the utility’s network. PPC will inform the client by phone of the date of the visit. A representative of the client’s must also be present for the inspection. The fees can be paid at the utility offices or also at banks, ATM machines, through e-banking and EASYPAY machines of Pireus Bank. The client Doing Business 2015 Greece 37 Time to No. Procedure Cost to complete complete needs to sign a contract with PPC to start the works. Any private electrician approved by the Greek ministry can carry out the internal wiring. The utility does not inspect the entire internal wiring. Agency: HEDNO S.A. * The client obtains external inspection from HEDNO S.A. A technical designer from PPC will visit the building and elaborate a plan for the method to connect it with the utility’s network. PPC will inform the client by phone of the date of the visit. A representative of the 1 calendar day EUR 0 2 client’s must also be present for the inspection. Agency: HEDNO S.A. * The client’s electrician obtains certification of their sworn statement by the Tax office To obtain turn on of electricity, the electrician/ electrical installer will need to submit a sworn statement on the details of the internal installation, certifying they have inspected it and it was carried out in compliance with the Regulations on Internal Electrical Installations (laws 4483/65 and 2302/95). Although this statement is needed at the last stage of the connection process, it is usually submitted before signing the connection contract with PPC. The statement needs to be certified by the Tax Office as follows: 1 calendar day EUR 0 3 • For building permits issued before 31.12.94, the Sworn Statement of the Installer must be certified by the competent Tax Offices (of the owner and of the electrician) • For building permits issued after 31.12.94, a certification from the owner's Tax Office is necessary. In case an indoor substation is required then customer has to also submit to PPC (DEH) a copy of the warehouse purchase or lease contract. Agency: Tax Office The client signs connection contract and awaits end of external works from HEDNO S.A. After having paid the connection fees, to sign a contract with PPC’s technical department, the client needs to submit the following 33 calendar days EUR 10,895 4 documents (in the case of a Limited Liability Company): • Address of the client (for correspondence), tax registration number, and phone and fax numbers. • Copy of the OFFICIAL JOURNAL OF THE HELLENIC REPUBLIC, in which is published the statute of the company, as well as any possible future Doing Business 2015 Greece 38 Time to No. Procedure Cost to complete complete modifications to that statute. • Extract from the meeting proceedings of the company’s Administration Council in order to determine the representatives of the company. In Athens, only PPC can carry out the external connection works. The connection to PPC’s network for consumptions till 250 kVA consists of laying out cables from the metering point to the nearest supply point on the LV network. A private transformer/substation is not required for constructions till 250 kVA. The excavation permit is usually applied for and obtained by the utility from the Municipality. Agency: HEDNO S.A. * The client obtains statement from Municipality that client has fulfilled all dues and taxes After internal wiring and external connections have been completed, and before the client can obtain electricity, they will need to submit to PPC SA a statement from the relevant Municipality showing the surface of the warehouse and stating that they have paid all their municipal dues and 5 taxes. 1 calendar day EUR 0 This is necessary in order for the utility to make the final connection, and is in accordance with the laws 25/75, 1080/80, and 2130/93. Agency: Local Municipality The client signs supply contract and obtains meter installation and final connection from HEDNO S.A. Once the construction is finished and the internal wiring is ready to be connected to the external network, the client should sign a contract with a supplier and submit the following documents in order to obtain the final connection (note that if the client decided to stay with PPC for supply of electricity, they can sign a contract with PPC’s retail department): • Copy of contract with the electricity supplier (assumed to be PPC) 4 calendar days EUR 591.97 6 according to law 3426/05 and Code on Electricity Supply Ministerial decision 4524/01 • Copy of authenticated building permit with the special seal for PPC SA (Laws 1512/85 and 2242/94, and Circular 61/85 of the Ministry of Environment Planning and Public Works) • Copy of contract with PPC SA on usage of land for substation (if needed) • Certified Sworn Statement from electrician on the details of the internal installation. • Completion certificate, if the building permit was obtained after Doing Business 2015 Greece 39 Time to No. Procedure Cost to complete complete January 1, 2006 (Law 3610/2007 and Circular 1008/2008 - Ministry of Economy and Economic POL) • Statement from Municipality showing that all municipal dues and tax requirements have been fulfilled • Certification of registration of elevator from the relevant Prefecture (Common Ministerial decision F9.2/29362/1957/2005) - only if needed Agency: HEDNO S.A. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2015 Greece 40 REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being accepted immovable property (number) as collateral for loans—limiting access to finance. Preregistration (for example, checking for liens, notarizing sales agreement, paying property What do the indicators cover? transfer taxes) Doing Business records the full sequence of Registration in the economy’s largest business procedures necessary for a business to purchase city 2 property from another business and transfer the property title to the buyer’s name. The transaction is Postregistration (for example, filing title with the municipality) considered complete when it is opposable to third parties and when the buyer can use the property, Time required to complete each procedure use it as collateral for a bank loan or resell it. The (calendar days) ranking of economies on the ease of registering Does not include time spent gathering property is determined by sorting their distance to information frontier scores for registering property. These scores are the simple average of the distance to frontier Each procedure starts on a separate day. scores for each of the component indicators. To Procedures that can be fully completed online are recorded as ½ day. make the data comparable across economies, several assumptions about the parties to the Procedure considered completed once final transaction, the property and the procedures are document is received used. No prior contact with officials The parties (buyer and seller): Cost required to complete each procedure  Are limited liability companies, 100% (% of property value) domestically and privately owned and Official costs only, no bribes perform general commercial activities. No value added or capital gains taxes included  Are located in the economy’s largest business city . 2  Is located in a periurban commercial zone, and no rezoning is required.  Have 50 employees each, all of whom are nationals.  Has no mortgages attached, has been under the same ownership for the past 10 years. The property (fully owned by the seller):  Consists of 557.4 square meters (6,000 square  Has a value of 50 times income per capita. feet) of land and a 10-year-old, 2-story The sale price equals the value. warehouse of 929 square meters (10,000  Is registered in the land registry or cada- square feet). The warehouse is in good stre, or both, and is free of title disputes. condition and complies with all safety standards, building codes and legal  Property will be transferred in its entirety. requirements. There is no heating system. 2 For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2015 Greece 41 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in Most indicator sets refer to a case scenario in the largest Greece? According to data collected by Doing Business, business city of an economy, except for 11 economies for registering property there requires 10.0 procedures, which the data are a population-weighted average of the takes 20.0 days and costs 4.9% of the property value 2 largest business cities. See the chapter on distance to (figure 5.1). frontier and ease of doing business ranking at the end of this profile for more details. Figure 5.1 What it takes to register property in Greece - Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Greece 42 REGISTERING PROPERTY Globally, Greece stands at 116 in the ranking of 189 regional average ranking provide other useful economies on the ease of registering property (figure information for assessing how easy it is for an 5.2). The rankings for comparator economies and the entrepreneur in Greece to transfer property. Figure 5.2 How Greece and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2015 Greece 43 REGISTERING PROPERTY Economies worldwide have been making it easier for the time required substantially—enabling buyers to use entrepreneurs to register and transfer property—such as or mortgage their property earlier. What property by computerizing land registries, introducing time limits registration reforms has Doing Business recorded in for procedures and setting low fixed fees. Many have cut Greece (table 5.1)? Table 5.1 How has Greece made registering property easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece made transferring property more costly by increasing DB2011 the transfer tax from 1% of the property value to 10%. Greece made it easier to transfer property by reducing the DB2015 property transfer tax and removing the requirement for the municipal tax clearance certificate. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 44 REGISTERING PROPERTY What are the details? The indicators reported here are based on a set of STANDARD PROPERTY TRANSFER specific procedures—the steps that a buyer and seller must complete to transfer the property to the buyer’s name—identified by Doing Business through information collected from local property lawyers, Property value: EUR 824,204 notaries and property registries. These procedures are those that apply to a transaction matching the City: Athens standard assumptions used by Doing Business in collecting the data (see the section in this chapter on The procedures, along with the associated time and what the indicators cover). cost, are summarized below. Table 5.2 Summary of time, cost and procedures for registering property in Greece Time to No. Procedure Cost to complete complete Receive site visit by the engineer An inspection by an engineer is required for the new topographic site plan to be drafted. 1 day Included in proc. 2 1 Agency: Engineer Obtain a topographic site plan and a certificate for the absence of non-licensed construction by the engineer After the inspection in Procedure 1, it is necessary to issue a recent topographic diagram depicting the boundaries of the property (new site plan) sealed and signed by the engineer. The plan shall be submitted to the notary public a few days before the conclusion of the sale contract. Given that the property has been owned by the seller for 10 years, we 7 days, may easily assume that the topographic site plan used for the previous simultaneous 2 transaction (the acquisition of the property by the current seller) is still EUR 400 with procedures valid and therefore there is no need for a new topographic site plan. 3, 4, 5 In addition, according to Law No 4178/2013, a certificate from an engineer and a declaration of the seller are needed, stating that there are no illegal constructions or planning offences in the property being sold. Agency: Engineer * Search of information in the Land Registry and preparation of the 1 day, Lawyer fees are sale agreement by a lawyer simultaneous freely agreed with 3 the parties. The A lawyer conducts a search of information in the Real Estate office and with procedures then prepares the sale agreement. Only lawyers are entitled to conduct a 2, 4, 5 Annex II of the search in the Real Estate Office. new Lawyer's code Doing Business 2015 Greece 45 Time to No. Procedure Cost to complete complete give an indicative From 1/1/2014 the involvement of lawyers is not required by law but it fee schedule for tends to remain a common practice for transfer of commercial legal fees. properties. According to the new Lawyer’s Code, the lawyer’s fee is freely agreed with the clients by means of a written agreement. In the absence of such an agreement, the new Lawyer’s Code provides a new schedule of fees which is included as Annex II of the new Code. Agency: Land Registry (“Ypothikofilakeion”) * Seller obtains tax clearance certificate about the seller and certificate about the Real Estate Unified Tax from the tax authority The seller should provide a Tax certificate issued by the competent Tax Authority, according to Law 1882/1990 . The certificate assures that the seller has been paying his taxes accordingly. The tax certificate may also be obtained by the notary public. Less than a day (online In addition, since January 2014, a Unified Real Estate Property tax is procedure), 4 no cost introduced for the natural person or legal entity that acquires any right simultaneous over a real estate. In order for the notarial deed of the real estate transfer with procedures to be valid, the taxpayer has to provide a tax certificate stating that 2, 3, 5 he/she has paid off the Unified Real Estate Property tax over the past 5 years with regard to the real estate at issue. Agency: Tax Authority * Seller obtains a certificate from Social Security Institute Less than a day The seller must obtain a certificate of good standing from the Social (online Security Institute, which assures that the seller (company) has been procedure), 5 paying its social security. no cost simultaneous with procedures Agency: Social Security Institute 2, 3, 4 Payment of property transfer tax at the Tax Authority For the buyer, 3% of the property Parties obtain a copy of the declaration made before the Tax Authority value plus third competent in the locality of the property verifying that the buyer has party duties 0,3% paid the property transfer tax. According to Article 11 of L.4223/2013 1 day 6 (City Tax). For the concerning the Single Property Tax, which replaced the previous provisions of L.3842/2010, the transfer tax imposed on the buyer is 3% of seller: 15% capital the transfer price of the property. Furthermore, according to the gains tax if the provisions of the new Income Tax Code (L.4172/2013) any income equal seller is a natural to the added value deriving from a transfer of property (the term "added person or 26% if Doing Business 2015 Greece 46 Time to No. Procedure Cost to complete complete value" in this case means the difference between the price the seller had the seller is a legal paid to obtain the property and the amount he/she receives when selling entity (not the same property), is subject to the 15% capital gains tax. According to included). the provisions of Article 43 of the latest Income Tax Code, if the seller is a natural person, this tax equals to 15% of the above described income from the property transfer. In this case the tax is collected in advance by the notary, who shall pay it to the Tax Authority. If the seller is a legal entity, according to the provisions of Article 58 par. 1 of the new Income Tax Code the legal entity shall include the price of the property transfer at the end of the financial year to its income declaration (which turns the tax payable to income tax rate at 26%. Agency: Inland Revenue Service Deliver the draft of the sale agreement to the Bar Association According to the new Lawyer's Code of Practice an attorney's participation at the conclusion of the contract is entirely optional for all contracting parties, irrespective of the value of the contract. cost included in However, this is still a common practice for commercial properties. In the 1 day Procedure 2 7 latter case, the draft of the sale agreement is delivered to the Bar (lawyer fees) Association of the Lawyers. Agency: Bar Association A notary public notarizes the sale agreement and prepares the transfer deed Notary fees according to the The notary notarizes the sale agreement and prepares the public deed in following fee the presence of the parties and their lawyers, who must also sign. The schedule notary checks up on the documentation which legitimizes the legal introduced by representatives of the contracting parties (i.e. Minutes of the Board of article 1 of Directors regarding the representation of the company published in the Ministerial Government Gazette, Minutes of the Board of Directors and notarized Power of Attorney regarding the authorization of the contracting party Decision to act on behalf of the company and execute a sale agreement regarding 111376/2012 (plus the specific real estate), the ID’s of seller and buyer and attaches to the 23% VAT): • 1% of 8 1 day Public Deed the documentation obtained in the previous Procedures. property value up The documentation includes: (i) Site plan or Cadastral extract, (ii) to EUR 120,000 • Declaration of the engineer that the buildings have been built in 0.7% of property accordance with the building permit or that any divergence has been value between legalized, (iii) Sale agreement, (iv) Tax clearance certificate, (v) Certificate EUR 120,000.01 that the Real Estate Unified Tax for the last 5 years for the specific and 380,000 • property has been paid (vi) Building's certificate of energy efficiency if 0.65% of property required (vii) Social Security certificate (viii) Verification of payment of value between transfer tax (ix) Copy of the building license. EUR 380,000.01 Agency: Notary and EUR 2.000,000 Doing Business 2015 Greece 47 Time to No. Procedure Cost to complete complete The deed is recorded under the name of the buyer at the Land Registry 0.475% of As per article 369 of the Greek Civil Code, contracts relating to real property (such as a purchase document) must be drafted and executed property value by and before a notary public. The public deed is delivered to the Real (registrar’s rights)+ 8 days (1 day for Estate Office to be recorded under the name of the buyer. At the same 23% VAT + EUR registration and 7 9 time, parties request a property certificate, an ownership certificate, a 6.50 for each of days for issuing non-opposition certificate and a records certificate from the Real Estate the 4 certificates the certificates) Office. The transfer of deeds usually takes place during the day of (EUR 4.50 for the application. certificate + EUR 2 for stamp duty) Agency: Land Registry (“Ypothikofilakeion”) Registration of the transfer in the Cadastre (ktimatologio) The transfer is registered in the Cadastre. During this period the Registrar checks the legality of the deeds’ transfer by using the cadastral database. 1 day EUR 35 10 Agency: Cadastre (“Ktimatologio”) * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Greece 48 GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable Strength of legal rights index (0–12) 3 lenders’ rights to view a potential borrower’s financial history (positive or negative)—valuable information to Rights of borrowers and lenders through consider when assessing risk. And they permit collateral laws borrowers to establish a good credit history that will Protection of secured creditors’ rights through allow easier access to credit. Sound collateral laws bankruptcy laws enable businesses to use their assets, especially Depth of credit information index (0–8) 4 movable property, as security to generate capital— while strong creditors’ rights have been associated Scope and accessibility of credit information with higher ratios of private sector credit to GDP. distributed by credit bureaus and credit registries What do the indicators cover? Credit bureau coverage (% of adults) Doing Business assesses the sharing of credit information and the legal rights of borrowers and Number of individuals and firms listed in lenders with respect to secured transactions through largest credit bureau as percentage of adult 2 sets of indicators. The depth of credit information population index measures rules and practices affecting the Credit registry coverage (% of adults) coverage, scope and accessibility of credit Number of individuals and firms listed in information available through a credit registry or a credit registry as percentage of adult credit bureau. The strength of legal rights index population measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses two case scenarios, Case A and Case B, to determine the scope of the secured transactions system, involving a  Has up to 50 employees. secured borrower and a secured lender and  Is 100% domestically owned, as is the lender. examining legal restrictions on the use of movable collateral (for more details on each case, see the Data The ranking of economies on the ease of getting Notes section of the Doing Business 2015 report). credit is determined by sorting their distance to These scenarios assume that the borrower: frontier scores for getting credit. These scores are the distance to frontier score for the strength of legal  Is a private limited liability company. rights index and the depth of credit information  Has its headquarters and only base of index. operations in the largest business city. For the 11 economies with a population of more than 100 million, data for a second city have been added. 3 For the legal rights index, 2 new points are added in Doing Business 2015 for new data collected to assess the overall legal framework for secured transactions and the functioning of the collateral registry. 4 For the credit information index, 2 new points are added in Doing Business 2015 for new data collected on accessing borrowers’ credit information online and availability of credit scores. Doing Business 2015 Greece 49 GETTING CREDIT Where does the economy stand today? How well do the credit information system and collateral Globally, Greece stands at 71 in the ranking of 189 and bankruptcy laws in Greece facilitate access to credit? economies on the ease of getting credit (figure 6.1). The The economy has a score of 7 on the depth of credit rankings for comparator economies and the regional information index and a score of 3 on the strength of average ranking provide other useful information for legal rights index (see the summary of scoring at the end assessing how well regulations and institutions in Greece of this chapter for details). Higher scores indicate more support lending and borrowing. credit information and stronger legal rights for borrowers and lenders. Figure 6.1 How Greece and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2015 Greece 50 GETTING CREDIT One way to put an economy’s score on the getting credit rights index for Greece and shows the scores for indicators into context is to see where the economy comparator economies as well as the regional average stands in the distribution of scores across economies. score. Figure 6.3 shows the same for the depth of credit Figure 6.2 highlights the score on the strength of legal information index. Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared — and lenders? and how widely? Economy scores on strength of legal rights index Economy scores on depth of credit information index Note: Higher scores indicate that collateral and bankruptcy Note: Higher scores indicate the availability of more credit laws are better designed to facilitate access to credit. information, from either a credit registry or a credit bureau, Source: Doing Business database. to facilitate lending decisions. 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. Source: Doing Business database. Doing Business 2015 Greece 51 GETTING CREDIT When economies strengthen the legal rights of lenders information, they can increase entrepreneurs’ access to and borrowers under collateral and bankruptcy laws, and credit. What credit reforms has Doing Business recorded increase the scope, coverage and accessibility of credit in Greece (table 6.1)? Table 6.1 How has Greece made getting credit easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece’s private credit bureau, Tiresias, expanded the amount DB2010 of information it distributes in credit reports, improving access to credit information. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 52 GETTING CREDIT What are the details? The getting credit indicators reported here for Greece The data on the legal rights of borrowers and lenders are are based on detailed information collected in that gathered through a survey of financial lawyers and economy. The data on credit information sharing are verified through analysis of laws and regulations as well collected through a survey of a credit registry and/or as public sources of information on collateral and credit bureau (if one exists). To construct the depth of bankruptcy laws. For the strength of legal rights index, a credit information index, a score of 1 is assigned for each score of 1 is assigned for each of 10 aspects related to of 8 features of the credit registry or credit bureau (see legal rights in collateral law and 2 aspects in bankruptcy summary of scoring below). law. Strength of legal rights index (0–12) Index score: 3 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable No assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of No movable assets, without requiring a specific description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of No its assets, without requiring a specific description of collateral? May a security right extend to future or after-acquired assets, and may it extend automatically Yes to the products, proceeds or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement Yes 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 unified geographically and by asset type, with an electronic database indexed by debtor's No name? Does a notice-based collateral registry exist in which all functional equivalents can be No registered? Does a modern collateral registry exist in which registrations, amendments, cancellations and No searches can be performed online by any interested third party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor No defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is No liquidated? Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by Yes providing clear grounds for relief from the stay and/or sets a time limit for it? Doing Business 2015 Greece 53 Strength of legal rights index (0–12) Index score: 3 Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through No public auction and private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Depth of credit information index (0–8) Credit bureau Credit registry Index score: 7 Are data on both firms and individuals distributed? Yes No 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 - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on Yes No 1 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 Yes No 1 capita distributed? By law, do borrowers have the right to access their Yes No 1 data in the credit bureau or credit registry? Can banks and financial institutions access borrowers’ credit information online (for example, through an Yes No 1 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 institutions Yes No 1 assess the creditworthiness of borrowers? Note: Prior to Doing Business 2015, the depth of credit information index covered only the first 6 features listed above. 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. Credit bureau Credit registry Coverage (% of adults) (% of adults) Number of firms 123,774 0 Number of individuals 5,853,648 0 Percent of total 82.5 0.0 Doing Business 2015 Greece 54 Source: Doing Business database. Doing Business 2015 Greece 55 PROTECTING MINORITY INVESTORS Protecting minority investors matters for the ability of companies to raise the capital they need to grow, WHAT THE PROTECTING MINORITY innovate, diversify and compete. Effective regulations INVESTORS INDICATORS MEASURE define related-party transactions precisely, promote clear and efficient disclosure requirements, require shareholder participation in major decisions of the Extent of disclosure index (0–10) company and set detailed standards of accountability Review and approval requirements for related-party for company insiders. transactions ; Disclosure requirements for related-party transactions What do the indicators cover? Doing Business measures the protection of minority Extent of director liability index (0–10) investors from conflicts of interest through one set of Ability of minority shareholders to sue and hold interested indicators and shareholders’ rights in corporate directors liable for prejudicial related-party transactions; governance through another. The ranking of economies Available legal remedies (damages, disgorgement of on the strength of minority investor protections is profits, fines, imprisonment, rescission of the transaction) determined by sorting their distance to frontier scores Ease of shareholder suits index (0–10) for protecting minority investors. These scores are the Access to internal corporate documents; Evidence simple average of the distance to frontier scores for the obtainable during trial and allocation of legal expenses extent of conflict of interest regulation index and the extent of shareholder governance index. To make the Extent of conflict of interest regulation index data comparable across economies, a case study uses (0–10) several assumptions about the business and the Sum of the extent of disclosure, extent of director liability transaction. and ease of shareholder indices, divided by 3 The business (Buyer): Extent of shareholder rights index (0-10.5)  Is a publicly traded corporation listed on the Shareholders’ rights and role in major corporate decisions economy’s most important stock exchange (or at least a large private company with Strength of governance structure index (0- multiple shareholders). 10.5) Governance safeguards protecting shareholders from  Has a board of directors and a chief executive undue board control and entrenchment officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not Extent of corporate transparency index (0-9) specifically required by law. Corporate transparency on ownership stakes, The transaction involves the following details: compensation, audits and financial prospects  Mr. James, a director and the majority Extent of shareholder governance index shareholder of the company, proposes that (0–10) the company purchase used trucks from Sum of the extent of shareholders rights, strength of another company he owns. governance structure and extent of corporate transparency indices, divided by 3  The price is higher than the going price for used trucks, but the transaction goes forward. Strength of investor protection index (0–10)  All required approvals are obtained, and all Simple average of the extent of conflict of interest required disclosures made, though the regulation and extent of shareholder governance indices transaction is prejudicial to Buyer.  Shareholders sue the interested parties and the members of the board of directors. Doing Business 2015 Greece 56 PROTECTING MINORITY INVESTORS Where does the economy stand today? How strong are minority investor protections against protection index (figure 7.1). While the indicator does self-dealing in Greece? The economy has a score of 5.8 not measure all aspects related to the protection of on the strength of minority investor protection index, minority investors, a higher ranking does indicate that an with a higher score indicating stronger protections. economy’s regulations offer stronger minority investor protections against self-dealing in the areas measured. Globally, Greece stands at 62 in the ranking of 189 economies on the strength of minority investor Figure 7.1 How Greece and comparator economies perform on the strength of minority investor protection index Source: Doing Business database. Doing Business 2015 Greece 57 PROTECTING MINORITY INVESTORS One way to put an economy’s scores on the protecting indices for Greece in 2014. A summary of scoring for the minority investors indicators into context is to see where protecting minority investors indicators at the end of this the economy stands in the distribution of scores across chapter provides details on how the indices were comparator economies. Figures 7.2 through 7.7 highlight calculated. the scores on the various minority investor protection Figure 7.2 How extensive are disclosure Figure 7.3 How extensive is the liability regime for directors? requirements? Extent of director liability index (0-10) Extent of disclosure index (0-10) Note: Higher scores indicate greater liability of directors. Note: Higher scores indicate greater disclosure. Source: Doing Business database. Source: Doing Business database. Doing Business 2015 Greece 58 PROTECTING MINORITY INVESTORS Figure 7.4 How easy is accessing internal corporate documents? Ease of shareholder suits index (0-10) Note: Higher scores indicate greater minority shareholder access to evidence before and during trial. Source: Doing Business database. Doing Business 2015 Greece 59 PROTECTING MINORITY INVESTORS Figure 7.5 How extensive are shareholder rights? Extent of shareholder rights index (0-10.5) Note: The higher the score, the stronger the protections. Source: Doing Business database. Figure 7.6 How strong is the governance structure? Strength of governance structure index (0-10.5) Note: Higher scores indicate more stringent governance structure requirements. Source: Doing Business database. Doing Business 2015 Greece 60 Figure 7.7 How extensive is corporate transparency? Extent of corporate transparency index (0-9) Note: Higher scores indicate greater transparency. Source: Doing Business database. Doing Business 2015 Greece 61 PROTECTING MINORITY INVESTORS Economies with the strongest protections of minority result, reforms to strengthen minority investor investors from self-dealing require detailed disclosure protections may move ahead on different fronts—such and define clear duties for directors. They also have well- as through new or amended company laws, securities functioning courts and up-to-date procedural rules that regulations or civil procedure rules. What minority give minority shareholders the means to prove their case investor protection reforms has Doing Business recorded and obtain a judgment within a reasonable time. As a in Greece (table 7.1)? Table 7.1 How has Greece strengthened minority investor protections—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece strengthened investor protections by requiring greater DB2013 immediate and annual disclosure of material related-party transactions. Greece strengthened investor protections by introducing a DB2014 requirement for director approval of related-party transactions. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 62 PROTECTING MINORITY INVESTORS What are the details? The protecting minority investors indicators reported to disclosure, director liability, shareholder suits, here for Greece are based on detailed information shareholder rights, governance structure and corporate collected through a survey of corporate and securities transparency in a standard case study (for more details, lawyers about securities regulations, company laws and see the Data Notes section of the Doing Business 2015 court rules of evidence and procedure. To construct the report). The summary below shows the details underlying six indicators on minority investor protection, scores are the scores for Greece. assigned to each based on a range of conditions relating Table 7.2 Summary of scoring for the protecting minority investors indicators in Greece Answer Score Extent of disclosure index (0-10) 7.0 Which corporate body can provide legally sufficient Board of directors excluding 2 approval for the Buyer-Seller transaction? (0-3) interested members Is disclosure by the interested director to the board of Existence of a conflict without any 1 directors required? (0-2) specifics Is disclosure of the transaction in published periodic filings Disclosure on the transaction and 2 (annual reports) required? (0-2) on the conflict of interest Is immediate disclosure of the transaction to the public Disclosure on the transaction and 2 and/or shareholders required? (0-2) on the conflict of interest Must an external body review the terms of the transaction No 0 before it takes place? (0-1) Extent of director liability index (0-10) 4.0 Can shareholders sue directly or derivatively for the damage caused by the Buyer-Seller transaction to the company? (0- Yes 1 1) Can shareholders hold the interested director liable for the Liable if negligent 1 damage caused by the transaction to the company? (0-2) Can shareholders hold members of the approving body liable for the damage cause by the transaction to the Liable if negligent 1 company? (0-2) Must the interested director pay damages for the harm caused to the company upon a successful claim by a Yes 1 shareholder plaintiff? (0-1) Must the interested director repay profits made from the transaction upon a successful claim by a shareholder No 0 plaintiff? (0-1) Can both fines and imprisonment be applied against the No 0 interested indrector? (0-1) Can a court void the transaction upon a successful claim by Only in case of fraud or bad faith 0 a shareholder plaintiff? (0-2) Ease of shareholder suits index (0-10) 5.0 Before filing suit, can shareholders owning 10% of the company’s share capital inspect the transaction documents? Yes 1 (0-1) Can the plaintiff obtain any documents from the defendant Documents that directly prove 2 Doing Business 2015 Greece 63 and witnesses during trial? (0-3) specific facts in the plaintiff’s claim Can the plaintiff request categories of documents from the No 0 defendant without identifying specific ones? (0-1) Can the plaintiff directly question the defendant and No 1 witnesses during trial? (0-2) Is the level of proof required for civil suits lower than that of No 0 criminal cases? (0-1) Can shareholder plaintiffs recover their legal expenses from Yes if successful 1 the company? (0-2) Strength of minority investor protection index (0-10) 5.8 Extent of conflict of interest regulation index (0-10) 5.3 Extent of shareholder rights index (0-10.5) 7.5 Can shareholders amend company bylaws or statutes with a No 0 simple majority? Can shareholders owning 10% of the company's share Yes 1.5 capital call for an extraordinary meeting of shareholders? Can shareholders remove members of the board of Yes 1.5 directors before the end of their term. Must a company obtain its shareholders’ approval every Yes 1.5 time it issues new shares? Are shareholders automatically granted subscription rights Yes 1.5 on new shares? Must shareholders approve the election and dismissal of the Yes 1.5 external auditor? Can shareholders freely trade shares prior to a major No 0 corporate action or meeting of shareholders? Strength of governance structure index (0-10.5) 6.0 Is the CEO barred from also serving as chair of the board of Yes 1.5 directors? Must the board of directors include independent board Yes for listed companies 1 members? Must a company have a separate audit committee? Yes for listed companies 1 Must changes to the voting rights of a series or class of shares be approved only by the holders of the affected Yes 1.5 shares? Must a potential acquirer make a tender offer to all Yes for listed companies 1 shareholders upon acquiring 50% of a company? Is cross-shareholding between 2 independent companies No 0 limited to 10% of outstanding shares? Is a subsidiary barred from acquiring shares issued by its No 0 parent company? Extent of corporate transparency index (0-9) 5.0 Must ownership stakes representing 10% be disclosed? Yes for listed companies 1 Must information about board members’ other directorships as well as basic information on their primary employment No 0 be disclosed? Must the compensation of individual managers be No 0 disclosed? Must financial statements contain explanatory notes on significant accounting policies, trends, risks, uncertainties Yes 1.5 and other factors influencing the reporting? Must annual financial statements be audited by an external Yes for listed companies 1 Doing Business 2015 Greece 64 auditor? Must audit reports be disclosed to the public? Yes 1.5 Extent of shareholder governance index (0-10) 6.2 Source: Doing Business database. PAYING TAXES Taxes are essential. The level of tax rates needs to be carefully chosen—and needless complexity in tax WHAT THE PAYING TAXES INDICATORS rules avoided. Firms in economies that rank better MEASURE on the ease of paying taxes in the Doing Business study tend to perceive both tax rates and tax Tax payments for a manufacturing company administration as less of an obstacle to business in 2013 (number per year adjusted for according to the World Bank Enterprise Survey electronic and joint filing and payment) research. Total number of taxes and contributions paid, What do the indicators cover? including consumption taxes (value added tax, sales tax or goods and service tax) Using a case scenario, Doing Business measures the taxes and mandatory contributions that a medium- Method and frequency of filing and payment size company must pay in a given year as well as the Time required to comply with 3 major taxes administrative burden of paying taxes and (hours per year) contributions. This case scenario uses a set of financial statements and assumptions about Collecting information and computing the tax payable transactions made over the year. Information is also compiled on the frequency of filing and payments as Completing tax return forms, filing with well as time taken to comply with tax laws. The proper agencies ranking of economies on the ease of paying taxes is Arranging payment or withholding determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are Preparing separate tax accounting books, if required the simple average of the distance to frontier scores for each of the component indicators, with a Total tax rate (% of profit before all taxes) threshold and a nonlinear transformation applied to Profit or corporate income tax one of the component indicators, the total tax rate . 5 The financial statement variables have been updated Social contributions and labor taxes paid by to be proportional to 2012 income per capita; the employer previously they were proportional to 2005 income Property and property transfer taxes per capita. To make the data comparable across Dividend, capital gains and financial economies, several assumptions are used. transactions taxes  TaxpayerCo is a medium-size business that Waste collection, vehicle, road and other taxes started operations on January 1, 2012.  Taxes and mandatory contributions include  The business starts from the same financial corporate income tax, turnover tax and all position in each economy. All the taxes labor taxes and contributions paidof by the 5 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 0.8. The threshold is defined as and mandatory the total contributions tax rate at the 15th percentilepaid during of the company. overall distribution for all years included in the analysis. It is calculated and adjusted on a the yearly basis. second The thresholdyear of is not operation based are recorded. on any economic theory of an “optimal tax rate” that minimizes distortions or maximizes efficiency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set  range Alower at the end ofstandard of deductions the distribution and of tax rates levied on medium-size  Taxes and mandatory contributions are exemptions enterprises in the manufacturing sector as observed through the paying taxes indicators. are also This reduces recorded. the bias in the indicators toward economies that do not need to levyat measured all levels significant government. ofon taxes companies like the Doing Business standardized case study company because they raise public revenue in other ways—for example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of the methodology). This year’s threshold is 26.1%. Doing Business 2015 Greece 65 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with 2 largest business cities. See the chapter on distance to taxes in Greece—and how much do firms pay in taxes? frontier and ease of doing business ranking at the end of On average, firms make 8.0 tax payments a year, spend this profile for more details. 193.0 hours a year filing, preparing and paying taxes and Globally, Greece stands at 59 in the ranking of 189 pay total taxes amounting to 49.9% of profit (see the economies on the ease of paying taxes (figure 8.1). The summary at the end of this chapter for details). Most rankings for comparator economies and the regional indicator sets refer to a case scenario in the largest average ranking provide other useful information for business city of an economy, except for 11 economies for assessing the tax compliance burden for businesses in which the data are a population-weighted average of the Greece. Figure 8.1 How Greece and comparator economies rank on the ease of paying taxes Source: Doing Business database. Doing Business 2015 Greece 66 PAYING TAXES Economies around the world have made paying taxes concrete results. Some economies simplifying tax faster and easier for businesses—such as by payment and reducing rates have seen tax revenue rise. consolidating filings, reducing the frequency of What tax reforms has Doing Business recorded in Greece payments or offering electronic filing and payment. (table 8.1)? Many have lowered tax rates. Changes have brought Table 8.1 How has Greece made paying taxes easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform DB2012 Greece reduced its corporate income tax rate. Greece made paying taxes more costly for companies by increasing the corporate income tax rate—though it also DB2014 reduced the employers’ contribution rate to the social security fund. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 67 PAYING TAXES What are the details? The indicators reported here for Greece are based on LOCATION OF STANDARDIZED COMPANY the taxes and contributions that would be paid by a standardized case study company used by Doing Business in collecting the data (see the section in this City: Athens chapter on what the indicators cover). Tax practitioners are asked to review a set of financial statements as well as a standardized list of assumptions and transactions that the company The taxes and contributions paid are listed in the completed during its 2nd year of operation. summary below, along with the associated number of Respondents are asked how much taxes and payments, time and tax rate. mandatory contributions the business must pay and how these taxes are filed and paid. Table 8.2 Summary of tax rates and administration Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate gross Social security contributions 1 online filing 46 27.46% 31 salaries taxable Corporate income tax 1 online filing 78 26% 18.2 profit assessed Property tax 1 0 0.6% 0.5 value interest not Interest tax 0 0 10% 0.3 income included various insurance Insurance premium 1 0 0.2 rates premium depending various Road Tax 1 0 on truck 0.1 rates weight Social security contributions 0 0 0 on employee value not Value added tax (VAT) 1 online filing 69 23% 0 added included Doing Business 2015 Greece 68 Total tax Notes on Tax or mandatory Payments Notes on Time Statutory Tax base rate (% of total tax contribution (number) payments (hours) tax rate profit) rate depending various on the small Advertising tax 1 0 0 rates type of amount advertising EUR 359 per 1000 fuel Fuel tax 1 0 liters for consumpti 0 unleaded on fuel Totals 8.0 193.0 49.9 Source: Doing Business database. Doing Business 2015 Greece 69 TRADING ACROSS BORDERS In today’s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE business. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to Documents required to export and import extra costs and delays for exporters and importers, (number) stifling trade potential. Research shows that Bank documents exporters in developing countries gain more from a Customs clearance documents 10% drop in their trading costs than from a similar reduction in the tariffs applied to their products in Port and terminal handling documents global markets. Transport documents What do the indicators cover? Time required to export and import (days) Doing Business measures the time and cost Obtaining, filling out and submitting all the (excluding tariffs and the time and cost for sea documents transport) associated with exporting and importing a Inland transport and handling standard shipment of goods by sea transport, and the number of documents necessary to complete the Customs clearance and inspections transaction. The indicators cover predefined stages Port and terminal handling such as documentation requirements and procedures Does not include sea transport time at customs and other regulatory agencies as well as at the port. They also cover trade logistics, including Cost required to export and import (US$ per the time and cost of inland transport to the largest container) business city. The ranking of economies on the ease All documentation of trading across borders is determined by sorting their distance to frontier scores for trading across Inland transport and handling borders. These scores are the simple average of the Customs clearance and inspections distance to frontier scores for each of the component Port and terminal handling indicators. To make the data comparable across economies, Doing Business uses several assumptions Official costs only, no bribes about the business and the traded goods. The business:  Is located in the economy’s largest The traded product: business city. For the 11 economies with a population of more than 100 million, data  Is not hazardous nor includes military items. for a second city have been added.  Does not require refrigeration or any other  Is a private, limited liability company, special environment. domestically owned and does not operate  Do not require any special phytosanitary or with special export or import privileges. environmental safety standards other than  Conducts export and import activities, but accepted international standards. does not have any special accreditation  Is one of the economy’s leading export or such as an authorized economic operator import products. status.  Is transported in a dry-cargo, 20-foot full container load. Doing Business 2015 Greece 70 TRADING ACROSS BORDERS Where does the economy stand today? What does it take to export or import in Greece? population-weighted average of the 2 largest business According to data collected by Doing Business, exporting cities. See the chapter on distance to frontier and ease of a standard container of goods requires 4 documents, doing business ranking at the end of this profile for more takes 15.0 days and costs $1040.0. Importing the same details. container of goods requires 6 documents, takes 14.0 Globally, Greece stands at 48 in the ranking of 189 days and costs $1135.0 (see the summary of four economies on the ease of trading across borders (figure predefined stages and documents at the end of this 9.1). The rankings for comparator economies and the chapter for details). Most indicator sets refer to a case regional average ranking provide other useful scenario in the largest business city of an economy, information for assessing how easy it is for a business in except for 11 economies for which the data are a Greece to export and import goods. Figure 9.1 How Greece and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2015 Greece 71 TRADING ACROSS BORDERS In economies around the world, trading across borders systems. These changes help improve the trading as measured by Doing Business has become faster and environment and boost firms’ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing Business tools to facilitate trade—including single windows, risk- recorded in Greece (table 9.1)? based inspections and electronic data interchange Table 9.1 How has Greece made trading across borders easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece made trading across borders easier by implementing a DB2014 system allowing electronic submission of customs declarations for exports. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 72 TRADING ACROSS BORDERS What are the details? The indicators reported here for Greece are based on LOCATION OF STANDARDIZED COMPANY a set of specific predefined stages for trading a standard shipment of goods by ocean transport (see the section in this chapter on what the indicators Port Name: Piraeus cover). Information on the required documents and the time and cost to complete export and import is City: Athens collected from local freight forwarders, shipping lines, The predefined stages, and the associated time and cost, customs brokers, port officials and banks. for exporting and importing a standard shipment of goods are listed in the summary below, along with the required documents. Table 9.2 Summary of predefined stages and documents for trading across borders in Greece Stages to export Time (days) Cost (US$) Customs clearance and inspections 1 230 Documents preparation 10 160 Inland transportation and handling 2 350 Ports and terminal handling 2 300 Totals 15 1,040 Stages to import Time (days) Cost (US$) Customs clearance and inspections 2 265 Documents preparation 8 140 Inland transportation and handling 2 350 Ports and terminal handling 2 380 Totals 14 1,135 Doing Business 2015 Greece 73 Documents to export Bill of Lading Commercial invoice Customs export declaration Packing list Documents to import Bill of lading Certificate of origin Commercial invoice Customs import declaration Delivery order Packing list Source: Doing Business database. Doing Business 2015 Greece 74 ENFORCING CONTRACTS Effective commercial dispute resolution has many WHAT THE ENFORCING CONTRACTS benefits. Courts are essential for entrepreneurs INDICATORS MEASURE because they interpret the rules of the market and protect economic rights. Efficient and transparent courts encourage new business relationships because Procedures to enforce a contract through businesses know they can rely on the courts if a new the courts (number) customer fails to pay. Speedy trials are essential for Steps to file and serve the case small enterprises, which may lack the resources to Steps for trial and judgment stay in business while awaiting the outcome of a long court dispute. Steps to enforce the judgment What do the indicators cover? Time required to complete procedures (calendar days) Doing Business measures the efficiency of the judicial system in resolving a commercial dispute before Time to file and serve the case local courts. Following the step-by-step evolution of Time for trial and obtaining judgment a standardized case study, it collects data relating to Time to enforce the judgment the time, cost and procedural complexity of resolving a commercial lawsuit. The ranking on the ease of Cost required to complete procedures (% of enforcing contracts is the simple average of the claim) percentile rankings on its component indicators: Average attorney fees procedures, time and cost. Court costs The dispute in the case study involves the breach of a sales contract between 2 domestic businesses. The Enforcement costs case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. To make the data comparable across economies, Doing Business uses several assumptions about the case:  The seller and buyer are located in the economy’s largest business city. For the 11 economies with a population of more than  The seller requests a pretrial attachment to 100 million, data for a second city have secure the claim. been added.  The dispute on the quality of the goods  The buyer orders custom-made goods, requires an expert opinion. then fails to pay.  The judge decides in favor of the seller; there  The seller sues the buyer before a is no appeal. competent court.  The seller enforces the judgment through a  The value of the claim is 200% of the public sale of the buyer’s movable assets. income per capita or the equivalent in local currency of USD 5,000, whichever is greater. Doing Business 2015 Greece 75 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial cities. See the chapter on distance to frontier and ease of dispute through the courts in Greece? According to data doing business ranking at the end of this profile for more collected by Doing Business, contract enforcement takes details. 1580.0 days, costs 14.4% of the value of the claim and Globally, Greece stands at 155 in the ranking of 189 requires 38.0 procedures (see the summary at the end of economies on the ease of enforcing contracts (figure this chapter for details). Most indicator sets refer to a 10.1). The rankings for comparator economies and the case scenario in the largest business city of an economy, regional average ranking provide other useful except for 11 economies for which the data are a benchmarks for assessing the efficiency of contract population-weighted average of the 2 largest business enforcement in Greece. Figure 10.1 How Greece and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2015 Greece 76 ENFORCING CONTRACTS Economies in all regions have improved contract reducing backlogs by introducing periodic reviews to enforcement in recent years. A judiciary can be improved clear inactive cases from the docket and by making in different ways. Higher-income economies tend to look procedures faster. What reforms making it easier (or for ways to enhance efficiency by introducing new more difficult) to enforce contracts has Doing Business technology. Lower-income economies often work on recorded in Greece (table 10.1)? Table 10.1 How has Greece made enforcing contracts easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece made enforcing contracts easier by introducing an electronic filing system for court users. DB2015 Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 77 ENFORCING CONTRACTS What are the details? The indicators reported here for Greece are based on COURT NAME a set of specific procedural steps required to resolve a standardized commercial dispute through the courts (see the section in this chapter on what the Claim value: EUR 34,514 indicators cover). These procedures, and the time and cost of completing them, are identified through Athens First Instance study of the codes of civil procedure and other court Court name: Single Member Court regulations, as well as through questionnaires completed by local litigation lawyers (and, in a City: Athens quarter of the economies covered by Doing Business, by judges as well). Table 10.2 Summary of time, cost and procedures for enforcing a contract in Greece OECD high Indicator Greece income average Time (days) 1,580 540 Filing and service 60 Trial and judgment 1,400 Enforcement of judgment 120 Cost (% of claim) 14.4 21.4 Attorney cost (% of claim) 10.0 Court cost (% of claim) 2.7 Enforcement Cost (% of claim) 1.7 Procedures (number) 38 32 Number of procedures (without bonus points) 39 Electronic filing of court cases -1 Total number of procedures (including bonus points) 38 Doing Business 2015 Greece 78 No. Procedures Filing and service: 1 Plaintiff hires a lawyer: Plaintiff hires a lawyer. Plaintiff files a summons and complaint: Plaintiff files a summons and complaint with the court (orally or * in writing). Plaintiff pays court fees: Plaintiff pays court fees (e.g. court duties, stamp duties, or any other type of court * fees). Answer ‘yes’ even if Plaintiff recovers these costs. Registration of court case: Registration of court case by the court administration (this can include 2 assigning a reference number to the case). Arrangements for physical delivery of summons and complaint: Plaintiff takes the necessary steps to * arrange for physical service of process on Defendant (e.g. instructing a court officer or a private bailiff). Attempt at physical delivery: An attempt to physically deliver summons and complaint to Defendant is 3 made. Application for substituted service: Because physical delivery is NOT successful, Plaintiff has recourse to 4 substituted service. Substituted service can include, but is not limited to, service by publication in newspapers or affixing of a notice in court or on public bulletin boards. Only ch Court order regarding substituted service: Judge in a court order sets out acceptable means for 5 substituted service in a particular case. Substituted service: Substituted service is completed by publication in newspapers, by affixing a notice in 6 court or on public bulletin boards, etc. * Proof of service: Plaintiff submits proof of service to court, as required by law or standard practice. Application for pre-judgment attachment: Plaintiff submits an application in writing for the attachment of * Defendant's property prior to judgment. Decision on pre-judgment attachment: Judge decides whether to grant Plaintiff’s request for pre- * judgment attachment of Defendant’s property and notifies Plaintiff and Defendant of the decision. Pre-judgment attachment order: Defendant's property is attached prior to judgment. Attachment order 7 either involves physical attachment, or is achieved by freezing, registering, marking, or otherwise separating and restricting Defendant’s movement of specific moveable assets. Report on pre-judgment attachment: Court enforcement officer or private bailiff issues and delivers a 8 report on the attachment of Defendant’s property to the judg e. Hearing on pre-judgment attachment: A hearing takes place as a matter of law or standard practice to 9 resolve the question of whether Defendant’s assets can be attached prior to judgment. This process may include the submission of separate summons and petitions. Trial and judgment: Doing Business 2015 Greece 79 No. Procedures Defendant files preliminary objections.: Defendant presents preliminary objections to the court. * (Preliminary exemptions differ from answers on the merits. Examples of preliminary motions are motions to dismiss on the basis of the statute of limitations or jurisdictional objections, etc.) Checke Plaintiff’s answer to preliminary motions: Plaintiff responds to preliminary motions raised by Defendant. * Checked as ‘yes’ if preliminary motions are commonly raised (step 30 ) and if Plaintiff responds to them immediately. Judge’s resolution on preliminary objections: Judge decides on preliminary objections separately from the 10 merits of the case. Checked as ‘yes’ if preliminary objections are commonly made (step 30) and if judge resolves the question before rendering his decision. Defendant files an answer to Plaintiff’s claim: Defendant files a written pleading which includes his answer 11 or defense on the merits of the case (see assumption 4). Plaintiff’s written reply to Defendant's answer: Plaintiff responds to Defendant’s answer with a written 12 pleading, which may or may not include witness statements or expert (witness) statements. Filing of written submissions: Plaintiff and Defendant file written pleadings and submissions with the court 13 and transmit copies of the written pleadings or submissions to one another. The pleadings may or may not include witness statements or expert (witness) statements. Adjournments: Court procedure is delayed because one or both parties request and obtain an 14 adjournment to submit written pleadings. Check as ‘yes’ if this commonly happens. Court appointment of independent expert: Judge appoints, either at the parties' request or at his own * initiative, an independent expert to decide whether the quality of the goods Plaintiff delivered to Defendant is adequate. (see assumption 5-b). Delivery of expert report by court-appointed expert: The independent expert, appointed by the court, * delivers his or her expert report to the court (see assumption 5-b). * Setting of date(s) for oral hearing or trial: Judge sets the date(s) for the oral hearing or trial. Adjournments: Court proceedings are delayed because one or both parties request and obtain an 15 adjournment to prepare for the oral hearing or trial as a matter of common practice. Oral hearing (prevalent in civil law): The parties argue the merits of the case at an oral hearing before the 16 judge. Witnesses and a court-appointed independent expert may be heard and questioned at the oral hearing. Adjournments: Court proceedings are delayed because one or both parties request and obtain an 17 adjournment during the oral hearing or trial, resulting in an additional or later trial or hearing date. Final arguments: The parties present their final factual and legal arguments to the court either by oral * presentation or by a written submission. 18 Notification of judgment in court: The parties are notified of the judgment at a court hearing. 19 Writing of judgment: The judge produces a written copy of the judgment. Registration of judgment: The court office registers the judgment after receiving a written copy of the 20 judgment. Doing Business 2015 Greece 80 No. Procedures Plaintiff receives a copy of the judgment: Plaintiff receives a copy of the written judgment which is 100% 21 in favor of Plaintiff (see assumption 6). Defendant is formally notified of the judgment: Plaintiff or court formally notifies the Defendant of the 22 judgment. The appeal period starts to run from the day the Defendant is formally notified of the judgment. Appeal period: By law Defendant has the opportunity to appeal the judgment during a specified period. 23 Defendant decides not to appeal. Seller decides to start enforcing the judgment when the appeal period ends (see assumption 8). Order for reimbursement by Defendant of Plaintiff's court fees: The judgment orders Defendant to 24 reimburse Plaintiff for the court fees Plaintiff has advanced, because Defendant has lost the case. Enforcement of judgment: Plaintiff hires a lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented by * a lawyer during the enforcement of judgment phase. Plaintiff retains an enforcement agent to enforce the judgment.: Plaintiff retains the services of a court 25 enforcement officer such as a court bailiff or sheriff, or a private bailiff. Plaintiff requests an enforcement order: Plaintiff applies to the court to obtain the enforcement order * ('seal' on judgment). 26 Plaintiff advances enforcement fees: Plaintiff pays the fees related to the enforcement of the judgment. Attachment of enforcement order to judgment: The judge attaches the enforcement order (‘seal’) to the 27 judgment. Delivery of enforcement order: The court's enforcement order is delivered to a court enforcement officer * or a private bailiff. Judge's order for physical enforcement: Judge orders the police to assist with the physical enforcement of 28 the attachment of Defendant's movable assets. Check as “yes” only if the pretrial order of attachment for Defendant’s moveable assets does not ordinarily involve physical seizure of the as Request to Defendant to comply voluntarily with judgment: Plaintiff, a court enforcement officer or a 29 private bailiff requests Defendant to voluntarily comply with the judgment. 30 Plaintiff identifies Defendant's assets for attachment: Plaintiff identifies Defendant's assets for attachment. Attachment: Defendant’s movable goods are attached (physically or by registering, marking or separating 31 assets). Report on execution of attachment: A court enforcement officer or private bailiff delivers a report on the 32 attachment of Defendant's movable goods to the judge. Valuation or appraisal of attached movable goods: The court or court-appointed valuation expert 33 evaluates the attached goods. Enforcement disputes before court: The enforcement of the judgment is delayed because Defendant 34 opposes aspects of the enforcement process before the judge. Doing Business 2015 Greece 81 No. Procedures Call for public auction: Judge calls a public auction by, for example, advertising or publication in the 35 newspapers. 36 Sale through public auction: The Defendant’s movable property is sold at public auction. Distribution of proceeds: The proceeds of the public auction are distributed to Plaintiff (and, where 37 applicable, to other creditors, according to the rules of priority). Reimbursement of Plaintiff’s enforcement fees: Defendant reimburses Plaintiff's enforcement fees which 38 Plaintiff had advanced previously. 39 Payment: Court orders that the proceeds of the public auction or the direct sale be delivered to Plaintiff. * Not counted in the total number of procedures. Source: Doing Business database. Doing Business 2015 Greece 82 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient INDICATORS MEASURE companies and reallocating the resources of inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of businesses Time required to recover debt (years) to normal operation and increase returns to Measured in calendar years creditors. By improving the expectations of creditors Appeals and requests for extension are and debtors about the outcome of insolvency included proceedings, well-functioning insolvency systems can facilitate access to finance, save more viable Cost required to recover debt (% of debtor’s businesses and thereby improve growth and estate) sustainability in the economy overall. Measured as percentage of estate value What do the indicators cover? Court fees Doing Business studies the time, cost and outcome of Fees of insolvency administrators insolvency proceedings involving domestic legal Lawyers’ fees entities. These variables are used to calculate the recovery rate, which is recorded as cents on the Assessors’ and auctioneers’ fees dollar recouped by secured creditors through Other related fees reorganization, liquidation or debt enforcement (foreclosure) proceedings. To determine the present Outcome value of the amount recovered by creditors, Doing Whether business continues operating as a Business uses the lending rates from the International going concern or business assets are sold Monetary Fund, supplemented with data from piecemeal central banks and the Economist Intelligence Unit. Recovery rate for creditors In addition, Doing Business evaluates the adequacy Measures the cents on the dollar recovered and integrity of the existing legal framework by secured creditors applicable to liquidation and reorganization proceedings through the strength of insolvency Outcome for the business (survival or not) determines the maximum value that can be framework index. The index tests whether economies recovered adopted internationally accepted good practices in four areas: commencement of proceedings, Official costs of the insolvency proceedings management of debtor’s assets, reorganization are deducted proceedings and creditor participation. Depreciation of furniture is taken into The ranking of the Resolving Insolvency indicator is account based on the recovery rate and the total score of the Present value of debt recovered strength of insolvency framework index. The Strength of insolvency framework index (0- Resolving Insolvency indicator does not measure 16) insolvency proceedings of individuals and financial institutions. The data are derived from survey Sum of the scores of four component indices: responses by local insolvency practitioners and Commencement of proceedings index (0-3) verified through a study of laws and regulations as well as public information on bankruptcy systems. Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Doing Business 2015 Greece 83 RESOLVING INSOLVENCY Where does the economy stand today? Combination of quality regulations and efficient practice According to data collected by Doing Business, Greece characterize the top-performing economies. How scores 2.5 out of 3 points on the commencement of efficient are insolvency proceedings in Greece? proceedings index, 5.5 out of 6 points on the According to data collected by Doing Business, resolving management of debtor’s assets index, 3.0 out of 3 points insolvency takes 3.5 years on average and costs 9.0% of on the reorganization proceedings index, and 1.0 out of the debtor’s estate, with the most likely outcome being 4 points on the creditor participation index. Greece’s that the company will be sold as piecemeal sale. The total score on the strength of insolvency framework average recovery rate is 34.3 cents on the dollar. Most index is 12.0 out of 16. indicator sets refer to a case scenario in the largest Globally, Greece stands at 52 in the ranking of 189 business city of an economy, except for 11 economies for economies on the ease of resolving insolvency (figure which the data are a population-weighted average of the 11.1). The rankings for comparator economies and the 2 largest business cities. See the chapter on distance to regional average ranking provide other useful frontier and ease of doing business ranking at the end of benchmarks for assessing the efficiency of insolvency this profile for more details. proceedings in Greece. Figure 11.1 How Greece and comparator economies rank on the ease of resolving insolvency Doing Business 2015 Greece 84 Source: Doing Business database. Doing Business 2015 Greece 85 Figure 11.2 Recovery Rate (0-100) - Greece Source: Doing Business database. Figure 11.3 Strength of insolvency framework index (0-16) - Greece Source: Doing Business database. Doing Business 2015 Greece 86 RESOLVING INSOLVENCY A well-balanced bankruptcy system distinguishes change. Many recent reforms of bankruptcy laws have companies that are financially distressed but been aimed at helping more of the viable businesses economically viable from inefficient companies that survive. What insolvency reforms has Doing Business should be liquidated. But in some insolvency systems recorded in Greece (table 11.1)? even viable businesses are liquidated. This is starting to Table 11.1 How has Greece made resolving insolvency easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Greece enhanced its insolvency process by abolishing the DB2013 conciliation procedure and introducing a new rehabilitation proceeding. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Greece 87 LABOR MARKET REGULATION Doing Business measures flexibility in the regulation of Doing Business 2015 presents the data for the labor employment, specifically as it affects the hiring and market regulation indicators in an annex. The report redundancy of workers and the rigidity of working hours. does not present rankings of economies on these This year, for the first time, the indicators measuring indicators nor include the topic in the aggregate distance flexibility in labor market regulations focus on those to frontier score or ranking on the ease of doing affecting the food retail industry, using a standardized business. Detailed data collected on labor market case study of a cashier in a supermarket. Also new is that regulations are available on the Doing Business website Doing Business collects data on regulations applying to (http://www.doingbusiness.org). The data on labor employees hired through temporary-work agencies as market regulations are based on a detailed survey of well as on those applying to permanent employees or employment regulations that is completed by local employees hired on fixed-term contracts. The indicators lawyers and public officials. Employment laws and also cover additional areas of labor market regulation, regulations as well as secondary sources are reviewed to including social protection schemes and benefits as well ensure accuracy. To make the data comparable across as labor disputes. economies, several assumptions about the worker and the business are used. Over the period from 2007 to 2011 improvements were made to align the methodology for the labor market The worker: regulation indicators (formerly the employing workers  Is a cashier in a supermarket or a grocery store indicators) with the letter and spirit of the International  Is a full-time employee Labour Organization (ILO) conventions. Only 6 of the 188  Is not a member of the labor union, unless ILO conventions cover areas measured by Doing membership is mandatory Business: employee termination, weekend work, holiday The business: with pay, night work, protection against unemployment  Is a limited liability company (or the equivalent and medical care and sickness benefits. The Doing in the economy) with 60 employees. Business methodology is fully consistent with these 6  Operates a supermarket or grocery store in the conventions. The ILO conventions covering areas related economy’s largest business city. For 11 to the labor market regulation indicators do not include economies the data are also collected for the the ILO core labor standards—8 conventions covering second largest business city. the right to collective bargaining, the elimination of  Is subject to collective bargaining agreements if forced labor, the abolition of child labor and equitable such agreements cover more than 50% of the treatment in employment practices. food retail sector and they apply even to firms that are not party to them. Between 2009 and 2011 the World Bank Group worked  Abides by every law and regulation but does not with a consultative group—including labor lawyers, grant workers more benefits than those employer and employee representatives, and experts mandated by law, regulation or (if applicable) from the ILO, the Organisation for Economic Co- collective bargaining agreements. operation and Development (OECD), civil society and the private sector—to review the methodology for the labor market regulation indicators and explore future areas of research. A full report with the conclusions of the consultative group is available at: http://www.doingbusiness.org/methodology/employing-workers. Doing Business 2015 Greece LABOR MARKET REGULATION Employment laws are needed to protect workers from the past 5 years did so in ways that increased labor arbitrary or unfair treatment and to ensure efficient market flexibility. What changes did Greece adopt that contracting between employers and workers. Many affected the Doing Business indicators on labor market economies that changed their labor market regulation in regulation (table 12.1)? Table 12.1 What changes did Greece make in terms of labor market regulation? DB year Reform Greece decreased the severance pay applicable in case of DB2012 redundancy dismissals. Source: Doing Business database. Doing Business 2015 Greece 89 LABOR MARKET REGULATION What are the details? The data reported here for Greece are based on a Employment laws and regulations as well as secondary detailed survey of labor market regulation that is sources are reviewed to ensure accuracy. completed by local lawyers and public officials. Difficulty of hiring index Difficulty of hiring covers 4 areas: (i) whether fixed-term wage to the average value added per worker. The contracts are prohibited for permanent tasks; (ii) the average value added per worker is the ratio of an maximum cumulative duration of fixed-term contracts; economy’s GNI per capita to the working-age population (iii) the minimum wage for a cashier, age 19, with 1 year as a percentage of the total population. of work experience; and (iv) the ratio of the minimum Difficulty of hiring index Data Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single fixed-term contract (months) 36 months Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study 814.75 (US$/month) Ratio of minimum wage to value added per worker 0.29 Source: Doing Business database. Doing Business 2015 Greece 90 LABOR MARKET REGULATION Rigidity of hours index Rigidity of hours covers 7 areas: (i) whether the premium for work on a weekly rest day (as a percentage workweek can extend to 50 hours or more (including of hourly pay); (v) whether there are restrictions on night overtime) for 2 months in a year to respond to a work; (vi) whether there are restrictions on weekly seasonal increase in workload; (ii) the maximum number holiday work; and (vii) the average paid annual leave for of days allowed in the workweek; (iii) the premium for workers with 1 year of tenure, 5 years of tenure and 10 night work (as a percentage of hourly pay); (iv) the years of tenure. Rigidity of hours index Data 50-hour workweek allowed for 2 months a year in case of a seasonal Yes increase in workload? Maximum working days per week 5.0 Premium for night work (% of hourly pay) 25% Premium for work on weekly rest day (% of hourly pay) 75% Major restrictions on night work? No Major restrictions on weekly holiday? Yes Paid annual leave for a worker with 1 year of tenure (in working days) 20.0 Paid annual leave for a worker with 5 years of tenure (in working days) 22.0 Paid annual leave for a worker with 10 years of tenure (in working days) 25.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in 22.3 working days) Source: Doing Business database. Doing Business 2015 Greece 91 LABOR MARKET REGULATION Difficulty of redundancy index Difficulty of redundancy index looks at 9 questions: (i) whether the employer needs approval from a third party what the length is in months of the maximum to terminate 1 redundant worker; (vi) whether the probationary period; (ii) whether redundancy is employer needs approval from a third party to terminate disallowed as a basis for terminating workers; (iii) a group of 9 redundant workers; (vii) whether the law whether the employer needs to notify a third party (such requires the employer to reassign or retrain a worker as a government agency) to terminate 1 redundant before making the worker redundant; (viii) whether worker; (iv) whether the employer needs to notify a third priority rules apply for redundancies; and (ix) whether party to terminate a group of 9 redundant workers; (v) priority rules apply for reemployment. Difficulty of redundancy index Data Maximum length of probationary period (months) 12.0 Dismissal due to redundancy allowed by law? Yes Third-party notification if 1 worker is dismissed? No Third-party approval if 1 worker is dismissed? No Third-party notification if 9 workers are dismissed? Yes Third-party approval if 9 workers are dismissed? Yes Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? No Source: Doing Business database. Doing Business 2015 Greece 92 LABOR MARKET REGULATION Redundancy cost Redundancy cost measures the cost of advance notice requirements and severance payments applicable to a requirements, severance payments and penalties due worker with 1 year of tenure, a worker with 5 years and when terminating a redundant worker, expressed in a worker with 10 years is considered. One month is weeks of salary. The average value of notice recorded as 4 and 1/3 weeks. Redundancy cost indicator (in salary weeks) Data Notice period for redundancy dismissal for a worker with 1 year of tenure 0.0 Notice period for redundancy dismissal for a worker with 5 years of tenure 0.0 Notice period for redundancy dismissal for a worker with 10 years of tenure 0.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years 0.0 of tenure) 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 13.0 Severance pay for redundancy dismissal for a worker with 10 years of tenure 26.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years 15.9 of tenure) Source: Doing Business database. Social protection schemes and benefits & Labor disputes Doing Business collects data on the existence of Doing Business also assesses the mechanisms available unemployment protection schemes as well as data on to resolve labor disputes. More specifically, it collects whether employers are legally required to provide data on what courts would be competent to hear labor health insurance for employees with permanent disputes and whether the competent court is contracts. specialized in resolving labor disputes. Social protection schemes and benefits & Labor disputes indicator Data Availability of unemployment protection scheme? Yes Health insurance existing for permanent employees? Yes Availability of courts or court sections specializing in labor disputes? Yes Source: Doing Business database. Doing Business 2015 Greece 93 Doing Business 2015 Greece 94 DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING This year’s report presents results for 2 aggregate defined as the total tax rate at the 15th percentile of the measures: the distance to frontier score and the ease of overall distribution for all years included in the analysis. doing business ranking, which for the first time this year For the time to pay taxes the frontier is defined as the is based on the distance to frontier score. The ease of lowest time recorded among all economies that levy the doing business ranking compares economies with one 3 major taxes: profit tax, labor taxes and mandatory another; the distance to frontier score benchmarks contributions, and value added tax (VAT) or sales tax. In economies with respect to regulatory best practice, addition, the cost to export and cost to import for each showing the absolute distance to the best performance year are divided by the GDP deflator, to take the general on each Doing Business indicator. When compared price level into account when benchmarking these across years, the distance to frontier score shows how absolute-cost indicators across economies with different much the regulatory environment for local entrepreneurs inflation trends. The base year for the deflator is 2013 for in an economy has changed over time in absolute terms, all economies. while the ease of doing business ranking can show only In the same formulation, to mitigate the effects of how much the regulatory environment has changed extreme outliers in the distributions of the rescaled data relative to that in other economies. for most component indicators (very few economies Distance to Frontier need 700 days to complete the procedures to start a business, but many need 9 days), the worst performance The distance to frontier score captures the gap between is calculated after the removal of outliers. The definition an economy’s performance and a measure of best of outliers is based on the distribution for each practice across the entire sample of 31 indicators for 10 component indicator. To simplify the process, 2 rules Doing Business topics (the labor market regulation were defined: the 95th percentile is used for the indicators are excluded). For starting a business, for indicators with the most dispersed distributions example, Canada and New Zealand have the smallest (including time, cost, minimum capital and number of number of procedures required (1), and New Zealand the payments to pay taxes), and the 99th percentile is used shortest time to fulfill them (0.5 days). Slovenia has the for number of procedures and number of documents to lowest cost (0.0), and Australia, Colombia and 110 other trade. No outlier was removed for component indicators economies have no paid-in minimum capital bound by definition or construction, including legal requirement (table 15.1 in the Doing Business 2015 index scores (such as the depth of credit information report). index, extent of conflict of interest regulation index and strength of insolvency framework index) and the Calculation of the distance to frontier score recovery rate (figure 15.1 in the Doing Business 2015 Calculating the distance to frontier score for each report). economy involves 2 main steps. First, individual Second, for each economy the scores obtained for component indicators are normalized to a common unit individual indicators are aggregated through simple where each of the 31 component indicators y (except for averaging into one distance to frontier score, first for the total tax rate) is rescaled using the linear each topic and then across all 10 topics: starting a transformation (worst − y)/(worst − frontier). In this business, dealing with construction permits, getting formulation the frontier represents the best performance electricity, registering property, getting credit, protecting on the indicator across all economies since 2005 or the minority investors, paying taxes, trading across borders, third year after data for the indicator were collected for enforcing contracts and resolving insolvency. More the first time. For legal indicators such as those on complex aggregation methods—such as principal getting credit or protecting minority investors, the components and unobserved components —yield a frontier is set at the highest possible value. For the total ranking nearly identical to the simple average used by tax rate, consistent with the use of a threshold in Doing Business . Thus Doing Business uses the simplest 6 calculating the rankings on this indicator, the frontier is 6 See Djankov, Manraj and others (2005). Principal components and unobserved components methods yield a ranking nearly identical to Doing Business 2015 Greece 95 method: weighting all topics equally and, within each overall tax system. Instead, it is mainly empirical in topic, giving equal weight to each of the topic nature. The nonlinear transformation along with the components . threshold reduces the bias in the indicator toward 7 economies that do not need to levy significant taxes on An economy’s distance to frontier score is indicated on a companies like the Doing Business standardized case scale from 0 to 100, where 0 represents the worst study company because they raise public revenue in performance and 100 the frontier. All distance to frontier other ways—for example, through taxes on foreign calculations are based on a maximum of 5 decimals. companies, through taxes on sectors other than However, indicator ranking calculations and the ease of manufacturing or from natural resources (all of which are doing business ranking calculations are based on 2 outside the scope of the methodology). In addition, it decimals. The difference between an economy’s distance acknowledges the need of economies to collect taxes to frontier score in any previous year and its score in from firms. 2014 illustrates the extent to which the economy has closed the gap to the regulatory frontier over time. And Calculation of scores for economies with 2 cities in any given year the score measures how far an covered economy is from the best performance at that time. For each of the 11 economies for which a second city Treatment of the total tax rate was added in this year’s report, the distance to frontier score is calculated as the population-weighted average This year, for the first time, the total tax rate component of the distance to frontier scores for the 2 cities covered of the paying taxes indicator set enters the distance to (table 12.1). This is done for the aggregate score, the frontier calculation in a different way than any other scores for each topic and the scores for all the indicator. The distance to frontier score obtained for the component indicators for each topic. total tax rate is transformed in a nonlinear fashion before it enters the distance to frontier score for paying taxes. Table 12.1 Weights used in calculating the distance to As a result of the nonlinear transformation, an increase in frontier scores for economies with 2 cities covered the total tax rate has a smaller impact on the distance to Economy City Weight (%) frontier score for the total tax rate—and therefore on the Dhaka 78 distance to frontier score for paying taxes—for Bangladesh Chittagong 22 economies with a below-average total tax rate than it São Paulo 61 would have in the calculation done in previous years (line Brazil Rio de Janeiro 39 B is smaller than line A in figure 15.2 of the Doing Shanghai 55 China Business 2015 report). And for economies with an Beijing 45 extreme total tax rate (a rate that is very high relative to Mumbai 47 India the average), an increase has a greater impact on both Delhi 53 these distance to frontier scores than before (line D is Jakarta 78 Indonesia bigger than line C in figure 15.2 of the Doing Business Surabaya 22 Tokyo 65 2015 report). Japan Osaka 35 The nonlinear transformation is not based on any Mexico City 83 Mexico economic theory of an “optimal tax rate” that minimizes Monterrey 17 distortions or maximizes efficiency in an economy’s Lagos 77 Nigeria Kano 23 Karachi 65 Pakistan that from the simple average method because both these methods Lahore 35 assign roughly equal weights to the topics, since the pairwise Moscow 70 Russian Federation correlations among indicators do not differ much. An alternative to the St. Petersburg 30 simple average method is to give different weights to the topics, New York 60 depending on which are considered of more or less importance in the United States Los Angeles 40 context of a specific economy. Source: United Nations, Department of Economic and Social 7 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60% assigned Affairs, Population Division, World Urbanization Prospects, to the strength of legal rights index and 40% to the depth of credit 2014 Revision. http://esa.un.org/unpd/wup/CD- information index. Indicators for all other topics are assigned equal ROM/Default.aspx. weights Doing Business 2015 Greece 96 Economies that improved the most across 3 or more Selecting the economies that implemented regulatory Doing Business topics in 2013/14 reforms in at least 3 topics and had the biggest improvements in their distance to frontier scores is Doing Business 2015 uses a simple method to calculate intended to highlight economies with ongoing, broad- which economies improved the ease of doing business based reform programs. The improvement in the the most. First, it selects the economies that in 2013/14 distance to frontier score is used to identify the top implemented regulatory reforms making it easier to do improvers because this allows a focus on the absolute business in 3 or more of the 10 topics included in this improvement—in contrast with the relative improvement year’s aggregate distance to frontier score. Twenty-one shown by a change in rankings—that economies have economies meet this criterion: Azerbaijan; Benin; the made in their regulatory environment for business. Democratic Republic of Congo; Côte d’Ivoire; the Czech Republic; Greece; India; Ireland; Kazakhstan; Lithuania; the former Yugoslav Republic of Macedonia; Poland; Ease of Doing Business ranking Senegal; the Seychelles; Spain; Switzerland; Taiwan, China; Tajikistan; Togo; Trinidad and Tobago; and the The ease of doing business ranking ranges from 1 to 189. United Arab Emirates. Second, Doing Business sorts these The ranking of economies is determined by sorting the economies on the increase in their distance to frontier aggregate distance to frontier scores, rounded to 2 score from the previous year using comparable data. decimals. Doing Business 2015 Greece 97 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Law library News on the Doing Business project Online collection of business laws and regulations http://www.doingbusiness.org relating to business http://www.doingbusiness.org/law-library Rankings How economies rank—from 1 to 189 Contributors http://www.doingbusiness.org/rankings More than 10,700 specialists in 189 economies who participate in Doing Business Data http://www.doingbusiness.org/contributors/doing- All the data for 189 economies—topic rankings, business indicator values, lists of regulatory procedures and details underlying indicators Entrepreneurship data http://www.doingbusiness.org/data Data on business density (number of newly registered companies per 1,000 working-age Reports people) for 139 economies Access to Doing Business reports as well as http://www.doingbusiness.org/data/exploretopics/ent subnational and regional reports, reform case repreneurship studies and customized economy and regional profiles Distance to frontier http://www.doingbusiness.org/reports Data benchmarking 189 economies to the frontier in regulatory practice Methodology http://www.doingbusiness.org/data/distance-to- The methodologies and research papers underlying frontier Doing Business http://www.doingbusiness.org/methodology Information on good practices Showing where the many good practices identified Research by Doing Business have been adopted Abstracts of papers on Doing Business topics and http://www.doingbusiness.org/data/good-practice related policy issues http://www.doingbusiness.org/research Doing Business iPhone App Doing Business at a Glance—presenting the full Doing Business reforms report, rankings and highlights for each topic for Short summaries of DB2015 business regulation the iPhone, iPad and iPod touch reforms, lists of reforms since DB2008 and a ranking http://www.doingbusiness.org/specialfeatures/ simulation tool iphone http://www.doingbusiness.org/reforms Historical data Customized data sets since DB2004 http://www.doingbusiness.org/custom-query Doing Business 2015 Greece 98