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Cover design: The Word Express Doing Business 2014 Austria 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 5 Starting a business ..................................................................................................................... 14 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 33 Registering property .................................................................................................................. 40 Getting credit .............................................................................................................................. 49 Protecting investors ................................................................................................................... 56 Paying taxes ................................................................................................................................ 65 Trading across borders .............................................................................................................. 72 Enforcing contracts .................................................................................................................... 80 Resolving insolvency .................................................................................................................. 89 Employing workers .................................................................................................................... 94 Data notes ................................................................................................................................. 101 Resources on the Doing Business website ............................................................................ 107 Doing Business 2014 Austria 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is the paying taxes indicators, which cover the period for a local entrepreneur to open and run a small to January–December 2012). 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, trading across borders and getting electricity), the getting credit, protecting investors, paying taxes, security of property from theft and looting, the trading across borders, enforcing contracts, resolving transparency of government procurement, insolvency and employing workers. macroeconomic conditions or the underlying strength In a series of annual reports Doing Business presents of institutions—are not directly studied by Doing quantitative indicators on business regulations and the Business. The indicators refer to a specific type of protection of property rights that can be compared business, generally a local limited liability company across 189 economies, from Afghanistan to Zimbabwe, operating in the largest business city. Because over time. The data set covers 47 economies in Sub- standard assumptions are used in the data collection, Saharan Africa, 33 in Latin America and the Caribbean, comparisons and benchmarks are valid across 25 in East Asia and the Pacific, 25 in Eastern Europe economies. The data not only highlight the extent of and Central Asia, 20 in the Middle East and North obstacles to doing business; they also help identify the Africa and 8 in South Asia, as well as 31 OECD high- source of those obstacles, supporting policy makers in income economies. The indicators are used to analyze designing regulatory reform. economic outcomes and identify what reforms have More information is available in the full report. Doing worked, where and why. Business 2014 presents the indicators, analyzes their This economy profile presents the Doing Business relationship with economic outcomes and presents indicators for Austria. To allow useful comparison, it business regulatory reforms. The data, along with also provides data for other selected economies information on ordering Doing Business 2014, are (comparator economies) for each indicator. The data in available on the Doing Business website at this report are current as of June 1, 2013 (except for http://www.doingbusiness.org. Doing Business 2014 Austria 5 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s regulatory environment for business, a good place to ECONOMY OVERVIEW start is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing Region: OECD high income business based on indicator sets that measure and benchmark regulations applying to domestic small to Income category: High income medium-size businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of Population: 8,462,446 doing business index. For each economy the index is calculated as the ranking on the simple average of its GNI per capita (US$): 48,160 percentile rankings on each of the 10 topics included in the index in Doing Business 2014: starting a business, DB2014 rank: 30 dealing with construction permits, getting electricity, registering property, getting credit, protecting DB2013 rank: 28* investors, paying taxes, trading across borders, Change in rank: -2 enforcing contracts and resolving insolvency. The ranking on each topic is the simple average of the DB 2014 DTF: 78.27 percentile rankings on its component indicators (see the data notes for more details). The employing workers DB 2013 DTF: 78.32 indicators are not included in this year’s aggregate ease of doing business ranking, but the data are presented Change in DTF: -0.03 in this year’s economy profile. The aggregate ranking on the ease of doing business * DB2013 ranking shown is not last year’s published benchmarks each economy’s performance on the ranking but a comparable ranking for DB2013 that indicators against that of all other economies in the captures the effects of such factors as data Doing Business sample (figure 1.1). While this ranking corrections and the addition of 4 economies (Libya, tells much about the business environment in an Myanmar, San Marino and South Sudan) to the economy, it does not tell the whole story. The ranking on sample this year. See the data notes for sources and the ease of doing business, and the underlying definitions. 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 2014 Austria 6 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 2014 Austria 7 THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy relative to the regional average (figure 1.2). The stands in the aggregate ranking on the ease of economy’s rankings on the topics included in the doing business is useful. Also useful is to know how ease of doing business index provide another it ranks relative to comparator economies and perspective (figure 1.3). Figure 1.2 How Austria and comparator economies rank on the ease of doing business Source: Doing Business database. Doing Business 2014 Austria 8 THE BUSINESS ENVIRONMENT Figure 1.3 How Austria ranks on Doing Business topics Source: Doing Business database. Doing Business 2014 Austria 9 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business Doing Business introduced the distance to frontier tells only part of the story, so do changes in that ranking. measure. This measure shows how far on average an Yearly movements in rankings can provide some indication economy is from the best performance achieved by any of changes in an economy’s regulatory environment fo r economy on each Doing Business indicator since 2005, firms, but they are always relative. except for the getting electricity indicators, which were introduced in 2009. Moreover, year-to-year changes in the overall rankings do not reflect how the business regulatory environment in an Comparing the measure for an economy at 2 points in economy has changed over time—or how it has changed time allows users to assess how much the economy’s in different areas. To aid in assessing such changes, regulatory environment as measured by Doing Business has changed over time—how far it has moved toward (or away from) the most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.4). Figure 1.4 How far has Austria come in the areas measured by Doing Business? Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2005, except for the getting electricity indicators, which were introduced in 2009. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to frontier is the average of the distance to frontier in the first 9 indicator sets shown in the figure and does not include getting electricity. Data on the overall distance to frontier including getting electricity is available at http://www.doingbusiness.org/data/distance-to-frontier. See the data notes for more details on the distance to frontier measure. Source: Doing Business database. Doing Business 2014 Austria 10 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part business regulation—such as a regulatory process that of the story (table 1.1). The indicators, on their own or can be completed with a small number of procedures in comparison with the indicators of a good practice in a few days and at a low cost. Comparison of the economy or those of comparator economies in the economy’s indicators today with those in the previous region, may reveal bottlenecks reflected in large year may show where substantial bottlenecks persist — numbers of procedures, long delays or high costs. Or and where they are diminishing. they may reveal unexpected strengths in an area of Table 1.1 Summary of Doing Business indicators for Austria Best performer globally Czech Republic DB2014 Switzerland DB2014 Germany DB2014 Belgium DB2014 Austria DB2014 Austria DB2013 Indicator France DB2014 Italy DB2014 DB2014 Starting a Business 138 133 49 146 41 111 90 104 New Zealand (1) (rank) Procedures (number) 8 8 3 9 5 9 6 6 New Zealand (1)* Time (days) 25.0 25.0 4.0 19.5 6.5 14.5 6.0 18.0 New Zealand (0.5) Cost (% of income per 4.8 4.9 5.2 8.2 0.9 4.7 14.2 2.0 Slovenia (0.0) capita) Paid-in Min. Capital (% 47.8 49.1 18.2 29.5 0.0 0.0 9.8 25.6 112 Economies (0.0)* of income per capita) Dealing with Hong Kong SAR, Construction Permits 94 83 100 86 92 12 112 58 China (1) (rank) Hong Kong SAR, Procedures (number) 13 13 13 33 9 9 11 13 China (6) Time (days) 194.0 194.0 214.0 120.0 184.0 97.0 233.5 154.0 Singapore (26.0) Doing Business 2014 Austria 11 Best performer globally Czech Republic DB2014 Switzerland DB2014 Germany DB2014 Belgium DB2014 Austria DB2014 Austria DB2013 Indicator France DB2014 Italy DB2014 DB2014 Cost (% of income per 55.8 57.3 54.3 10.5 244.4 46.7 186.4 38.1 Qatar (1.1) capita) Getting Electricity 28 26 90 146 42 3 89 8 Iceland (1) (rank) Procedures (number) 5 5 6 6 5 3 5 3 10 Economies (3)* Time (days) 23 23 88 279 79 17 124 39 Germany (17) Cost (% of income per 101.7 104.5 92.5 179.0 43.3 46.9 215.9 59.6 Japan (0.0) capita) Registering Property 36 34 180 37 149 81 34 16 Georgia (1) (rank) Procedures (number) 3 3 8 3 8 5 4 4 4 Economies (1)* Time (days) 20.5 20.5 64.0 24.0 49.0 40.0 16.0 16.0 New Zealand (1.0)* Cost (% of property 4.6 4.6 12.7 4.0 6.1 5.7 4.4 0.3 5 Economies (0.0)* value) Getting Credit (rank) 28 24 73 55 55 28 109 28 Malaysia (1)* Strength of legal rights 7 7 6 6 7 7 3 8 10 Economies (10)* index (0-10) Depth of credit 6 6 4 5 4 6 5 5 31 Economies (6)* information index (0-6) Public registry coverage 1.7 1.8 96.2 6.4 43.6 0.0 25.6 0.0 Portugal (100.0)* (% of adults) Private bureau 51.8 52.6 0.0 76.0 0.0 100.0 100.0 26.5 22 Economies (100.0)* coverage (% of adults) Protecting Investors 98 95 16 98 80 98 52 170 New Zealand (1) (rank) Extent of disclosure 5 5 8 2 10 5 7 0 10 Economies (10)* Doing Business 2014 Austria 12 Best performer globally Czech Republic DB2014 Switzerland DB2014 Germany DB2014 Belgium DB2014 Austria DB2014 Austria DB2013 Indicator France DB2014 Italy DB2014 DB2014 index (0-10) Extent of director 5 5 6 5 1 5 4 5 Cambodia (10) liability index (0-10) Ease of shareholder 5 5 7 8 5 5 7 4 3 Economies (10)* suits index (0-10) Strength of investor 5.0 5.0 7.0 5.0 5.3 5.0 6.0 3.0 New Zealand (9.7) protection index (0-10) United Arab Emirates Paying Taxes (rank) 79 79 76 122 52 89 138 16 (1) Payments (number per Hong Kong SAR, 12 12 11 8 7 9 15 19 year) China (3)* United Arab Emirates Time (hours per year) 166 170 160 413 132 218 269 63 (12) Trading Across Borders 19 21 28 68 36 14 56 35 Singapore (1) (rank) Documents to export 3 3 4 4 2 4 3 3 Ireland (2)* (number) Time to export (days) 9 9 9 17 10 9 19 8 5 Economies (6)* Cost to export (US$ per 1,090 1,090 1,240 1,215 1,335 905 1,195 1,635 Malaysia (450) container) Documents to import 4 4 4 6 2 4 3 4 Ireland (2)* (number) Time to import (days) 8 8 8 17 11 7 18 8 Singapore (4) Cost to import (US$ per 1,155 1,155 1,400 1,190 1,445 940 1,145 1,440 Singapore (440) container) Enforcing Contracts 6 6 16 75 7 5 103 20 Luxembourg (1) (rank) Doing Business 2014 Austria 13 Best performer globally Czech Republic DB2014 Switzerland DB2014 Germany DB2014 Belgium DB2014 Austria DB2014 Austria DB2013 Indicator France DB2014 Italy DB2014 DB2014 Time (days) 397 397 505 611 395 394 1,185 390 Singapore (150) Cost (% of claim) 18.0 18.0 17.7 33.0 17.4 14.4 23.1 24.0 Bhutan (0.1) Procedures (number) 25 25 26 27 29 30 37 32 Singapore (21)* Resolving Insolvency 14 12 6 29 46 13 33 47 Japan (1) (rank) Time (years) 1.1 1.1 0.9 2.1 1.9 1.2 1.8 3.0 Ireland (0.4) Cost (% of estate) 10 10 4 17 9 8 22 4 Norway (1) Outcome (0 as piecemeal sale and 1 as 1 1 1 1 0 1 1 0 going concern) Recovery rate (cents on 82.4 83.3 89.0 65.0 48.3 82.9 62.7 47.6 Japan (92.8) the dollar) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. * 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 2014 Austria 14 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 Preregistration (for example, name well as to new markets. And their employees can verification or reservation, notarization) benefit from protections provided by the law. An additional benefit comes with limited liability Registration in the economy’s largest companies. These limit the financial liability of business city company owners to their investments, so personal Postregistration (for example, social security assets of the owners are not put at risk. Where registration, company seal) governments make registration easy, more entrepreneurs start businesses in the formal sector, Time required to complete each procedure creating more good jobs and generating more (calendar days) revenue for the government. Does not include time spent gathering What do the indicators cover? information Doing Business measures the ease of starting a Each procedure starts on a separate day (2 business in an economy by recording all procedures cannot start on the same day). procedures officially required or commonly done in Procedures that can be fully completed practice by an entrepreneur to start up and online are an exception to this rule. formally operate an industrial or commercial Procedure completed once final document is business—as well as the time and cost required to received complete these procedures. It also records the paid-in minimum capital that companies must No prior contact with officials deposit before registration (or within 3 months). Cost required to complete each procedure The ranking on the ease of starting a business is (% of income per capita) the simple average of the percentile rankings on the 4 component indicators: procedures, time, cost Official costs only, no bribes and paid-in minimum capital requirement. 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:  Has a start-up capital of 10 times income per  Is a limited liability company, located in the capita. largest business city and is 100% domestically  Has a turnover of at least 100 times income per owned. capita.  Has between 10 and 50 employees.  Does not qualify for any special benefits.  Conducts general commercial or industrial  Does not own real estate. activities. Doing Business 2014 Austria 15 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Austria? days, costs 4.8% of income per capita and requires According to data collected by Doing Business, starting paid-in minimum capital of 47.8% of income per capita a business there requires 8 procedures, takes 25.0 (figure 2.1). Figure 2.1 What it takes to start a business in Austria Paid-in minimum capital (% of income per capita): 47.8 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 2014 Austria 16 STARTING A BUSINESS Globally, Austria stands at 138 in the ranking of 189 regional average ranking provide other useful economies on the ease of starting a business (figure information for assessing how easy it is for an 2.2). The rankings for comparator economies and the entrepreneur in Austria to start a business. Figure 2.2 How Austria and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2014 Austria 17 STARTING A BUSINESS What are the changes over time? The benchmarks provided by the economies that over 2.3) can help show what is possible in making it easier time have had the best performance regionally or to start a business. And changes in regional averages globally on the procedures, time, cost or paid-in can show where Austria is keeping up—and where it is minimum capital required to start a business (figure falling behind. Figure 2.3 Has starting a business become easier over time? Procedures (number) Time (days) Doing Business 2014 Austria 18 STARTING A BUSINESS Cost (% of income per capita) Paid-in minimum capital (% of income per capita) Note: Ninety economies globally have no paid-in minimum capital requirement. DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 Austria 19 STARTING A BUSINESS Economies around the world have taken steps making greater firm satisfaction and savings and more it easier to start a business—streamlining procedures registered businesses, financial resources and job by setting up a one-stop shop, making procedures opportunities. simpler or faster by introducing technology and What business registration reforms has Doing Business reducing or eliminating minimum capital requirements. recorded in Austria (table 2.1)? Many have undertaken business registration reforms in stages—and they often are part of a larger regulatory reform program. Among the benefits have been Table 2.1 How has Austria made starting a business easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 20 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Austria is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new City: Vienna firm. These are identified by Doing Business through collaboration with relevant local Legal Form: Gesellschaft mit beschränkter Haftung professionals and the study of laws, regulations and (GmbH) publicly available information on business entry in Paid in Minimum Capital Requirement: EUR that economy. Following is a detailed summary of 17,500 those procedures, along with the associated time and cost. These procedures are those that apply to Start-up Capital: 10 times GNI per capita 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). Summary of procedures for starting a business in Austria—and the time and cost Time to No. Procedure Cost to complete complete Obtain the confirmation from the Economic Chamber that the start-up company is really a new enterprise A form (Neufö 1 or NeuFö 3), which is available electronically on the homepage of the Austrian Ministry of Finance must be filled in and be confirmed by the Economic Chamber. The Neufö applies to the company formation and to the transfer of businesses. Procedure 1 is optional but it can lead to exemption from paying certain publicly levied fees and taxes. If certain requirements are met, the following fees and taxes will be waived: • Stamp duties and certain administrative fees. • Real estate transfer tax. 1 • Charges for registration in the commercial register and the cadastral 1 day no charge register. • Capital transaction tax (1% of nominal capital). • For 1 year, certain ancillary wage costs borne by the employer in addition to social security contributions. Depending on the requested exemptions, companies must obtain confirmation by certain public bodies (Chamber of Commerce or Social Security Organization) that the application form has been completed, after receiving counseling by that body concerning the scope and applicability of the law. Doing Business 2014 Austria 21 Time to No. Procedure Cost to complete complete Notarize the statutes/articles of association or the declaration of establishment The articles of association (Gesellschaftsvertrag), which must be executed before a notary by notary deed (Notariatsakt), must include the following: name, seat, scope of activities, capital and initial contribution by each shareholder. 2 4 days EUR 1,500 Notarization time ranges from 2 to 5 days. Cost will depend on the authorized share capital and are subject to negotiation with the notary public. Deposit the minimum capital requirement in the bank The confirmation fee depends on the bank, ranging from EUR 0 to 1 day no charge 3 about EUR 30. Register the company at the local court (Handelsgericht) and publish an announcement of formation in the Wiener Zeitung The application for registering an Austrian limited liability company (Gesellschaft mit beschränkter Haftung, GmbH) must be accompanied by the following documents: declaration of establishment notarized; articles of association; a declaration (accompanied by a banker's confirmation) that the demanded amount of primary deposit, to be paid in cash, has been paid; evidence that the free disposability of the paid primary deposit by managing directors is not restricted by counterclaims; specimen signatures of the managing directors; and EUR 30 registration confirmation by the tax authorities that the capital transaction tax on the formation has been paid or is guaranteed. If the court has doubts fee for private about the company name, it may request an opinion from the Chamber limited companies of Commerce. A GmbH comes into legal existence upon registration in + publication fee of 4 the commercial registry. 7 days EUR 40 for first 5 lines and EUR 6 for The following company information is inter alia listed and published in each additional line the commercial registry: corporate name, registered office and address, (assuming 35 total name and the date of birth of the company´s representatives and lines) shareholders, nominal capital. The fixed application fee (court fee) amounts to EUR 30; individual service fees - depending on the information to be registered - apply, e.g. registration of a managing director amounts to EUR 27. Public notaries and lawyers are obliged to file any petition as well as related documents, deeds etc in electronic form; the application fee for physical or non-electronic applications will be raised to EUR 46. Please note, that the court fees do not apply if the requirements for the start up governmental aid (see Procedure 1) are met. Doing Business 2014 Austria 22 Time to No. Procedure Cost to complete complete Tax Office registration (obtain a VAT number) The commercial register automatically informs tax authorities of the registration of new companies. In turn, tax authorities usually respond by requesting that the company file for tax registration. One of the following forms must be filed with the tax authority: Form 15, or 24 (available at www.bmf.gv.at/), and the articles of association, the opening balance sheet, an excerpt of the company register, an 5 identification card of a managing director, a specimen signature sheet 12 days no charge of the representatives must be filed as attachments. The authority issues the tax number within 10 to 14 days. The VAT number is usually issued simultaneously with the tax identification number. The statutory deadline to obtain a tax number is 1 month. Frequently tax authorities extend a “welcome visit” to those companies intending to engage in business activities that are eligible for the filing of VAT returns. no charge if exemption is granted under Procedure 1; * Register trade (Gewerbeanmeldung) with the trade authority otherwise stamp (Bezirksverwaltungsbehörde) duties vary If permission is mandatory, completion of procedures takes longer, 1 day depending on the depending on the requirements and authorities involved (e. g., the (simultaneous with type of trade 6 production of hazardous goods requires proof of special qualifications previous intended and of management and approval and control of the production site). procedure) whether the trade Companies can register in person, by postal mail, or over the Internet. and/or profession only requires registration or it requires permission by authorities (i.e. particular professio * Register employees for social security Upon registering in the commercial register, companies with employees must apply for an employer's account number (Dienstgeberkontonummer) electronically via ELDA, the data Less than one day transmission interface of the statutory health insurance office (online procedure, 7 (Gebietskrankenkasse). In practice, the employer applies for a new simultaneous with no charge account number via ELDA (under the menu item, Online-Services previous [Kontonummeranforderung]) before a new employee is registered with procedure) the statutory health insurance office. Health insurance is obligatory: every new employee must be electronically registered with the statutory health insurance office prior Doing Business 2014 Austria 23 Time to No. Procedure Cost to complete complete to and no later than the day of employment. Unless the company does not own a computer, the employee must be registered via ELDA. Otherwise, this may be done by mail or by fax. Moreover, the employer must automatically extend obligatory health insurance upon entry. On being registered with the statutory health insurance office, the employee is automatically registered for accident insurance and retirement insurance as provided by law. No further registration is needed. By data transmission, the employee is immediately registered with the competent statutory health insurance office (social insurance office). The employer instantly receives a “sent” report and a confirmation of registration. Procedure can be done online * Register with the municipality Municipalities levy community taxes on all businesses. In addition, 1 day particular activities (e.g., organizing a public event) may trigger (simultaneous with 8 no charge municipal stamp duties or other minor duties and taxes (e.g., previous advertising fees "Werbeabgaben"). procedure) * 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 2014 Austria 24 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 PERMITS INDICATORS MEASURE excessive constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in Procedures to legally build a warehouse time and money, many builders opt out. They may (number) pay bribes to pass inspections or simply build Submitting all relevant documents and illegally, leading to hazardous construction that obtaining all necessary clearances, licenses, puts public safety at risk. Where compliance is permits and certificates simple, straightforward and inexpensive, everyone Submitting all required notifications and is better off. receiving all necessary inspections What do the indicators cover? Obtaining utility connections for water, Doing Business records the procedures, time and sewerage and a land telephone line cost for a business in the construction industry to Registering the warehouse after its obtain all the necessary approvals to build a completion (if required for use as collateral or warehouse in the economy’s largest business city, for transfer of the warehouse) connect it to basic utilities and register the Time required to complete each procedure property so that it can be used as collateral or (calendar days) transferred to another entity. Does not include time spent gathering The ranking on the ease of dealing with information construction permits is the simple average of the Each procedure starts on a separate day. percentile rankings on its component indicators: Procedures that can be fully completed online procedures, time and cost. are an exception to this rule. To make the data comparable across economies, Procedure considered completed once final Doing Business uses several assumptions about the document is received business and the warehouse, including the utility connections. No prior contact with officials The business: Cost required to complete each procedure (% of income per capita)  Is a limited liability company operating in Official costs only, no bribes the construction business and located in the largest business city.  Will be connected to water, sewerage (sewage system, septic tank or their  Is domestically owned and operated. equivalent) and a fixed telephone line. The  Has 60 builders and other employees. connection to each utility network will be 10 The warehouse: meters (32 feet, 10 inches) long.  Is a new construction (there was no  Will be used for general storage, such as of previous construction on the land). books or stationery (not for goods requiring special conditions).  Has complete architectural and technical plans prepared by a licensed architect or  Will take 30 weeks to construct (excluding all engineer. delays due to administrative and regulatory requirements). Doing Business 2014 Austria 25 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to permits there requires 13 procedures, takes 194.0 days build a warehouse in Austria? According to data and costs 55.8% of income per capita (figure 3.1). collected by Doing Business, dealing with construction Figure 3.1 What it takes to comply with formalities to build a warehouse in Austria 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 2014 Austria 26 DEALING WITH CONSTRUCTION PERMITS Globally, Austria stands at 94 in the ranking of 189 other useful information for assessing how easy it is for economies on the ease of dealing with construction an entrepreneur in Austria to legally build a permits (figure 3.2). The rankings for comparator warehouse. economies and the regional average ranking provide Figure 3.2 How Austria and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2014 Austria 27 DEALING WITH CONSTRUCTION PERMITS What are the changes over time? The benchmarks provided by the economies that over what is possible in making it easier to deal with time have had the best performance regionally or construction permits. And changes in regional globally on the procedures, time or cost required to averages can show where Austria is keeping up—and deal with construction permits (figure 3.3) help show where it is falling behind. Figure 3.3 Has dealing with construction permits become easier over time? Procedures (number) Time (days) Doing Business 2014 Austria 28 DEALING WITH CONSTRUCTION PERMITS Cost (% of income per capita) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. Source: Doing Business database. Doing Business 2014 Austria 29 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while building safety while keeping compliance costs making compliance easy and accessible to all. reasonable, governments around the world have Coherent and transparent rules, efficient processes and worked on consolidating permitting requirements. adequate allocation of resources are especially What construction permitting reforms has Doing important in sectors where safety is at stake. Business recorded in Austria (table 3.1)? Construction is one of them. In an effort to ensure Table 3.1 How has Austria made dealing with construction permits easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 30 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Austria are based BUILDING A WAREHOUSE on a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified by Doing Business through City : Vienna information collected from experts in construction licensing, including architects, civil engineers, Estimated construction lawyers, construction firms, utility EUR 1,691,000 Warehouse Value : service providers and public officials who deal with building regulations. These procedures are those The procedures, along with the associated time and that apply to a company and structure matching cost, are summarized below. the standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). Summary of procedures for dealing with construction permits in Austria —and the time and cost Time to No. Procedure Cost to complete complete Obtain location site permit When issuing a location site permit, the municipality grants only the right to build on a plot; it does not authorize the actual construction. Obtaining a location site permit, however, is a prerequisite for the other procedures. According to official building regulations, the developer 1 must apply for a building permit. According to Administrative 30 days EUR 380 Procedural Act (1991) the time limit for any public service related procedure is 6 months. So officials may choose to respond in 30 days if everything is correct. The fee can range anywhere between EUR 300.00 to EUR 500.00. * Obtain proof of land ownership BuildCo must obtain and submit with the building permit request a proof of land ownership that is not older than 3 months. The procedure 1 day EUR 10 2 can be done online, however sometimes authorities will require the applicants to visit the local office of the Land Registry for verification. * Obtain approval of heat and noise insulation This approval is issued by an insulation engineering expert. BuildCo 30 days EUR 5,000 3 would have to hire a third party specialist to conduct this work. Doing Business 2014 Austria 31 Time to No. Procedure Cost to complete complete * Obtain expert opinion on structural engineering 4 The company must request this opinion from an independent expert. 11 days EUR 5,000 * Obtain energy pass (energieausweiss) Following the Directive of European Union 2002/91/EC the practice of requiring the so called “Energy Pass” (Energieausweiss) by the Municipality of Vienna has become compulsory for all projects as of January 2009. The energy pass is required when applying for the 5 building permit at the relevant authority of City of Vienna. There are 10 days EUR 700 officially licensed companies and individual engineers that issue the energy pass. The prices may range, however on average it is EUR 700.00 for a building with overall size of 1300.6 sq. m. This procedure will normally take between 1-2 weeks to complete. * Receive on-site inspection prior to issuance of building permit A physical inspection occurs before a building permit is issued. The inspection fee is EUR 7.00 per half hour. The inspection is estimated at 3 hours. 6 The Building Inspection (MA 37) of the City of Vienna is provided upon 1 day EUR 300 approval of construction projects and aims at monitoring of buildings, orderly expansion of the city, and ensuring the safety of citizens. Obtain building permit The building permit is valid for a period of 18 months from the date of issue and cannot be extended. Within those 18 months the same applicants can request a duplicate of the building permit if the zoning and development plan have not changed. Documents required for a building permit: • Application for building permit • Approval of the land ownership of registered land • Current Land Registry copy (not older than three months) • An energy performance certificate (in electronic form) and proof of 7 noise control, heat and sound insulation 80 days EUR 42 • For new, additions or modifications: confirmation of the plan or author's plan • Demonstration of compliance with the parking requirement • Static concept or preliminary design including foundations for smaller construction projects report that insignificance of the project for structural reasons, where no risk is due to the (experts or expert) • Confirmation of the principles of accessible design and construction • Design concept for garden areas of the site, for new buildings for construction class III • Proving the availability of sufficient water for fire fighting on the plan; information on hydrants • Locations for waste receptacles Doing Business 2014 Austria 32 Time to No. Procedure Cost to complete complete • For enterprises that are under the Seveso II Directive: documentation of the risks • Required documents for architectural review of the Department of Architecture and Urban Design (MA 19) Request and receive on-site inspection prior to commencement of construction The Building Control Office performs a physical inspection before the start of construction. The building inspection during construction is 1 day no charge 8 done by the building supervisor of the company. However, if any irregularities take place during the construction, the civil engineer appointed by the municipality will come to the site. Notify the municipal authority about completion of construction works Upon completion of construction work, the building supervisor must 9 provide the municipal authority with a notification of completion. The 1 day EUR 35 notification must be certified by a civil engineer and include several reports. Obtain industrial operating permit 10 80 days EUR 300 * Receive on-site inspection from the municipal authority A physical inspection occurs before an industrial operating permit is 1 day no charge 11 issued. The inspection is requested by phone. * Request water connection and meet with official at the Vienna Water works The municipal authority provides both water and sewerage 12 connections. The water connection fee is EUR 4,000.00; on average, 60 days EUR 8,500 service delivery takes 60 days. The sewerage connection fee is EUR 3,000.00 to 6,000.00; service delivery takes 30 days. * Request and obtain telephone connection 13 30 days EUR 160 * 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 2014 Austria 33 GETTING ELECTRICITY Access to reliable and affordable electricity is vital WHAT THE GETTING ELECTRICITY for businesses. To counter weak electricity supply, many firms in developing economies have to rely INDICATORS MEASURE on self-supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the Procedures to obtain an electricity first step for a customer is always to gain access by connection (number) obtaining a connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for Completing all required notifications and a 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 Obtaining external installation works and complete them. These procedures include possibly purchasing material for these works applications and contracts with electricity utilities, Concluding any necessary supply contract and clearances from other agencies and the external obtaining final supply and final connection works. The ranking on the ease of getting electricity is the simple average of Time required to complete each procedure the percentile rankings on its component (calendar days) indicators: procedures, time and cost. To make the Is at least 1 calendar day data comparable across economies, several assumptions are used. Each procedure starts on a separate day The warehouse: Does not include time spent gathering information  Is located in the economy’s largest business city, in an area where other Reflects the time spent in practice, with little warehouses are located. follow-up and no prior contact with officials  Is not in a special economic zone where Cost required to complete each procedure the connection would be eligible for (% of income per capita) subsidization or faster service. Official costs only, no bribes  Has road access. The connection works Excludes value added tax involve the crossing of a road or roads but are carried out on public land.  Is to either the low-voltage or the medium-  Is a new construction being connected to voltage distribution network and either overhead electricity for the first time. or underground, whichever is more common in the economy and area where the warehouse is  Has 2 stories, both above ground, with a located. The length of any connection in the total surface of about 1,300.6 square customer’s private domain is negligible. meters (14,000 square feet), and is built on a plot of 929 square meters (10,000 square  Requires crossing of a 10-meter road but all the feet). works are carried out in a public land, so there is no crossing into other people's private property. The electricity connection:  Involves installing one electricity meter. The  Is 150 meters long and is a 3-phase, 4-wire Y, monthly electricity consumption will be 0.07 140-kilovolt-ampere (kVA) (subscribed gigawatt-hour (GWh). The internal electrical capacity) connection. wiring has been completed. Doing Business 2014 Austria 34 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity procedures, takes 23 days and costs 101.7% of income connection in Austria? According to data collected by per capita (figure 4.1). Doing Business, getting electricity there requires 5 Figure 4.1 What it takes to obtain an electricity connection in Austria 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 2014 Austria 35 GETTING ELECTRICITY Globally, Austria stands at 28 in the ranking of 189 regional average ranking provide another perspective economies on the ease of getting electricity (figure in assessing how easy it is for an entrepreneur in 4.2). The rankings for comparator economies and the Austria to connect a warehouse to electricity. Figure 4.2 How Austria and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2014 Austria 36 GETTING ELECTRICITY Even more helpful than rankings on the ease of getting performers on these indicators may provide useful electricity may be the indicators underlying those benchmarks. rankings (table 4.1). And regional and global best Table 4.1 The ease of getting electricity in Austria Best performer in Best performer Indicator Austria DB2014 Austria DB2013 OECD high income globally DB2014 DB2014 Rank 28 26 Iceland (1) Iceland (1) Procedures (number) 5 5 4 Economies* (3) 10 Economies* (3) Time (days) 23 23 Germany (17) Germany (17) Cost (% of income per capita) 101.7 104.5 Japan (0.0) Japan (0.0) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. * Two or more economies share the top ranking on this indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2014 Austria 37 GETTING ELECTRICITY Obtaining an electricity connection is essential to safety in the connection process while keeping enable a business to conduct its most basic operations. connection costs reasonable, governments around the In many economies the connection process is world have worked to consolidate requirements for complicated by the multiple laws and regulations obtaining an electricity connection. What reforms in involved—covering service quality, general safety, getting electricity has Doing Business recorded in technical standards, procurement practices and Austria (table 4.2)? internal wiring installations. In an effort to ensure Table 4.2 How has Austria made getting electricity easier—or not? By Doing Business report year DB year Reform DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2014 Austria 38 GETTING ELECTRICITY What are the details? The indicators reported here for Austria 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 City: Vienna utility—identified by Doing Business. Data are collected from the distribution utility, then completed and Name of Utility: Wien Energie Stromnetz verified by electricity regulatory agencies and GmbH independent professionals such as electrical engineers, The procedures are those that apply to a warehouse electrical contractors and construction companies. The and electricity connection matching the standard electricity distribution utility surveyed is the one assumptions used by Doing Business in collecting the serving the area (or areas) in which warehouses are data (see the section in this chapter on what the located. If there is a choice of distribution utilities, the indicators cover). The procedures, along with the one serving the largest number of customers is associated time and cost, are summarized below. selected. Summary of procedures for getting electricity in Austria—and the time and cost Time to No. Procedure Cost to complete complete Submit application with Wien Energie Stromnetz GmbH and await estimate An application can be submitted online, in person, by mail. There are no 1 costs associated and no documents have to be attached. An assumption 14 calendar days no charge of the technical relevant values, like active and reactive power have to be attached to the application. Receive external inspection by Wien Energie Stromnetz GmbH An external site inspection is necessary. The waiting time is usually a few 9 calendar days no charge 2 days. Someone from the customer’s party has to be present. Submit notifcation to network operator Wien Energie Stromnetz GmbH and obtain clearance The customer needs to obtain a clearance for the internal wiring installation from the network operator Wien Energie Stromnetz GmbH in order to get an electricity connection (“Fertigstellungsanzeige”). The 3 electrician who did the internal wiring has to do a completion 3 calendar days EUR 24.0 notification (electrician completion notification) by sending this note to Wien Energie Stromnetz GmbH as prove that the internal wiring is complying with security and safety standards. This clearance is done automatically, meaning the client does not have to go and pick it up, it is processed automatically. The connection contract will be concluded after the clearance. Doing Business 2014 Austria 39 Time to No. Procedure Cost to complete complete Obtain external connection works and meter installation from Wien Energie Stromnetz GmbH The external works start immediately after signature of the contract. Only the utility is in charge of the works. The utility is providing all the material. A new transformer would have to be built on the private ground of the customer. The meter gets installed at the same time. The utility installs the meter and is the owner of it. Electricity starts flowing immediately if a contract with a supplier of electricity has been signed. The connection fees in Austria are composed of two parts: 1) Fee for accessing the net ("Netzzutrittsentgelt") which includes all costs such as 6 calendar days EUR 37,233.4 4 labor and material cost. The utility is usually having as standard transformers of 360kVA. In the case of a 140kVA connection, the customer would pay about half of the transformer and the remaining capacity would be used by other customers. 2) Fee for using the net ("Netzbereitstellungsentgelt" at Netzebene 6). With a power connection of 140kVA, the customer is automatically on Level 6, meaning the customer owns the connection to the transformer and is directly connected to the low tension side of the transformer. There are meter installation costs. Sign supply contract with Wienstrom Electricity starts flowing only if a contract with a supplier of electricity has been signed. Wien Energie Stromnetz GmbH is a daughter company of Wien Energie GmbH, as well as the energy supplier Wienstrom. The application for connection is submitted with Wien Energie Stromnetz 2 calendar days no charge 5 GmbH, however only Wienstrom is supplying electricity. Therefore, the customer needs to conclude a contract with Wienstrom for the supply of energy. The supply contract can be concluded already before the external connection works are finished. * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2014 Austria 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 immovable property (number) accepted as collateral for loans—limiting access to Preregistration (for example, checking for liens, finance. notarizing sales agreement, paying property transfer taxes) What do the indicators cover? Registration in the economy’s largest business Doing Business records the full sequence of city procedures necessary for a business to purchase property from another business and transfer the Postregistration (for example, filing title with the municipality) property title to the buyer’s name. The transaction is considered complete when it is opposable to Time required to complete each procedure third parties and when the buyer can use the (calendar days) property, use it as collateral for a bank loan or Does not include time spent gathering resell it. The ranking on the ease of registering information property is the simple average of the percentile rankings on its component indicators: procedures, Each procedure starts on a separate day. time and cost. Procedures that can be fully completed online are an exception to this rule. To make the data comparable across economies, Procedure considered completed once final several assumptions about the parties to the document is received transaction, the property and the procedures are used. No prior contact with officials The parties (buyer and seller): Cost required to complete each procedure (% of property value)  Are limited liability companies, 100% domestically and privately owned. Official costs only, no bribes  Are located in the economy’s largest No value added or capital gains taxes included business city. and no rezoning is required.  Have 50 employees each, all of whom are  Has no mortgages attached and has been nationals. under the same ownership for the past 10  Perform general commercial activities. years. The property (fully owned by the seller):  Consists of 557.4 square meters (6,000 square feet) of land and a 10-year-old, 2-story  Has a value of 50 times income per capita. warehouse of 929 square meters (10,000 The sale price equals the value. square feet). The warehouse is in good  Is registered in the land registry or cada- condition and complies with all safety stre, or both, and is free of title disputes. standards, building codes and legal requirements. There is no heating system. The  Is located in a periurban commercial zone, property will be transferred in its entirety. Doing Business 2014 Austria 41 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in 20.5 days and costs 4.6% of the property value (figure Austria? According to data collected by Doing Business, 5.1). registering property there requires 3 procedures, takes Figure 5.1 What it takes to register property in Austria 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 2014 Austria 42 REGISTERING PROPERTY Globally, Austria stands at 36 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 Austria to transfer property. Figure 5.2 How Austria and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2014 Austria 43 REGISTERING PROPERTY What are the changes over time? The benchmarks provided by the economies that over what is possible in making it easier to register time have had the best performance regionally or property. And changes in regional averages can show globally on the procedures, time or cost required to where Austria is keeping up—and where it is falling complete a property transfer (figure 5.3) help show behind. Figure 5.3 Has registering property become easier over time? Procedures (number) Time (days) Doing Business 2014 Austria 44 REGISTERING PROPERTY Cost (% of property value) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on “no practice” marks, see the data notes. Source: Doing Business database. Doing Business 2014 Austria 45 REGISTERING PROPERTY Economies worldwide have been making it easier for have cut the time required substantially—enabling entrepreneurs to register and transfer property—such buyers to use or mortgage their property earlier. What as by computerizing land registries, introducing time property registration reforms has Doing Business limits for procedures and setting low fixed fees. Many recorded in Austria (table 5.1)? Table 5.1 How has Austria made registering property easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. Austria made it easier to transfer property by requiring online DB2011 submission of all applications to register property transfers. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 46 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 City: Vienna lawyers, notaries and property registries. These procedures are those that apply to a transaction Property Value: EUR 1,831,960 matching the standard assumptions used by Doing Business in collecting the data (see the section in The procedures, along with the associated time and this chapter on what the indicators cover). cost, are summarized below. Summary of procedures for registering property in Austria—and the time and cost Time to No. Procedure Cost to complete complete Obtain a land registry extract from either the competent District Court, a notary public or an attorney-at-law Obtain an extract showing the intended piece of land from either the competent District Court or a notary public or attorney-at-law. As of Less than a day 1 March 2006, it is now possible to query the documents archive of the (online EUR 13 land registry electronically. With this information accessible online, the procedure) submission procedure has become even more simplified. All district courts offer the online option to request documents of land registry. Authenticate signatures and authorization of representatives, and property acquisition tax clearance from the notary At the notaries office the parties can combine three steps: • The signatures of seller and buyer have to be authenticated on the contract. That can be done by notary or by court (time to complete: can be done within 30 minutes, if required, normally 1 day; cost: 134.90 EUR EUR 134.90 per per person (As of August 1, 2010 the costs for the authentification of the signature + 3.5% signatures were increased from EUR 111,30 to EUR 134,90 per signature of property value as suggested by the Act on Fees of Public Notaries, last amended by the 1 - 3 days (transfer tax) + 2 regulsation Federal Law Gazetta BGBI II NR 218/2010); the fee of the 1.1% of property court may differ slightly to the notary’s. Provided more than one value (Registration signature has to be authenticated in one document (e.g. sales agreement), the costs for the further signature amount to 50% of the fee) costs stated (i.e. 67,50). • In case of a corporation as seller or buyer the authorization of the signing representatives has to be proven. At the notaries office that is done uno actu with the authentication of the signatures; otherwise a certified excerpt out of the business register produced by the High Court (Landesgericht) has to be presented to the Land Book (time to complete: Doing Business 2014 Austria 47 Time to No. Procedure Cost to complete complete can be done within 30 minutes, normally 1 day; cost: 13 - EUR per corporation). • The parties have to pay Property Acquisition Tax or Transfer Tax (Grunderwerbssteuer) which, in this case, amounts to 3.5 % of the purchase price. They have to present to the Land Register a clearance certificate (Unbedenklichkeitsbescheinigung) furnished by the tax authorities certifying that the tax was paid (time to complete: tax assessment will last about 4 weeks; to get the certificate after paying the tax further 2 weeks; no extra costs). This clearance certificate may be substituted by a self-assessment declaration (Selbstbemessungserklärung) filed by a notary or a lawyer (attorney at law/solicitor) if the tax is paid to the notary or lawyer who cooperates with the tax authorities. The notary public or the attorney-at-law usually issues the clearance certificate stating that the real estate transfer tax (3.5% of the purchase price) and registration fee for the Land Register (1.1% of the purchase price) have been paid. The registration fee for the Land Register rises from 1% to 1,1 % of the purchase price due to the regulation Federal Law Gazetta BGBI I Nr 111/2010 and is effective as of January 01, 2011. The certificate will be issued immediately after the notary or lawyer has received the amount of the real estate transfer tax and registration fee. The money for the purchase and the taxes is given to the notary/lawyer on a trust account. The parties may set up the contract themselves or use a standard template. In late 2005, the Act concerning “Changes in the vocational law of notary publics, attorneys-at-law and civil engineers” was announced, providing for the use of electronic signatures which are to be submitted electronically to the courts. This Act has therefore created the legal basis for online registration and electronic notarial attestation. This reform is effective as of July 1, 2007. File the application at the competent District Court (Land Registry) Pursuant to Sec. 32 of the Austrian As of November 1, 2009, applications to transfer and register a property Court Fee Act are required to be submitted electronically via an online data-exchange (Gerichtsgebühren system called WebERV. The WebERV is an online-based form of gesetz), the filing communication between the courts, notaries and lawyers for submission fee has been of claims, briefs and applications and delivery of court transcripts, orders amended and now and decisions. This system provides standardized masks and forms for 7-28 days amounts to EUR 3 various kinds of applications such as registration of the ownership, registration of mortgages, precedences (Vorrangeinräumung) and 40 (if the cancelations. application and the deeds involved Documentation on the fact that the company is owned by Austrian or are submitted via European Community citizens. WebERV) and to EUR 56 (if the This system is effective as of November 1, 2009 and is provided for by application and the "Grundbuchs-Novelle 2008" (Land Registry Amendment 2008), the deeds involved Doing Business 2014 Austria 48 Time to No. Procedure Cost to complete complete Federal Law Gazetta Part 1 No. 100/2008 (BGB1 I 100/2008). As per this are not submitted law, it is mandatory for attorneys and notaries to submit their via WebERV). applications concerning the transfer and registration of property using this system. Registration with the Land Registry has a binding effect as from the date of application, i.e. from this moment the company becomes the owner of the entire property (land, building, etc.). The fee for registration (paid to the attorney at law or notary) is freed from the trust account. Also, the notary/lawyer transfers the real property transaction tax to the tax office and transfers the purchase price to the seller. The documentation shall include: (a) Sales agreement (b) Clearenace Certificate of the tax authority verifying the payment of land transfer tax or self-assessment certificate. (c) Documentation on the fact that the company is owned by Austrian or European Community citizens. * 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 2014 Austria 49 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 lenders’ rights to view a potential borrower’s Strength of legal rights index (0–10) financial history (positive or negative)—valuable Rights of borrowers and lenders through information to consider when assessing risk. And collateral laws they permit borrowers to establish a good credit Protection of secured creditors’ rights through history that will allow easier access to credit. Sound bankruptcy laws collateral laws enable businesses to use their assets, especially movable property, as security to generate Depth of credit information index (0–6) capital—while strong creditors’ rights have been Scope and accessibility of credit information associated with higher ratios of private sector credit distributed by public credit registries and to GDP. private credit bureaus What do the indicators cover? Public credit registry coverage (% of adults) Doing Business assesses the sharing of credit Number of individuals and firms listed in information and the legal rights of borrowers and public credit registry as percentage of adult lenders with respect to secured transactions population through 2 sets of indicators. The depth of credit Private credit bureau coverage (% of adults) information index measures rules and practices Number of individuals and firms listed in affecting the coverage, scope and accessibility of largest private credit bureau as percentage of credit information available through a public credit adult population registry or a private credit bureau. The strength of legal rights index measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses case scenarios to determine the scope of the  Has up to 100 employees. secured transactions system, involving a secured  Is 100% domestically owned, as is the lender. borrower and a secured lender and examining legal The ranking on the ease of getting credit is based on restrictions on the use of movable collateral. These the percentile rankings on the sum of its component scenarios assume that the borrower: indicators: the depth of credit information index and  Is a private, incorporated, limited liability the strength of legal rights index. company.  Has its headquarters and only base of operations in the largest business city. Doing Business 2014 Austria 50 GETTING CREDIT Where does the economy stand today? How well do the credit information system and Globally, Austria stands at 28 in the ranking of 189 collateral and bankruptcy laws in Austria facilitate economies on the ease of getting credit (figure 6.1). access to credit? The economy has a score of 6 on the The rankings for comparator economies and the depth of credit information index and a score of 7 on regional average ranking provide other useful the strength of legal rights index (see the summary of information for assessing how well regulations and scoring at the end of this chapter for details). Higher institutions in Austria support lending and borrowing. scores indicate more credit information and stronger legal rights for borrowers and lenders. Figure 6.1 How Austria and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2014 Austria 51 GETTING CREDIT What are the changes over time? While the most recent Doing Business data reflect how institutions and regulations have been strengthened — well the credit information system and collateral and and where they have not (table 6.1). That can help bankruptcy laws in Austria support lending and identify where the potential for improvement is borrowing today, data over time can help show where greatest. Table 6.1 The ease of getting credit in Austria over time By Doing Business report year Indicator DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 Rank .. .. .. .. .. .. .. .. 24 28 Strength of legal rights 7 7 7 7 7 7 7 7 7 7 index (0-10) Depth of credit 6 6 6 6 6 6 6 6 6 6 information index (0-6) Public registry coverage 1.1 1.2 1.2 1.3 1.3 1.4 1.4 1.7 1.8 1.7 (% of adults) Private bureau 39.3 45.4 39.9 40.6 40.9 39.2 40.6 51.6 52.6 51.8 coverage (% of adults) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 Austria 52 GETTING CREDIT One way to put an economy’s score on the getting shows the number of economies with this score in credit indicators into context is to see where the 2013 as well as the regional average score. Figure 6.3 economy stands in the distribution of scores across shows the same thing for the depth of credit economies. Figure 6.2 highlights the score on the information index. strength of legal rights index for Austria in 2013 and Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared— and lenders? and how widely? Number of economies with each score on strength of legal Number of economies with each score on depth of credit rights index (0–10), 2013 information index (0–6), 2013 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. Regional averages for the depth of credit information index exclude economies with no credit registry or credit bureau. Source: Doing Business database. Doing Business 2014 Austria 53 GETTING CREDIT When economies strengthen the legal rights of lenders credit information, they can increase entrepreneurs’ and borrowers under collateral and bankruptcy laws, access to credit. What credit reforms has Doing and increase the scope, coverage and accessibility of Business recorded in Austria (table 6.2)? Table 6.2 How has Austria made getting credit easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 54 GETTING CREDIT What are the details? The getting credit indicators reported here for Austria The data on the legal rights of borrowers and lenders are based on detailed information collected in that are gathered through a survey of financial lawyers and economy. The data on credit information sharing are verified through analysis of laws and regulations as collected through a survey of a credit registry and/or well 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, credit information index, a score of 1 is assigned for a score of 1 is assigned for each of 8 aspects related to each of 6 features of the credit registry or credit legal rights in collateral law and 2 aspects in bureau (see summary of scoring below). bankruptcy law. Summary of scoring for the getting credit indicators in Austria OECD high income OECD high income Indicator Austria average average Strength of legal rights index (0-10) 7 7 Depth of credit information index (0-6) 6 5 Public registry coverage (% of adults) 1.7 42.9 Private bureau coverage (% of adults) 51.8 73.9 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Regional averages for the depth of credit information index exclude economies with no credit registry or credit bureau. Regional averages for the credit registry coverage exclude economies with no credit registry. Regional averages for the credit bureau coverage exclude economies with no credit bureau. Strength of legal rights index (0–10) Index score: 7 Can any business use movable assets as collateral while keeping possession of the assets; and Yes any financial institution accept such assets as collateral ? 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, that is unified geographically and by asset type, with an No electronic database indexed by debtor's names? Doing Business 2014 Austria 55 Strength of legal rights index (0–10) Index score: 7 Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor Yes defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is Yes liquidated? Are secured creditors either not subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure, or does the law provide secured Yes creditors with grounds for relief from an automatic stay or/and sets a time limit to it? Does the law allow parties to agree in a collateral agreement that the lender may enforce its Yes security right out of court, at the time a security interest is created? Depth of credit information index (0–6) Credit bureau Credit registry Index score: 6 Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative data distributed? Yes No 1 Does the registry distribute credit information from retailers, trade creditors or utility companies as well as Yes No 1 financial institutions? Are more than 2 years of historical credit information Yes Yes 1 distributed? Is data on all loans below 1% of income per capita Yes No 1 distributed? Is it guaranteed by law that borrowers can inspect Yes Yes 1 their data in the largest credit registry? Note: An economy receives a score of 1 if there is a "yes" to either private bureau or public registry. Credit bureau Credit registry Coverage (% of adults) (% of adults) Number of firms 3,863 51,197 Number of individuals 2,945,529 47,702 Source: Doing Business database. Doing Business 2014 Austria 56 PROTECTING INVESTORS Protecting investors matters for the ability of WHAT THE PROTECTING INVESTORS companies to raise the capital they need to grow, INDICATORS MEASURE innovate, diversify and compete. If the laws do not protect minority shareholders, investors may be reluctant to provide funding to companies through Extent of disclosure index (0–10) the purchase of shares unless they become the Approval process for related-party controlling shareholders. Effective regulations define transactions related-party transactions precisely, promote clear Disclosure requirements in case of related- and efficient disclosure requirements, require party transactions shareholder participation in major decisions of the company and set detailed standards of accountability Extent of director liability index (0–10) for company insiders. Ability of minority shareholders to file a direct or derivative lawsuit What do the indicators cover? Ability of minority shareholders to hold Doing Business measures the strength of minority interested parties and members of the shareholder protections against directors’ use of approving body liable for prejudicial related- corporate assets for personal gain—or self-dealing. party transactions The indicators distinguish 3 dimensions of investor protections: transparency of related-party Available legal remedies (damages, repayment of profits, fines, imprisonment and rescission transactions (extent of disclosure index), liability for of the transaction) self-dealing (extent of director liability index) and minority shareholders’ access to evidence before and Ease of shareholder suits index (0–10) during trial (ease of shareholder suits index). The Access to internal corporate documents ranking on the strength of investor protection index is (directly or through a government inspector) the simple average of the percentile rankings on these 3 indices. To make the data comparable across Documents and information available during trial economies, a case study uses several assumptions about the business and the transaction. Strength of investor protection index (0–10) The business (Buyer): Simple average of the extent of disclosure, extent of director liability and ease of  Is a publicly traded corporation listed on the shareholder suits indices economy’s most important stock exchange (or at least a large private company with multiple shareholders). the company purchase used trucks from another company he owns.  Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of  The price is higher than the going price for used Buyer where permitted, even if this is not trucks, but the transaction goes forward. specifically required by law.  All required approvals are obtained, and all The transaction involves the following details: required disclosures made, though the transaction is prejudicial to Buyer.  Mr. James, a director and the majority shareholder of the company, proposes that  Shareholders sue the interested parties and the members of the board of directors. Doing Business 2014 Austria 57 PROTECTING INVESTORS Where does the economy stand today? How strong are investor protections against self- index (figure 7.1). While the indicator does not dealing in Austria? The economy has a score of 5.0 on measure all aspects related to the protection of the strength of investor protection index, with a higher minority investors, a higher ranking does indicate that score indicating stronger protections (see the an economy’s regulations offer stronger investor summary of scoring at the end of this chapter for protections against self-dealing in the areas measured. details). Globally, Austria stands at 98 in the ranking of 189 economies on the strength of investor protection Figure 7.1 How Austria and comparator economies rank on the strength of investor protection index Source: Doing Business database. Doing Business 2014 Austria 58 PROTECTING INVESTORS What are the changes over time? While the most recent Doing Business data reflect how ranking on the strength of investor protection index well regulations in Austria protect minority investors over time shows whether the economy is slipping today, data over time show whether the protections behind other economies in investor protections—or have been strengthened (table 7.1). And the global surpassing them. Table 7.1 The strength of investor protections in Austria over time By Doing Business report year Indicator DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014 Rank .. .. .. .. .. .. .. 95 98 Extent of disclosure 5 5 5 5 5 5 5 5 5 index (0-10) Extent of director 5 5 5 5 5 5 5 5 5 liability index (0-10) Ease of shareholder 5 5 5 5 5 5 5 5 5 suits index (0-10) Strength of investor protection index (0- 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 5.0 10) Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 Austria 59 PROTECTING INVESTORS One way to put an economy’s scores on the protecting shows the number of economies with this score in investors indicators into context is to see where the 2013 as well as the regional average score. Figure 7.3 economy stands in the distribution of scores across applies to the extent of director liability index, and economies. Figure 7.2 highlights the score on the figure 7.4 to the ease of shareholder suits index. extent of disclosure index for Austria in 2013 and Figure 7.2 How strong are disclosure requirements? Figure 7.3 How strong is the liability regime for directors? Number of economies with each score on the extent of Number of economies with each score on the extent of director liability index (0–10), 2013 disclosure index (0–10), 2013 Note: Higher scores indicate greater liability of directors. Note: Higher scores indicate greater disclosure. Source: Doing Business database. Source: Doing Business database. Doing Business 2014 Austria 60 PROTECTING INVESTORS Figure 7.4 How easy is accessing internal corporate documents? Number of economies with each score on the ease of shareholder suits index (0–10), 2013 Note: Higher scores indicate greater minority shareholder access to evidence before and during trial. Source: Doing Business database. Doing Business 2014 Austria 61 PROTECTING INVESTORS The scores recorded over time for Austria on the changes over time in the regional average score on strength of investor protection index may also be this index. revealing (figure 7.5). Equally interesting may be the Figure 7.5 Have investor protections become stronger over time? Strength of investor protection index (0–10) Note: The higher the score, the stronger the protections. Source: Doing Business database. Doing Business 2014 Austria 62 PROTECTING INVESTORS Economies with the strongest protections of minority reasonable time. As a result, reforms to strengthen investors from self-dealing require detailed disclosure investor protections may move ahead on different and define clear duties for directors. They also have fronts—such as through new or amended company well-functioning courts and up-to-date procedural laws, securities regulations or civil procedure rules. rules that give minority shareholders the means to What investor protection reforms has Doing Business prove their case and obtain a judgment within a recorded in Austria (table 7.2)? Table 7.2 How has Austria strengthened investor protections—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 63 PROTECTING INVESTORS What are the details? The protecting investors indicators reported here for ease of shareholder suits indices, scores are assigned Austria are based on detailed information collected to each based on a range of conditions relating to through a survey of corporate and securities lawyers disclosure, director liability and shareholder suits in a about securities regulations, company laws and court standard case study transaction (see the data notes at rules of evidence and procedure. To construct the the end of this chapter). The summary below shows extent of disclosure, extent of director liability and the details underlying the scores for Austria. Summary of scoring for the protecting investors indicators in Austria OECD high OECD high income Indicator Austria income average average Extent of disclosure index (0-10) 5 7 Extent of director liability index (0-10) 5 5 Ease of shareholder suits index (0-10) 5 7 Strength of investor protection index (0-10) 5.0 6.2 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Score Score description Extent of disclosure index (0-10) 5 What corporate body provides legally sufficient Board of directors and Mr. James is 2 approval for the transaction? not allowed to vote Whether disclosure of the conflict of interest by Mr. Existence of a conflict without any 1 James to the board of directors is required? specifics Whether immediate disclosure of the transaction to 0 No disclosure obligation the public and/or shareholders is required? Whether disclosure of the transaction in published Disclosure on the transaction and Mr. 2 periodic filings (annual reports) is required? James' conflict of interest Whether an external body must review the terms of 0 No the transaction before it takes place? Extent of director liability index (0-10) 5 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction 1 Yes causes to the company? Whether shareholders can hold Mr. James liable for Liable for negligence or influencing the damage that the Buyer-Seller transaction causes 1 the approval of the transaction to the company? Whether shareholders can hold members of the approving body liable for the damage that the Buyer- 1 Liable for negligence Seller transaction causes to the company? Doing Business 2014 Austria 64 Score Score description Whether a court can void the transaction upon a Not possible or only in case of Seller's 0 successful claim by a shareholder plaintiff? fraud or bad faith Whether Mr. James pays damages for the harm caused to the company upon a successful claim by 1 Yes the shareholder plaintiff? Whether Mr. James repays profits made from the transaction upon a successful claim by the 1 Yes shareholder plaintiff? Whether fines and imprisonment can be applied 0 No against Mr. James? Ease of shareholder suits index (0-10) 5 Whether shareholders owning 10% or less of Buyer's shares can inspect transaction documents before 0 No filing suit? Whether shareholders owning 10% or less of Buyer's shares can request an inspector to investigate the 1 Yes transaction? Whether the plaintiff can obtain any documents from Information that directly proves 2 the defendant and witnesses during trial? specific facts in the plaintiff’s claim Whether the plaintiff can request categories of documents from the defendant without identifying 0 No specific ones? Whether the plaintiff can directly question the 1 Yes defendant and witnesses during trial? Whether the level of proof required for civil suits is 1 Yes lower than that of criminal cases? Strength of investor protection index (0-10) 5.0 Source: Doing Business database. Doing Business 2014 Austria 65 PAYING TAXES Taxes are essential. They fund the public amenities, WHAT THE PAYING TAXES INDICATORS infrastructure and services that are crucial for a MEASURE properly functioning economy. But the level of tax rates needs to be carefully chosen—and needless Tax payments for a manufacturing company complexity in tax rules avoided. According to in 2012 (number per year adjusted for Doing Business data, in economies where it is more electronic and joint filing and payment) difficult and costly to pay taxes, larger shares of economic activity end up in the informal sector — Total number of taxes and contributions paid, where businesses pay no taxes at all. including consumption taxes (value added tax, sales tax or goods and service tax) What do the indicators cover? Method and frequency of filing and payment Using a case scenario, Doing Business measures Time required to comply with 3 major taxes the taxes and mandatory contributions that a (hours per year) medium-size company must pay in a given year as well as the administrative burden of paying taxes Collecting information and computing the tax and contributions. This case scenario uses a set of payable financial statements and assumptions about Completing tax return forms, filing with transactions made over the year. Information is proper agencies also compiled on the frequency of filing and Arranging payment or withholding payments as well as time taken to comply with tax laws. The ranking on the ease of paying taxes is Preparing separate tax accounting books, if the simple average of the percentile rankings on required its component indicators: number of annual Total tax rate (% of profit before all taxes) payments, time and total tax rate, with a threshold 1 Profit or corporate income tax being applied to the total tax rate. To make the data comparable across economies, several Social contributions and labor taxes paid by assumptions about the business and the taxes and the employer contributions are used. Property and property transfer taxes  TaxpayerCo is a medium-size business that Dividend, capital gains and financial started operations on January 1, 2011. transactions taxes  The business starts from the same financial Waste collection, vehicle, road and other taxes position in each economy. All the taxes  Taxes and mandatory contributions include and mandatory contributions paid during corporate income tax, turnover tax and all the second year of operation are recorded. labor taxes and contributions paid by the  Taxes and mandatory contributions are company. measured at all levels of government.  A range of standard deductions and exemptions are also recorded. 1 The threshold is defined as the highest total tax rate among the top 15% of economies in the ranking on the total tax rate. It is calculated and adjusted on a yearly basis. The threshold is not based 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 at the lower end of the distribution of tax rates levied on medium-size enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies that do not need to levy significant taxes on 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 25.5%. Doing Business 2014 Austria 66 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with Globally, Austria stands at 79 in the ranking of 189 taxes in Austria—and how much do firms pay in taxes? economies on the ease of paying taxes (figure 8.1). The On average, firms make 12 tax payments a year, spend rankings for comparator economies and the regional 166 hours a year filing, preparing and paying taxes and average ranking provide other useful information for pay total taxes amounting to 52.4% of profit (see the assessing the tax compliance burden for businesses in summary at the end of this chapter for details). Austria. Figure 8.1 How Austria and comparator economies rank on the ease of paying taxes Source: Doing Business database. Doing Business 2014 Austria 67 PAYING TAXES What are the changes over time? The benchmarks provided by the economies that over show what is possible in easing the administrative time have had the best performance regionally or burden of tax compliance. And changes in regional globally on the number of payments or the time averages can show where Austria is keeping up—and required to prepare and file taxes (figure 8.2) help where it is falling behind. Figure 8.2 Has paying taxes become easier over time? Payments (number per year) Time (hours per year) Doing Business 2014 Austria 68 PAYING TAXES Total tax rate (% of profit) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. DB2013 rankings reflect changes to the methodology. For all economies with a total tax rate below the threshold of 25.5% applied in DB2014, the total tax rate is set at 25.5% for the purpose of calculating the ranking on the ease of paying taxes. Source: Doing Business database. Doing Business 2014 Austria 69 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 consolidating filings, reducing the frequency of rise. What tax reforms has Doing Business recorded in payments or offering electronic filing and payment. Austria (table 8.1)? Many have lowered tax rates. Changes have brought Table 8.1 How has Austria made paying taxes easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 70 PAYING TAXES What are the details? The indicators reported here for Austria are based LOCATION OF STANDARDIZED COMPANY on a standard set of taxes and contributions that would be paid by the case study company used by Doing Business in collecting the data (see the City: Vienna section in this chapter on what the indicators cover). Tax practitioners are asked to review standard financial statements as well as a standard list of transactions that the company completed The taxes and contributions paid are listed in the during the year. Respondents are asked how much summary below, along with the associated number of in taxes and mandatory contributions the business payments, time and tax rate. must pay and what the process is for doing so. Summary of tax rates and administrative burden in Austria OECD high income OECD high income Indicator Austria average average Payments (number per year) 12 12 Time (hours per year) 166 175 Profit tax (%) 15.3 16.1 Labor tax and contributions (%) 34.7 23.1 Other taxes (%) 2.4 2.0 Total tax rate (% profit) 52.4 41.3 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. 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 Social security gross 1 online filing 52 21.76% 24.1 contributions salaries taxable Corporate income tax 1 online filing 47 25% 15.3 profit gross Contribution to family fund 0 paid jointly 0 4.5% 5.1 salaries Doing Business 2014 Austria 71 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 Municipal employees tax 1 online filing 0 3% 3.4 salaries Contribution to pension gross 0 paid jointly 0 1.53% 1.7 fund salaries insurance Tax on insurance contracts 1 0 6% 1.2 premium value land assessed Property tax 1 0 variable 1 by tax authority Contribution to the gross 1 online filing 0 0.44% 0.5 chamber of commerce salaries value of Advertising tax 1 0 5% 0.2 service small Vehicle tax 1 0 fixed fee 0 amount depending small Stamp duty 1 0 0.8% to 2% 0 on taxable amount event value not Value added tax (VAT) 1 online filing 67 20% 0 added included small Road tax 1 0 fixed fee 0 amount EUR 397 fuel small Fuel Tax 1 0 per 1000 consumpti 0 amount liter on Totals 12 166 52.4 Source: Doing Business database. Doing Business 2014 Austria 72 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 Customs clearance documents a 10% drop in their trading costs than from a similar reduction in the tariffs applied to their Port and terminal handling documents products in 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 Inland transport and handling a standard shipment of goods by sea transport, and the number of documents necessary to Customs clearance and inspections complete the transaction. The indicators cover Port and terminal handling procedural requirements such as documentation Does not include sea transport time requirements and procedures at customs and other regulatory agencies as well as at the port. They also Cost required to export and import (US$ per cover trade logistics, including the time and cost of container) inland transport to the largest business city. The All documentation ranking on the ease of trading across borders is the simple average of the percentile rankings on its Inland transport and handling component indicators: documents, time and cost Customs clearance and inspections to export and import. Port and terminal handling To make the data comparable across economies, Official costs only, no bribes Doing Business uses several assumptions about the business and the traded goods. The business: military items.  Is of medium size and employs 60 people.  Do not require refrigeration or any other special environment.  Is located in the periurban area of the economy’s largest business city.  Do not require any special phytosanitary or environmental safety standards other than  Is a private, limited liability company, accepted international standards. domestically owned, formally registered and operating under commercial laws and  Are one of the economy’s leading export or regulations of the economy. import products. The traded goods:  Are transported in a dry-cargo, 20-foot full container load.  Are not hazardous nor do they include Doing Business 2014 Austria 73 TRADING ACROSS BORDERS Where does the economy stand today? What does it take to export or import in Austria? Globally, Austria stands at 19 in the ranking of 189 According to data collected by Doing Business, economies on the ease of trading across borders exporting a standard container of goods requires 3 (figure 9.1). The rankings for comparator economies documents, takes 9 days and costs $1090. Importing and the regional average ranking provide other useful the same container of goods requires 4 documents, information for assessing how easy it is for a business takes 8 days and costs $1155 (see the summary of in Austria to export and import goods. procedures and documents at the end of this chapter for details). Figure 9.1 How Austria and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2014 Austria 74 TRADING ACROSS BORDERS What are the changes over time? The benchmarks provided by the economies that over possible in making it easier to trade across borders. time have had the best performance regionally or And changes in regional averages can show where globally on the documents, time or cost required to Austria is keeping up—and where it is falling behind. export or import (figure 9.2) help show what is Figure 9.2 Has trading across borders become easier over time? Documents to export (number) Time to export (days) Doing Business 2014 Austria 75 TRADING ACROSS BORDERS Cost to export (US$ per container) Documents to import (number) Doing Business 2014 Austria 76 TRADING ACROSS BORDERS Time to import (days) Cost to import (US$ per container) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB201 3 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 Austria 77 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 tools to facilitate trade—including single windows, Business recorded in Austria (table 9.1)? risk-based inspections and electronic data interchange Table 9.1 How has Austria made trading across borders easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 78 TRADING ACROSS BORDERS What are the details? The indicators reported here for Austria are based LOCATION OF STANDARDIZED COMPANY on a set of specific procedural requirements for trading a standard shipment of goods by ocean transport (see the section in this chapter on what City: Vienna the indicators cover). Information on the procedures as well as the required documents and the time and cost to complete each procedure is The procedural requirements, and the associated time collected from local freight forwarders, shipping and cost, for exporting and importing a standard lines, customs brokers, port officials and banks. shipment of goods are listed in the summary below, along with the required documents. Summary of procedures and documents for trading across borders in Austria OECD high income OECD high income Indicator Austria average average Documents to export (number) 3 4 Time to export (days) 9 11 Cost to export (US$ per container) 1,090 1,070 Documents to import (number) 4 4 Time to import (days) 8 10 Cost to import (US$ per container) 1,155 1,090 Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Procedures to export Time (days) Cost (US$) Documents preparation 3 130 Customs clearance and technical control 1 60 Ports and terminal handling 2 250 Inland transportation and handling 3 650 Totals 9 1,090 Procedures to import Time (days) Cost (US$) Documents preparation 3 145 Doing Business 2014 Austria 79 Procedures to import Time (days) Cost (US$) Customs clearance and technical control 1 60 Ports and terminal handling 1 250 Inland transportation and handling 3 700 Totals 8 1,155 Documents to export Documents to import Bill of lading Bill of lading Commercial invoice Commercial invoice Customs export declaration Customs import declaration Source: Doing Business database. Transit document (T1) Doing Business 2014 Austria 80 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 Procedures to enforce a contract through courts encourage new business relationships the courts (number) because businesses know they can rely on the courts if a new customer fails to pay. Speedy trials Steps to file and serve the case are essential for small enterprises, which may lack Steps for trial and judgment the resources to stay in business while awaiting the outcome of a long court dispute. Steps to enforce the judgment Time required to complete procedures What do the indicators cover? (calendar days) Doing Business measures the efficiency of the Time to file and serve the case judicial system in resolving a commercial dispute before local courts. Following the step-by-step Time for trial and obtaining judgment evolution of a standardized case study, it collects Time to enforce the judgment data relating to the time, cost and procedural complexity of resolving a commercial lawsuit. The Cost required to complete procedures (% of ranking on the ease of enforcing contracts is the claim) simple average of the percentile rankings on its Average attorney fees component indicators: procedures, time and cost. Court costs The dispute in the case study involves the breach Enforcement costs of a sales contract between 2 domestic businesses. The 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.  The dispute on the quality of the goods requires an expert opinion.  The buyer orders custom-made goods, then fails to pay.  The judge decides in favor of the seller; there is no appeal.  The seller sues the buyer before a competent court.  The seller enforces the judgment through a public sale of the buyer’s movable assets.  The value of the claim is 200% of income per capita.  The seller requests a pretrial attachment to secure the claim. Doing Business 2014 Austria 81 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial Globally, Austria stands at 6 in the ranking of 189 dispute through the courts in Austria? According to economies on the ease of enforcing contracts (figure data collected by Doing Business, contract enforcement 10.1). The rankings for comparator economies and the takes 397 days, costs 18.0% of the value of the claim regional average ranking provide other useful and requires 25 procedures (see the summary at the benchmarks for assessing the efficiency of contract end of this chapter for details). enforcement in Austria. Figure 10.1 How Austria and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2014 Austria 82 ENFORCING CONTRACTS What are the changes over time? The benchmarks provided by the economies that over help show what is possible in improving the efficiency time have had the best performance regionally or of contract enforcement. And changes in regional globally on the number of steps, time or cost required averages can show where Austria is keeping up—and to enforce a contract through the courts (figure 10.2) where it is falling behind. Figure 10.2 Has enforcing contracts become easier over time? Time (days) Cost (% of claim) Doing Business 2014 Austria 83 ENFORCING CONTRACTS Procedures (number) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. Source: Doing Business database. Doing Business 2014 Austria 84 ENFORCING CONTRACTS Economies in all regions have improved contract often work on reducing backlogs by introducing enforcement in recent years. A judiciary can be periodic reviews to clear inactive cases from the docket improved in different ways. Higher-income economies and by making procedures faster. What reforms tend to look for ways to enhance efficiency by making it easier (or more difficult) to enforce contracts introducing new technology. Lower-income economies has Doing Business recorded in Austria (table 10.1)? Table 10.1 How has Austria made enforcing contracts easier—or not? By Doing Business report year DB year Reform Austria mainstreamed electronic filing by making use of an electronic data channel comprehensive for all correspondence DB2009 between lawyers and the court in civil matters. This cut out manual procedures and made proceedings more efficient. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 85 ENFORCING CONTRACTS What are the details? The indicators reported here for Austria are based COURT NAME on a set of specific procedural steps required to resolve a standardized commercial dispute through the courts (see the section in this chapter City: Vienna on what the indicators cover). These procedures, and the time and cost of completing them, are Claim Value LCU: 71325 identified through study of the codes of civil procedure and other court regulations, as well as Court Name: Vienna Commercial Court through surveys completed by local litigation lawyers (and, in a quarter of the economies The procedures for resolving a commercial lawsuit, and covered by Doing Business, by judges as well). the associated time and cost, are listed in the summary below. Summary of procedures for enforcing a contract in Austria—and the time and cost OECD high income OECD high income Indicator Austria average average Time (days) 397 529 529 Filing and service 30 Trial and judgment 277 Enforcement of judgment 90 Cost (% of claim) 18.0 21.0 21.0 Attorney cost (% of claim) 13.6 Court cost (% of claim) 4.1 Enforcement Cost (% of claim) 0.3 Procedures (number) 25 31 31 Number of procedures (without bonus points) 27 Electronic filing of court cases -1 Specialized commercial courts -1 Total number of procedures (including bonus 25 points) Note: In cases where an economy’s regional classification is “OECD high income,” regional averages above are only displayed once. Doing Business 2014 Austria 86 ENFORCING CONTRACTS No. Procedure Filing and service: Plaintiff requests payment: Plaintiff or his lawyer asks Defendant orally or in writing to comply with the 1 contract. 2 Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to represent him before the court. Plaintiff’s filing of summons and complaint: Plaintiff files his summons and complaint with the court, orally * or in writing. * Plaintiff’s payment of court fees: Plaintiff pays court duties, stamp duties, or any other type of court fee. Assignment of court case to a judge: The court case is assigned to a specific judge through a random * procedure, automated system, ruling of an administrative judge, court officer, etc. Court scrutiny of summons and complaint: A judge examines Plaintiff's summons and complaint for 3 formal requirements. Judge admits summons and complaint: After verifying the formal requirements, the judge decides to * admit Plaintiff’s summons and complaint. 4 Court order for service: Upon Plaintiff’s request, judge orders process be served on Defendant. Mailing of summons and complaint: Court or process server, including (private) bailiff, mails summons * and complaint to Defendant. Trial and judgment: Defendant’s filing of defense or answer to Plaintiff’s claim: Defendant files a written pleading which includes his defense or answer on the merits of the case. Defendant's written answer may or may not 5 include witness statements, expert statements, the documents Defendant relies on as evidence and the legal authori Filing of pleadings: Plaintiff and Defendant file written pleadings and submissions with the court and 6 transmit copies of the written pleadings or submissions to one another. The pleadings may or may not include witness statements or expert (witness) statements. Framing of issues: Plaintiff and Defendant assist the court in framing issues on which evidence is to be 7 presented. 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 6-b of this case) 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 6-b of this case) * Setting of date(s) for oral hearing or trial: The judge sets the date(s) for the oral hearing or trial. Doing Business 2014 Austria 87 No. Procedure Summoning of (expert) witnesses: The court summons (expert) witnesses to appear in court for the oral 8 hearing or trial. (see assumption 6-a) Oral hearing (prevalent in civil law): The parties argue the merits of the case at an oral hearing before the 9 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 10 adjournment during the oral hearing or trial, resulting in an additional or later trial or hearing date. 11 Closing of the evidence period: The court makes the formal decision to close the evidence period. 12 Writing of judgment: The judge produces a written copy of the judgment. 13 Plaintiff's receipt of a copy of written judgment: Plaintiff receives a copy of the written judgment. Notification of Defendant of judgment: Plaintiff or court formally notifies the Defendant of the judgment. 14 The appeal period starts to run the day the Defendant is formally notified of the judgment. Appeal period: By law, Defendant has the opportunity to appeal the judgment during a period specified in 15 the law. Defendant decides not to appeal. Judgment becomes final the day the appeal period ends. Reimbursement by Defendant of Plaintiff's court fees: The judgment obliges Defendant to reimburse 16 Plaintiff for the court fees Plaintiff has advanced, because Defendant has lost the case. Enforcement of judgment: Plaintiff’s hiring of lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented * by a lawyer during the enforcement of judgment phase. Plaintiff’s request for enforcement order: Plaintiff applies to the court to obtain the enforcement order * ('seal' on judgment). Plaintiff’s advancement of enforcement fees: Plaintiff pays the fees related to the enforcement of the 17 judgment. Attachment of enforcement order to judgment: The judge attaches the enforcement order (‘seal’) to the 18 judgment. Delivery of enforcement order: The court's enforcement order is delivered to a court enforcement officer * or a (private) bailiff. Identification of Defendant's assets for attachment by court official or Defendant: Judge, a court 19 enforcement officer, a (private) bailiff or the Defendant himself identifies Defendant's movable assets for attachment. Attachment: Defendant’s movable goods are attached (physically or by registering, marking or separating 20 assets). Report on execution of attachment: A court enforcement officer or private process server delivers a report 21 on the attachment of Defendant's movable goods to the judge. Call for public auction: The judge calls a public auction by, for example, advertising or publication in the 22 newspapers. Doing Business 2014 Austria 88 No. Procedure 23 Sale through public auction: The Defendant’s movable property is sold at public auction. 24 Judge's decision on bids: The judge determines the adequacy of the bids presented at public auction. Distribution of proceeds: The proceeds of the public auction are distributed to various creditors (including 25 Plaintiff), according to the rules of priority. Reimbursement of Plaintiff’s enforcement fees: Defendant reimburses Plaintiff's enforcement fees whi ch 26 Plaintiff had advanced previously. 27 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 2014 Austria 89 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient companies and reallocating the resources of INDICATORS MEASURE inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of Time required to recover debt (years) businesses to normal operation and increase Measured in calendar years returns to creditors. By improving the expectations of creditors and debtors about the outcome of Appeals and requests for extension are insolvency proceedings, well-functioning included insolvency systems can facilitate access to finance, Cost required to recover debt (% of debtor’s save more viable businesses and thereby improve estate) growth and 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 Fees of insolvency administrators of insolvency proceedings involving domestic entities. It does not measure insolvency Lawyers’ fees proceedings of individuals and financial Assessors’ and auctioneers’ fees institutions. The data are derived from survey Other related fees responses by local insolvency practitioners and verified through a study of laws and regulations as Outcome well as public information on bankruptcy systems. Whether business continues operating as a The ranking on the ease of resolving insolvency is going concern or business assets are sold based on the recovery rate, which is recorded as piecemeal cents on the dollar recouped by creditors through Recovery rate for creditors (cents on the reorganization, liquidation or debt enforcement dollar) (foreclosure) proceedings. The recovery rate is a Measures the cents on the dollar recovered function of time, cost and other factors, such as by creditors lending rate and the likelihood of the company continuing to operate. Present value of debt recovered To make the data comparable across economies, Official costs of the insolvency proceedings Doing Business uses several assumptions about the are deducted business and the case. It assumes that the Depreciation of furniture is taken into company: account  Is a domestically owned, limited liability Outcome for the business (survival or not) company operating a hotel. affects the maximum value that can be recovered  Operates in the economy’s largest business city.  Has 201 employees, 1 main secured  Has a higher value as a going concern—and creditor and 50 unsecured creditors. the efficient outcome is either reorganization or sale as a going concern, not piecemeal liquidation. Doing Business 2014 Austria 90 RESOLVING INSOLVENCY Where does the economy stand today? Speed, low costs and continuation of viable businesses concern. The average recovery rate is 82.4 cents on the characterize the top-performing economies. How dollar. efficient are insolvency proceedings in Austria? Globally, Austria stands at 14 in the ranking of 189 According to data collected by Doing Business, economies on the ease of resolving insolvency (figure resolving insolvency takes 1.1 years on average and 11.1). The rankings for comparator economies and the costs 10% of the debtor’s estate, with the most likely regional average ranking provide other useful outcome being that the company will be sold as going benchmarks for assessing the efficiency of insolvency proceedings in Austria. Figure 11.1 How Austria and comparator economies rank on the ease of resolving insolvency Source: Doing Business database. Doing Business 2014 Austria 91 RESOLVING INSOLVENCY What are the changes over time? The benchmarks provided by the economies that over possible in improving the efficiency of insolvency time have had the best performance regionally or proceedings. And changes in regional averages can globally on the time or cost of insolvency proceedings show where Austria is keeping up—and where it is or on the recovery rate (figure 11.2) help show what is falling behind. Figure 11.2 Has resolving insolvency become easier over time? Time (years) Cost (% of estate) Doing Business 2014 Austria 92 RESOLVING INSOLVENCY Recovery rate (cents on the dollar) Note: DB2013 rankings shown are not last year’s published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year. “No practice” indicates that in each of the previous 5 years the economy had no cases involving a judicial reorganization, judicial liquidation or debt enforcement procedure (foreclosure). This means that creditors are unlikely to recover their money through a formal legal process (in or out of court). The recovery rate for “no practice” economies is 0. Regional averages on time and cost exclude economies with a “no practice” mark. Source: Doing Business database. Doing Business 2014 Austria 93 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 Austria (table 11.1)? even viable businesses are liquidated. This is starting to Table 11.1 How has Austria made resolving insolvency easier—or not? By Doing Business report year DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. Austria passed a new law that simplifies restructuring DB2012 proceedings and gives preferential consideration to the interests of the debtors. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2014 Austria 94 EMPLOYING WORKERS Doing Business measures flexibility in the regulation of employing workers methodology proposed by the employment, specifically as it affects the hiring and consultative group are available on the Doing Business redundancy of workers and the rigidity of working website (http://www.doingbusiness.org). The data on hours. Over the period from 2007 to 2011 employing workers are based on a detailed survey of improvements were made to align the methodology employment regulations that is completed by local for the employing workers indicators with the letter lawyers and public officials. Employment laws and and spirit of the International Labour Organization regulations as well as secondary sources are reviewed (ILO) conventions. Only 4 of the 188 ILO conventions to ensure accuracy. cover areas measured by Doing Business: employee To make the data comparable across economies, termination, weekend work, holiday with pay and night several assumptions about the worker and the work. The Doing Business methodology is fully business are used. consistent with these 4 conventions. The ILO conventions covering areas related to the Employing The worker: Workers indicators do not include the ILO core labor  Earns a salary plus benefits equal to the standards—8 conventions covering the right to economy’s average wage during the entire collective bargaining, the elimination of forced labor, period of his employment. the abolition of child labor and equitable treatment in  Has a pay period that is the most common for workers in the economy. employment practices.  Is a lawful citizen who belongs to the same race and religion as the majority of the Between 2009 and 2011 the World Bank Group worked economy’s population. with a consultative group—including labor lawyers,  Resides in the economy’s largest business city. employer and employee representatives, and experts  Is not a member of a labor union, unless from the ILO, OECD, civil society and the private membership is mandatory. sector—to review the employing workers methodology and explore future areas of research. A i The business:  Is a limited liability company. full report with the conclusions of the consultative  Operates in the economy’s largest business group is available at city. http://www.doingbusiness.org/methodology/employin  Is 100% domestically owned. g-workers.  Operates in the manufacturing sector.  Has 60 employees. This year Doing Business continued research collecting  Is subject to collective bargaining agreements additional data on regulations covering the in economies where such agreements cover probationary period for new employees. more than half the manufacturing sector and apply even to firms not party to them. Doing Business 2014 presents the data on the  Abides by every law and regulation but does not grant workers more benefits than employing workers indicators in an annex. The report mandated by law, regulation or (if applicable) does not present rankings of economies on the collective bargaining agreement. employing workers indicators nor include the topic in the aggregate ranking on the ease of doing business. Detailed data collected on labor regulations and the Doing Business 2014 Austria 95 EMPLOYING WORKERS What do some of the data show? One of the employing workers indicators is the worker in his or her first job. Doing Business data show difficulty of hiring index. This measure assesses, among the trend in the minimum wage applied by Austria other things, the minimum wage for a 19-year-old (figure 12.1). Figure 12.1 Has the minimum wage for a 19-year-old worker or an apprentice increased over time? Minimum wage (US$ per month) Note: A horizontal line along the x-axis of the figure indicates that the economy has no minimum wage. Source: Doing Business database. Doing Business 2014 Austria 96 EMPLOYING WORKERS Employment laws are needed to protect workers from past 5 years did so in ways that increased labor market arbitrary or unfair treatment and to ensure efficient flexibility. What changes did Austria adopt that contracting between employers and workers. Many affected the Doing Business indicators on employing economies that changed their labor regulations in the workers (table 12.1)? Table 12.1 What changes did Austria make in employing workers in 2013? DB year Reform DB2009 No reform as measured by Doing Business. DB2010 No reform as measured by Doing Business. DB2011 No reform as measured by Doing Business. DB2012 No reform as measured by Doing Business. DB2013 No reform as measured by Doing Business. DB2014 No reform as measured by Doing Business. Source: Doing Business database. Doing Business 2014 Austria 97 EMPLOYING WORKERS What are the details? The data on employing workers reported here for public officials. Employment laws and regulations as Austria are based on a detailed survey of employment well as secondary sources are reviewed to ensure regulations that is completed by local lawyers and accuracy. Rigidity of employment index The rigidity of employment index measures 3 areas of labor regulation: difficulty of hiring, rigidity of hours and difficulty of redundancy. Difficulty of hiring index The difficulty of hiring index measures whether fixed- worker. (The average value added per worker is the term contracts are prohibited for permanent tasks; the ratio of an economy’s gross national income per capita maximum cumulative duration of fixed-term contracts; to the working-age population as a percentage of the and the ratio of the minimum wage for a trainee or total population.) first-time employee to the average value added per Difficulty of hiring index Data Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage for a 19-year old worker or an apprentice (US$/month) 725.5 Ratio of minimum wage to value added per worker 0.12 Source: Doing Business database. Doing Business 2014 Austria 98 EMPLOYING WORKERS Rigidity of hours index The rigidity of hours index has 5 components: whether respond to a seasonal increase in production; and there are restrictions on night work; whether there are whether the average paid annual leave for a worker restrictions on weekly holiday work; whether the with 1 year of tenure, a worker with 5 years and a workweek can consist of 5.5 days or is more than 6 worker with 10 years is more than 26 working days or days; whether the workweek can extend to 50 hours or fewer than 15 working days. more (including overtime) for 2 months a year to Rigidity of hours index Data Standard workday in manufacturing (hours) 8 hours 50-hour workweek allowed for 2 months a year in case of a seasonal Yes increase in production? Maximum working days per week 5.5 Premium for night work (% of hourly pay) in case of continuous 17% operations Premium for work on weekly rest day (% of hourly pay) in case of 100% continuous operations Major restrictions on night work in case of continuous operations? No Major restrictions on weekly holiday in case of continuous operations? No Paid annual leave for a worker with 1 year of tenure (in working days) 25.0 Paid annual leave for a worker with 5 years of tenure (in working days) 25.0 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 25.0 working days) Source: Doing Business database. Doing Business 2014 Austria 99 EMPLOYING WORKERS Difficulty of redundancy index The difficulty of redundancy index has 8 components: worker; whether the employer needs approval from a whether redundancy is disallowed as a basis for third party to terminate a group of 9 redundant terminating workers; whether the employer needs to workers; whether the law requires the employer to notify a third party (such as a government agency) to reassign or retrain a worker before making the worker terminate 1 redundant worker; whether the employer redundant; whether priority rules apply for needs to notify a third party to terminate a group of 9 redundancies; and whether priority rules apply for redundant workers; whether the employer needs reemployment. approval from a third party to terminate 1 redundant Difficulty of redundancy index Data Dismissal due to redundancy allowed by law? Yes Third-party notification if 1 worker is dismissed? Yes 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? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Source: Doing Business database. Doing Business 2014 Austria 100 EMPLOYING WORKERS Redundancy cost The redundancy cost indicator measures the cost of notice requirements and severance payments advance notice requirements, severance payments and applicable to a worker with 1 year of tenure, a worker penalties due when terminating a redundant worker, with 5 years and a worker with 10 years is used to expressed in weeks of salary. The average value of assign the score. Redundancy cost indicator Data Notice period for redundancy dismissal (for a worker with 1 year of tenure, in salary 2.0 weeks) Notice period for redundancy dismissal (for a worker with 5 years of tenure, in 2.0 salary weeks) Notice period for redundancy dismissal (for a worker with 10 years of tenure, in 2.0 salary weeks) Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years 2.0 of tenure, in salary weeks) Severance pay for redundancy dismissal (for a worker with 1 year of tenure, in 0.0 salary weeks) Severance pay for redundancy dismissal (for a worker with 5 years of tenure, in 0.0 salary weeks) Severance pay for redundancy dismissal (for a worker with 10 years of tenure, in 0.0 salary weeks) Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years 0.0 of tenure, in salary weeks) Source: Doing Business database. Doing Business 2014 Austria 101 DATA NOTES The indicators presented and analyzed in Doing rounds of verification, leading to revisions or Business measure business regulation and the expansions of the information collected. protection of property rights—and their effect on businesses, especially small and medium-size domestic firms. First, the indicators document the complexity of ECONOMY CHARACTERISTICS regulation, such as the number of procedures to start a business or to register and transfer commercial property. Second, they gauge the time and cost to Gross national income per capita achieve a regulatory goal or comply with regulation, such as the time and cost to enforce a contract, go Doing Business 2014 reports 2012 income per capita through bankruptcy or trade across borders. Third, as published in the World Bank’s World Development they measure the extent of legal protections of Indicators 2013. Income is calculated using the Atlas property, for example, the protections of investors method (current U.S. dollars). For cost indicators against looting by company directors or the range of expressed as a percentage of income per capita, assets that can be used as collateral according to 2012 gross national income (GNI) in U.S. dollars is secured transactions laws. Fourth, a set of indicators used as the denominator. GNI data were not documents the tax burden on businesses. Finally, a set available from the World Bank for Afghanistan, The of data covers different aspects of employment Bahamas, Bahrain, Barbados, Brunei Darussalam, regulation. The 11 sets of indicators measured in Djibouti, the Islamic Republic of Iran, Kuwait, Libya, Doing Business were added over time, and the sample Myanmar, New Zealand, Oman, San Marino, the of economies expanded. Syrian Arab Republic, West Bank and Gaza, and the Republic of Yemen. In these cases GDP or GNP per The data for all sets of indicators in Doing Business 2 capita data and growth rates from other sources, 2014 are for June 2013. such as the International Monetary Fund’s World Economic Outlook database and the Economist Intelligence Unit, were used. Methodology Region and income group The Doing Business data are collected in a standardized way. To start, the Doing Business team, Doing Business uses the World Bank regional and with academic advisers, designs a questionnaire. The income group classifications, available at questionnaire uses a simple business case to ensure http://data.worldbank.org/about/country- classifications. The World Bank does not assign comparability across economies and over time—with regional classifications to high-income economies. assumptions about the legal form of the business, its For the purpose of the Doing Business report, high- size, its location and the nature of its operations. income OECD economies are assigned the “regional” Questionnaires are administered to more than 10,200 classification OECD high income. Figures and tables local experts, including lawyers, business consultants, presenting regional averages include economies accountants, freight forwarders, government officials from all income groups (low, lower middle, upper and other professionals routinely administering or middle and high income). advising on legal and regulatory requirements (table Population 21.2). These experts have several rounds of interaction with the Doing Business team, involving conference Doing Business 2014 reports midyear 2012 calls, written correspondence and visits by the team. population statistics as published in World For Doing Business 2014 team members visited 33 Development Indicators 2013. economies to verify data and recruit respondents. The data from questionnaires are subjected to numerous The Doing Business methodology offers several advantages. It is transparent, using factual information about what laws and regulations say and allowing 2 The data for paying taxes refer to January – December 2012. multiple interactions with local respondents to clarify Doing Business 2014 Austria 102 potential misinterpretations of questions. Having entrepreneurs reported in the World Bank Enterprise representative samples of respondents is not an issue; Surveys or other perception surveys. Doing Business is not a statistical survey, and the texts This year Doing Business completed subnational of the relevant laws and regulations are collected and studies in Colombia, Italy and the city of Hargeisa answers checked for accuracy. The methodology is (Somaliland) and is currently updating indicators in inexpensive and easily replicable, so data can be Egypt, Mexico and Nigeria. Doing Business also collected in a large sample of economies. Because published regional studies for the g7+ and the East standard assumptions are used in the data collection, African Community. The g7+ group is a country- comparisons and benchmarks are valid across owned and country-led global mechanism established economies. Finally, the data not only highlight the in April 2010 to monitor, report and draw attention to extent of specific regulatory obstacles to business but the unique challenges faced by fragile states. The also identify their source and point to what might be member countries included in the report are reformed. Information on the methodology for each Afghanistan, Burundi, the Central African Republic, Doing Business topic can be found on the Doing Chad, the Comoros, the Democratic Republic of Business website at Congo, Côte d’Ivoire, Guinea, Guinea-Bissau, Haiti, http://www.doingbusiness.org/methodology. Liberia, Papua New Guinea, Sierra Leone, the Solomon Islands, South Sudan, Timor-Leste and Togo. Limits to what is measured The subnational studies point to differences in business regulation and its implementation —as well as The Doing Business methodology has 5 limitations that in the pace of regulatory reform—across cities in the should be considered when interpreting the data. First, same economy. For several economies subnational the collected data refer to businesses in the economy’s studies are now periodically updated to measure largest business city (which in some economies differs change over time or to expand geographic coverage from the capital) and may not be representative of to additional cities. This year that is the case for all the regulation in other parts of the economy. To address subnational studies published. this limitation, subnational Doing Business indicators were created (box 21.1). Second, the data often focus on a specific business form—generally a limited liability company (or its legal equivalent) of a specified Changes in what is measured size—and may not be representative of the regulation The methodology for 2 indicator sets—trading across on other businesses, for example, sole proprietorships. borders and paying taxes—was updated this year. For Third, transactions described in a standardized case trading across borders, documents that are required scenario refer to a specific set of issues and may not purely for purposes of preferential treatment are no represent the full set of issues a business encounters. longer included in the list of documents (for example, Fourth, the measures of time involve an element of a certificate of origin if the use is only to qualify for a judgment by the expert respondents. When sources preferential tariff rate under trade agreements). For indicate different estimates, the time indicators paying taxes, the value of fuel taxes is no longer reported in Doing Business represent the median included in the total tax rate because of the difficulty values of several responses given under the of computing these taxes in a consistent way across all assumptions of the standardized case. economies covered. The fuel tax amounts are in most cases very small, and measuring these amounts is Finally, the methodology assumes that a business has often complicated because they depend on fuel full information on what is required and does not consumption. Fuel taxes continue to be counted in the waste time when completing procedures. In practice, number of payments. completing a procedure may take longer if the business lacks information or is unable to follow up In a change involving several indicator sets, the rule promptly. Alternatively, the business may choose to establishing that each procedure must take at least 1 disregard some burdensome procedures. For both day was removed for procedures that can be fully reasons the time delays reported in Doing Business completed online in just a few hours. This change 2014 would differ from the recollection of affects the time indicator for starting a business, Doing Business 2014 Austria 103 dealing with construction permits and registering with one another, while the distance to frontier property. For procedures that can be fully completed measure benchmarks economies to the frontier in 3 online, the duration is now set at half a day rather than regulatory practice, measuring the absolute distance to a full day. the best performance on each indicator. Both measures can be used for comparisons over time. The threshold for the total tax rate introduced in 2011 When compared across years, the distance to frontier for the purpose of calculating the ranking on the ease measure shows how much the regulatory environment of paying taxes was updated. All economies with a for local entrepreneurs in each economy has changed total tax rate below the threshold (which is calculated over time in absolute terms, while the ease of doing and adjusted on a yearly basis) receive the same business ranking can show only relative change. ranking on the total tax rate indicator. The threshold is not based on any economic theory of an “optimal tax Ease of doing business rate” that minimizes distortions or maximizes efficiency The ease of doing business index ranks economies in the tax system of an economy overall. Instead, it is from 1 to 189. For each economy the ranking is mainly empirical in nature, set at the lower end of the calculated as the simple average of the percentile distribution of tax rates levied on medium-size rankings on each of the 10 topics included in the index enterprises in the manufacturing sector as observed in Doing Business 2014: starting a business, dealing through the paying taxes indicators. This reduces the with construction permits, getting electricity, bias in the indicators toward economies that do not registering property, getting credit, protecting need to levy significant taxes on companies like the investors, paying taxes, trading across borders, Doing Business standardized case study company enforcing contracts, and resolving insolvency. The because they raise public revenue in other ways—for employing workers indicators are not included in this example, through taxes on foreign companies, through year’s aggregate ease of doing business ranking. taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of Construction of the ease of doing business index the methodology). This year the threshold is 25,5%. Here is one example of how the ease of doing business index is constructed. In Denmark it takes 4 procedures, 5.5 days and 0.2% of annual income per capita in fees Data challenges and revisions to open a business. The minimum capital requirement Most laws and regulations underlying the Doing is 24% of annual income per capita. On these 4 Business data are available on the Doing Business indicators Denmark ranks in the 12th, 11th, 1st and website at http://www.doingbusiness.org. All the 79th percentiles. So on average Denmark ranks in the sample questionnaires and the details underlying the 25th percentile on the ease of starting a business. It indicators are also published on the website. Questions ranks in the 21st percentile on getting credit, 19th on the methodology and challenges to data can be percentile on paying taxes, 27th percentile on submitted through the website’s “Ask a Question” enforcing contracts, 5th percentile on resolving function at http://www.doingbusiness.org. insolvency and so on. Higher rankings indicate simpler regulation and stronger protection of property rights. Ease of doing business and distance to The simple average of Denmark’s percentile rankings frontier on all topics is 17th. When all economies are ordered Doing Business 2014 presents results for 2 aggregate by their average percentile rankings, Denmark stands measures: the aggregate ranking on the ease of doing at 5 in the aggregate ranking on the ease of doing business and the distance to frontier measure. The business. ease of doing business ranking compares economies More complex aggregation methods—such as 3 For getting electricity the rule that each procedure must take a principal components and unobserved components— minimum of 1 day still applies because in practice there are no yield a ranking nearly identical to the simple average cases in which procedures can be fully completed online in less than a day. For example, even though in some cases it is possible to apply for an electricity connection online, additional requirements mean that the process cannot be completed in less than 1 day. Doing Business 2014 Austria 104 4 used by Doing Business. Thus, Doing Business uses 58 on enforcing contracts, 116 on dealing with the simplest method: weighting all topics equally and, construction permits and 145 on getting electricity. within each topic, giving equal weight to each of the Variation in performance across the indicator sets is topic components. not at all unusual. It reflects differences in the degree If an economy has no laws or regulations covering a of priority that government authorities give to specific area—for example, insolvency—it receives a particular areas of business regulation reform and the “no practice” mark. Similarly, an economy receives a ability of different government agencies to deliver “no practice” or “not possible” mark if regulation exists tangible results in their area of responsibility. but is never used in practice or if a competing Distance to frontier measure regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom o f the A drawback of the ease of doing business ranking is ranking on the relevant indicator. that it can measure the regulatory performance of economies only relative to the performance of others. The ease of doing business index is limited in scope. It It does not provide information on how the absolute does not account for an economy’s proximity to large quality of the regulatory environment is improving markets, the quality of its infrastructure services (other over time. Nor does it provide information on how than services related to trading across borders and large the gaps are between economies at a single getting electricity), the strength of its financial system, point in time. the security of property from theft and looting, macroeconomic conditions or the strength of The distance to frontier measure is designed to underlying institutions. address both shortcomings, complementing the ease of doing business ranking. This measure illustrates the Variability of economies’ rankings across topics distance of an economy to the “frontier,” and the Each indicator set measures a different aspect of the change in the measure over time shows the extent to business regulatory environment. The rankings of an which the economy has closed this gap. The frontier is economy can vary, sometimes significantly, across a score derived from the most efficient practice or indicator sets. The average correlation coefficient highest score achieved on each of the component between the 10 indicator sets included in the indicators in 10 Doing Business indicator sets aggregate ranking is 0.38, and the coefficients (excluding the employing workers indicators) by any between any 2 sets of indicators range from 0.18 economy. In starting a business, for example, Canada (between getting electricity and getting credit) to 0.58 and New Zealand have achieved the highest (between trading across borders and resolving performance on the number of procedures required (1) insolvency and between trading across borders and and on the time (0.5 days), Denmark and Slovenia on getting electricity). These correlations suggest that the cost (0% of income per capita) and Chile, Zambia economies rarely score universally well or universally and 99 other economies on the paid-in minimum badly on the indicators. capital requirement (0% of income per capita) (table 22.2). Consider the example of Canada. It stands at 19 in the aggregate ranking on the ease of doing business. Its Calculating the distance to frontier for each economy ranking is 2 on starting a business, 4 on protecting involves 2 main steps. First, individual indicator scores investors, and 8 on paying taxes. But its ranking is only are normalized to a common unit: except for the total tax rate, each of the 31 component indicators y is rescaled to (max − y)/(max − min), with the minimum 4 See Simeon Djankov, Darshini Manraj, Caralee McLiesh and Rita Ramalho, “Doing Business Indicators: Why Aggregate, and How to value (min) representing the frontier—the highest Do It” (World Bank, Washington, DC, 2005). Principal components performance on that indicator across all economies and unobserved components methods yield a ranking nearly since 2003 or the first year the indicator was collected. 5 identical to that from the simple average method because both these methods assign roughly equal weights to the topics, since the For the total tax rate, consistent with the calculation of pairwise correlations among indicators do not differ much. An alternative to the simple average method is to give different weights to the topics, depending on which are considered of more or less 5 Even though scores for the distance to frontier are calculated from importance in the context of a specific economy. 2005, data from as early as 2003 are used to define the frontier Doing Business 2014 Austria 105 the rankings, the frontier is defined as the total tax rate Economies that improved the most across 3 or at the 15th percentile of the overall distribution of more Doing Business topics in 2012/13 total tax rates for all years. Second, for each economy Doing Business 2014 uses a simple method to calculate the scores obtained for individual indicators are which economies improved the most in the ease of aggregated through simple averaging into one doing business. First, it selects the economies that in distance to frontier score, first for each topic and then 2012/13 implemented regulatory reforms making it across all topics. An economy’s distance to frontier is easier to do business in 3 or more of the 10 topics indicated on a scale from 0 to 100, where 0 represents included in this year’s ease of doing business ranking. 6 the lowest performance and 100 the frontier. Twenty-nine economies meet this criterion: Azerbaijan, The maximum (max) and minimum (min) observed Belarus, Burundi, Côte d’Ivoire, Croatia, Djibouti, values are computed for all economies included in the Gabon, Guatemala, Guinea, Italy, Kosovo, Latvia, the Doing Business sample since 2003 and for all years former Yugoslav Republic of Macedonia, Malaysia, (from 2003 to 2013). To mitigate the effects of extreme Mauritius, Mexico, Moldova, Mongolia, Morocco, outliers in the distributions of the rescaled data (very Panama, the Philippines, the Republic of Congo, few economies need 694 days to complete the Romania, the Russian Federation, Rwanda, Sri Lanka, procedures to start a business, but many need 9 days), Ukraine, Uzbekistan and the United Arab Emirates. th the maximum (max) is defined as the 95 percentile of Second, Doing Business sorts these economies on the the pooled data for all economies and all years for increase in their distance to frontier measure from the each indicator. The exceptions are the getting credit, previous year using comparable data. protecting investors and resolving insolvency Selecting the economies that implemented regulatory indicators, whose construction precludes outliers. In reforms in at least 3 topics and improved the most in addition, the cost to export and cost to import for each the distance to frontier measure is intended to year are divided by the GDP deflator, so as to take the highlight economies with ongoing, broadbased reform general price level into account when benchmarking programs. The criterion for identifying the top these absolute-cost indicators across economies with improvers was changed from last year. The different inflation trends. The base year for the deflator improvement in ease of doing business ranking is no is 2013 for all economies. longer used. The improvement in the distance to The difference between an economy’s distance to frontier measure is used instead because under this frontier score in any previous year and its score in measure economies are sorted according to their abs- 2013 illustrates the extent to which the economy has olute improvement instead of relative improvement. closed the gap to the frontier over time. And in any given year the score measures how far an economy is from the highest performance at that time. Take Colombia, which has a score of 70.5 on the distance to frontier measure for 2014. This score indicates that the economy is 29.5 percentage points away from the frontier constructed from the best performances across all economies and all years. Colombia was further from the frontier in 2009, with a score of 66.2. The difference between the scores shows an improvement over time. The distance to frontier measure can also be used for comparisons across economies in the same year, complementing the ease of doing business ranking. For example, Colombia stands at 63 this year in the ease of doing business ranking, while Peru, which is 6 Doing Business reforms making it more difficult to do business are 29.3 percentage points from the frontier, stands at 42. subtracted from the total number of those making it easier to do business. Doing Business 2014 Austria 107 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Doing Business reforms News on the Doing Business project Short summaries of DB2014 business regulation http://www.doingbusiness.org reforms, lists of reforms since DB2008 and a ranking simulation tool Rankings http://www.doingbusiness.org/reforms/ How economies rank—from 1 to 189 http://www.doingbusiness.org/rankings/ Historical data Customized data sets since DB2004 Data http://www.doingbusiness.org/custom-query/ All the data for 189 economies—topic rankings, indicator values, lists of regulatory procedures and Law library details underlying indicators Online collection of business laws and regulations http://www.doingbusiness.org/data/ relating to business and gender issues http://www.doingbusiness.org/law-library/ Reports http://wbl.worldbank.org/ Access to Doing Business reports as well as subnational and regional reports, reform case Contributors studies and customized economy and regional More than 10,200 specialists in 189 economies profiles who participate in Doing Business http://www.doingbusiness.org/reports/ http://www.doingbusiness.org/contributors/doing- business/ Methodology The methodologies and research papers Entrepreneurship data underlying Doing Business Data on business density for 139 economies http://www.doingbusiness.org/methodology/ http://www.doingbusiness.org/data/exploretopics/e ntrepreneurship Research Abstracts of papers on Doing Business topics and Doing Business iPhone App related policy issues Doing Business at a Glance App presents the full http://www.doingbusiness.org/research/ report, rankings and highlights http://www.doingbusiness.org/specialfeatures/ iphone Doing Business 2014 Austria 108