Doing Business 2018 Pakistan Economy Pro le of Pakistan Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Pakistan Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region South Asia DB 2018 Rank 190 1 Pakistan Income Category Lower middle income 147 Population 193,203,476 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 1,510 0 100 51.65 City Covered Karachi DB 2018 Distance to Frontier (DTF) 0 100 65.29: China (Rank: 78) 60.76: India (Rank: 100) 53.64: Regional Average (South Asia) 51.65: Pakistan (Rank: 147) 40.99: Bangladesh (Rank: 177) Page 3   aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Pakistan Ease of Doing Business in Region South Asia DB 2018 Rank 190 1 Pakistan Income Category Lower middle income 147 Population 193,203,476 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 1,510 0 100 51.65 City Covered Karachi DB 2018 Distance to Frontier (DTF) 0 100 65.29: China (Rank: 78) 60.76: India (Rank: 100) 53.64: Regional Average (South Asia) 51.65: Pakistan (Rank: 147) 40.99: Bangladesh (Rank: 177) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Pakistan 1 20 28 55 82 82 Rank 105 109 142 141 136 156 167 170 171 163 172 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Pakistan 100 78.61 80 71.67 59.72 60 DTF 45.00 46.43 45.83 42.39 41.41 41.94 43.49 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.34 Change:+0.71 Change:0.00 Investors Change:-0.19 Borders Change:0.00 Change:+0.82 Change:+0.75 Permits Change:+1.67 Change:+2.53 Change:+0.50 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.34 Change:+0.71 Change:0.00 Investors Change:-0.19 Borders Change:0.00 Change:+0.82 Change:+0.75 Permits Change:+1.67 Change:+2.53 Doing Business 2018 Pakistan Change:+0.50 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Page 5   Starting a Business - Karachi before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Pakistan Starting a Business - Karachi Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement PKR 0 City Covered Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Procedure – Men (number) 12 7.9 4.9 1.00 (New Zealand) Time – Men (days) 17.5 15.4 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 7.6 21.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 12 8.1 4.9 1.00 (New Zealand) Time – Women (days) 17.5 15.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 7.6 21.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 0.2 8.7 0.00 (113 Economies) Figure – Starting a Business in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.47: China (Rank: 93) 80.67: Bangladesh (Rank: 131) 78.61: Karachi 75.40: India (Rank: 156) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Karachi – Procedure, Time and Cost Time Cost 7 16 6 14 ome per capita) 5 12 (days) 10 Page 6   4 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Starting a Business in Karachi – Procedure, Time and Cost Time Cost 7 16 6 14 Cost (% of income per capita) 5 12 Time (days) 10 4 8 3 6 2 4 1 2 0 0 1 2 3 4 5 6 7 *8 *9 * 10 * 11 * 12 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve a company name online via the Securities and Exchange 1 day PKR 200 Commission of Pakistan (SECP) E-services website Agency : Securities and Exchange Commission of Pakistan (SECP) The entrepreneur can check the availability of the desired company name via the website of the Securities and Exchange Commission of Pakistan (SECP). To reserve a company name, the applicant proposes one or more names in order of preference, and submits the application form to SECP either online or in person. The o cial con rmation (or rejection) of the chosen name and its availability is received by email or via courier upon payment of the name reservation fee of PKR 200 (online name reservation) or PKR 500 (o ine name reservation) at the SECP-designated bank. The approved name is reserved for 90 days, during which the company must be incorporated. SECP recently introduced the Fast Track Registration Services (FTRS), processing the company name reservation applications within 4 hours of submission for an expedited fee of PKR 500 online and PKR 1,000 in person payable in addition to the normal fees. 2 Pay the name reservation and company incorporation fees at the MCB 1 day included in Bank procedure 1 (name Agency : Bank (MCB) reservation fees) and procedure 3 The company must pay the name reservation and incorporation fees at the (registration fees) designated MCB Bank (formerly Muslim Commercial Bank) or at the United Bank Limited. The form indicating the amount due is obtained from SECP either online (downloaded) or on-site, or from the bank. Page 7   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Pakistan Details – Starting a Business in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve a company name online via the Securities and Exchange 1 day PKR 200 Commission of Pakistan (SECP) E-services website Agency : Securities and Exchange Commission of Pakistan (SECP) The entrepreneur can check the availability of the desired company name via the website of the Securities and Exchange Commission of Pakistan (SECP). To reserve a company name, the applicant proposes one or more names in order of preference, and submits the application form to SECP either online or in person. The o cial con rmation (or rejection) of the chosen name and its availability is received by email or via courier upon payment of the name reservation fee of PKR 200 (online name reservation) or PKR 500 (o ine name reservation) at the SECP-designated bank. The approved name is reserved for 90 days, during which the company must be incorporated. SECP recently introduced the Fast Track Registration Services (FTRS), processing the company name reservation applications within 4 hours of submission for an expedited fee of PKR 500 online and PKR 1,000 in person payable in addition to the normal fees. 2 Pay the name reservation and company incorporation fees at the MCB 1 day included in Bank procedure 1 (name Agency : Bank (MCB) reservation fees) and procedure 3 The company must pay the name reservation and incorporation fees at the (registration fees) designated MCB Bank (formerly Muslim Commercial Bank) or at the United Bank Limited. The form indicating the amount due is obtained from SECP either online (downloaded) or on-site, or from the bank. The SECP launched online payment facility for its stakeholders in April 2014, therefore, online ling and payment is now possible for SECP’s online lers, without visiting the Bank or the SECP o ces. 3 Obtain PIN for company registration Less than one day PKR 100 Agency : Securities and Exchange Commission of Pakistan (SECP) (online procedure) As of April 2017, SEC has allowed for the registration for company incorporation to be submitted through inputting the PIN number instead of the digital certi cate. As such, companies now just need to input the following information into the system his/her 13 digit CNIC Number /NICOP /POC without dashes. The user will also enter his/her personal details i.e. Full Name, Father’s/Spouse Name, Gender, Date of Birth, Current Address, Permanent Address, Mobile Number, Email Address. The user will then enter his/her proposed password. In next section, the user is required to select three security Questions and then provide answer to those questions. The user will then click the Signup button to proceed further. After veri cation, the system will send security code to User on his/her provided Mobile Number and also on his/her email address. Upon submission, the system will send PIN to User on the provided Mobile No. through SMS and also on the provided Email Address. This system generated PIN will be required for company incorporation. 4 Complete online registration on the Securities & Exchange Commission 2 days See comments of Pakistan (SECP) e-portal Agency : Securities and Exchange Commission of Pakistan (SECP) Page 8   the provided Email Address. This system generated PIN will be required for Doing company incorporation. Business 2018 Pakistan 4 Complete online registration on the Securities & Exchange Commission 2 days See comments of Pakistan (SECP) e-portal Agency : Securities and Exchange Commission of Pakistan (SECP) Registration can either be completed online or in person at SECP. The following documents are required for submission: a. Form 1: Declaration of compliance b. Form 21: Identi cation of the location of the o ce c. Form 29: Particulars of directors, secretary, chief accountant, auditors, and others d. One copy of the Memorandum and Articles of Associations with the signature of each member (in presence of a witness) The fees for incorporation of a company was updated on May 24, 2016 according to the S.R.O 448. The fees depend on the authorized capital as: - Online submission: PKR 1,000 for registration of a company whose nominal share capital does not exceed PKR 100,000 and an additional fee of PKR 500 for every PKR 100,000 of nominal share capital or part thereof, up to PKR 10,000,000. The online ling fee is PKR 400 per document. A con rmation of the online or physical submission is received instantly, and the actual certi cate a few days later via email or courier. The entrepreneur can register with any Company Registration O ce, irrespective of the jurisdiction. All regional SECP o ces are computerized. In February 2012, SECP launched the Fast Track Registration Services (FTRS), under which the incorporation of a company can take place within 4 hours for an expedited fee of PKR 20,000 for on-site incorporation and PKR 10,000 for online incorporation payable in addition to the normal fees above. To register a company online, the entrepreneur must rst obtain a digital signature through the National Institutional Facilitation Technologies (NIFT) system. If the application is received with less than four hours remaining in the working day, the same shall be disposed of in the next working day. 5 Open a bank account for tax registration 1 day No charge Agency : Bank A bank account number in the name of the company is needed in order to register for taxes. A copy of the registration certi cate is needed in order to open a bank account. 6 Apply for a national tax number (NTN) and register for income tax 2 days no charge Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Karachi To apply, the company must submit a simple one page form called the NTN Form as well as a proof of registration, the Memorandum and Articles of Association, bank account number, copies of the national identity cards of its directors, and an attestation of the registered business address at the nearest tax facilitation counter of the Regional Tax O ce in Pakistan. All applications are forwarded to the Central Registration O ce (CRO) in Islamabad that allocates a uniform NTN number to each company. The center processes the application and issues the NTN at no charge. The certi cate is then sent to the registered address of the applicant. The company can track the application online or through the RTO helpline. If undelivered, the NTN certi cation can be collected from the speci ed o ce at the Central Board of Revenue. Recently, the Federal Board of Revenue launched electronic services enabling online applications for NTN numbers to be made through its website: www.fbr.gov.pk. Page 9   register for taxes. A copy of the registration certi cate is needed in order to Doing open account.Pakistan a bank2018 Business 6 Apply for a national tax number (NTN) and register for income tax 2 days no charge Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Karachi To apply, the company must submit a simple one page form called the NTN Form as well as a proof of registration, the Memorandum and Articles of Association, bank account number, copies of the national identity cards of its directors, and an attestation of the registered business address at the nearest tax facilitation counter of the Regional Tax O ce in Pakistan. All applications are forwarded to the Central Registration O ce (CRO) in Islamabad that allocates a uniform NTN number to each company. The center processes the application and issues the NTN at no charge. The certi cate is then sent to the registered address of the applicant. The company can track the application online or through the RTO helpline. If undelivered, the NTN certi cation can be collected from the speci ed o ce at the Central Board of Revenue. Recently, the Federal Board of Revenue launched electronic services enabling online applications for NTN numbers to be made through its website: www.fbr.gov.pk. 7 Apply for a Sales Tax Number (STN) at the tax facilitation center of the 1 day no charge Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Karachi Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Karachi According to the Sections 14, 15 and 16 of the Sales Tax Act 1990 and Sales Tax Rules 2006, the company must register for sales tax by submitting the application Form STR-1 at any tax facilitation counter at the nearest Regional Tax O ce (RTO). The local RTO forwards all applications to the Central Registration O ce. After veri cation, the CRO issues a Registration Certi cate bearing the registration number and mails the same to the registered company, on a prescribed From STR-5. The Sales Tax General Order No. 4/2007 introduced electronic ling of the sales tax returns; and as of July 1st 2008, electronic ling was made mandatory for all categories of taxpayers. 8 Register for Professional Tax with the Excise & Taxation Department of 7 days no charge the District (simultaneous with Agency : Excise & Taxation Department of the District the previous procedure) Following the Devolution Plan 2001, professional tax is enforced at the district level by the Excise and Taxation Department of the relevant provincial district. The tax is levied upon businesses, professionals, trades, callings or companies employing such professionals. The responsible district Excise and Taxation O cer (ET o cer) is empowered to enroll in survey register every person who carries on any such business or profession and thereafter, give notice to such enrolled person. In case of a new business, the company is required to make a request to the ET o cer to get enrolled by submitting a simple assessment form. The ET o cer issues a registration number that acts as the reference number for the registered company and is noted down on every Bank Challan when assessments are paid into the Bank. 9 Register with the Sindh Employees Social Security Institution (SESSI) 7 days no charge Agency : Sindh Employees Social Security Institution (SESSI) (simultaneous with the previous Registration with the Sindh Employees Social Security Institution is governed procedure) at the provincial level by an independent institution called the Sindh ESSI. Register with Employees Old-Age Bene ts Institution (EOBI) 1 week no charge Page 10   is noted down on every Bank Challan when assessments are paid into the Doing Bank. Business 2018 Pakistan 9 Register with the Sindh Employees Social Security Institution (SESSI) 7 days no charge Agency : Sindh Employees Social Security Institution (SESSI) (simultaneous with the previous Registration with the Sindh Employees Social Security Institution is governed procedure) at the provincial level by an independent institution called the Sindh ESSI. Register with Employees Old-Age Bene ts Institution (EOBI) 1 week no charge 10 Agency : Employees Old-Age Bene ts Institution (EOBI) (simultaneous with the previous According to the Amendment in EOBI Act 1976 e ective as of July 2008, every procedure) industry or a commercial establishment with 5 or more employees must register with the federal Employees Old Age Bene ts Institution. Under the Employees Old Age Bene t Scheme, insured persons are entitled to pension upon retirement, invalidity in the case of a disability, old-age grant in the case of a retiring elder lacking the minimum threshold for pension, and survivor’s pension. A contribution of 5% of minimum wage must be paid by the employer and 1% of minimum wage must be paid by the employee. An employer shall before expiration of thirty days from the day on which the Act becomes applicable to the industry or establishment in respect of which he/she is the employer, communicate to the Institution the name and particulars of the industry or establishment in Form PR-01 and of every insured person employed therein in Form PE-01 and, in the case of Form PE- 01, give the receipt appended to the Form to the insured persons. An insured person may also communicate his/her name and other particulars to the Institution in Form PE-02. Upon receipt of the requisite particulars in Forms PR-01 and PE-01 from an employer, the Institution shall register the name of the industry or establishment in respect of which he/she is the employer and of the insured person and issue to the employer a Certi cate of Registration in Form PI-02 and to each insured person a Registration Card in Form PI-03. The institution may send the Registration Card in Form PI-03 to the employer for delivery to the insured person to whom it relates. The minimum Pension has been increased from PKR 3,600 per month to PKR 5,250 per month. Register under the West Pakistan Shops and Establishment Ordinance 7 days PKR 1,000 11 1969 with the Labor Department of the District (simultaneous with Agency : Labour Department of the District the previous procedure) Pakistan Shops and Establishment Ordinance 1969 requires every establishment other than a one man shop to be registered with the Deputy Chief Inspector of the Labor Department in each district. This is to safeguard the labor standards of the workers. To register, the employer must submit the application Form A accompanied by a bank challan. The application for a new establishment shall be made within 2 months of setting up the establishment. The registration fees have been changed to the following pursuant to the Punjab Shops and Establishments (Amendment) Act 2014 (II of 2014): Rs. 200 in the case of an establishment employing 1 to 5 workers. Rs. 300 in the case of an establishment employing 6 to 10 workers. Rs. 500 in the case of an establishment employing 11 to 20 workers. Rs. 1000 in the case of an establishment employing more than 20 workers. Once the payment is settled, the Deputy Chief Inspection lists the establishment in the Register of Establishments maintained in Form B and issues a registration certi cate in Form C. The registration certi cate shall be Page 11   prominently displayed by the employer at the establishment, and shall be The minimum Pension has been increased from PKR 3,600 per month to PKR Doing 5,250 per month. Business 2018 Pakistan Register under the West Pakistan Shops and Establishment Ordinance 7 days PKR 1,000 11 1969 with the Labor Department of the District (simultaneous with Agency : Labour Department of the District the previous procedure) Pakistan Shops and Establishment Ordinance 1969 requires every establishment other than a one man shop to be registered with the Deputy Chief Inspector of the Labor Department in each district. This is to safeguard the labor standards of the workers. To register, the employer must submit the application Form A accompanied by a bank challan. The application for a new establishment shall be made within 2 months of setting up the establishment. The registration fees have been changed to the following pursuant to the Punjab Shops and Establishments (Amendment) Act 2014 (II of 2014): Rs. 200 in the case of an establishment employing 1 to 5 workers. Rs. 300 in the case of an establishment employing 6 to 10 workers. Rs. 500 in the case of an establishment employing 11 to 20 workers. Rs. 1000 in the case of an establishment employing more than 20 workers. Once the payment is settled, the Deputy Chief Inspection lists the establishment in the Register of Establishments maintained in Form B and issues a registration certi cate in Form C. The registration certi cate shall be prominently displayed by the employer at the establishment, and shall be renewed after every two years upon payment of fees. Register the appointed CEO with the SECP Half a day (online PKR 400 for the cost 12 Agency : SECP procedure) of form 29 Pursuant to the Companies Ordinance 1984, articles 198 - 205, a CEO is to be appointed within 15 days of the company's incorporation. The company needs to register said CEO within 14 days of the decision. Applies to women only. Takes place simultaneously with previous procedure. Starting a Business - Lahore Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement PKR 0 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedure – Men (number) 12 7.9 4.9 1.00 (New Zealand) Time – Men (days) 17.5 15.4 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 7.6 21.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 12 8.1 4.9 1.00 (New Zealand) Time – Women (days) 17.5 15.5 8.5 Page 12   0.50 (New Zealand) Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Starting a Business - Lahore Standardized Company Legal form Private Limited Liability Company Paid-in minimum capital requirement PKR 0 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedure – Men (number) 12 7.9 4.9 1.00 (New Zealand) Time – Men (days) 17.5 15.4 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 7.6 21.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 12 8.1 4.9 1.00 (New Zealand) Time – Women (days) 17.5 15.5 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 7.6 21.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 0.0 0.2 8.7 0.00 (113 Economies) Figure – Starting a Business in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.47: China (Rank: 93) 80.67: Bangladesh (Rank: 131) 78.61: Lahore 75.40: India (Rank: 156) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Lahore – Procedure, Time and Cost Time Cost 7 16 6 14 ome per capita) 5 12 (days) 10 Page 13   4 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Starting a Business in Lahore – Procedure, Time and Cost Time Cost 7 16 6 14 Cost (% of income per capita) 5 12 Time (days) 10 4 8 3 6 2 4 1 2 0 0 1 2 3 4 5 6 7 *8 *9 * 10 * 11 * 12 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve a company name online via the Securities and Exchange 1 day Free of charge Commission of Pakistan (SECP) E-services website Agency : Securities and Exchange Commission of Pakistan (SECP) The entrepreneur can check the availability of the desired company name via the website of the Securities and Exchange Commission of Pakistan (SECP). To reserve a company name, the applicant proposes one or more names in order of preference, and submits the application form to SECP either online or in person. The o cial con rmation (or rejection) of the chosen name and its availability is received by email or via courier upon payment of the name reservation fee of PKR 200 (online name reservation) or PKR 500 (o ine name reservation) at the SECP-designated bank. The approved name is reserved for 90 days, during which the company must be incorporated. SECP recently introduced the Fast Track Registration Services (FTRS), processing the company name reservation applications within 4 hours of submission for an expedited fee of PKR 500 online and PKR 1,000 in person payable in addition to the normal fees. 2 Pay the name reservation and company incorporation fees at the MCB 1 day included in Bank procedure 1 (name Agency : Bank (MCB) reservation fees) and procedure 3 The company must pay the name reservation and incorporation fees at the (registration fees) designated MCB Bank (formerly Muslim Commercial Bank) or at the United Bank Limited. The form indicating the amount due is obtained from SECP either online (downloaded) or on-site, or from the bank. Page 14   (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Pakistan Details – Starting a Business in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Reserve a company name online via the Securities and Exchange 1 day Free of charge Commission of Pakistan (SECP) E-services website Agency : Securities and Exchange Commission of Pakistan (SECP) The entrepreneur can check the availability of the desired company name via the website of the Securities and Exchange Commission of Pakistan (SECP). To reserve a company name, the applicant proposes one or more names in order of preference, and submits the application form to SECP either online or in person. The o cial con rmation (or rejection) of the chosen name and its availability is received by email or via courier upon payment of the name reservation fee of PKR 200 (online name reservation) or PKR 500 (o ine name reservation) at the SECP-designated bank. The approved name is reserved for 90 days, during which the company must be incorporated. SECP recently introduced the Fast Track Registration Services (FTRS), processing the company name reservation applications within 4 hours of submission for an expedited fee of PKR 500 online and PKR 1,000 in person payable in addition to the normal fees. 2 Pay the name reservation and company incorporation fees at the MCB 1 day included in Bank procedure 1 (name Agency : Bank (MCB) reservation fees) and procedure 3 The company must pay the name reservation and incorporation fees at the (registration fees) designated MCB Bank (formerly Muslim Commercial Bank) or at the United Bank Limited. The form indicating the amount due is obtained from SECP either online (downloaded) or on-site, or from the bank. The SECP launched online payment facility for its stakeholders in April 2014, therefore, online ling and payment is now possible for SECP’s online lers, without visiting the Bank or the SECP o ces. 3 Obtain PIN for company incorporation submission Less than one day PKR 100 Agency : SECP (online procedure) As of April 2017, SEC has allowed for the registration for company incorporation to be submitted through inputting the PIN number instead of the digital certi cate. As such, companies now just need to input the following information into the system his/her 13 digit CNIC Number /NICOP /POC without dashes. The user will also enter his/her personal details i.e. Full Name, Father’s/Spouse Name, Gender, Date of Birth, Current Address, Permanent Address, Mobile Number, Email Address. The user will then enter his/her proposed password. In next section, the user is required to select three security Questions and then provide answer to those questions. The user will then click the Signup button to proceed further. After veri cation, the system will send security code to User on his/her provided Mobile Number and also on his/her email address. Upon submission, the system will send PIN to User on the provided Mobile No. through SMS and also on the provided Email Address. This system generated PIN will be required for company incorporation. 4 Complete online registration on the Securities & Exchange Commission 2 days See comments of Pakistan (SECP) e-portal Agency : Securities and Exchange Commission of Pakistan (SECP) Page 15   the provided Email Address. This system generated PIN will be required for Doing company incorporation. Business 2018 Pakistan 4 Complete online registration on the Securities & Exchange Commission 2 days See comments of Pakistan (SECP) e-portal Agency : Securities and Exchange Commission of Pakistan (SECP) Registration can either be completed online or in person at SECP. The following documents are required for submission: a. Form 1: Declaration of compliance b. Form 21: Identi cation of the location of the o ce c. Form 29: Particulars of directors, secretary, chief accountant, auditors, and others d. One copy of the Memorandum and Articles of Associations with the signature of each member (in presence of a witness) The fees for incorporation of a company was updated on May 24, 2016 according to the S.R.O 448. The fees depend on the authorized capital as: - Online submission: PKR 1,000 for registration of a company whose nominal share capital does not exceed PKR 100,000 and an additional fee of PKR 500 for every PKR 100,000 of nominal share capital or part thereof, up to PKR 10,000,000. The online ling fee is PKR 400 per document. A con rmation of the online or physical submission is received instantly, and the actual certi cate a few days later via email or courier. The entrepreneur can register with any Company Registration O ce, irrespective of the jurisdiction. All regional SECP o ces are computerized. In February 2012, SECP launched the Fast Track Registration Services (FTRS), under which the incorporation of a company can take place within 4 hours for an expedited fee of PKR 20,000 for on-site incorporation and PKR 10,000 for online incorporation payable in addition to the normal fees above. To register a company online, the entrepreneur must rst obtain a digital signature through the National Institutional Facilitation Technologies (NIFT) system. If the application is received with less than four hours remaining in the working day, the same shall be disposed of in the next working day. 5 Open a bank account for tax registration 1 day No charge Agency : Bank A bank account number in the name of the company is needed in order to register for taxes. A copy of the registration certi cate is needed in order to open a bank account. 6 Apply for a national tax number (NTN) and register for income tax 2 days no charge Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Lahore To apply, the company must submit a simple one page form called the NTN Form as well as a proof of registration, the Memorandum and Articles of Association, bank account number, copies of the national identity cards of its directors, and an attestation of the registered business address at the nearest tax facilitation counter of the Regional Tax O ce in Pakistan. All applications are forwarded to the Central Registration O ce (CRO) in Islamabad that allocates a uniform NTN number to each company. The center processes the application and issues the NTN at no charge. The certi cate is then sent to the registered address of the applicant. The company can track the application online or through the RTO helpline. If undelivered, the NTN certi cation can be collected from the speci ed o ce at the Central Board of Revenue. Recently, the Federal Board of Revenue launched electronic services enabling online applications for NTN numbers to be made through its website: www.fbr.gov.pk. Page 16   register for taxes. A copy of the registration certi cate is needed in order to Doing open account.Pakistan a bank2018 Business 6 Apply for a national tax number (NTN) and register for income tax 2 days no charge Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Lahore To apply, the company must submit a simple one page form called the NTN Form as well as a proof of registration, the Memorandum and Articles of Association, bank account number, copies of the national identity cards of its directors, and an attestation of the registered business address at the nearest tax facilitation counter of the Regional Tax O ce in Pakistan. All applications are forwarded to the Central Registration O ce (CRO) in Islamabad that allocates a uniform NTN number to each company. The center processes the application and issues the NTN at no charge. The certi cate is then sent to the registered address of the applicant. The company can track the application online or through the RTO helpline. If undelivered, the NTN certi cation can be collected from the speci ed o ce at the Central Board of Revenue. Recently, the Federal Board of Revenue launched electronic services enabling online applications for NTN numbers to be made through its website: www.fbr.gov.pk. 7 Apply for a Sales Tax Number (STN) at the tax facilitation center of the 1 day no charge Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Lahore Agency : Tax facilitation center of the Regional Tax O ce (RTO) of the Federal Board of Revenue (FBR) in Lahore According to the Sections 14, 15 and 16 of the Sales Tax Act 1990 and Sales Tax Rules 2006, the company must register for sales tax by submitting the application Form STR-1 at any tax facilitation counter at the nearest Regional Tax O ce (RTO). The local RTO forwards all applications to the Central Registration O ce. After veri cation, the CRO issues a Registration Certi cate bearing the registration number and mails the same to the registered company, on a prescribed From STR-5. The Sales Tax General Order No. 4/2007 introduced electronic ling of the sales tax returns; and as of July 1st 2008, electronic ling was made mandatory for all categories of taxpayers. 8 Register for Professional Tax with the Excise & Taxation Department of 7 days no charge the District (simultaneous with Agency : Excise & Taxation Department of the District the previous procedure) Following the Devolution Plan 2001, professional tax is enforced at the district level by the Excise and Taxation Department of the relevant provincial district. According to the Punjab Finance Act 1977, the tax is levied upon businesses, professionals, trades, callings or companies employing such professionals. The responsible district Excise and Taxation O cer (ET o cer) is empowered to enroll in survey register every person who carries on any such business or profession and thereafter, give notice to such enrolled person. In case of a new business, the company is required to make a request to the ET o cer to get enrolled by submitting a simple assessment form. The ET o cer issues a registration number that acts as the reference number for the registered company and is noted down on every Bank Challan when assessments are paid into the Bank. 9 Register with the Punjab Employees Social Security Institution (SESSI) 1 week no charge Agency : Punjab Employees Social Security Institution (PESSI) (simultaneous with the previous According to the Punjab Industrial Policy 2003, registration with the Sindh procedure) Employees Social Security Institution is governed at the provincial level by an independent institution called the Punjab ESSI. Employers covered under the Page 17   scheme contribute 6% of the wages to their insured workers. The wage number for the registered company and is noted down on every Bank Doing Challan Businesswhen assessments 2018 are paid into the Bank. Pakistan 9 Register with the Punjab Employees Social Security Institution (SESSI) 1 week no charge Agency : Punjab Employees Social Security Institution (PESSI) (simultaneous with the previous According to the Punjab Industrial Policy 2003, registration with the Sindh procedure) Employees Social Security Institution is governed at the provincial level by an independent institution called the Punjab ESSI. Employers covered under the scheme contribute 6% of the wages to their insured workers. The wage ceiling should not exceed PKR 15,000 per month or PKR 600 per day 2 as per Noti cation No: N-L-II (SEESI) 5-12- 91 dated 30 October, 2013. Registration is compulsory. The company has to complete a simple form to be allotted a registration number and to later receive an employee card. Register with Employees Old-Age Bene ts Institution (EOBI) 1 week no charge 10 Agency : Employees Old-Age Bene ts Institution (EOBI) (simultaneous with the previous According to the Amendment in EOBI Act 1976 e ective as of July 2008, every procedure) industry or a commercial establishment with 5 or more employees must register with the federal Employees Old Age Bene ts Institution. Under the Employees Old Age Bene t Scheme, insured persons are entitled to pension upon retirement, invalidity in the case of a disability, old-age grant in the case of a retiring elder lacking the minimum threshold for pension, and survivor’s pension. A contribution of 5% of minimum wage must be paid by the employer and 1% of minimum wage must be paid by the employee. An employer shall before expiration of thirty days from the day on which the Act becomes applicable to the industry or establishment in respect of which he/she is the employer, communicate to the Institution the name and particulars of the industry or establishment in Form PR-01 and of every insured person employed therein in Form PE-01 and, in the case of Form PE- 01, give the receipt appended to the Form to the insured persons. An insured person may also communicate his/her name and other particulars to the Institution in Form PE-02. Upon receipt of the requisite particulars in Forms PR-01 and PE-01 from an employer, the Institution shall register the name of the industry or establishment in respect of which he/she is the employer and of the insured person and issue to the employer a Certi cate of Registration in Form PI-02 and to each insured person a Registration Card in Form PI-03. The institution may send the Registration Card in Form PI-03 to the employer for delivery to the insured person to whom it relates. The minimum Pension has been increased from PKR 3,600 per month to PKR 5,250 per month. Register under the West Pakistan Shops and Establishment Ordinance 7 days PKR 1,000 11 1969 with the Labor Department of the District (simultaneous with Agency : Labour Department of the District the previous procedure) Pakistan Shops and Establishment Ordinance 1969 requires every establishment other than a one man shop to be registered with the Deputy Chief Inspector of the Labor Department in each district. This is to safeguard the labor standards of the workers. To register, the employer must submit the application Form A accompanied by a bank challan. The application for a new establishment shall be made within 2 months of setting up the establishment. The registration fees have been changed to the following pursuant to the Punjab Shops and Establishments (Amendment) Act 2014 (II of 2014): Rs. 200 in the case of an establishment employing 1 to 5 workers. Rs. 300 in the case of an establishment employing 6 to 10 workers. Rs. 500 in the case of an establishment employing 11 to 20 workers. Page 18   Rs. 1000 in the case of an establishment employing more than 20 workers. The minimum Pension has been increased from PKR 3,600 per month to PKR Doing 5,250 per month. Business 2018 Pakistan Register under the West Pakistan Shops and Establishment Ordinance 7 days PKR 1,000 11 1969 with the Labor Department of the District (simultaneous with Agency : Labour Department of the District the previous procedure) Pakistan Shops and Establishment Ordinance 1969 requires every establishment other than a one man shop to be registered with the Deputy Chief Inspector of the Labor Department in each district. This is to safeguard the labor standards of the workers. To register, the employer must submit the application Form A accompanied by a bank challan. The application for a new establishment shall be made within 2 months of setting up the establishment. The registration fees have been changed to the following pursuant to the Punjab Shops and Establishments (Amendment) Act 2014 (II of 2014): Rs. 200 in the case of an establishment employing 1 to 5 workers. Rs. 300 in the case of an establishment employing 6 to 10 workers. Rs. 500 in the case of an establishment employing 11 to 20 workers. Rs. 1000 in the case of an establishment employing more than 20 workers. Once the payment is settled, the Deputy Chief Inspection lists the establishment in the Register of Establishments maintained in Form B and issues a registration certi cate in Form C. The registration certi cate shall be prominently displayed by the employer at the establishment, and shall be renewed after every two years upon payment of fees. Register CEO at SECP Less than a day PKR 400 for form 29 12 Agency : SECP (online procedures) As per companies ordinance 1984, the company is required to a appoint a CEO within 15 days of commencement of activities. The appointed CEO is then required by law to be registered at the company's registry. This registration is a submission of a form online that costs PKR 400. Con rmed by public sector and private. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also Page 19   collected for the second largest business city. Obtaining utility connections for water and Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures. Building quality control index (0-15) - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Dealing with Construction Permits - Karachi Page 20   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Pakistan Dealing with Construction Permits - Karachi Standardized Warehouse Estimated value of warehouse PKR 8,140,382.70 City Covered Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Procedures (number) 15 16.0 12.5 7.00 (Denmark) Time (days) 260 193.9 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 8.5 17.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.5 8.7 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 61.97: Bangladesh (Rank: 130) 58.30: Karachi 47.28: China (Rank: 172) 38.80: India (Rank: 181) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Karachi – Procedure, Time and Cost Time Cost 3 250 2.5 Cost (% of warehouse value) 200 2 Time (days) 150 1.5 100 1 50 0.5 0 0 1 2 *3 4 5 6 7 8 9 10 11 12 13 14 15 Page 21   component indicators. Doing Business 2018 Pakistan Figure – Dealing with Construction Permits in Karachi – Procedure, Time and Cost Time Cost 3 250 2.5 Cost (% of warehouse value) 200 2 Time (days) 150 1.5 100 1 50 0.5 0 0 1 2 *3 4 5 6 7 8 9 10 11 12 13 14 15 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Karachi and comparator economies – Measure of Quality 14 12.5 12 11.5 10.0 9.6 10 8.7 Index score 8 6 4 2 0 Karachi Bangladesh China India South Asia Details – Dealing with Construction Permits in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain letter from the relevant land owning authority con rming the 14 days no charge land title Agency : Relevant Land Owning Authority BuildCo must obtain a letter from the relevant authority con rming the title or land use, the dimensions of the plot, and the possible existence of any road widening, cut line, or reservation. 2 Obtain building permit 60 days PKR 224,000 Agency : Sindh Building Control Authority An application form is to be submitted to the Sindh Building Control Authority (SBCA) along with the following documents: Page 22   Karachi Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Dealing with Construction Permits in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain letter from the relevant land owning authority con rming the 14 days no charge land title Agency : Relevant Land Owning Authority BuildCo must obtain a letter from the relevant authority con rming the title or land use, the dimensions of the plot, and the possible existence of any road widening, cut line, or reservation. 2 Obtain building permit 60 days PKR 224,000 Agency : Sindh Building Control Authority An application form is to be submitted to the Sindh Building Control Authority (SBCA) along with the following documents: • A building plan (initially three copies and then six copies) together with: 1. Full particulars of the land plot with a speci cation of its intended use (such as residential, commercial, etc.) 2. Two sets of all documents relating to the plot and a letter from the concerned authority con rming the title or land use, the plot dimensions, and the possible existence of any road widening, cut line, or reservation • A plan description: 1. Any proposed and/or revised addition and/or alteration 2. Any previous approval, if applicable 3. Details of any litigation relating to the plot The drawings should show plans, sections, and elevations, together with other necessary details pertaining to RCC elements, joinery work, and covered areas of every oor, including the basement (if applicable). In addition, a block plan of the site, drawn to a scale of not less than 1:500 (1”:8’) should be included. Such a plan and sections should show the building’s intended use; the access to and from the various parts of the building; the position dimensions; the means of ventilation; the proposed plinth height; the superstructure at each oor level; and the dimensions and descriptions of all the walls, oors, roofs, staircases, elevators, and the like. • A description of the proposed construction: 1. Type of building 2. Total oor area 3. Number of oors 4. Number of units (for public sale projects only) 5. Car parking space 6. Area of amenity space • Particulars of the licensed professionals employed to prepare the plan and supervise work: 1. Name 2. License number/professional registration number from the Public Electricity Corporation (PEC) 3. National identity card number 4. Mailing and permanent address/ telephone number 5. O ce address and telephone number • A speci cation of the building’s intended use (i.e., is it being built for public Page 23   3. National identity card number 4. Mailing and permanent address/ telephone number Business Doing 5. 2018andPakistan O ce address telephone number • A speci cation of the building’s intended use (i.e., is it being built for public sale) • A list of other documents to be attached to the application (photocopies should be duly attested by the professional): 1. Lease/sale deed, allotment order, mutation (or transfer) order (or extract) 2. Possession order 3. Acknowledgement of possession 4. Site plan 5. No-objection certi cate (NOC), if applicable 6. National identity card 7. Letter from the owner, or attorney of the owner, authorizing a named professional whose license or registration number should also be provided, to complete and comply with the requirements of the Sindh Building Control Ordinance of 1979, as amended, and with the requirements of the regulations framed under the ordinance for and on behalf of the owner. The letter should also indicate that a plinth certi cate notice would be provided at the completion of the plinth as required under section 3-2.10 of the Karachi Building and Town Planning Regulations of 2002. The letter should also specify that the owner would abide by all the aforementioned rules and regulations, and it must be signed by the owner or the owner’s attorney, contain their national identity card number, email address, mailing and permanent address, telephone number, and the signature and particulars of the architect and structural engineer. • A form specifying the architect’s and structural engineer’s undertaking: 1. The SBCA operates under the Sindh Local Government Ordinance of 2002, and falls under the control of the Karachi City District Government of which the Nazim (elected head of Karachi city local council) is the chief executive. If the property is in a military cantonment jurisdiction, BuildCo must send the documents to the Cantonment Board, which takes about 30 days. The Doing Business case study considered here assumes that the property is not located in this type of jurisdiction. 3 File an environmental checklist with the Environmental Protection 30 days PKR 30,000 Agency Agency : Environmental Protection Agency According to the Sindh Environmental Protection Agency Regulations 2014, warehouses shall le environmental checklist with the Agency and the provisions of section 17 shall apply to such projects. 4 Notify the Sindh Building Control Authority (SBCA) in writing of the 1 day no charge completion of foundations Agency : Sindh Building Control Authority Upon completion of the plinth level, BuildCo is required to notify the SBCA so that they can verify the building lines. 5 Receive foundations work inspection from the Sindh Building Control 15 days no charge Authority (SBCA) and await approval Agency : Sindh Building Control Authority Except for Category 1 building works, Regulation No. 3-2.10 of the 2002 Regulations requires BuildCo to notify the SBCA upon completion of plinth level and, in the case of a basement, upon the completion of foundations, so that SBCA can verify the building lines. Regulation No. 3-2.10 also indicates that no further work can be carried out for a 15-day period following the Page 24   Upon completion of the plinth level, BuildCo is required to notify the SBCA so Doing that they can Business verify the 2018 building lines. Pakistan 5 Receive foundations work inspection from the Sindh Building Control 15 days no charge Authority (SBCA) and await approval Agency : Sindh Building Control Authority Except for Category 1 building works, Regulation No. 3-2.10 of the 2002 Regulations requires BuildCo to notify the SBCA upon completion of plinth level and, in the case of a basement, upon the completion of foundations, so that SBCA can verify the building lines. Regulation No. 3-2.10 also indicates that no further work can be carried out for a 15-day period following the noti cation date. During this period, the SBCA either approves the building lines or informs the owner or owner’s representative of any possible errors found. If no response is received from the SBCA within the 15-day period, the owner can proceed with the building works after notifying the SBCA, provided that the construction is consistent with the approved building plan. 6 Submit the rst oor Certi cate Form to the Sindh Building Control 1 day no charge Authority (SBCA) Agency : Sindh Building Control Authority (SBCA) For Category “III” and Category “IV” buildings, the owner and Professionals shall submit to the Authority oor certi cate (Form ZP-5) casting of slab of each oor, certifying that all the building line and structural members on the said oor are in conformity with the design as approved by the Authority subject to clause 3-2.4 and 3-2.5. If the owner/professional fails to submit the oor certi cate the authority shall stop further construction work. 7 Receive rst oor slab casting inspection from the Sindh Building 15 days no charge Control Authority (SBCA) and await approval Agency : Sindh Building Control Authority (SBCA) 8 Submit the second oor Certi cate Form to the Sindh Building Control 1 day no charge Authority (SBCA) Agency : Sindh Building Control Authority (SBCA) 9 Receive second oor slab casting inspection from the Sindh Building 15 days no charge Control Authority (SBCA) and await approval Agency : Sindh Building Control Authority (SBCA) 10 Request a copy of property tax valuation and copy of the certi cate from 30 days no charge the Excise and Taxation Department Agency : Excise and Taxation Department BuildCo must obtain a copy of the property tax valuation and a copy of the certi cate from the tax authorities con rming that it does not owe them any money. These documents are submitted along with the water connection application. The Excise and Taxation Department of the Government of Sindh provides the property tax valuation after the building is completed. The department inspects the building and issues a certi cate to the owner of the building. The certi cate provides an assessment of the value of the building. If BuildCo has any objections to this assessment, it is required to make them known within 14 days. Otherwise, the department issues a PT-1 Form, a certi cate that provides the assessed value of the property and the resultant property tax to be charged. Page 25   Control Authority (SBCA) and await approval Agency : Sindh Building Control Authority (SBCA) Doing Business 2018 Pakistan 10 Request a copy of property tax valuation and copy of the certi cate from 30 days no charge the Excise and Taxation Department Agency : Excise and Taxation Department BuildCo must obtain a copy of the property tax valuation and a copy of the certi cate from the tax authorities con rming that it does not owe them any money. These documents are submitted along with the water connection application. The Excise and Taxation Department of the Government of Sindh provides the property tax valuation after the building is completed. The department inspects the building and issues a certi cate to the owner of the building. The certi cate provides an assessment of the value of the building. If BuildCo has any objections to this assessment, it is required to make them known within 14 days. Otherwise, the department issues a PT-1 Form, a certi cate that provides the assessed value of the property and the resultant property tax to be charged. The documents needed are the following: • An application providing information relating to the building • Title documents/ documents evidencing title of the property • Approved building plan • National identity card of the applicant 11 Receive inspection from the Excise and Taxation Department and obtain 1 day no charge a copy of property tax valuation and copy of the certi cate from the tax authorities Agency : Excise and Taxation Department 12 Request water and sewerage connection 60 days PKR 217,175 Agency : Karachi Water and Sewerage Board An application form must be submitted to the Karachi Water and Sewerage Board along with the following documents to apply for water and sewerage connection: • A copy of the approved building plan along with a copy of the letter under the cover of which the approved building plan was issued by the SBCA • Proof of ownership of the plot, or for a tenancy, a copy of the lease agreement • A copy of the property tax valuation • A copy of the certi cate from the tax authorities con rming that the company does not owe them any money • A copy of the applicant’s national identity card 13 Apply for occupancy permit and request nal inspection 1 day no charge Agency : Sindh Building Control Authority After the building is completed, a “notice of completion and permission for occupation” form must be submitted along with the architect’s certi cate. After receipt of this notice, the SBCA inspects the building to verify that it has been built according to the approved plans. 14 Receive nal inspection 1 day no charge Agency : Sindh Building Control Authority 15 Receive completion certi cate from the Sindh Building Control Authority 45 days PKR 224,000 (SBCA) Agency : Sindh Building Control Authority Page 26   14 Receive nal inspection 1 day no charge Agency : Sindh Building Control Authority Doing Business 2018 Pakistan 15 Receive completion certi cate from the Sindh Building Control Authority 45 days PKR 224,000 (SBCA) Agency : Sindh Building Control Authority Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Karachi – Measure of Quality Answer Score Building quality control index (0-15) 12.5 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 1.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction; Mandatory inspections are done most of the time during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Page 27   Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Dealing with Construction Permits in Karachi – Measure of Quality Answer Score Building quality control index (0-15) 12.5 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 1.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 0.0 inspections are not always done in practice during construction; Mandatory inspections are done most of the time during construction. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.5 Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 Page 28   building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) company. Liability Doing 2018 regimes and insurance Business index (0-2) Pakistan 1.5 Which parties (if any) are held liable by law for structural aws or problems in the Construction 0.5 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) company. Which parties (if any) are required by law to obtain an insurance policy to cover Construction 1.0 possible structural aws or problems in the building once it is in use (Latent Defect company; Liability Insurance or Decennial Insurance)? (0-1) Insurance is commonly taken in practice. Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Dealing with Construction Permits - Lahore Standardized Warehouse Estimated value of warehouse PKR 8,140,382.70 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedures (number) 15 16.0 12.5 7.00 (Denmark) Time (days) 266 193.9 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 3.0 17.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 8.7 11.4 15.00 (3 Economies) Page 29   architect or engineer. Doing Business 2018 Pakistan Dealing with Construction Permits - Lahore Standardized Warehouse Estimated value of warehouse PKR 8,140,382.70 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedures (number) 15 16.0 12.5 7.00 (Denmark) Time (days) 266 193.9 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 3.0 17.6 1.6 0.10 (5 Economies) Building quality control index (0-15) 11.0 8.7 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 62.35: Lahore 61.97: Bangladesh (Rank: 130) 47.28: China (Rank: 172) 38.80: India (Rank: 181) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Lahore – Procedure, Time and Cost Time Cost 1.2 250 1 Cost (% of warehouse value) 200 0.8 Time (days) 150 0.6 100 0.4 50 0.2 Page 30   0 0 component indicators. Doing Business 2018 Pakistan Figure – Dealing with Construction Permits in Lahore – Procedure, Time and Cost Time Cost 1.2 250 1 Cost (% of warehouse value) 200 0.8 Time (days) 150 0.6 100 0.4 50 0.2 0 0 1 2 *3 4 5 6 7 8 9 10 11 12 13 14 15 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Lahore and comparator economies – Measure of Quality 14 12 11.0 11.5 10.0 9.6 10 8.7 Index score 8 6 4 2 0 Lahore Bangladesh China India South Asia Details – Dealing with Construction Permits in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain Fard (letter from concerned authority con rming the land title) 2 days PKR 150 from the Land Revenue Management Information System Agency : Land Revenue Management Information system (LRMIS) BuildCo must obtain a letter from the concerned authority con rming the title or land use, the dimensions of the plot, and the possible existence of any road widening, cut line, or reservation. 2 Obtain a No Objection Certi cate on the Environmental Impact 105 days PKR 10,000 Assessment from the Environmental Protection Agency Agency : Environmental Protection Agency Per the Punjab Environmental Protection Act, 1997 (Amended in 2012) and Page 31   Lahore Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Dealing with Construction Permits in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain Fard (letter from concerned authority con rming the land title) 2 days PKR 150 from the Land Revenue Management Information System Agency : Land Revenue Management Information system (LRMIS) BuildCo must obtain a letter from the concerned authority con rming the title or land use, the dimensions of the plot, and the possible existence of any road widening, cut line, or reservation. 2 Obtain a No Objection Certi cate on the Environmental Impact 105 days PKR 10,000 Assessment from the Environmental Protection Agency Agency : Environmental Protection Agency Per the Punjab Environmental Protection Act, 1997 (Amended in 2012) and the Environmental Impact Assessment Regulations of 2000, the building authority in Lahore requires a No Objection Certi cate from the Environmental Protection Agency to issue the building permit. BuildCo must then prepare and submit an Initial Environmental Examination (IEE) to the Environmental Protection Agency in order to obtain this certi cate which costs PKR 10,000 per schedule II of the regulation. 3 Obtain a building permit 60 days PKR 70,000 Agency : Lahore Development Authority (LDA) According to the Building and Zoning By Laws of 2007, in order to obtain approval to execute the works, the building company must apply in writing to the LDA and submit the following documents: a. Application form signed by the registered architect, the attorney-in- practice, and a registered structural engineer; b. Five sets of building plans (site plan, architectural drawings with elevations and sections, structural drawings, and stability certi cate), each signed by the relevant professional (either the architect or the structural engineer); c. Proof of ownership (copy of the sale deed, copy of the allotment letter, or fard); d. Copy of the company’s memorandum of incorporation; e. Power of attorney to act on behalf of the company and a copy of the national identi cation card of the attorney-in-practice. If the building company does not receive a response to its application within 45 days of submission, it can send a written communication by registered post to the relevant authority. If such communication is not answered within 15 days, the building company can assume that the building plan approval has been granted and can start construction (as per Art. 27.6, Section 192, Fourth Schedule, Chapter 14 of the Punjab Local Government Ordinance, 2001). 4 Notify the local city government (LDA) in writing of the completion of 1 day no charge foundations Agency : Lahore Development Authority (LDA) Upon completion of the foundation level, BuildCo is required to notify the LDA so that they can conduct an inspection. 5 Receive foundations work inspection from the Lahore Development 1 day no charge Authority (LDA) Page 32   Upon completion of the foundation level, BuildCo is required to notify the Doing LDA so that they Business 2018 conduct an inspection. can Pakistan 5 Receive foundations work inspection from the Lahore Development 1 day no charge Authority (LDA) Agency : Lahore Development Authority (LDA) Inspectors from LDA must inspect the building site when the foundations have been laid. Inspections are free of charge. 6 Submit the rst oor Certi cate Form to the Lahore Development 1 day no charge Authority (LDA) Agency : Lahore Development Authority (LDA) Per Art. 8(ii) of the 2001 Law, a certi cate of durability in accordance with building plan must be obtained from architect and engineers concerned after the completion of each oor. 7 Receive rst oor slab casting inspection from the Lahore Development 1 day no charge Authority (LDA) Agency : Lahore Development Authority (LDA) 8 Submit the second oor Certi cate Form to the Lahore Development 1 day no charge Authority (LDA) Agency : Lahore Development Authority (LDA) 9 Receive second oor slab casting inspection from the Lahore 1 day no charge Development Authority (LDA) Agency : Lahore Development Authority (LDA) 10 Request assessment copy of property unit from the Excise and Taxation 30 days no charge Department Agency : Excise & Taxation Department, Government of The Punjab BuildCo must obtain a copy of the property tax valuation and a copy of the certi cate from the tax authorities con rming that the company does not owe them any money. These documents are submitted along with the water connection application. The Excise and Taxation Department of the Government of the Punjab provides the property tax valuation after the building is completed. The department inspects the building and issues a certi cate to the owner of the building. The certi cate provides an assessment of the value of the building. If BuildCo has any objections to this assessment, it is required to make them known within 14 days. Otherwise, the department issues a PT-1 Form, a certi cate that provides the assessed value of the property and the resultant property tax to be charged. The following documents are needed: • An application providing information relating to the building • Title documents/ documents evidencing title of the property • Approved building plan • National identity card of the applicant 11 Receive inspection from the Excise and Taxation Department and obtain 1 day no charge the assessment copy of property unit Agency : Excise & Taxation Department, Government of The Punjab The department inspects the building and issues a certi cate to the owner of the building. The certi cate provides an assessment of the value of the building. 12 Request water and sewerage connection 60 days PKR 90,000 Page 33   the building. The certi cate provides an assessment of the value of the Doing building. Business 2018 Pakistan 12 Request water and sewerage connection 60 days PKR 90,000 Agency : Water and Sewerage Authority (WASA) The following documents should be provided with the new connection form: - Attested photocopy of CNIC - Attested photocopy of sale deed/proof of ownership - Copy of the assessment of property unit - Site plan to indicate location of property 13 Apply for completion certi cate and request nal inspection 1 day PKR 70,000 Agency : Lahore Development Authority (LDA) After the building is completed, a “notice of completion and permission for occupation” form is to be submitted along with the architect’s certi cate. After receipt of this notice, the Lahore Development Authority (LDA) inspects the building to verify that it has been built according to the approved plans. 14 Receive nal inspection 1 day no charge Agency : Lahore Development Authority (LDA) 15 Receive completion certi cate from the Lahore Development Authority 60 days no charge (LDA) Agency : Lahore Development Authority (LDA) After the nal inspection has taken place, and provided that the works have been carried out according to the approved building plan, the Lahore Development Authority (LDA) issues a certi cate of completion. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Lahore – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house Page 34   engineer; Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Dealing with Construction Permits in Lahore – Measure of Quality Answer Score Building quality control index (0-15) 11.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in Licensed 1.0 compliance with existing building regulations? (0-1) architect; Licensed engineer. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) in-house engineer; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 2.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency; Final inspection is not required by law. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 0.0 does not always occur in practice; Final inspection occurs most of the time. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Page 35   Liability Doing 2018 regimes and insurance Business index (0-2) Pakistan 0.0 Which parties (if any) are held liable by law for structural aws or problems in the No party is held 0.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. Page 36   obtaining final supply - Is a new construction and is being connected to electricity for the rst architect or engineer. Doing Business 2018 Pakistan Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the Official costs only, no bribes warehouse is located and requires works that involve the crossing of a 10- meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 37   Getting Electricity - Karachi frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Pakistan Getting Electricity - Karachi Standardized Connection Price of electricity (US cents per kWh) 18.8 Name of utility K-Electric Ltd. City Covered Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Procedures (number) 5 5.7 4.7 2 (United Arab Emirates) Time (days) 215 136.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 1665.5 1163.2 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 0 2.1 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.21: India (Rank: 29) 68.83: China (Rank: 98) 40.11: Karachi 16.97: Bangladesh (Rank: 185) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Karachi – Procedure, Time and Cost Time Cost 1800 200 1600 (% of income per capita) 1400 150 1200 Time (days) 1000 100 800 Page 38   600 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Getting Electricity in Karachi – Procedure, Time and Cost Time Cost 1800 200 1600 Cost (% of income per capita) 1400 150 1200 Time (days) 1000 100 800 600 50 400 200 0 0 1 2 3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Karachi and comparator economies – Measure of Quality 8 7 7 6 6 Index score 5 4 3 2.1 2 1 0 0 0 Karachi Bangladesh China India South Asia Details – Getting Electricity in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to K-Electric Ltd. and await site inspection 30 calendar days PKR 200 Agency : K-Electric Ltd. Application form should be veri ed by the Licensed Electrical Contractor. The application should be accompanied with a copy of the computerized national identity card (CNIC) of the owner, a copy of the approved building plan, a copy of the approved layout plan, a copy of the trade license, the list of machinery & equipment (needs to be notarized), details of the chiller units (in case of centrally air conditioned units), a passport size photo of the applicant, a company letter head mentioning the name of the authorizing person (needs to be notarized), the CNIC number, and the NTN certi cate from the federal board of revenue. Page 39   Karachi Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Getting Electricity in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to K-Electric Ltd. and await site inspection 30 calendar days PKR 200 Agency : K-Electric Ltd. Application form should be veri ed by the Licensed Electrical Contractor. The application should be accompanied with a copy of the computerized national identity card (CNIC) of the owner, a copy of the approved building plan, a copy of the approved layout plan, a copy of the trade license, the list of machinery & equipment (needs to be notarized), details of the chiller units (in case of centrally air conditioned units), a passport size photo of the applicant, a company letter head mentioning the name of the authorizing person (needs to be notarized), the CNIC number, and the NTN certi cate from the federal board of revenue. 2 Obtain site inspection by K-Electric Ltd. and await estimate 21 calendar days PKR 0 Agency : K-Electric Ltd. After site inspection/survey, connection point is assessed, load ow study is done and schematic diagram is prepared after which veri cation from network department is carried out and load approval process is done. After load approval, cost estimation is prepared and delivered to applicant within 3 days. 3 Obtain wiring inspection 14 calendar days PKR 10,000 Agency : Electric Inspectorate Karachi To obtain the wiring test form from the Electric Inspectorate Karachi (EIK) - and once the internal works are completed - the contractor needs to give the address of the property so that EIK can proceed to test the internal wiring on-site. An inspector from EIK will then carry-out the inspection and issue the tness certi cate. It takes two calendar weeks on average from the time of the request to the time the tness certi cate is issued. 4 Pay estimate to K-Electric Ltd., and submit the internal wiring test 30 calendar days PKR 2,701,421.9 report as well as the delivery orders of the material Agency : K-Electric Ltd. The customer submits the wiring test and makes the payment of the connection estimate. The payment has to be made by cheque at the bank counter of the utility. The customer then nominates one of the pre-quali ed contractors (if it hasn’t already) who purchases the material, after which he submits the delivery and order con rmations. K-electric will issue the following documents: • Bill of materials • Approved drawings • List of approved manufacturers / suppliers for supply of materials • List of contact details of manufacturers / suppliers • List of approved pre-quali ed contractors for scheme execution • Letter of agreement for conformance to current KE speci cations • Letter of conformance to current KE speci cations (for transformers) • Letter of conformance to current KE speci cations (for other materials) 5 Await external works, meter installation and electricity ow from K- 120 calendar days PKR 0 Electric Ltd. Page 40   Agency : K-Electric Ltd. • Letter of conformance to current KE speci cations (for transformers) Letter of conformance Doing •Business to current KE speci cations (for other materials) 2018 Pakistan 5 Await external works, meter installation and electricity ow from K- 120 calendar days PKR 0 Electric Ltd. Agency : K-Electric Ltd. The pre-approved contractor conducts the works under the direct supervision of K-Electric technicians. The external connection works includes the erection of poles, the laying of HT/LT cables, the completion of PMT / Sub Station works, and the meter installation works. Once the works are completed, K-electric carries out the installation of the meter and then the electricity turn-on. Takes place simultaneously with previous procedure. Details – Getting Electricity in Karachi – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 505.6 System average interruption frequency index (SAIFI) 385.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 0 Are e ective tari s available online? Yes Link to the website, if available online https://www.ke.com. pk/assets/uploads/2 016/08/SRO-571- updated.pdf Are customers noti ed of a change in tari ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. Page 41   Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Getting Electricity in Karachi – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 505.6 System average interruption frequency index (SAIFI) 385.5 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 0 Are e ective tari s available online? Yes Link to the website, if available online https://www.ke.com. pk/assets/uploads/2 016/08/SRO-571- updated.pdf Are customers noti ed of a change in tari ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Getting Electricity - Lahore Standardized Connection Price of electricity (US cents per kWh) 18.8 Name of utility Lahore Electricity Supply Company Ltd (LESCO) Page 42   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Pakistan Getting Electricity - Lahore Standardized Connection Price of electricity (US cents per kWh) 18.8 Name of utility Lahore Electricity Supply Company Ltd (LESCO) City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedures (number) 6 5.7 4.7 2 (United Arab Emirates) Time (days) 117 136.4 79.1 10 (United Arab Emirates) Cost (% of income per capita) 1660.2 1163.2 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 0 2.1 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 85.21: India (Rank: 29) 68.83: China (Rank: 98) 46.62: Lahore 16.97: Bangladesh (Rank: 185) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Lahore – Procedure, Time and Cost Time Cost 1800 1600 100 (% of income per capita) 1400 80 1200 Time (days) 1000 60 800 Page 43   40 600 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Getting Electricity in Lahore – Procedure, Time and Cost Time Cost 1800 1600 100 Cost (% of income per capita) 1400 80 1200 Time (days) 1000 60 800 40 600 400 20 200 0 0 1 2 3 4 5 6 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Lahore and comparator economies – Measure of Quality 8 7 7 6 6 Index score 5 4 3 2.1 2 1 0 0 0 Lahore Bangladesh China India South Asia Details – Getting Electricity in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to LESCO and await site inspection 30 calendar days PKR 0 Agency : LESCO The application form should be veri ed by a Licensed Electrical Contractor. It should be accompanied with a copy of the computerized national identity card (CNIC) of the owner, a copy of the approved building plan, a copy of the approved layout plan, a copy of the trade license, the list of machinery, the equipment, details of chiller units (in case of centrally air conditioned units), a passport size photo of applicants, and a company letter head mentioning name of authorizing person and his CNIC number. The client submits the application to the marketing department of LESCO, Page 44   which forwards it to the concerned authority in charge of the relevant load. Lahore Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Getting Electricity in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application to LESCO and await site inspection 30 calendar days PKR 0 Agency : LESCO The application form should be veri ed by a Licensed Electrical Contractor. It should be accompanied with a copy of the computerized national identity card (CNIC) of the owner, a copy of the approved building plan, a copy of the approved layout plan, a copy of the trade license, the list of machinery, the equipment, details of chiller units (in case of centrally air conditioned units), a passport size photo of applicants, and a company letter head mentioning name of authorizing person and his CNIC number. The client submits the application to the marketing department of LESCO, which forwards it to the concerned authority in charge of the relevant load. 2 Obtain site inspection by LESCO and receive estimate 30 calendar days PKR 0 Agency : LESCO 3 Obtain wiring inspection 14 calendar days PKR 1,480 Agency : Electrical Inspector from Punjab Energy Department Contractor has to collect this test form from the Punjab Energy Department (they issue one form per connection application). He/she only needs to give the address of the property to obtain the form. The form certi es that the internal wiring complies with technical and safety norms. 4 Pay estimate to LESCO, and submit the internal wiring test report 1 calendar day PKR 2,701,421.9 Agency : LESCO The payment has to be made by cheque at the Bank counter of the utility. The internal wiring test report form is obtained by the licensed contractor testifying that the electrical wiring of the warehouse has been tested and meets the required testing guidelines. 5 Receive external works and await nal inspection 28 calendar days PKR 0 Agency : Electrical Contractor The contractor of the client carries out the external connection. First an order has to be placed for the material through an accredited store. For the transformer, the store will put in a request with LESCO for the inspection and approval of the materials. Once approved, the contractor is noti ed to pay and collect the transformer. The external works themselves include the erection of poles, laying of HT/LT cables, and the completion of the PMT/Sub Station. Upon completion of the works, the contractor informs LESCO so that they can perform an inspection of the works - as well as the installation of the meter. 6 Receive inspection of external works, meter installation and electricity 14 calendar days PKR 0 ow from LESCO Agency : LESCO After the electrical external works are approved by LESCO, they will come and install the meter. Electricity can then be supplied. Takes place simultaneously with previous procedure. Page 45   After the electrical external works are approved by LESCO, they will come and install the meter. Electricity can then be supplied. Doing Business 2018 Pakistan Takes place simultaneously with previous procedure. Details – Getting Electricity in Lahore – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 658.3 System average interruption frequency index (SAIFI) 410.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 0 Are e ective tari s available online? Yes Link to the website, if available online http://www.lesco.gov .pk/3000063 Are customers noti ed of a change in tari ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 46   Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Getting Electricity in Lahore – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 0 Total duration and frequency of outages per customer a year (0-3) 0 System average interruption duration index (SAIDI) 658.3 System average interruption frequency index (SAIFI) 410.8 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages Yes exceed a certain cap? Communication of tari s and tari changes (0-1) 0 Are e ective tari s available online? Yes Link to the website, if available online http://www.lesco.gov .pk/3000063 Are customers noti ed of a change in tari ahead of the billing cycle? No Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Page 47   If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Pakistan Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the purchase. Quality of land administration index (0-30) - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Registering Property - Karachi Standard Property Transfer Property value PKR 8,140,382.70 Page 48   Doing Business 2018 Pakistan Registering Property - Karachi Standard Property Transfer Property value PKR 8,140,382.70 City Covered Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Procedures (number) 8 6.8 4.6 1.00 (4 Economies) Time (days) 208 111.6 22.3 1.00 (3 Economies) Cost (% of property value) 4.2 6.9 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 6.0 8.0 22.7 29.00 (Singapore) Figure – Registering Property in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.15: China (Rank: 41) 47.08: India (Rank: 154) 33.59: Karachi 27.67: Bangladesh (Rank: 185) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Karachi – Procedure, Time and Cost Time Cost 4.5 200 4 3.5 Cost (% of property value) 150 3 Time (days) 2.5 100 2 1.5 50 1 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) Page 49   registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Registering Property in Karachi – Procedure, Time and Cost Time Cost 4.5 200 4 3.5 Cost (% of property value) 150 3 Time (days) 2.5 100 2 1.5 50 1 0.5 0 0 1 *2 *3 4 5 6 7 8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Karachi and comparator economies – Measure of Quality 20 18.3 18 16 14 Index score 12 10 8.2 8.0 8 6.0 6 4.5 4 2 0 Karachi Bangladesh China India South Asia Details – Registering Property in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtaining a Non-Objection Certi cate 2 weeks PKR 1000 Agency : District O cer Revenue The Deputy District O cer Revenue and the District O cer Revenue, at Town and city level respectively, issue a “No Objection Certi cate” in favor of the Seller permitting the sale of the property, provided that the entire amount due and payable in respect of the property has been satis ed. 2 Advertisement of transaction in newspapers inviting objections one week and one PKR 10,000 Agency : Local Newspaper day A Public notice is placed in two di erent newspapers having circulation of 100,000 copies, in English and in Urdu news paper, inviting objections/claims. Page 50   Karachi Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Registering Property in Karachi – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtaining a Non-Objection Certi cate 2 weeks PKR 1000 Agency : District O cer Revenue The Deputy District O cer Revenue and the District O cer Revenue, at Town and city level respectively, issue a “No Objection Certi cate” in favor of the Seller permitting the sale of the property, provided that the entire amount due and payable in respect of the property has been satis ed. 2 Advertisement of transaction in newspapers inviting objections one week and one PKR 10,000 Agency : Local Newspaper day A Public notice is placed in two di erent newspapers having circulation of 100,000 copies, in English and in Urdu news paper, inviting objections/claims. After publication, there is a seven-day waiting time for arrival of objections, if any. Advertisement is published in local newspapers (dailies) having a large circulation. Simultaneously, the buyer will verify the authenticity of the documents presented by the seller as well his authority to act on behalf of the company to sell this property. At the same time, there is a checking for any encumbrances. 3 Conduct title search one week no cost Agency : Sub-Registrar's o ce As a part of the due diligence procedure, it is a common practice to search the books and verify whether the counterpart actually owns the property. Lawyers also look into the previous owners. The process is completely manual and does not have cost. 4 Hire deed writer or lawyer to draft sale purchase agreement 3-7 calendar days PKR 5,000-10,000 Agency : Deed writer or lawyer It is common practice in Pakistan to hire a lawyer to draft the sale purchase agreement. 5 Payment of stamp duty, capital value tax, Town tax and registration fee 1 calendar day 2% of property price Agency : Government Treasury or National Bank of Pakistan (stamp duty) + 1% of property price The following payments must be made: (i) Conveyance stamp duty 3% of (registration fee)+ 1% property value. (ii) The capital value tax (CVT) decreased from 4% to 2.5% of Town Tax + 2.5 % of the property value (Sindh Finance Act, 2010 which came into force on July 1st, the property price 2010 amending the Sindh Urban Immoveable Property Tax Act, 1958, section (Capital value tax) 4). After the 18th constitutional amendment (April, 2010), the CVT on Capital value tax is property was transferred to the provincial governments. CVT is applicable in urban areas for residential property exceeding an area of one kanal and in not included into case of commercial properties without any threshold of land area or size of cost estimates. the property. However, where the value of such property is not recorded, the CVT is payable at Rs. 100 per square yard of land area. (iii) 1% of property value for the registration fee. (iv) 1% of the property value for the Town Tax Fees are paid at the Government Treasury or National Bank of Pakistan, an autonomous bank jointly owned by Government of Pakistan and public, who issue receipt of money which is taken to the Stamp o ce of the Government. The receipt of payment is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the change of ownership. Page 51   It is common practice in Pakistan to hire a lawyer to draft the sale purchase Doing agreement. Business 2018 Pakistan 5 Payment of stamp duty, capital value tax, Town tax and registration fee 1 calendar day 2% of property price Agency : Government Treasury or National Bank of Pakistan (stamp duty) + 1% of property price The following payments must be made: (i) Conveyance stamp duty 3% of (registration fee)+ 1% property value. (ii) The capital value tax (CVT) decreased from 4% to 2.5% of Town Tax + 2.5 % of the property value (Sindh Finance Act, 2010 which came into force on July 1st, the property price 2010 amending the Sindh Urban Immoveable Property Tax Act, 1958, section (Capital value tax) 4). After the 18th constitutional amendment (April, 2010), the CVT on Capital value tax is property was transferred to the provincial governments. CVT is applicable in urban areas for residential property exceeding an area of one kanal and in not included into case of commercial properties without any threshold of land area or size of cost estimates. the property. However, where the value of such property is not recorded, the CVT is payable at Rs. 100 per square yard of land area. (iii) 1% of property value for the registration fee. (iv) 1% of the property value for the Town Tax Fees are paid at the Government Treasury or National Bank of Pakistan, an autonomous bank jointly owned by Government of Pakistan and public, who issue receipt of money which is taken to the Stamp o ce of the Government. The receipt of payment is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the change of ownership. 6 Receipt of payment is taken to Stamp O ce 1 calendar day no cost Agency : Stamp O ce of the Government The receipt of payment obtained in Procedure 4 is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the change of ownership. 7 Execution and registration of the deed before the registration authority 6 months no cost Agency : Sub-Registrar of Conveyance/Assurances The conveyance deed must be executed before the registering authority. Execution of the deed is done before the Sub-Registrar of Conveyance/Assurances of the area, o cial responsible under the Registration Act. Registration of the deed automatically follows the execution of sale deed. A receipt is issued immediately, but the deed is delivered a few weeks later. The name of the buyer is recorded in the new deed, showing the change in ownership. The documentation shall include: • Conveyance/Sale Deed (stamped after payment in Procedure 4) • ID of parties • Original title deed of seller • If the parties have authorized someone else through a power of attorney, the power of attorney in original with copies. The buyer will conduct post registration Procedures, such as changing the name at the utility companies, property taxation and municipal services. 8 Mutation one week PKR 1000 Agency : Relevant land authority Once the registration process is completed, and the sale deed has been collected from the registrar o ce, the mutation processes is carried out at the relevant land owning authority for transfer of ownership. The mutation is the process of obtaining the new title document. A property mutation is simply the change of title ownership under certain conditions such as sale/purchase or death of an owner and even if the property is bought through a power of attorney (PoA). Through mutation, while the new owner gets the property in his name, the government is able to charge Page 52   property tax from the right owner. conduct post registration Procedures, such as changing the name at the Doing utility 2018 property companies, Business taxation and municipal services. Pakistan 8 Mutation one week PKR 1000 Agency : Relevant land authority Once the registration process is completed, and the sale deed has been collected from the registrar o ce, the mutation processes is carried out at the relevant land owning authority for transfer of ownership. The mutation is the process of obtaining the new title document. A property mutation is simply the change of title ownership under certain conditions such as sale/purchase or death of an owner and even if the property is bought through a power of attorney (PoA). Through mutation, while the new owner gets the property in his name, the government is able to charge property tax from the right owner. Takes place simultaneously with previous procedure. Details – Registering Property in Karachi – Measure of Quality Answer Score Quality of the land administration index (0-30) 6.0 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? O ce of Registrar In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land Revenue Department, Board of Revenue In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 Page 53   made publicly available–and if so, how? Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Registering Property in Karachi – Measure of Quality Answer Score Quality of the land administration index (0-30) 6.0 Reliability of infrastructure index (0-8) 0.0 What is the institution in charge of immovable property registration? O ce of Registrar In what format are the majority of title or deed records kept in the largest business city Paper 0.0 —in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for checking for encumbrances (liens, mortgages, No 0.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land Revenue Department, Board of Revenue In what format are the majority of maps of land plots kept in the largest business city— Paper 0.0 in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing No 0.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Separate 0.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 2.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: https://sindhzam een.gos.pk/demo _Registries/pdf/d oc_Registrationo fProperty.pdf Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Page 54   Link for Doing online access: Business 2018 Pakistan Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, in person 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private No 0.0 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 Page 55   property transaction (e.g., checking the compliance of contracts with requirements of engaged in good faith in a property transaction based on erroneous information ed by the immovable certi Business Doing property registry? 2018 Pakistan Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Interested Parties. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Interested Parties. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a District Courts property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for More than 3 0.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Registering Property - Lahore Standard Property Transfer Property value PKR 8,140,382.70 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedures (number) 7 6.8 4.6 1.00 (4 Economies) Time (days) 56 111.6 22.3 1.00 (3 Economies) Cost (% of property value) 5.2 6.9 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 10.5 8.0 22.7 29.00 (Singapore) Figure – Registering Property in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) Page 56   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Pakistan Registering Property - Lahore Standard Property Transfer Property value PKR 8,140,382.70 City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Procedures (number) 7 6.8 4.6 1.00 (4 Economies) Time (days) 56 111.6 22.3 1.00 (3 Economies) Cost (% of property value) 5.2 6.9 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 10.5 8.0 22.7 29.00 (Singapore) Figure – Registering Property in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.15: China (Rank: 41) 55.95: Lahore 47.08: India (Rank: 154) 27.67: Bangladesh (Rank: 185) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Lahore – Procedure, Time and Cost Time Cost 6 50 5 Cost (% of property value) 40 4 Time (days) 30 3 20 2 10 1 0 0 Page 57   1 2 3 4 5 6 7 registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Pakistan Figure – Registering Property in Lahore – Procedure, Time and Cost Time Cost 6 50 5 Cost (% of property value) 40 4 Time (days) 30 3 20 2 10 1 0 0 1 2 3 4 5 6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Lahore and comparator economies – Measure of Quality 20 18.3 18 16 14 Index score 12 10.5 10 8.2 8.0 8 6 4.5 4 2 0 Lahore Bangladesh China India South Asia Details – Registering Property in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the Fard (ownership and non-encumbrance certi cate) 2 calendar days PKR 150 Agency : LRMIS To con rm ownership and records for the property the seller obtains the Fard. The Fard is an ownership certi cate with the details of the property, the owner, the boundaries and any liens on the property. 2 Advertisement of a transaction in newspapers and inviting objections 8 calendar days PKR 10,000 Agency : Local Newspaper The public notice in two di erent newspapers having circulation of 100,000 Page 58   Lahore Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Registering Property in Lahore – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the Fard (ownership and non-encumbrance certi cate) 2 calendar days PKR 150 Agency : LRMIS To con rm ownership and records for the property the seller obtains the Fard. The Fard is an ownership certi cate with the details of the property, the owner, the boundaries and any liens on the property. 2 Advertisement of a transaction in newspapers and inviting objections 8 calendar days PKR 10,000 Agency : Local Newspaper The public notice in two di erent newspapers having circulation of 100,000 copies, in English and in Urdu news paper, inviting objections/claims should be placed. After publication, there is a seven-day waiting time for arrival of objections, if any. Advertisement is published in local newspapers (dailies) having a large circulation. Simultaneously, the buyer will verify the authenticity of the documents presented by the seller as well his authority to act on behalf of the company to sell this property. At the same time, there is a checking for any encumbrances. 3 Hire the deed writer or the lawyer to draft the sale purchase agreement 3 calendar days PKR 8,000 Agency : Lawyer It is common practice in Pakistan to hire a lawyer to draft the sale purchase agreement. People who cannot a ord lawyers hire a deed writer costing around PKP 1,000. 4 Payment of the stamp duty, capital value tax, town tax and registration 1 calendar day 2% of the property fee price (Capital value Agency : Government Treasury or National Bank of Pakistan tax) (not included in calculations) Following payments must be made: + 3% of property (i) Conveyance stamp duty 3% of property value. price (stamp duty) (ii) The capital value tax (CVT) is set at 2% of the property value (Punjab + 1% of property Finance Act, 2010). (This tax is not included in cost calculations.) (iii) 1% of property value for the registration fee. price (registration (iv) 1% of the property value for the Town Tax fee) + 1% Town Tax Fees are paid at the Government Treasury or National Bank of Pakistan, an autonomous bank jointly owned by Government of Pakistan and public, who issue receipt of money which is taken to the Stamp o ce of the Government. The receipt of payment is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the change of ownership. 5 Receipt of the payment is submitted to the Stamp O ce 1 calendar day no cost Agency : Stamp O ce of the Government The receipt of payment obtained in Procedure 4 is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the Page 59   change of ownership. value (money deposited) on the Sale Deed. Such typed stamp paper will be Doing presented Business later 2018before the Registrar, who registers the change of ownership. Pakistan 5 Receipt of the payment is submitted to the Stamp O ce 1 calendar day no cost Agency : Stamp O ce of the Government The receipt of payment obtained in Procedure 4 is taken to the Stamp O ce of the Government. The Stamp o ce will, upon production of receipt, issue a stamp paper of the value (money deposited) on the Sale Deed. Such typed stamp paper will be presented later before the Registrar, who registers the change of ownership. 6 Execution and registration of a deed before the registration authority 38 calendar days PKR 500 Agency : Sub-Registrar of Conveyance/Assurances The conveyance deed must be executed before the registering authority. Execution of the deed is done before the Sub-Registrar of Conveyance/Assurances of the area, o cial responsible under the Registration Act. Registration of the deed automatically follows the execution of sale deed. A receipt is issued immediately, but the deed is delivered a few weeks later. The name of the buyer is recorded in the new deed, showing the change in ownership. The documentation shall include: Conveyance/Sale Deed ID of parties Original title deed of seller If parties have authorized someone else through a power of attorney, the power of attorney in original with copies. The buyer will conduct post registration procedures, such as changing the name at the utility companies, property taxation and municipal services. 7 Mutation 3 calendar days PKR 500 Agency : Land authority ofthe district where the company is located Once the registration process described above is completed, and the sale deed has been collected from the sub-registrar o ce, the mutation process is carried out by the buyer at the relevant land authority for transfer of ownership. A property mutation is the change of the title ownership under certain conditions such as sale/purchase or death of an owner and even if the property is bought through a power of attorney (PoA). Through mutation, while the new owner gets the property in his name, the government is able to charge property tax from the right owner. The new owner needs to pick up the application with the purchase agreement with the sub-registrar and scanning o ce’s stamp and take it to the Director’s o ce of the concerned land authority. The owner is only the o cial owner once the mutation is completed and the new title issued. Takes place simultaneously with previous procedure. Details – Registering Property in Lahore – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Land Records Management Information System Page 60   In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 Takes place simultaneously with previous procedure. Doing Business 2018 Pakistan Details – Registering Property in Lahore – Measure of Quality Answer Score Quality of the land administration index (0-30) 10.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Land Records Management Information System In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Land Record Management Information System In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 2.0 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: Is the applicable fee schedule for any property transaction at the agency in charge of Yes, in person 0.0 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Page 61   legally binding document that proves property ownership within a speci c time frame– and if Doing so, how does Business Pakistan the service standard? it communicate 2018 Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the No 0.0 immovable property registration agency? Number of property transfers in the largest business city in 2015: Who is able to consult maps of land plots in the largest business city? Anyone who 0.5 pays the o cial fee Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, in person 0.0 —and if so, how? Link for online access: Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 0.0 Are all privately held land plots in the economy formally registered at the immovable No 0.0 property registry? Are all privately held land plots in the largest business city formally registered at the No 0.0 immovable property registry? Are all privately held land plots in the economy mapped? No 0.0 Are all privately held land plots in the largest business city mapped? No 0.0 Land dispute resolution index (0–8) 3.5 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private No 0.0 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar. Page 62   property transaction (e.g., checking the compliance of contracts with requirements of the law)? Doing Business 2018 Pakistan If yes, who is responsible for checking the legality of the documents? Registrar. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar. Is there a national database to verify the accuracy of identity documents? Yes 1.0 For a standard land dispute between two local businesses over tenure rights of a District Court property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the rst instance? How long does it take on average to obtain a decision from the rst-instance court for More than 3 0.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? No 0.0 Number of land disputes in the largest business city in 2015: Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Page 63   Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Pakistan Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Getting Credit - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Strength of legal rights index (0-12) 2 5.3 6.0 12.00 (4 Economies) Page 64   possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Pakistan Getting Credit - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Strength of legal rights index (0-12) 2 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 9.9 3.8 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 6.7 14.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: India (Rank: 29) 60.00: China (Rank: 68) 45.00: Karachi 25.00: Bangladesh (Rank: 159) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Karachi and comparator economies 9 8 8 7 6 Index score 5 5.3 5 4 4 3 2 2 1 0 Karachi Bangladesh China India South Asia Details – Legal Rights in Karachi Strength of legal rights index (0-12) 2 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Page 65   Karachi Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Legal Rights in Karachi Strength of legal rights index (0-12) 2 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Karachi and comparator economies 10 8 8 7 7 Index score 6 4.0 4 2 0 0 Karachi Bangladesh China India South Asia Details – Credit Information in Karachi Page 66   0 0 Doing BusinessKarachi 2018 Pakistan Bangladesh China India South Asia Details – Credit Information in Karachi Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 7,869,665 11,523,845 Number of firms 0 122,955 Total 7,869,665 11,646,800 Percentage of adult population 6.7 9.9 Getting Credit - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Strength of legal rights index (0-12) 2 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 9.9 3.8 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 6.7 14.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) Page 67   Percentage of adult population 6.7 9.9 Doing Business 2018 Pakistan Getting Credit - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Strength of legal rights index (0-12) 2 5.3 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 7 4.0 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 9.9 3.8 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 6.7 14.1 63.7 100.00 (23 Economies) Figure – Getting Credit in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: India (Rank: 29) 60.00: China (Rank: 68) 45.00: Lahore 25.00: Bangladesh (Rank: 159) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Lahore and comparator economies 9 8 8 7 6 Index score 5 5.3 5 4 4 3 2 2 1 0 Lahore Bangladesh China India South Asia Details – Legal Rights in Lahore Strength of legal rights index (0-12) 2 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No Page 68   enforcement of functional equivalents to security interests in movable assets exist in the economy? Lahore Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Legal Rights in Lahore Strength of legal rights index (0-12) 2 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without Yes requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and No obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically No and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? No Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law No allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Lahore and comparator economies 10 8 8 7 7 Index score 6 4.0 4 2 0 0 Lahore Bangladesh China India South Asia Details – Credit Information in Lahore Page 69   0 0 Doing BusinessLahore 2018 Pakistan Bangladesh China India South Asia Details – Credit Information in Lahore Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes Yes 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes Yes 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial Yes No 1 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 7 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 7,869,665 11,523,845 Number of firms 0 122,955 Total 7,869,665 11,646,800 Percentage of adult population 6.7 9.9 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 70   transactions; Available legal remedies (damages, Percentage of adult population 6.7 9.9 Doing Business 2018 Pakistan Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Protecting Minority Investors - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 5.5 6.4 9.3 (New Zealand) Page 71   10) and the other parties that approved the transaction. Doing Business 2018 Pakistan Protecting Minority Investors - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 5.5 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 5.3 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: India (Rank: 4) 71.67: Karachi 56.67: Bangladesh (Rank: 76) 48.33: China (Rank: 119) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Karachi and comparator economies – Measure of Quality Karachi 7 7 6 9 8 6 Bangladesh 6 7 6 4 5 6 China 9 1 10 2 3 4 India 8 7 8 8 10 7 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 South Asia 6.1 5.9 5.6 5.8 6.5 6.4 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Karachi – Measure of Quality Page 72   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Pakistan Details – Protecting Minority Investors in Karachi – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.3 Extent of disclosure index (0-10) 6 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 7 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by Yes 1.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Page 73   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Pakistan Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) At the discretion 0.0 of the court Extent of shareholder governance index (0-10) 8 Extent of shareholder rights index (0-10) 8 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 9 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Page 74   Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Pakistan Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Protecting Minority Investors - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 5.5 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 5.3 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) Page 75   0 100 Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Pakistan Protecting Minority Investors - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 6.3 5.5 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 5.3 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 80.00: India (Rank: 4) 71.67: Lahore 56.67: Bangladesh (Rank: 76) 48.33: China (Rank: 119) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Lahore and comparator economies – Measure of Quality Lahore 7 7 6 9 8 6 Bangladesh 6 7 6 4 5 6 China 9 1 10 2 3 4 India 8 7 8 8 10 7 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 South Asia 6.1 5.9 5.6 5.8 6.5 6.4 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Page 76   con ict of interest regulation index and the extent of shareholder governance index. Doing Business 2018 Pakistan Figure – Protecting Minority Investors in Lahore and comparator economies – Measure of Quality Lahore 7 7 6 9 8 6 Bangladesh 6 7 6 4 5 6 China 9 1 10 2 3 4 India 8 7 8 8 10 7 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 South Asia 6.1 5.9 5.6 5.8 6.5 6.4 0 10 20 30 40 50 60 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Lahore – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.3 Extent of disclosure index (0-10) 6 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 7 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 Page 77   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Pakistan Details – Protecting Minority Investors in Lahore – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 6.3 Extent of disclosure index (0-10) 6 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Board of 2.0 directors excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 7 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by Yes 1.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Page 78   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Pakistan Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Preapproved 1.0 questions only Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) At the discretion 0.0 of the court Extent of shareholder governance index (0-10) 8 Extent of shareholder rights index (0-10) 8 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require Yes 1.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new No 0.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their Yes 1.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 9 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Page 79   Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Pakistan Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and Yes 1.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general No 0.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 80   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Pakistan Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Paying Taxes - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Page 81   return, but within the tax assessment period. Doing Business 2018 Pakistan Paying Taxes - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Payments (number per year) 47 28.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 311.5 277.3 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 33.8 43.0 40.1 18.47% (32 Economies) Postfiling index (0-100) 10.49 41.05 83.45 99.38 (Estonia) Figure – Paying Taxes in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 66.06: India (Rank: 119) 62.90: China (Rank: 130) 56.13: Bangladesh (Rank: 152) 46.43: Karachi Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Karachi and comparator economies – Measure of Quality 60 49.08 49.31 50 44.36 41.05 40 Index score 30 20 10.49 10 0 Karachi Bangladesh China India South Asia Details – Paying Taxes in Karachi Total tax and Page 82   Tax or mandatory Payments Notes on Time contribution rate (% Notes on Doing Business 2018 Pakistan Figure – Paying Taxes in Karachi and comparator economies – Measure of Quality 60 49.08 49.31 50 44.36 41.05 40 Index score 30 20 10.49 10 0 Karachi Bangladesh China India South Asia Details – Paying Taxes in Karachi Total tax and Tax or mandatory Payments Notes on Time contribution rate (% Notes on contribution (number) Payments (hours) Statutory tax rate Tax base of profit) TTR Corporate income 5 40 25% taxable profit 18.29 tax Employer paid - 12 5% or PKR 700 per gross salaries 7.06 Pension employee per contributions month Social security 12 40 6% up to PKR gross salaries 6.46 contributions 15,000 wage ceiling Education cess 1 PKR 100 per per worker 0.93 month Property tax 1 18% (including annual rental 0.89 10% discount) value of property Tax on interest 0 10% interest 0.26 included in other taxes Professional tax 1 PKR 10,000 fixed fee 0.14 Vehicle tax 1 varies fixed fee 0.07 depending on type of vehicle Stamp duty 1 rate based on 0.00 contract value Employee paid - 0 jointly 1% or PKR 140 per gross salaries 0.00 withheld Pension employee per contributions month Fuel tax 1 25% included into fuel 0.00 small price amount Goods and sales 12 232 17% value added 0.00 not Page 83   Pension employee per contributions Doing Business 2018 Pakistan month Fuel tax 1 25% included into fuel 0.00 small price amount Goods and sales 12 232 17% value added 0.00 not tax (VAT) included Totals 47 311.5 33.8 Details – Paying Taxes in Karachi – Tax by Type Taxes by type Answer Profit tax (% of profit) 18.3 Labor tax and contributions (% of profit) 14.5 Other taxes (% of profit) 1.1 Details – Paying Taxes in Karachi – Measure of Quality Answer Score Post ling index (0-100) 10.49 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 6 months Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 84.0 0 Time to obtain a VAT refund (weeks) 79.0 0 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax audit (hours) 69.0 0 Time to complete a corporate income tax audit (weeks) 18.6 41.96 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. Page 84   N/A = Not applicable. corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. Doing The for Social 2018 Business hours Security Pakistan include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Paying Taxes - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Payments (number per year) 47 28.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 311.5 277.3 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 33.8 43.0 40.1 18.47% (32 Economies) Postfiling index (0-100) 10.49 41.05 83.45 99.38 (Estonia) Figure – Paying Taxes in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 66.06: India (Rank: 119) 62.90: China (Rank: 130) 56.13: Bangladesh (Rank: 152) 46.43: Lahore Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Lahore and comparator economies – Measure of Quality 60 49.08 49.31 50 44.36 41.05 40 Index score 30 20 10.49 10 0 Lahore Bangladesh China India South Asia Page 85   a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Pakistan Paying Taxes - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Payments (number per year) 47 28.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 311.5 277.3 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 33.8 43.0 40.1 18.47% (32 Economies) Postfiling index (0-100) 10.49 41.05 83.45 99.38 (Estonia) Figure – Paying Taxes in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 66.06: India (Rank: 119) 62.90: China (Rank: 130) 56.13: Bangladesh (Rank: 152) 46.43: Lahore Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Lahore and comparator economies – Measure of Quality 60 49.08 49.31 50 44.36 41.05 40 Index score 30 20 10.49 10 0 Lahore Bangladesh China India South Asia Details – Paying Taxes in Lahore Page 86   Doing Business 2018 Pakistan Figure – Paying Taxes in Lahore and comparator economies – Measure of Quality 60 49.08 49.31 50 44.36 41.05 40 Index score 30 20 10.49 10 0 Lahore Bangladesh China India South Asia Details – Paying Taxes in Lahore Total tax and Tax or mandatory Payments Notes on Time contribution rate (% Notes on contribution (number) Payments (hours) Statutory tax rate Tax base of profit) TTR Corporate income 5 40 25% taxable profit 18.29 tax Employer paid - 12 5% or PKR 700 per gross salaries 7.06 Pension employee per contributions month Social security 12 40 6% up to PKR gross salaries 6.46 contributions 15,000 wage ceiling Education cess 1 PKR 100 per per worker 0.93 month Property tax 1 18% (including annual rental 0.89 10% discount) value of property Tax on interest 0 10% interest 0.26 included in other taxes Professional tax 1 PKR 10,000 fixed fee 0.14 Vehicle tax 1 varies fixed fee 0.07 depending on type of vehicle Stamp duty 1 rate based on 0.00 contract value Employee paid - 0 jointly 1% or PKR 140 per gross salaries 0.00 withheld Pension employee per contributions month Fuel tax 1 25% included into fuel 0.00 small price amount Goods and sales 12 232 17% value added 0.00 not Page 87   Pension employee per contributions Doing Business 2018 Pakistan month Fuel tax 1 25% included into fuel 0.00 small price amount Goods and sales 12 232 17% value added 0.00 not tax (VAT) included Totals 47 311.5 33.8 Details – Paying Taxes in Lahore – Tax by Type Taxes by type Answer Profit tax (% of profit) 18.3 Labor tax and contributions (% of profit) 14.5 Other taxes (% of profit) 1.1 Details – Paying Taxes in Lahore – Measure of Quality Answer Score Post ling index (0-100) 10.49 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process Carry forward for 6 months Percentage of cases exposed to a VAT audit (%) 50% - 74% Is there a mandatory carry forward period? Yes Time to comply with VAT refund (hours) 84.0 0 Time to obtain a VAT refund (weeks) 79.0 0 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax audit (hours) 69.0 0 Time to complete a corporate income tax audit (weeks) 18.6 41.96 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. Page 88   N/A = Not applicable. corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. Doing The for Social 2018 Business hours Security Pakistan include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments Page 89   of agriculture or industry, national security agencies and any other a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Pakistan Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) Traffic delays and road police checks while from its natural import partner—the economy from which it imports the shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 90   of agriculture or industry, national security agencies and any other Doing Business 2018 Pakistan government authorities. Trading across Borders - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Time to export: Border compliance (hours) 75 59.4 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 406 369.8 149.9 0.00 (19 Economies) Time to export: Documentary compliance 55 77.0 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 257 179.5 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 129 113.8 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 937 638.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 143 104.7 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 735 341.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 69.91: China (Rank: 97) 58.56: India (Rank: 146) 41.94: Karachi 34.86: Bangladesh (Rank: 173) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Karachi – Time and Cost Time Cost 160 937 1000 143 140 129 735 800 120 Time (hours) Cost (USD) 100 600 80 75 406 60 55 400 257 40 200 20 Page 91   Doing Business 2018 Pakistan Figure – Trading across Borders in Karachi – Time and Cost Time Cost 160 937 1000 143 140 129 735 800 120 Time (hours) Cost (USD) 100 600 80 75 406 60 55 400 257 40 200 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Karachi Characteristics Export Import Product HS 52 : Cotton HS 8708: Parts and accessories of motor vehicles Trade partner China Thailand Border Qasim port Qasim port Distance (km) 54 54 Domestic transport time (hours) 6 4 Domestic transport cost (USD) 200 200 Details – Trading across Borders in Karachi – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 30.9 150.0 Export: Clearance and inspections required by agencies other than customs 24.0 100.0 Export: Port or border handling 75.0 156.0 Import: Clearance and inspections required by customs authorities 34.0 285.7 Import: Clearance and inspections required by agencies other than customs 89.6 342.9 Import: Port or border handling 120.0 308.0 Details – Trading across Borders in Karachi – Trade Documents Export Import Bill of lading Bill of lading Packing list Packing list Page 92   Domestic transport cost (USD) 200 200 Doing Business 2018 Pakistan Details – Trading across Borders in Karachi – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 30.9 150.0 Export: Clearance and inspections required by agencies other than customs 24.0 100.0 Export: Port or border handling 75.0 156.0 Import: Clearance and inspections required by customs authorities 34.0 285.7 Import: Clearance and inspections required by agencies other than customs 89.6 342.9 Import: Port or border handling 120.0 308.0 Details – Trading across Borders in Karachi – Trade Documents Export Import Bill of lading Bill of lading Packing list Packing list Certificate of origin Certificate of origin Inspection report Pre-shipment inspection certificate Insurance certificate Technical standards certificate Export General Manifest (EGM) Form I E Form (with Commercial Bank) Import general manifest Customs Export Declaration Import declaration Price certificate SOLAS certificate Phytosanitary certificate Gate pass SOLAS certificate Trading across Borders - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Time to export: Border compliance (hours) 75 59.4 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 406 369.8 149.9 0.00 (19 Economies) Time to export: Documentary compliance 55 77.0 2.4 1.0 (25 Economies) (hours) Page 93   SOLAS certificate Doing Business 2018 Pakistan Trading across Borders - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Time to export: Border compliance (hours) 75 59.4 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 406 369.8 149.9 0.00 (19 Economies) Time to export: Documentary compliance 55 77.0 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 257 179.5 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 129 113.8 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 937 638.0 111.6 0.00 (27 Economies) Time to import: Documentary compliance 143 104.7 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 735 341.6 25.6 0.00 (30 Economies) Figure – Trading across Borders in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 69.91: China (Rank: 97) 58.56: India (Rank: 146) 41.94: Lahore 34.86: Bangladesh (Rank: 173) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Lahore – Time and Cost Time Cost 160 937 1000 143 140 129 735 800 120 Time (hours) Cost (USD) 100 600 80 75 406 60 55 400 257 40 200 20 Page 94   Doing Business 2018 Pakistan Figure – Trading across Borders in Lahore – Time and Cost Time Cost 160 937 1000 143 140 129 735 800 120 Time (hours) Cost (USD) 100 600 80 75 406 60 55 400 257 40 200 20 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Lahore Characteristics Export Import Product HS 52 : Cotton HS 8708: Parts and accessories of motor vehicles Trade partner China Thailand Border Qasim port Qasim port Distance (km) 1296 1296 Domestic transport time (hours) 48 48 Domestic transport cost (USD) 500 500 Details – Trading across Borders in Lahore – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 30.9 150.0 Export: Clearance and inspections required by agencies other than customs 24.0 100.0 Export: Port or border handling 75.0 156.0 Import: Clearance and inspections required by customs authorities 34.0 285.7 Import: Clearance and inspections required by agencies other than customs 89.6 342.9 Import: Port or border handling 120.0 308.0 Details – Trading across Borders in Lahore – Trade Documents Export Import Bill of lading Bill of lading Packing list Packing list Page 95   Domestic transport cost (USD) 500 500 Doing Business 2018 Pakistan Details – Trading across Borders in Lahore – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 30.9 150.0 Export: Clearance and inspections required by agencies other than customs 24.0 100.0 Export: Port or border handling 75.0 156.0 Import: Clearance and inspections required by customs authorities 34.0 285.7 Import: Clearance and inspections required by agencies other than customs 89.6 342.9 Import: Port or border handling 120.0 308.0 Details – Trading across Borders in Lahore – Trade Documents Export Import Bill of lading Bill of lading Packing list Packing list Certificate of origin Certificate of origin Inspection report Pre-shipment inspection certificate Insurance certificate Technical standards certificate Export General Manifest (EGM) Form I E Form (with Commercial Bank) Import General Manifest Customs Export Declaration Import declaration Gate pass SOLAS certificate Price certificate issued by the All Pakistan Textile Mills Association Phytosanitary certificate SOLAS certificate Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) Page 96   between 2 domestic businesses. The case study assumes that the court SOLAS certificate Doing Business 2018 Pakistan Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Enforcing Contracts - Karachi Standardized Case Claim value PKR 533,051.00 Court name Karachi District Court City Covered Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Time (days) 1096 1101.6 577.8 164.00 (Singapore) Cost (% of claim value) 18.1 29.6 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 6.0 7.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 Page 97   78.23: China (Rank: 5) of judicial processes Quality Business Doing index (0-18) 2018 Pakistan 6.0 7.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.23: China (Rank: 5) 44.36: Karachi 40.76: India (Rank: 164) 22.21: Bangladesh (Rank: 189) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Karachi – Time and Cost Time Cost 1600 80 1442 1445 1400 66.8 70 Cost (% of claim value) 1200 1096 1101.6 60 Time (days) 1000 50 800 40 31.0 577.8 29.6 600 496.3 30 21.5 16.2 18.1 400 20 200 10 0 0 Bangladesh China India Karachi OECD high income South Asia Figure – Enforcing Contracts in Karachi and comparator economies – Measure of Quality Karachi 2 1.5 0.5 2 Bangladesh 3 1 0.5 3 China 3 4.5 3 4.5 India 2.3 1.5 2 4.5 OECD high income 2.5 2.9 2 3.6 South Asia 2.3 1.1 0.8 3.2 0 2 4 6 8 10 12 14 Page 98   16 0 0 Bangladesh China India Karachi OECD high income South Asia Doing Business 2018 Pakistan Figure – Enforcing Contracts in Karachi and comparator economies – Measure of Quality Karachi 2 1.5 0.5 2 Bangladesh 3 1 0.5 3 China 3 4.5 3 4.5 India 2.3 1.5 2 4.5 OECD high income 2.5 2.9 2 3.6 South Asia 2.3 1.1 0.8 3.2 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Karachi Indicator Time (days) 1096 Filing and service 96 Trial and judgment 700 Enforcement of judgment 300 Cost (% of claim value) 18.1 Attorney fees 11 Court fees 5.9 Enforcement fees 1.2 Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.0 Case management (0-6) 1.5 Court automation (0-4) 0.5 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Karachi – Measure of Quality Page 99   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Pakistan Details – Enforcing Contracts in Karachi – Measure of Quality Answer Score Quality of judicial processes index (0-18) 6.0 Court structure and proceedings (-1-5) 2.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? No -1.0 Case management (0-6) 1.5 1. Time standards 0.5 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court Yes 1.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.5 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 100   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Pakistan 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Enforcing Contracts - Lahore Standardized Case Claim value PKR 533,051.00 Court name Lahore District Court City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Time (days) 1025 1101.6 577.8 164.00 (Singapore) Cost (% of claim value) 25.0 29.6 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 5.0 7.0 11.0 15.50 (Australia) Page 101   if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Pakistan Enforcing Contracts - Lahore Standardized Case Claim value PKR 533,051.00 Court name Lahore District Court City Covered Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Time (days) 1025 1101.6 577.8 164.00 (Singapore) Cost (% of claim value) 25.0 29.6 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 5.0 7.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 78.23: China (Rank: 5) 41.86: Lahore 40.76: India (Rank: 164) 22.21: Bangladesh (Rank: 189) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Lahore – Time and Cost Time Cost 1600 80 1442 1445 1400 66.8 70 Cost (% of claim value) 1200 1101.6 60 1025 Time (days) 1000 50 800 40 31.0 577.8 29.6 600 496.3 25.0 30 21.5 400 16.2 20 200 10 0 0 Bangladesh China India Lahore OECD high income South Asia Page 102   Figure – Enforcing Contracts in Lahore and comparator economies – Measure of Quality 0 0 Bangladesh China India Lahore OECD high income South Asia Doing Business 2018 Pakistan Figure – Enforcing Contracts in Lahore and comparator economies – Measure of Quality Lahore 2 0.5 0.5 2 Bangladesh 3 1 0.5 3 China 3 4.5 3 4.5 India 2.3 1.5 2 4.5 OECD high income 2.5 2.9 2 3.6 South Asia 2.3 1.1 0.8 3.2 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Lahore Indicator Time (days) 1025 Filing and service 60 Trial and judgment 600 Enforcement of judgment 365 Cost (% of claim value) 25.0 Attorney fees 15 Court fees 7 Enforcement fees 3 Quality of judicial processes index (0-18) 5.0 Court structure and proceedings (-1-5) 2.0 Case management (0-6) 0.5 Court automation (0-4) 0.5 Alternative dispute resolution (0-3) 2.0 Details – Enforcing Contracts in Lahore – Measure of Quality Page 103   Alternative dispute resolution (0-3) 2.0 Doing Business 2018 Pakistan Details – Enforcing Contracts in Lahore – Measure of Quality Answer Score Quality of judicial processes index (0-18) 5.0 Court structure and proceedings (-1-5) 2.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? No -1.0 Case management (0-6) 0.5 1. Time standards 0.5 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? No 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? n.a. 3. Can two of the following four reports be generated about the competent court: (i) No 0.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the No 0.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 0.5 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 104   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Pakistan 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? No 0.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the No general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or No consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 105   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Pakistan Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Resolving Insolvency - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Recovery rate (cents on the dollar) 43.4 32.7 71.2 93.1 (Norway) Page 106   Creditor participation index (0-4) Doing Business 2018 Pakistan Resolving Insolvency - Karachi OECD high Indicator Karachi South Asia income Overall Best Performer Recovery rate (cents on the dollar) 43.4 32.7 71.2 93.1 (Norway) Time (years) 2.8 2.6 1.7 0.4 (Ireland) Cost (% of estate) 4.0 9.9 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.0 4.9 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.82: China (Rank: 56) 45.26: Karachi 40.75: India (Rank: 103) 27.71: Bangladesh (Rank: 152) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Karachi – Time and Cost Time Cost 4.5 4.3 25 4.0 22.0 4 3.5 20 Cost (% of estate) 3 2.8 Time (years) 2.6 15 2.5 2 1.7 1.7 9.1 9.9 9.0 10 8.0 1.5 1 4.0 5 0.5 0 0 Bangladesh China India Karachi OECD high income South Asia Figure – Resolving Insolvency in Karachi and comparator economies – Measure of Quality Page 107   Karachi 3 2 2 0 0 0 Bangladesh China India Karachi OECD high income South Asia Doing Business 2018 Pakistan Figure – Resolving Insolvency in Karachi and comparator economies – Measure of Quality Karachi 3 2 2 0 Bangladesh 2 2 0 China 5 3 1 2.5 India 4.5 2 1 1 OECD high income 5.4 2.8 2.3 1.9 South Asia 2.6 2 0.9 0.4 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Karachi and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 50 43.4 45 40 36.9 35 32.7 28.3 30 26.4 25 20 15 10 5 0 Karachi Bangladesh China India South Asia Details – Resolving Insolvency in Karachi Indicator Answer Explanation Proceeding foreclosure After Mirage's default on payment, the BizBank will bring a recovery action (foreclosure proceedings) under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, against the Mirage at the Banking Court. This is the most effective way for BizBank to recoup its investment with the security interest over Mirage's assets. Outcome piecemeal sale After Court's decision on Mirage's case, BizBank would gain possession of Mirage's assets and sell them piecemeal in a public auction by the court appointed auctioneer. The hotel will stop operating. Time (in years) 2.8 The foreclosure procedure until BizBank is repaid some or all of the money owed to it takes approximate 2.8 years. BizBank would initiate foreclosure 3 months after Mirage's default. The Court will then review the case, notify all relevant parties, hold a hearing and appoint an Page 108   official receiver. This period usually takes about 4 months. Then it takes approximate half a Karachi Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Resolving Insolvency in Karachi Indicator Answer Explanation Proceeding foreclosure After Mirage's default on payment, the BizBank will bring a recovery action (foreclosure proceedings) under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, against the Mirage at the Banking Court. This is the most effective way for BizBank to recoup its investment with the security interest over Mirage's assets. Outcome piecemeal sale After Court's decision on Mirage's case, BizBank would gain possession of Mirage's assets and sell them piecemeal in a public auction by the court appointed auctioneer. The hotel will stop operating. Time (in years) 2.8 The foreclosure procedure until BizBank is repaid some or all of the money owed to it takes approximate 2.8 years. BizBank would initiate foreclosure 3 months after Mirage's default. The Court will then review the case, notify all relevant parties, hold a hearing and appoint an official receiver. This period usually takes about 4 months. Then it takes approximate half a year for the court appointed official receiver to finalize creditors' claims and an additional 4 months to have the court's final decision made. The court would then appoint an auctioneer to conduct the sale of Mirage's assets. Execution of the auction sale until BizBank is repaid takes around 1 year. Cost (% of 4.0 The costs associated with the case would amount to approximately 4% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include court or government agency fees (0.1%), attorneys’ fees (2%), costs of notification and publication (<1%), fees of accountants, assessors, inspectors and other professionals (1%), and fees of auctioneers (1%). Recovery rate (cents on the 43.4 dollar) Details – Resolving Insolvency in Karachi – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 Page 109   goods and services to the debtor? dollar) Doing Business 2018 Pakistan Details – Resolving Insolvency in Karachi – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Page 110   Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment Doing Businessof the 2018insolvency representative? Pakistan Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Resolving Insolvency - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Recovery rate (cents on the dollar) 46.5 32.7 71.2 93.1 (Norway) Time (years) 2.3 2.6 1.7 0.4 (Ireland) Cost (% of estate) 4.0 9.9 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.0 4.9 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.82: China (Rank: 56) 46.88: Lahore 40.75: India (Rank: 103) 27.71: Bangladesh (Rank: 152) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Lahore – Time and Cost Time Cost 4.5 4.3 25 4.0 22.0 4 3.5 Page 111   20 te) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Pakistan Resolving Insolvency - Lahore OECD high Indicator Lahore South Asia income Overall Best Performer Recovery rate (cents on the dollar) 46.5 32.7 71.2 93.1 (Norway) Time (years) 2.3 2.6 1.7 0.4 (Ireland) Cost (% of estate) 4.0 9.9 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 7.0 4.9 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Pakistan and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 55.82: China (Rank: 56) 46.88: Lahore 40.75: India (Rank: 103) 27.71: Bangladesh (Rank: 152) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Lahore – Time and Cost Time Cost 4.5 4.3 25 4.0 22.0 4 3.5 20 Cost (% of estate) 3 Time (years) 2.6 15 2.5 2.3 2 1.7 1.7 9.1 9.9 9.0 10 8.0 1.5 1 4.0 5 0.5 0 0 Bangladesh China India Lahore OECD high income South Asia Figure – Resolving Insolvency in Lahore and comparator economies – Measure of Quality Page 112   0 0 Bangladesh China India Lahore OECD high income South Asia Doing Business 2018 Pakistan Figure – Resolving Insolvency in Lahore and comparator economies – Measure of Quality Lahore 3 2 2 0 Bangladesh 2 2 0 China 5 3 1 2.5 India 4.5 2 1 1 OECD high income 5.4 2.8 2.3 1.9 South Asia 2.6 2 0.9 0.4 0 2 4 6 8 10 12 14 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Lahore and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 50 46.5 45 40 36.9 35 32.7 28.3 30 26.4 25 20 15 10 5 0 Lahore Bangladesh China India South Asia Details – Resolving Insolvency in Lahore Indicator Answer Explanation Proceeding foreclosure After Mirage's default on payment, the BizBank will bring a recovery action (foreclosure proceedings) under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, against the Mirage at the Banking Court. This is the most effective way for BizBank to recoup its investment with the security interest over Mirage's assets. Outcome piecemeal sale After Court's decision on Mirage's case, BizBank would gain possession of Mirage's assets and sell them piecemeal in a public auction by the court appointed auctioneer. The hotel will stop operating. Time (in years) 2.3 Recovery law is a specialized law and provides a restricted time frame of ninety days to conclude the foreclosure procedure. However, in practice, it may extend to about 28 months. The time consumed in obtaining a judgement before the Banking Court is year and Page 113   some additional months. The time for the successful execution and enforcement of decree Lahore Bangladesh China India South Asia Doing Business 2018 Pakistan Details – Resolving Insolvency in Lahore Indicator Answer Explanation Proceeding foreclosure After Mirage's default on payment, the BizBank will bring a recovery action (foreclosure proceedings) under Section 9 of the Financial Institutions (Recovery of Finances) Ordinance 2001, against the Mirage at the Banking Court. This is the most effective way for BizBank to recoup its investment with the security interest over Mirage's assets. Outcome piecemeal sale After Court's decision on Mirage's case, BizBank would gain possession of Mirage's assets and sell them piecemeal in a public auction by the court appointed auctioneer. The hotel will stop operating. Time (in years) 2.3 Recovery law is a specialized law and provides a restricted time frame of ninety days to conclude the foreclosure procedure. However, in practice, it may extend to about 28 months. The time consumed in obtaining a judgement before the Banking Court is year and some additional months. The time for the successful execution and enforcement of decree also takes approximately an additional a year Cost (% of 4.0 The costs associated with the case would amount to approximately 4% of the value of the estate) debtor's estate. Cost incurred during the entire insolvency process mainly include court or government agency fees (0.1%), attorneys’ fees (2%), costs of notification and publication (<1%), fees of accountants, assessors, inspectors and other professionals (1%), and fees of auctioneers (1%). Recovery rate (cents on the 46.5 dollar) Details – Resolving Insolvency in Lahore – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Page 114   dollar) Doing Business 2018 Pakistan Details – Resolving Insolvency in Lahore – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 7.0 Commencement of proceedings index (0-3) 2.0 What procedures are available to a DEBTOR when commencing insolvency (b) Debtor may 0.5 proceedings? le for liquidation only Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (b) Yes, but a 0.5 creditor may le for liquidation only What basis for commencement of the insolvency proceedings is allowed under the (a) Debtor is 1.0 insolvency framework? generally unable to pay its debts as they mature Management of debtor's assets index (0-6) 3.0 Does the insolvency framework allow the continuation of contracts supplying essential No 0.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 0.0 Which creditors vote on the proposed reorganization plan? N/A 0.0 Does the insolvency framework require that dissenting creditors in reorganization No 0.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization No 0.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Page 115   Does the insolvency framework require approval by the creditors for selection or No 0.0 appointment Doing Businessof the 2018insolvency representative? Pakistan Does the insolvency framework require approval by the creditors for sale of substantial Yes 1.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity Page 116   leave; (iv) whether employees on maternity leave the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Pakistan Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Labor Market Regulation - Karachi Details – Labor Market Regulation in Karachi Answer Page 117   days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Pakistan Labor Market Regulation - Karachi Details – Labor Market Regulation in Karachi Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 9.0 Maximum length of xed-term contracts, including renewals (months) 9.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 129.8 Ratio of minimum wage to value added per worker 0.6 Maximum length of probationary period (months) 3.0 Working hours Standard workday 9.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 100.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 14.0 Paid annual leave for a worker with 5 years of tenure (working days) 14.0 Paid annual leave for a worker with 10 years of tenure (working days) 14.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 14.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Page 118   Third-party Doing cation if Pakistan noti 2018 Business nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.4 Severance pay for redundancy dismissal for a worker with 10 years of tenure 42.9 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 22.9 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Labor Market Regulation - Lahore Details – Labor Market Regulation in Lahore Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 9.0 Maximum length of xed-term contracts, including renewals (months) 9.0 Page 119   Minimum wage applicable to the worker assumed in the case study (US$/month) 129.8 Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Pakistan Labor Market Regulation - Lahore Details – Labor Market Regulation in Lahore Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) 9.0 Maximum length of xed-term contracts, including renewals (months) 9.0 Minimum wage applicable to the worker assumed in the case study (US$/month) 129.8 Ratio of minimum wage to value added per worker 0.6 Maximum length of probationary period (months) 3.0 Working hours Standard workday 9.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 100.0 Premium for overtime work (% of hourly pay) 100.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men No Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 14.0 Paid annual leave for a worker with 5 years of tenure (working days) 14.0 Paid annual leave for a worker with 10 years of tenure (working days) 14.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 14.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Page 120   Third-party Doing cation if Pakistan noti 2018 Business nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 4.3 Notice period for redundancy dismissal for a worker with 10 years of tenure 4.3 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 4.3 Severance pay for redundancy dismissal for a worker with 1 year of tenure 4.3 Severance pay for redundancy dismissal for a worker with 5 years of tenure 21.4 Severance pay for redundancy dismissal for a worker with 10 years of tenure 42.9 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 22.9 Job quality Equal remuneration for work of equal value? No Gender nondiscrimination in hiring? No Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 84.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? No Minimum contribution period for unemployment protection (months)? n.a. Business Reforms in Pakistan In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Pakistan implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Pakistan made starting a business easier by replacing the need to obtain a digital signature for company incorporation with a less costly personal identi cation number. This change applies to both Karachi and Lahore. Registering Property: Pakistan, Karachi improved the transparency of the land registration process by publishing online the fee schedule and the list of documents necessary to complete any property registration. Page 121   Protecting Minority Investors: Pakistan increased minority investor protections by making it easier to sue directors in case of Minimum contribution period for unemployment protection (months)? n.a. Doing Business 2018 Pakistan Business Reforms in Pakistan In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Pakistan implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Starting a Business: Pakistan made starting a business easier by replacing the need to obtain a digital signature for company incorporation with a less costly personal identi cation number. This change applies to both Karachi and Lahore. Registering Property: Pakistan, Karachi improved the transparency of the land registration process by publishing online the fee schedule and the list of documents necessary to complete any property registration. Protecting Minority Investors: Pakistan increased minority investor protections by making it easier to sue directors in case of prejudicial transactions with interested parties. This reform applies to both Karachi and Lahore. Trading across Borders: Pakistan made importing and exporting easier by developing a new container terminal and enhancing its customs platform for electronic document submission. These changes apply to both Karachi and Lahore. DB2017 Registering Property: Pakistan improved the quality of land administration by digitizing ownership and land records. This reform applies to Lahore. Getting Credit: Pakistan improved access to credit information guaranteeing by law borrowers’ rights to inspect their own data. The credit bureau also expanded its borrower coverage. This reform applies to both Lahore and Karachi. Trading across Borders: Pakistan made exporting and importing easier by enhancing its electronic "Web Based One Customs Platform". DB2015 Trading across Borders: Pakistan made trading across borders easier by introducing a fully automated, computerized system (the Web-Based One Customs system) for the submission and processing of export and import documents. This reform applies to both Lahore and Karachi. DB2012 Paying Taxes: Pakistan increased the pro t tax rate for small rms. DB2011 Registering Property: Pakistan made property transfer more a ordable by reducing the stamp duty rate. Trading across Borders: Pakistan reduced the time to export by improving electronic communication between the Karachi Port authorities and the private terminals, which have also boosted e ciency by introducing new equipment. DB2010 Starting a Business: Pakistan made starting a business easier by introducing an electronic registration system, allowing online registration for sales tax and eliminating the requirement to make the declaration of compliance on a stamped paper. DB2008 Registering Property: Pakistan made registering property more expensive by increasing the capital value tax. Getting Credit: Pakistan’s private credit bureau began distributing positive as well as negative credit information, and its public credit registry eliminated the minimum threshold for loans included in its database. Page 122   Getting Credit: Pakistan’s private credit bureau began distributing positive as well as negative credit information, and its public credit Doing registry 2018the Pakistan eliminated Business minimum threshold for loans included in its database. Page 123