92085 Doing Business 2015 Mexico Economy Profile 2015 Mexico Doing Business 2015 Mexico 2 © 2014 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org All rights reserved. 1 2 3 4 17 16 15 14 This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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Doing Business 2015 Mexico 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 27 Getting electricity ....................................................................................................................... 43 Registering property .................................................................................................................. 53 Getting credit .............................................................................................................................. 61 Protecting minority investors ................................................................................................... 68 Paying taxes ................................................................................................................................ 77 Trading across borders .............................................................................................................. 82 Enforcing contracts .................................................................................................................... 87 Resolving insolvency .................................................................................................................. 96 Labor market regulation ......................................................................................................... 101 Distance to frontier and ease of doing business ranking .................................................... 107 Resources on the Doing Business website ............................................................................ 110 Doing Business 2015 Mexico 4 INTRODUCTION Doing Business sheds light on how easy or difficult it is 1, 2014 (except for the paying taxes indicators, which for a local entrepreneur to open and run a small to cover the period January–December 2013). medium-size business when complying with relevant The Doing Business methodology has limitations. Other regulations. It measures and tracks changes in areas important to business—such as an economy’s regulations affecting 11 areas in the life cycle of a proximity to large markets, the quality of its business: starting a business, dealing with construction infrastructure services (other than those related to permits, getting electricity, registering property, getting trading across borders and getting electricity), the credit, protecting minority investors, paying taxes, security of property from theft and looting, the trading across borders, enforcing contracts, resolving transparency of government procurement, insolvency and labor market regulation. macroeconomic conditions or the underlying strength of In a series of annual reports Doing Business presents institutions—are not directly studied by Doing Business. quantitative indicators on business regulations and the The indicators refer to a specific type of business, protection of property rights that can be compared generally a local limited liability company operating in across 189 economies, from Afghanistan to Zimbabwe, the largest business city. Because standard assumptions over time. The data set covers 47 economies in Sub- are used in the data collection, comparisons and Saharan Africa, 32 in Latin America and the Caribbean, 25 benchmarks are valid across economies. The data not in East Asia and the Pacific, 26 in Eastern Europe and only highlight the extent of obstacles to doing business; Central Asia, 20 in the Middle East and North Africa and they also help identify the source of those obstacles, 8 in South Asia, as well as 31 OECD high-income supporting policy makers in designing regulatory reform. economies. The indicators are used to analyze economic More information is available in the full report. Doing outcomes and identify what reforms have worked, where Business 2015 presents the indicators, analyzes their and why. relationship with economic outcomes and presents This economy profile presents the Doing Business business regulatory reforms. The data, along with indicators for Mexico. To allow useful comparison, it also information on ordering Doing Business 2015, are provides data for other selected economies (comparator available on the Doing Business website at economies) for each indicator. The data in this report are http://www.doingbusiness.org. current as of June Doing Business 2015 Mexico 5 CHANGES IN DOING BUSINESS 2015 As part of a 2-year update in methodology, Doing Finally, the name of the employing workers indicator set Business 2015 incorporates 7 important changes. First, has been changed to labor market regulation, and the the ease of doing business ranking as well as all topic- scope of this indicator set has also been changed. The level rankings are now computed on the basis of indicators now focus on labor market regulation distance to frontier scores (see the chapter on the applying to the retail sector rather than the distance to frontier and ease of doing business ranking). manufacturing sector, and their coverage has been Second, for the 11 economies with a population of more expanded to include regulations on labor disputes and than 100 million, data for a second city have been added on benefits provided to workers. The labor market to the data set and the ranking calculation. These regulation indicators continue to be excluded from the economies are Bangladesh, Brazil, China, India, aggregate distance to frontier score and ranking on the Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian ease of doing business. Federation and the United States. Third, for getting Beyond these changes there are 3 other updates in credit, the methodology has been revised for both the methodology. For paying taxes, the financial statement strength of legal rights index and the depth of credit variables have been updated to be proportional to 2012 information index. The number of points has been income per capita; previously they were proportional to increased in both indices, from 10 to 12 for the strength 2005 income per capita. For enforcing contracts, the of legal rights index and from 6 to 8 for the depth of value of the claim is now set at twice the income per credit information index. In addition, only credit bureaus capita or $5,000, whichever is greater. For dealing with and registries that cover at least 5% of the adult construction permits, the cost of construction is now set population can receive a score on the depth of credit at 50 times income per capita (before, the cost was information index. assessed by the Doing Business respondents). In addition, Fourth, the name of the protecting investors indicator set this indicator set no longer includes the procedures for has been changed to protecting minority investors to obtaining a landline telephone connection. better reflect its scope—and the scope of the indicator For more details on the changes, see the “What is set has been expanded to include shareholders’ rights in changing in Doing Business?” chapter starting on page corporate governance beyond related-party transactions. 24 of the Doing Business 2015 report. For more details Fifth, the resolving insolvency indicator set has been on the data and methodology, please see the “Data expanded to include an index measuring the strength of Notes” chapter starting on page 114 of the Doing the legal framework for insolvency. Sixth, the calculation Business 2015 report. For more details on the distance to of the distance to frontier score for paying taxes has frontier metric, please see the “Distance to frontier and been changed. The total tax rate component now enters ease of doing business ranking” chapter in this profile. the score in a nonlinear fashion, in an approach different from that used for all other indicators (see the chapter on the distance to frontier and ease of doing business ranking). Doing Business 2015 Mexico 6 THE BUSINESS ENVIRONMENT For policy makers trying to improve their economy’s regulatory environment for business, a good place to start ECONOMY OVERVIEW is to find out how it compares with the regulatory environment in other economies. Doing Business provides an aggregate ranking on the ease of doing business Region: Latin America & Caribbean based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size Income category: Upper middle income businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking. This Population: 122,332,399 year's report presents results for 2 aggregate measures: the distance to frontier score and the ease of doing GNI per capita (US$): 9,940 business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 39 The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute DB2014 rank: 43* distance to the best performance in each Doing Business Change in rank: 4 indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the DB 2015 DTF: 71.5 worst performance and 100 the frontier. (See the chapter on the distance to frontier and ease of doing business). DB 2014 DTF: 70.6 The 10 topics included in the ranking in Doing Business 2015: starting a business, dealing with construction Change in DTF: 0.9 permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading * DB2014 ranking shown is not last year’s published across borders, enforcing contracts and resolving ranking but a comparable ranking for DB2014 that insolvency. The labor market regulation indicators captures the effects of such factors as data (formerly employing workers) are not included in this corrections and the changes in methodology. See year’s aggregate ease of doing business ranking, but the the data notes starting on page 114 of the Doing data are presented in this year’s economy profile. Business 2015 report for sources and definitions. The aggregate ranking on the ease of doing business benchmarks each economy’s performance on the indicators against that of all other economies in the Doing Business sample (figure 1.1). While this ranking tells much about the business environment in an economy, it does not tell the whole story. The ranking on the ease of doing business, and the underlying indicators, do not measure all aspects of the business environment that matter to firms and investors or that affect the competitiveness of the economy. Still, a high ranking does mean that the government has created a regulatory environment conducive to operating a business. Doing Business 2015 Mexico THE BUSINESS ENVIRONMENT Figure 1.1 Where economies stand in the global ranking on the ease of doing business Source: Doing Business database. Doing Business 2015 Mexico THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy regional average (figure 1.2). The economy’s rankings stands in the aggregate ranking on the ease of doing (figure 1.3) and distance to frontier scores (figure 1.4) business is useful. Also useful is to know how it ranks on the topics included in the ease of doing business relative to comparator economies and relative to the ranking provide another perspective. Figure 1.2 How Mexico and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2015 Mexico 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Mexico (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Mexico (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database. Doing Business 2015 Mexico 10 THE BUSINESS ENVIRONMENT Just as the overall ranking on the ease of doing business tells Doing Business introduced the distance to frontier score. This only part of the story, so do changes in that ranking. Yearly measure shows how far on average an economy is from the movements in rankings can provide some indication of best performance achieved by any economy on each Doing changes in an economy’s regulatory environment for firms, Business indicator. but they are always relative. Comparing the measure for an economy at 2 points in time Moreover, year-to-year changes in the overall rankings do allows users to assess how much the economy’s regulatory not reflect how the business regulatory environment in an environment as measured by Doing Business has changed economy has changed over time—or how it has changed in over time—how far it has moved toward (or away from) the different areas. To aid in assessing such changes, most efficient practices and strongest regulations in areas covered by Doing Business (figure 1.5). Figure 1.5 How far has Mexico come in the areas measured by Doing Business? Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for more details on the distance to frontier score. Source: Doing Business database. Doing Business 2015 Mexico 11 THE BUSINESS ENVIRONMENT The absolute values of the indicators tell another part of regulation—such as a regulatory process that can be the story (table 1.1). The indicators, on their own or in completed with a small number of procedures in a few comparison with the indicators of a good practice days and at a low cost. Comparison of the economy’s economy or those of comparator economies in the indicators today with those in the previous year may region, may reveal bottlenecks reflected in large numbers show where substantial bottlenecks persist—and where of procedures, long delays or high costs. Or they may they are diminishing. reveal unexpected strengths in an area of business Table 1.1 Summary of Doing Business indicators for Mexico Best performer globally Mexico City DB2015 Monterrey DB2015 Argentina DB2015 Mexico DB2015 Mexico DB2014 Indicator China DB2015 Brazil DB2015 Chile DB2015 DB2015 Starting a Business 67 61 -- -- 146 167 59 128 New Zealand (1) (rank) Starting a Business (DTF 88.85 88.88 88.76 89.28 72.58 63.37 89.83 77.43 New Zealand (99.96) Score) Procedures (number) 6.0 6.0 6.0 6.0 14.0 11.6 7.0 11.0 New Zealand (1.0)* Time (days) 6.3 6.3 6.0 8.0 25.0 83.6 5.5 31.4 New Zealand (0.5) Cost (% of income per 18.6 18.4 20.0 11.8 15.2 4.3 0.7 0.9 Slovenia (0.0) capita) Paid-in min. capital (% 0.0 0.0 0.0 0.0 4.0 0.0 0.0 0.0 112 Economies (0.0)* of income per capita) Dealing with Hong Kong SAR, Construction Permits 108 97 -- -- 181 174 62 179 China (1) (rank) Dealing with Hong Kong SAR, Construction Permits 68.43 70.77 66.95 75.66 42.54 48.31 76.13 43.75 China (95.53) (DTF Score) Doing Business 2015 Mexico 12 Best performer globally Mexico City DB2015 Monterrey DB2015 Argentina DB2015 Mexico DB2015 Mexico DB2014 Indicator China DB2015 Brazil DB2015 Chile DB2015 DB2015 Hong Kong SAR, Procedures (number) 11.3 11.3 11.0 13.0 21.0 18.2 13.0 22.0 China (5.0) Time (days) 87.6 87.6 82.0 115.0 341.0 426.1 152.0 244.3 Singapore (26.0) Cost (% of warehouse 10.3 8.9 11.8 3.1 3.5 0.4 0.7 7.6 Qatar (0.0)* value) Getting Electricity 116 112 -- -- 104 19 49 124 Korea, Rep. (1) (rank) Getting Electricity (DTF 68.47 68.46 66.55 77.85 72.42 89.20 81.34 66.35 Korea, Rep. (99.83) Score) Procedures (number) 6.8 6.8 7.0 6.0 6.0 4.0 6.0 5.5 12 Economies (3.0)* Time (days) 78.9 78.9 85.0 49.0 92.0 53.3 30.0 143.2 Korea, Rep. (18.0)* Cost (% of income per 346.1 349.2 367.8 240.3 45.4 31.6 62.1 459.4 Japan (0.0) capita) Registering Property 110 109 -- -- 119 138 45 37 Georgia (1) (rank) Registering Property 62.45 62.54 59.76 75.59 60.63 56.18 78.96 80.67 Georgia (99.88) (DTF Score) Procedures (number) 6.8 6.8 7.0 6.0 7.0 13.6 6.0 4.0 4 Economies (1.0)* Time (days) 63.6 64.5 73.0 18.0 51.5 31.7 28.5 19.4 3 Economies (1.0)* Cost (% of property 5.1 5.0 5.4 3.5 6.6 2.5 1.2 3.6 4 Economies (0.0)* value) Getting Credit (rank) 12 14 -- -- 71 89 71 71 New Zealand (1) Getting Credit (DTF 80.00 75.00 80.00 80.00 50.00 45.00 50.00 50.00 New Zealand (100) Score) Strength of legal rights 8 7 8 8 2 2 4 4 3 Economies (12)* index (0-12) Doing Business 2015 Mexico 13 Best performer globally Mexico City DB2015 Monterrey DB2015 Argentina DB2015 Mexico DB2015 Mexico DB2014 Indicator China DB2015 Brazil DB2015 Chile DB2015 DB2015 Depth of credit 8 8 8 8 8 7 6 6 23 Economies (8)* information index (0-8) Credit registry coverage 0.0 0.0 0.0 0.0 41.2 52.5 44.7 33.2 Portugal (100.0) (% of adults) Credit bureau coverage 100.0 100.0 100.0 100.0 100.0 63.6 8.8 0.0 23 Economies (100.0)* (% of adults) Protecting Minority 62 61 -- -- 62 35 56 132 New Zealand (1) Investors (rank) Protecting Minority 57.50 57.50 57.50 57.50 57.50 62.50 58.33 45.00 New Zealand (81.67) Investors (DTF Score) Extent of conflict of interest regulation 6.0 6.0 6.0 6.0 5.0 5.7 6.7 5.0 Singapore (9.3)* index (0-10) Extent of shareholder governance index (0- 5.5 5.5 5.5 5.5 6.5 6.8 5.0 4.0 France (7.8)* 10) Strength of minority investor protection 5.8 5.8 5.8 5.8 5.8 6.3 5.8 4.5 New Zealand (8.2) index (0-10) United Arab Emirates Paying Taxes (rank) 105 102 -- -- 170 177 29 120 (1)* Paying Taxes (DTF United Arab Emirates 71.17 71.24 71.20 71.00 44.99 41.31 84.50 67.44 Score) (99.44)* Payments (number per Hong Kong SAR, 6.0 6.0 6.0 6.0 9.0 9.0 7.0 7.0 year) China (3.0)* Time (hours per year) 334.0 334.0 334.0 334.0 405.0 2,600.0 291.0 261.0 Luxembourg (55.0) Trading Across Borders 44 44 -- -- 128 123 40 98 Singapore (1) (rank) Trading Across Borders 81.26 81.29 81.98 77.75 65.11 66.11 82.05 71.68 Singapore (96.47) Doing Business 2015 Mexico 14 Best performer globally Mexico City DB2015 Monterrey DB2015 Argentina DB2015 Mexico DB2015 Mexico DB2014 Indicator China DB2015 Brazil DB2015 Chile DB2015 DB2015 (DTF Score) Documents to export 4 4 4 4 6 6 5 8 Ireland (2)* (number) Time to export (days) 12.0 12.0 11.0 17.0 12.0 13.4 15.0 21.0 5 Economies (6.0)* Cost to export (US$ per 1,499.3 1,499.3 1,450.0 1,740.0 1,770.0 2,322.8 910.0 823.0 Timor-Leste (410.0) container) Cost to export (deflated 1,499.3 1,529.9 1,450.0 1,740.0 1,770.0 2,322.8 910.0 823.0 US$ per container) Documents to import 4 4 4 4 8 8 5 5 Ireland (2)* (number) Time to import (days) 11.2 11.2 11.0 12.0 30.0 17.0 12.0 24.0 Singapore (4.0) Cost to import (US$ per 1,887.6 1,804.6 1,840.0 2,120.0 2,320.0 2,322.8 860.0 800.0 Singapore (440.0) container) Cost to import (deflated 1,887.6 1,841.4 1,840.0 2,120.0 2,320.0 2,322.8 860.0 800.0 US$ per container) Enforcing Contracts 57 59 -- -- 63 118 64 35 Singapore (1) (rank) Enforcing Contracts 64.61 64.61 64.10 67.14 63.88 53.60 63.85 68.21 Singapore (89.54) (DTF Score) Time (days) 388.9 388.9 400.0 335.0 590.0 731.0 480.0 452.8 Singapore (150.0) Cost (% of claim) 30.9 30.9 31.0 30.4 20.5 16.5 28.6 16.2 Iceland (9.0) Procedures (number) 36.8 36.8 37.0 36.0 36.0 43.6 36.0 37.0 Singapore (21.0)* Resolving Insolvency 27 33 -- -- 83 55 73 53 Finland (1) (rank) Resolving Insolvency 72.59 66.05 72.59 72.59 45.10 54.52 47.38 55.31 Finland (93.85) (DTF Score) Doing Business 2015 Mexico 15 Best performer globally Mexico City DB2015 Monterrey DB2015 Argentina DB2015 Mexico DB2015 Mexico DB2014 Indicator China DB2015 Brazil DB2015 Chile DB2015 DB2015 Time (years) 1.8 1.8 1.8 1.8 2.8 4.0 3.2 1.7 Ireland (0.4) Cost (% of estate) 18.0 18.0 18.0 18.0 12.0 12.0 14.5 22.0 Norway (1.0) Outcome (0 as piecemeal sale and 1 as 1 1 1 1 0 1 0 0 going concern) Recovery rate (cents on 68.1 67.6 68.1 68.1 28.6 25.8 30.0 36.0 Japan (92.9) the dollar) Strength of insolvency 11.5 9.5 11.5 11.5 9.5 13.0 10.0 11.5 5 Economies (15.0)* framework index (0-16) Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of s uch factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice” mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the relevant indicator. * Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website (http://www.doingbusiness.org). Source: Doing Business database. Doing Business 2015 Mexico 16 STARTING A BUSINESS Formal registration of companies has many WHAT THE STARTING A BUSINESS immediate benefits for the companies and for business owners and employees. Legal entities can INDICATORS MEASURE outlive their founders. Resources are pooled as several shareholders join forces to start a company. Procedures to legally start and operate a Formally registered companies have access to company (number) services and institutions from courts to banks as well Preregistration (for example, name as to new markets. And their employees can benefit verification or reservation, notarization) from protections provided by the law. An additional benefit comes with limited liability companies. These Registration in the economy’s largest limit the financial liability of company owners to their business city 1 investments, so personal assets of the owners are not Postregistration (for example, social security put at risk. Where governments make registration registration, company seal) easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and Time required to complete each procedure generating more revenue for the government. (calendar days) What do the indicators cover? Does not include time spent gathering information Doing Business measures the ease of starting a business in an economy by recording all procedures Each procedure starts on a separate day (2 officially required or commonly done in practice by procedures cannot start on the same day). an entrepreneur to start up and formally operate an Procedures that can be fully completed industrial or commercial business—as well as the online are recorded as ½ day. time and cost required to complete these procedures. Procedure completed once final document is It also records the paid-in minimum capital that received companies must deposit before registration (or within 3 months). The ranking of economies on the No prior contact with officials ease of starting a business is determined by sorting Cost required to complete each procedure their distance to frontier scores for starting a (% of income per capita) business. These scores are the simple average of the distance to frontier scores for each of the component Official costs only, no bribes indicators. No professional fees unless services required To make the data comparable across economies, by law Doing Business uses several assumptions about the Paid-in minimum capital (% of income business and the procedures. It assumes that all per capita) information is readily available to the entrepreneur and that there has been no prior contact with Deposited in a bank or with a notary before officials. It also assumes that the entrepreneur will registration (or within 3 months) pay no bribes. And it assumes that the business:  Is a limited liability company, located in the  Has a start-up capital of 10 times income per largest business city and is 100% domestically capita. owned . 1  Has a turnover of at least 100 times income per  Has between 10 and 50 employees. capita.  Conducts general commercial or industrial  Does not qualify for any special benefits. activities.  Does not own real estate. 1 For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2015 Mexico 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Mexico? largest business city of an economy, except for 11 According to data collected by Doing Business, starting a economies for which the data are a population-weighted business there requires 6.0 procedures, takes 6.3 days, average of the 2 largest business cities. See the chapter costs 18.6% of income per capita and requires paid-in on distance to frontier and ease of doing business minimum capital of 0.0% of income per capita (figure ranking at the end of this profile for more details. 2.1). Most indicator sets refer to a case scenario in the Figure 2.1 What it takes to start a business in Mexico - Mexico City Paid-in minimum capital (% of income per capita): 0.0 Doing Business 2015 Mexico 18 What it takes to start a business in Mexico - Monterrey Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Mexico 19 STARTING A BUSINESS Globally, Mexico stands at 67 in the ranking of 189 average ranking provide other useful information for economies on the ease of starting a business (figure 2.2). assessing how easy it is for an entrepreneur in Mexico to The rankings for comparator economies and the regional start a business. Figure 2.2 How Mexico and comparator economies rank on the ease of starting a business Source: Doing Business database. Doing Business 2015 Mexico 20 STARTING A BUSINESS Economies around the world have taken steps making it they often are part of a larger regulatory reform easier to start a business—streamlining procedures by program. Among the benefits have been greater firm setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses, or faster by introducing technology and reducing or financial resources and job opportunities. eliminating minimum capital requirements. Many have What business registration reforms has Doing Business undertaken business registration reforms in stages—and recorded in Mexico (table 2.1)? Table 2.1 How has Mexico made starting a business easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made starting a business easier by establishing an electronic platform for company registration, by substantially DB2010 reducing the time required for registration and by eliminating the requirement to register with the statistical office. Mexico launched an online one-stop shop for initiating DB2011 business registration. Mexico made starting a business easier by eliminating the DB2013 minimum capital requirement for limited liability companies. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 21 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Mexico is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new Legal form: Sociedad Anónima (S.A.) - firm. These are identified by Doing Business through Corporation collaboration with relevant local professionals and the study of laws, regulations and publicly available Paid in minimum capital requirement: MXN 0 information on business entry in that economy. City: Mexico City, Monterrey Following is a detailed summary of those procedures, along with the associated time and cost. These Start-up Capital: 10 times GNI per capita procedures are those that apply to a company matching the standard assumptions (the “standardized company”) used by Doing Business in collecting the data (see the section in this chapter on what the indicators measure). Table 2.2 Summary of time, cost and procedures for starting a business in Mexico - Mexico City Time to No. Procedure Cost to complete complete Obtain the authorization of using the company name online and file the draft deed of incorporation with the notary online The applicant can obtain the authorization of using the company name online from the website www.tuempresa.gob.mx and the Ministry of Economy will issue the corresponding authorization. After the authorization is given, the entrepreneur can choose the notary public Less than one day 1 that will grant the incorporation deed and then file online the draft of no charge (online procedure) incorporation deed together with the authorization issued by the Ministry of Economy. The notary public informs the entrepreneur by email of the appointment to sign the incorporation deed. Agency: Ministry of Economy (Secretaría de Economia) Sign the deed of incorporation before a notary public, obtain Tax Registry Number (RFC) and file online the deed of incorporation with the Public Register of Commerce If the notary public drafts or provides expert advice on the company bylaws, notary fees are generally high, from MXN 5,000 to MXN 11,000. MXN 10,500 (notary The company charter and bylaws must be drafted before appearing fees) + MXN 14,899 2 2 days on average before a notary public. (registration fees) Certain notaries in Mexico City have signed an agreement with the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) (through the Sistema de Administración Tributaria, SAT) to grant the tax registration number. The notary who issues the tax registration number must also issue the deed of incorporation. The Doing Business 2015 Mexico 22 Time to No. Procedure Cost to complete complete notary files the notarized deed of incorporation with the Public Registry of Commerce through the online portal - tuempresa.gob.mx - and obtain the tax number online as well. It usually takes the notary 2-3 days to review the documents and process the final incorporation deed for execution by the relevant parties. Agency: Public Notary Register with the Mexican Social Security Institute (IMSS) In order to make this registration faster the company must file a pre- application on the website of the IMSS, and an appointment in order to register the company at the IMSS offices is generated, the website 1 day no charge 3 follows: http://www.imss.gob.mx/patrones/alta-patronal. Agency: Mexican Social Security Institute (IMSS) Register with the local tax administration (Secretaría de Finanzas del Gobierno del Distrito Federal) for payroll tax The company must register with the local tax administration after registering with the IMSS. The local office can be found at 4 www.finanzas.df.gob.mx. The tax registration number and the 1 day no charge company’s postal code are required to register. Agency: Ministry of Finance and Credit Notify the local government (Delegación) online of the opening of a mercantile establishment. The notice of opening a mercantile establishment is fully completed online through the website www.sedeco.df.gob.mx. For low risk Less than one day 5 no charge activities, the notification record is received automatically in an email. (online procedure) Agency: local tax administration Register with the National Business Information Registry (Sistema de Information Empresarial, SIEM) Mandatory registration with the National Business Information Registry The costs can vary (Sistema de Information Empresarial, SIEM) has been in effect since from MXN $100 to 6 January 1997. The company will be registered with the specific chamber 1 day MXN $670 corresponding to its corporate purpose or activities. The cost varies with the number of employees and the company’s activities as shown below. Fees for industry related activities (maximum fees) Doing Business 2015 Mexico 23 Time to No. Procedure Cost to complete complete -6 or more employees $ 670 -3 to 5 employees $ 350 -Up to 2 employees $ 150 Fees for commercial and services related activities (maximum fees): -4 or more employees $ 640 -3 or less employees $ 300 -Up to 2 employees $ 100 The costs can vary from MXN $100 to MXN $670. Agency: Local Government Office or Delegation * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Summary of time, cost and procedures for starting a business in Mexico - Monterrey Time to No. Procedure Cost to complete complete Obtain the authorization of using the company name online and file the draft deed of incorporation with the notary online This is a federal procedure that must be completed by the entrepreneur to choose and reserve a company name. The information is available in the Ministry, by phone and on the website: http://www.tuempresa.gob.mx/ The employer must be registered in the portal tuempresa.gob.mx with her/his Advanced Electronic Signature and must enter the desired corporate name to check availability. If available the request will be approved and the name can be reserved; otherwise if the name is already in use or does not meet the criteria the Less than one day no charge 1 request will be rejected. The process is regulated by the General (online procedure) Commercial Law, the Organic Law of the Federal Public Administration, the Foreign Investment Law and the Regulations for the Authorization of Use of Company Names. Once the name is reserved and the entrepreneur selects the public broker or notary with whom the process will be completed and should visit her/him to draft the company charter. Agency: Ministry of Economy (Secretaría de Economia) Sign the deed of incorporation before a notary public, obtain Tax Registry Number (RFC) This procedure consists in the formalization of the company’s charter by 2 the notary. Upon receipt of authorization regarding the company name, 4 days MXN 8,500 the notary proceeds to notify of the use of the corporate name and drafts the articles of incorporation in order to be duly signed by the partners. The founding partners must provide their general personal information and present their official identifications and their Tax IDs. Doing Business 2015 Mexico 24 Time to No. Procedure Cost to complete complete Some notaries in the city signed an agreement with the Ministry of Finance through the Tax Administration Service (SAT) to obtain the certificate and register the company in the Federal Taxpayers Registry (RFC) through remote means. The process is legislated in Arts. 24 to 27 of the Regulations for the Authorization of Use of Company Names; Arts. 5 and 6 of the General Corporations Law; Article 27 of the Fiscal Code of the Federation; Arts. 19 and 20 of the Regulations of the Fiscal Code of the Federation; and Rule II.2.3.1. of the Fiscal Miscellaneous Resolution. The notary fees vary between MXN 8,000 and MXN 14,000. Agency: Public Notary File online or in person the deed of incorporation with the Public Register of Commerce This procedure is intended to publicize the act of incorporation and is mandatory for all companies registered in the Public Registry of Commerce regarding their constitution, transformation, merger, dissolution and liquidation. To perform the procedure, the user must have: a. Duly notarized articles of incorporation (+ a copy); b .Document certifying age above 18 years old. The information is available at the agency, by phone and on its website: http://www.nl.gob.mx/ The notary public is in charge of making the registration of the articles of incorporation at the Public Registry of Commerce whether in person or through remote electronic means. The process is regulated by Article 92 of the General Commercial Law; Arts. 18 to 20 of the Commercial Code; Less than one day MXN 6,369 3 and Arts. 23 and 24 of the Regulatory Law of Public Registry of (online procedure) Properties and Commerce of Nuevo León. The cost is based on Article 271, Section I of the Finance Act of the State of Nuevo León, effective in 2014, for the payment of fees to the Public Registry of Commerce. If the procedure is completed online the payment to the Registry is generated through Recaudanet (www.recuadanet.gob.mx ), once it is paid the information is uploaded into the RIE system, the pre-coded forms are filled out with information included in the articles of incorporation, then they are sent to the Public Registry of Commerce and enrollment takes place immediately. Agency: Public Registry of Commerce Register with the Mexican Social Security Institute (IMSS) This is a federal procedure that is performed to enroll at least one worker in Social Security. Information is available in person, by phone and on the agency’s website: http://www.imss.gob.mx/ The employer must file AFIL02 format. The application may be pre-submitted online 1 day no charge 4 and then visit the agency’s office where the entrepreneur will obtain his registry May be performed pre-internet high and then go to the IMSS administrative sub-delegation where the employer and the record high for at least one worker is obtained. The process is regulated by the Social Security Act and the Regulations of the Law on Social Insurance regarding Membership, Business Classification, Collection and Taxation. Doing Business 2015 Mexico 25 Time to No. Procedure Cost to complete complete At the same time the company registers with the IMSS, registration at the National Worker’s Housing Fund Institute (INFONAVIT) takes place and individual retirement savings accounts for the employees (Afore) are opened. Agency: Mexican Social Security Institute (IMSS) Register with the State Taxpayer Registry at the Ministry of Finance of the State of Nuevo León This procedure consists in registering the tax payer’s information at the State Registry to obtain an account to file the tax returns corresponding to the payroll tax (ISN). To complete the procedure, the user must have: a. State Registry Form (original and copy); b. Proof of fiscal residence, no older than one month (original and copy); c. Official current photo ID of the person concerned and her/his representative if applicable (original and copy); d . Articles of incorporation (copy); e . Proof of the identity of the legal representative, and where applicable the notarized power of attorney and a valid official identification with photograph of the representative (original and copy) ; f . Being a person or entity; g 1 day no charge 5 .Domicile or establishment located in the state of Nuevo León. Information about this procedure is available in person, by phone and on the agency’s website: http://www.nl.gob.mx/ The employer must go to the Taxpayers Registry, Lodging, Awards and ISAN window, and proceeded to register her/his data in the system and at the end is given an account number. The procedure is regulated by Arts. 154 and 155 of the Finance Act of the State of Nuevo León; and by the Agreement of Cooperation in Fiscal Federal Matters between Mexico’s Federal Ministry of Finance and the State of Nuevo León. Agency: Ministry of Finance Register with the National Business Information Registry (Sistema de Information Empresarial, SIEM) Mandatory registration with the National Business Information Registry (Sistema de Information Empresarial, SIEM) has been in effect since January 1997. The company will be registered with the specific chamber corresponding to its corporate purpose or activities. The cost varies with the number of employees and the company’s activities as shown below. The costs can vary 6 1 day from MXN $100 to Fees for industry related activities (maximum fees): MXN $670 -6 or more employees $ 670 -3 to 5 employees $ 350 -Up to 2 employees $ 150 Fees for commercial and services related activities (maximum fees): -4 or more employees $ 640 -3 or less employees $ 300 -Up to 2 employees $ 100 Doing Business 2015 Mexico 26 Time to No. Procedure Cost to complete complete The costs can vary from MXN $100 to MXN $670. Agency: National Business Information Registry * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Mexico 27 DEALING WITH CONSTRUCTION PERMITS Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION public. But it needs to be efficient, to avoid excessive PERMITS INDICATORS MEASURE constraints on a sector that plays an important part in every economy. Where complying with building regulations is excessively costly in time and money, Procedures to legally build a warehouse many builders opt out. They may pay bribes to pass (number) inspections or simply build illegally, leading to Submitting all relevant documents and hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses, Where compliance is simple, straightforward and permits and certificates inexpensive, everyone is better off. Submitting all required notifications and What do the indicators cover? receiving all necessary inspections Doing Business records the procedures, time and cost Obtaining utility connections for water and for a business in the construction industry to obtain sewerage all the necessary approvals to build a warehouse in Registering the warehouse after its the economy’s largest business city, connect it to completion (if required for use as collateral or basic utilities and register the warehouse so that it for transfer of the warehouse) can be used as collateral or transferred to another Time required to complete each procedure entity. (calendar days) The ranking of economies on the ease of dealing with Does not include time spent gathering construction permits is determined by sorting their information distance to frontier scores for dealing with Each procedure starts on a separate day. construction permits. These scores are the simple Procedures that can be fully completed online average of the distance to frontier scores for each of are recorded as ½ day. the component indicators. Procedure considered completed once final To make the data comparable across economies, document is received Doing Business uses several assumptions about the business and the warehouse, including the utility No prior contact with officials connections. Cost required to complete each procedure (% The business: of warehouse value) Official costs only, no bribes  Is a limited liability company operating in the construction business and located in  Will have complete architectural and the largest business city. For the 11 technical plans prepared by a licensed economies with a population of more than architect or engineer. 100 million, data for a second city have  Will be connected to water and sewerage been added. Is domestically owned and (sewage system, septic tank or their operated. equivalent). The connection to each utility  Has 60 builders and other employees. network will be 150 meters (492 feet) long. The warehouse:  Will be used for general storage, such as of books or stationery (not for goods requiring  Is valued at 50 times income per capita. special conditions).  Is a new construction (there was no  Will take 30 weeks to construct (excluding all previous construction on the land). delays due to administrative and regulatory requirements). Doing Business 2015 Mexico 28 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build business city of an economy, except for 11 economies for a warehouse in Mexico? According to data collected by which the data are a population-weighted average of the Doing Business, dealing with construction permits there 2 largest business cities. See the chapter on distance to requires 11.3 procedures, takes 87.6 days and costs frontier and ease of doing business ranking at the end of 10.3% of the warehouse value (figure 3.1). Most this profile for more details. indicator sets refer to a case scenario in the largest Figure 3.1 What it takes to comply with formalities to build a warehouse in Mexico - Mexico City Doing Business 2015 Mexico 29 What it takes to comply with formalities to build a warehouse in Mexico - Monterrey Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Mexico 30 DEALING WITH CONSTRUCTION PERMITS Globally, Mexico stands at 108 in the ranking of 189 economies and the regional average ranking provide economies on the ease of dealing with construction other useful information for assessing how easy it is for permits (figure 3.2). The rankings for comparator an entrepreneur in Mexico to legally build a warehouse. Figure 3.2 How Mexico and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database. Doing Business 2015 Mexico 31 DEALING WITH CONSTRUCTION PERMITS Smart regulation ensures that standards are met while an effort to ensure building safety while keeping making compliance easy and accessible to all. Coherent compliance costs reasonable, governments around the and transparent rules, efficient processes and adequate world have worked on consolidating permitting allocation of resources are especially important in sectors requirements. What construction permitting reforms has where safety is at stake. Construction is one of them. In Doing Business recorded in Mexico (table 3.1)? Table 3.1 How has Mexico made dealing with construction permits easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made dealing with construction permits faster by DB2012 consolidating internal administrative procedures. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 32 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Mexico are based BUILDING A WAREHOUSE on a set of specific procedures—the steps that a company must complete to legally build a warehouse—identified by Doing Business through Estimated cost of information collected from experts in construction MXN 6,441,848 construction : licensing, including architects, civil engineers, construction lawyers, construction firms, utility City : Mexico City, Monterrey service providers and public officials who deal with building regulations. These procedures are those The procedures, along with the associated time and cost, that apply to a company and structure matching the are summarized below. standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). Table 3.2 Summary of time, cost and procedures for dealing with construction permits in Mexico - Mexico City Time to No. Procedure Cost to complete complete Request and obtain the alignment certificate (alineamiento) and official number (número official) The relevant agencies for this procedure are the Delegational One-Stop Shop (Ventanilla Única Delegacional), the Urban Development and Housing Ministry (Secretaría de Desarrollo Urbano y Vivienda), and the Federal District Department (Gobierno del Distrito Federal). Either a simple original copy or a certified one is acceptable. For the official number, the Federal District Department will assign a single official number for each property, at the request of the interested party, that has a front facing the public pathway. For the official alignment, the plot across the land indicates the restrictions or expropriation lines to be respected in the interaction between the property and the public pathway. Obtaining the single zoning certificate stating specific land use and feasibility is required. 1 11 days MXN 1,039 The following documents must be submitted: • Proof of payment of applicable real estate taxes (copy) • Public deed certifying property or title ownership (original and copy) • Payment of all fees • Application form (original) • Identification of the person completing the procedure and document certifying the respective identity (original and copy) Payment is made the same day when the certificate is requested. At the same time, a date is set for the taxpayer to return to receive the certificate, generally within 3 or 4 working days. The certificate is valid for 2 years. The cost is established by the Financial Code of the Federal District, Articles 233 and 234. The official cost, as amended in December 2013, is the sum of the alignment at MXN 35.82 per linear meter in the front of the building, plus a general fee for the official number at MXN 233. Doing Business 2015 Mexico 33 Time to No. Procedure Cost to complete complete In this case, the front of the building is assumed to be 22.5 meters, so the total cost would be MXN 1,038.95 (= 35.82 x 22.5 m+233) . The official time limit is 8 days, but in practice, the process can take 1 -- 2 weeks. Agency: Delegational One-Stop Shop (Ventanilla Única Delegacional), Urban Development and Housing Ministry (Secretaría de Desarrollo Urbano y Vivienda), and Federal District Department (Gobierno del Distrito Federal) Request and obtain single zoning certificate stating specific land use and feasibility At this stage, BuildCo obtains the document that certifies whether a specific use of a given building is authorized. The Financial Code of the Federal District, Article 235, Section III, was amended in December 2013. 12 days MXN 926 2 Agency: Subdirección de Ventanilla Única of the Secretaría de Desarrollo Urbano y Vivienda attached to the Dirección del Registro de los Planes y Programas de Desarrollo Urbano of the Dirección General de Desarrollo Urbano Request and obtain a water feasibility study This certificate reflects the technical opinion of the competent administrative units and indicates whether water supply and sewage and rainwater drainage services are feasible. This procedure precedes 3 the application for drinking water supply. 12 days no charge Agency: Sistema de Aguas de la Ciudad de México Register Construction Statement Type B Construction Statement Type B applies to nonresidential or mixed uses of up to 5,000 square meters or up to 10,000 square meters for residential use or for single-family dwelling units within a risk zone. The following documents must be submitted: • Valid alignment certificate and official number (simple original copy or certified one) 1 day MXN 758,425 4 • Single zoning certificate for specific land use and feasibility (simple original copy or certified copy for collation) • Four copies of the architectural project for the construction work on duly outlined scale maps and containing all specifications regarding materials, finishes, and equipment to be used, signed by the owner, the director responsible for the construction work, and the co-responsible party for urban and architectural design and installations, as the case may be • Project descriptive report Doing Business 2015 Mexico 34 Time to No. Procedure Cost to complete complete • Calculation report • Registration and identification card of the director responsible for the construction work and the co-responsible party for structural safety, urban and architectural design, and installations as appropriate (simple original copy or certified copy for collation) • Two copies of the structural design signed by the director responsible for the construction work and the co-responsible party for structural safety • Proof of payment of improvement taxes for potable water and sewerage works provided by the Federal District Department and license issuance fees if the application is required (simple original copy or certified copy for collation). Because the building considered here requires installation or modification of the water main and hook-up to the sewage system, the application and proof of payment of the corresponding fees are attached. After registration of the construction statement, the one-stop shop (Ventanilla Única Delegacional) reviews the submitted data and documents and verifies the progress of the construction work under the terms stated in the Administrative Verification Rules (Reglamento de Verificación Administrativa) for the Federal District. The director responsible for the construction work undertakes to post a signboard showing the registration number in the construction work statement and the general construction work data, including the location and statement validity. The signboard must be posted in a visible place and legible from the public pathway. The validity of the statement (for construction work completion) is as follows: • Up to 300 square meters: 1 year • 300 -- 1,000 square meters: 2 years • More than 1,000 square meters: 3 years The cost breakdown for obtaining the building permit is the following: • Register: MXN 524.50 (DF Tax Code 2013 Article 185, Sec. B, fr. I, p.a) • Analysis: MXN 76.50 x 1,300.6 m2 = MXN 99,495.9 (DF Tax Code 2013 Article 185, Sec. B, fr. I, p.b) • Compensations for the Environment: MXN 40.50 x 1300.6 m2 = 52,674.3 MXN (DF Tax Code 2013 Article 300) • Compensations for road impact: MXN 116.80 x 1300.6 m2 = 151,910.08 MXN (DF Tax Code 2013 Article 301) • Rights for new water and sewage connection: MXN 295 x 1300.6 m2 = 383,677 MXN (DF Tax Code 2013 Article 302) TOTAL= 688,281.78 MXN The cost breakdown for water and sewage: A) Services of Hydraulic Construction and Operation (Art. 181) • Water Connection: MXN 13,393.81 (DF Tax Code Article 181, Section A, fr. I, p. c) • Water measurer device: MXN 6,720.22 (DF Tax Code Article 181, Section A, fr. III, p. c) • "Armado de Cuadro": MXN 1,405.83 (DF Tax Code Article 181, Section A, fr. IV, p. c) • Sewage Connection: MXN 9,069.08 (DF Tax Code, Article 181, Section Doing Business 2015 Mexico 35 Time to No. Procedure Cost to complete complete B, fr. I, p. a) B) Authorization to use the Water and Sewage Network (Art. 182) • Technical assessment: MXN 38,388.40 (DF Tax Code, Article 182, fr. I, p. 2) • Water pipes usage fee: MXN 1,165.69 (DF Tax Code, Article 182, fr. III) TOTAL = 70,143.03 Thus, the cost breakdown to Register Construction Statement Type B: MXN 688,281.78 + MXN 70,143.03 = 758,424.81 The cost for the water connection includes the installation of the main pipeline, board, and meter. The cost to connect to water and sewage services are included in this procedure since the proof of payment of such fees are needed to request connection to these utility services (procedure 10). The cost is established by the Financial Code of the Federal District. Agency: Ventanilla Única Delegacional Receive inspection (structure) by the Municipality (Directorate of General Works) According to Article III, Section VI of Building Regulations, an inspection 5 of the structure by the Municipality is required. 1 day no charge Agency: Municipality (Directorate of General Works) Notify the Municipal Authority upon completion of construction work The notification of completion is made in writing once the construction has been completed. Once notified, inspectors may visit the location 6 within a week to verify the construction is in compliance with all 1 day no charge applicable regulation. Agency: Municipality Receive inspection upon completion of construction work from Directorate of General Works 7 1 day no charge Agency: Directorate of General Works (Municipality) Request and obtain occupancy clearance Building use clearance is granted by the one-stop shop. 8 6 days no charge Agency: Delegational One-Stop Shop Doing Business 2015 Mexico 36 Time to No. Procedure Cost to complete complete Request and obtain authorization from civil protection An inspection from the civil protection agency (Secretaria de Protección Civil) will not be necessary -- only for more complex installations. After the form and the emergency plan are filed, the civil protection agency 7 days no charge 9 will issue a certificate within 7 days. Agency: Secretaria de Protección Civil Update the building record at the Tax Ministry The time and cost of updating the building record are established by the Financial Code of the Federal District, Article 217. The building is not actually registered with the Property Registry. Once built, a cadastral actualization document (manifestacion de actualisacion del valor cadastral) is filed for tax purposes with the Tax Ministry. The information in the new deed is updated only when the property (with the building included) is sold. In Mexico, the owner of the land is 1 day no charge 10 automatically the owner of the building unless otherwise specified. Only in cases where the owner of the building and the owner of the property are two different people would the building be registered. Agency: Tax Ministry * Request and connect to water and sewage services 11 30 days no charge Agency: Sistema de Aguas de la Ciudad de México * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Summary of time, cost and procedures for dealing with construction permits in Mexico - Monterrey Time to No. Procedure Cost to complete complete Obtain feasibility of zoning certificate (uso de suelo) in the Secretariat for Urban Development and Ecology The zoning certificate provides information on the type of constructions that are allowed on the land. The following documents must be provided: 5 days MXN 135 1 a. Feasibility application for urbanizing the land (original) b. Property title (1 copy) c. A document certifying the legal status of the applicant: d. Incorporation charter registered with the relevant authority (1 copy) e. Power of Attorney (1 copy) f. Official identification of owner and agent (1 copy) g. Updated proof of payment of the property tax (1 copy) Doing Business 2015 Mexico 37 Time to No. Procedure Cost to complete complete h. Location plan of the property i. Payment of the corresponding fees In areas considered high risk, a geophysical, geological and hydrological study done by a registered expert may also be requested. The procedure is legislated in Arts. 140 and 143 of the Zoning and Land Use Regulations of the City of Monterrey, Nuevo León. The basis of the cost is Art. BIS-52, Section I of the Finance Act for the Municipalities of Nuevo León. Agency: Secretariat for Urban Development and Ecology Receive civil protection authorization from the Department of Civil Protection at the Secretariat for Urban Development and Ecology (SEDUE) This consists of the verification that the premises comply with the security measures and minimum standards of protection to prevent civil contingencies when in operation. The following documents must be provided: a. Official identification of the legal representative; b. 2 copies of the architectural plan; 8 days no charge 2 c. Proof of payment of the property taxes; d. Photograph of the land; e. Constitutive Act. The procedure is legislated in Art. 12, Section XXVI of the Civil Protection Rules of the City of Monterrey, and Art. 26, Section XXI of the Civil Protection Code of the State of Nuevo León. Agency: Department of Civil Protection * Obtain alignment certificate (alineamiento vial) from the Secretariat for Urban Development and Ecology The certificate of alignment is issued by the Secretariat for Urban Development and Ecology to provide the exact limit of the private property in regards to public roads. The following documents must be provided: 3 a. Document proving ownership; 5 days MXN 101 b. Official identification of the legal representative; c. Proof of property taxes paid; d. Plan of the location of the property The procedure is legislated in Art. Regulation 73 of the Zoning and Land Use Rules of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52-BIS, Section IX of the Finance Act for the Municipalities of Nuevo León. Doing Business 2015 Mexico 38 Time to No. Procedure Cost to complete complete Agency: Secretariat for Urban Development and Ecology Request zoning certificate, building use license, official number and construction license from the Secretariat for Urban Development and Ecology 4 1 day no charge Agency: Secretariat for Urban Development and Ecology Receive inspection prior to issuing of construction license by the Secretariat for Urban Development and Ecology Prior to the issuance of the building permit, there is a site visit to verify the conditions of the property. The inspection is scheduled at the time of the application for licenses of land use, building use and construction. 5 1 day no charge The procedure is legislated in Art. 351 of the Law of Urban Development of the State of Nuevo Leon. Agency: Secretariat for Urban Development and Ecology Receive zoning certificate, building use license, official number and construction license from the Secretariat for Urban Development and Ecology Through a unique form issued by the City of Monterrey, the official number that corresponds to the property is provided, in addition to the permitted and prohibited uses at the site. The authorization of the construction of a new building on the premises is also provided. The following documents must be presented: a. Application form; b. Document proving ownership; 6 c. Proof of payment of property tax; 40 days MXN 50,315 d. Professional license and responsive letter signed by the DRO; e. 4 photographs of the exterior of the property; f. Drawings of the draft; g. Architectural plans of the project in physical and AutoCAD 2004 format; h. Evidence of alignment; i. Soil mechanics and technical report of the proyect; j. Policy of liability insurance; k. Approval of Municipal Civil Protection; l. Proof of payment of fees. The customer must go to the Dirección de Control Urbano to complete the procedure from Monday to Friday between 8:00 am to 2:00 pm. Doing Business 2015 Mexico 39 Time to No. Procedure Cost to complete complete The procedure is legislated in Art. 11 of the Zoning and Land Use Rules of the Municipality of Monterrey, Nuevo Leon and Arts. 17 and 20 of the Building Rules of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52, Section I, Subsection A, Art. 52- BIS, Section II, Paragraph E, Section III, Paragraph E and Art. 55 of the Finance Act for the Municipalities of the State of Nuevo León. Agency: Secretariat for Urban Development and Ecology Update the cadastral registry BuildCo must update the cadastral information of the property (surface and value) before beginning construction. The following documents must be presented: a. Application form b. Official property plan approved by the municipal authority c. Proof of payment of the property tax d. Land use license e. Title deed f. Power of attorney of the legal representative g. Identification document of the person submitting the 7 application 6 days MXN 32,209 h. Payment of the corresponding fees The procedure is regulated in Arts. 9, 22, and 31 bis 1 of the Cadastral Law of the State of Nuevo León and Arts. 12, 14, 25, 26, 29, 31 and 21 of the regulations of the Cadastral Law of the State of Nuevo León. The cost is regulated by Art. 277, Section V of the Finance Law of the State of Nuevo León. Agency: Municipal Treasury Request and obtain feasibility study for water and drainage services from the Water and Drainage Services of Monterrey (SADM) It is the process that confirms the possibility of providing a potable water and sewer service connection in a certain area of the city. To perform the procedure, BuildCo must have: 8 a. Unique form to request the service; 14 days no charge b. Sketch of the location. BuildCo must visit any commercial office the SADM at the Costumer Service Section and request the feasibility to contract the service. The procedure is legislated in Art. 42 of the Finance Act for the Municipalities of Nuevo León. Doing Business 2015 Mexico 40 Time to No. Procedure Cost to complete complete Agency: Water and Drainage Services of Monterrey (SADM) Obtain excavation permit from the Secretariat of Public Services (Technical Department, Permit Coordination) This permit allows BuildCo to conduct any excavation of the road to install the pipes. The pavement must be repaired to its initial status after the completion of the work. To obtain the permit, BuildCo must submit: a. Communication addressed to the Technical Director; b. Proof of payment of property tax; c. Copy of the constitution; d. Official identification of the legal representative; e. Work project; f. Work program; 5 days MXN 50,468 9 g. Copy of professional license and identification of the DRO; h. Payment of fees; i. Escrow; j. Feasibility of water and drainage. The procedure is legislated in Art. 37 of the Building Code of the City of Monterrey, Nuevo León. The basis of the cost is in the Art. 52, Section III of the Finance Act for the Municipalities of Nuevo León. Agency: Secretariat of Public Services (Technical Department, Permit Coordination) Request and connect to water and drainage services at the Water and Drainage Services of Monterrey (SADM) BuildCo must submit the following: a. Document proving ownership; b. Official identification of the legal representative; c. Articles of incorporation; d. Land use permit; e. Building permit; f. Registration of wastewater discharge; g. Architectural plan. 10 30 days MXN 64,461 The procedure is legislated in Art. 42 of the Finance Act for the Municipalities of Nuevo Leon and Art. 31 of the Building Code of the City of Monterrey, Nuevo León. The basis of the cost is in the Second Agreement, Title Services Water and Sewerage of Monterrey, IPD Meter Installation Fees for Connection and Service Standards Reinstalling Meter; Official Gazette no. 147. The cost is calculated as follows: [MXN 44,221 for the infrastructure contribution] + [MXN 9,140 for water connection] + [MXN 9,350 for drain connection] + [MXN 1,750 for the meter and installation]. It is assumed that the water consumption is for a business with 50 Doing Business 2015 Mexico 41 Time to No. Procedure Cost to complete complete employees for the infrastructure contribution fee. A diameter of 1 inch for the drinking water connection and 4 inches for the drain connection are also assumed. Connection costs include labor, materials and costs of repaving. Agency: Water and Drainage Services of Monterrey (SADM) Submit notification of construction work completion at the Secretariat for Urban Development and Ecology BuildCo must notify the Secretariat for Urban Development and Ecology of the completion of the construction. BuildCo must submit the following: a. Application form; b. Proof of payment of property tax; c. Responsive letter and copy of the professional license of the DRO; d. 2 original and 1 copy of the flat plane of history; e. Approval of civil protection; 1 day no charge 11 f. Articles of incorporation. g. Approved building license Payment is then made to obtain the certificate. The procedure is legislated in Art. 123 of the Building Code the City of Monterrey, Nuevo León. Agency: Secretariat for Urban Development and Ecology Receive final inspection from the Secretariat for Urban Development and Ecology A final inspection is carried out to verify that the warehouse has been built in accordance with the regulations and the approved plans. The inspection is scheduled at the time of the notification of the completion of the construction. 12 1 day no charge The procedure is legislated in Art. 351 of the Urban Development Law of the State of Nuevo Leon. Agency: Secretariat for Urban Development and Ecology Obtain certificate of completion of construction work from the Secretariat for Urban Development and Ecology Once the final inspection is complete and the appropriate fees are paid, 3 days MXN 168 13 the Secretariat for Urban Development and Ecology will issue the certificate of completion, certifying that the warehouse is built in accordance with existing regulations and approved plans. Doing Business 2015 Mexico 42 Time to No. Procedure Cost to complete complete The procedure is legislated in Art. 123 of the Building Code of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52-BIS, Section VIII of the Finance Act for the Municipalities of Nuevo León. Agency: Secretariat for Urban Development and Ecology * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Mexico 43 GETTING ELECTRICITY Access to reliable and affordable electricity is vital for WHAT THE GETTING ELECTRICITY businesses. To counter weak electricity supply, many firms in developing economies have to rely on self- INDICATORS MEASURE supply, often at a prohibitively high cost. Whether electricity is reliably available or not, the first step for Procedures to obtain an electricity a customer is always to gain access by obtaining a connection (number) connection. Submitting all relevant documents and What do the indicators cover? obtaining all necessary clearances and permits Doing Business records all procedures required for a Completing all required notifications and local business to obtain a permanent electricity receiving all necessary inspections connection and supply for a standardized warehouse, as well as the time and cost to complete them. These Obtaining external installation works and procedures include applications and contracts with possibly purchasing material for these works electricity utilities, clearances from other agencies Concluding any necessary supply contract and and the external and final connection works. The obtaining final supply ranking of economies on the ease of getting electricity is determined by sorting their distance to Time required to complete each procedure frontier scores for getting electricity. These scores are (calendar days) the simple average of the distance to frontier scores Is at least 1 calendar day for each of the component indicators. To make the data comparable across economies, several Each procedure starts on a separate day assumptions are used. Does not include time spent gathering The warehouse: information  Is owned by a local entrepreneur, located Reflects the time spent in practice, with little in the economy’s largest business city, in follow-up and no prior contact with officials an area where other warehouses are Cost required to complete each procedure located. For the 11 economies with a (% of income per capita) population of more than 100 million, data Official costs only, no bribes for a second city have been added. Excludes value added tax  Is not in a special economic zone where the connection would be eligible for subsidization or faster service.  Is to either the low-voltage or the medium- voltage distribution network and either  Is located in an area with no physical overhead or underground, whichever is more constraints (ie. property not near a railway). common in the area where the warehouse is  Is a new construction being connected to located. Included only negligible length in the electricity for the first time. customer’s private domain.  Is 2 stories, both above ground, with a total  Requires crossing of a 10-meter road but all surface of about 1,300.6 square meters the works are carried out in a public land, so (14,000 square feet), is built on a plot of there is no crossing into other people's 929 square meters (10,000 square feet), is private property. used for storage of refrigerated goods  Involves installing one electricity meter. The The electricity connection: monthly electricity consumption will be 26880 kilowatt hour (kWh). The internal  Is 150 meters long and is a 3-phase, 4-wire electrical wiring has been completed. Y, 140-kilovolt-ampere (kVA) (subscribed capacity) connection. Doing Business 2015 Mexico 44 GETTING ELECTRICITY Where does the economy stand today? What does it take to obtain a new electricity connection Most indicator sets refer to a case scenario in the largest in Mexico? According to data collected by Doing business city of an economy, except for 11 economies for Business, getting electricity there requires 6.8 procedures, which the data are a population-weighted average of the takes 78.9 days and costs 346.1% of income per capita 2 largest business cities. See the chapter on distance to (figure 4.1). frontier and ease of doing business ranking at the end of this profile for more details. Figure 4.1 What it takes to obtain an electricity connection in Mexico - Mexico City What it takes to obtain an electricity connection in Mexico - Monterrey Doing Business 2015 Mexico 45 Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Mexico 46 GETTING ELECTRICITY Globally, Mexico stands at 116 in the ranking of 189 average ranking provide another perspective in assessing economies on the ease of getting electricity (figure 4.2). how easy it is for an entrepreneur in Mexico to connect a The rankings for comparator economies and the regional warehouse to electricity. Figure 4.2 How Mexico and comparator economies rank on the ease of getting electricity Source: Doing Business database. Doing Business 2015 Mexico 47 GETTING ELECTRICITY Obtaining an electricity connection is essential to enable ensure safety in the connection process while keeping a business to conduct its most basic operations. In many connection costs reasonable, governments around the economies the connection process is complicated by the world have worked to consolidate requirements for multiple laws and regulations involved—covering service obtaining an electricity connection. What reforms in quality, general safety, technical standards, procurement getting electricity has Doing Business recorded in Mexico practices and internal wiring installations. In an effort to (table 4.1)? Table 4.1 How has Mexico made getting electricity easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform In Mexico the distribution utility made getting electricity easier by streamlining procedures, offering training opportunities to DB2013 private contractors, using a geographic information system (GIS) to map the electricity distribution network and increasing the stock of materials. Mexico made getting electricity easier by increasing the efficiency of the utility’s internal processes and by enforcing a DB2014 “silence is consent” rule for the approval of the feasibility study for a new connection. Source: Doing Business database. Doing Business 2015 Mexico 48 GETTING ELECTRICITY What are the details? The indicators reported here for Mexico are based on a OBTAINING AN ELECTRICITY CONNECTION set of specific procedures—the steps that an entrepreneur must complete to get a warehouse connected to electricity by the local distribution utility— Name of utility - identified by Doing Business. Data are collected from the Mexico City: CFE distribution utility, then completed and verified by electricity regulatory agencies and independent Name of utility - Comisión Federal de professionals such as electrical engineers, electrical Monterrey: Electricidad (CFE) contractors and construction companies. The electricity distribution utility surveyed is the one serving the area City: Mexico City, Monterrey (or areas) in which warehouses are located. If there is a choice of distribution utilities, the one serving the largest The procedures are those that apply to a warehouse and number of customers is selected. electricity connection matching the standard assumptions used by Doing Business in collecting the data (see the section in this chapter on what the indicators cover). The procedures, along with the associated time and cost, are summarized below. Table 4.2 Summary of time, cost and procedures for getting electricity in Mexico - Mexico City Time to No. Procedure Cost to complete complete The customer submits a request for a feasibility study (Technical Evaluation) to one of the offices of the Comisión Federal de Electricidad (CFE). The client request a feasibility study to the Comisión Federal de Electricidad (CFE). The energy demand and a sketch of the localization of the warehouse are requested by the CFE. 5 calendar days MXN 0 1 Agency: Comisión Federal de Electricidad (CFE) The customer hires an electrical contractor who designs the connection, submits the plans to the Comisión Federal de Electricidad (CFE) and awaits approval. Once the feasibility of the project has been confirmed by Comisión Federal de Electricidad (CFE), the clients electrical contractor obtains the 26 calendar days MXN 0 2 design specifications from CFE, prepares the design of the electrical works needed to carry out the connection on the basis of these specifications and awaits approval of the plans from CFE. Agency: Comisión Federal de Electricidad (CFE) Doing Business 2015 Mexico 49 Time to No. Procedure Cost to complete complete * The Comisión Federal de Electricidad (CFE) carries out a technical inspection in order to approve the design of the connection This external inspection is necessary to validate the design of the 3 connection works. 1 calendar day MXN 0 Agency: Comisión Federal de Electricidad (CFE) The customer obtains a permit for the external connection works at the Municipality The customer or the electrical contractor obtains the authorization from 4 the municipality to carry out the connection works in public land. 30 calendar days MXN 2,445 Agency: Municipality The private electrical company hired to do the design carries out the external connection works according to the approved design. The installation of the transformer substation and the external connection works are the responsibility of the customer, who can choose 20 calendar days MXN 441,500 5 to hire a private contractor to do the works. Agency: Comisión Federal de Electricidad (CFE) * The customer must obtain approval of his internal wiring installations from a specialized firm. The monitoring of the internal wiring installations is done by a specialized firm (Unidad de Verificación de Instalaciones Eléctricas ) which is responsible for checking that the wiring was done according to Mexican standards. 6 The applicant must go to a Unidad de Verificación de Instalaciones 2 calendar days MXN 25,000 Eléctricas (UVIE), accredited with the Entidad Mexicana de Acreditamiento (EMA) and registered with the Ministry of Energy (Secretaria de Energia). The firm will verify that the electrical installation meets the safety standards established in NOM 001-SEDE; the UVIE also oversees the external work that is performed by the client (construction of the electrical substation). A certificate issued at the end of the inspection is needed by the time the Doing Business 2015 Mexico 50 Time to No. Procedure Cost to complete complete supply contract is signed. This procedure may be performed simultaneously with other procedures. The costs associated with this procedure are determined by the Unidad Verificadora and the applicant. If the wiring is done within the provisions of the Mexican Standards, usually one inspection is sufficient to issue the approval (Dictamen de Verificación), but if the applicant did not perform its electrical work within the rules, then the Unidad Verificadora must make several visits to ensure that the wiring corresponds to the standards. Link to http://www.sener.gob.mx/webSener/portal/index.jsp?id=120 Agency: Empresa privada The customer signs the supply contract, pays a security deposit and awaits the installation of the meter by the Comisión Federal de Electricidad (CFE). At the signing of the contract for providing electrical service connection the certificate of verification for the internal wiring installation must be submitted. The process of signing the supply contract is done after the security deposit has been paid for. Payment is made at the offices of the 7 company. It is possible to settle the security deposit with a bank 4 calendar days MXN 4,953.2 guarantee. The meter installation is done by the Área comercial which coordinates with the Departamento de Distribuccion. Agency: Comisión Federal de Electricidad (CFE) * Takes place simultaneously with another procedure. Source: Doing Business database. Summary of time, cost and procedures for getting electricity in Mexico - Monterrey Time to No. Procedure Cost to complete complete The customer submits a request for a feasibility study (Technical Evaluation) to one of the offices of the Comisión Federal de Electricidad (CFE). The client request a feasibility study to the Comisión Federal de 1 Electricidad (CFE). The energy demand and a sketch of the localization of 10 calendar days MXN 0 the warehouse are requested by the CFE. Agency: Comisión Federal de Electricidad (CFE) Doing Business 2015 Mexico 51 Time to No. Procedure Cost to complete complete The customer hires an electrical contractor who designs the connection, submits the plans to the Comisión Federal de Electricidad (CFE) and awaits approval. Once the feasibility of the project has been confirmed by Comisión Federal de Electricidad (CFE), the clients electrical contractor obtains the 2 design specifications from CFE, prepares the design of the electrical 15 calendar days MXN 0 works needed to carry out the connection on the basis of these specifications and awaits approval of the plans from CFE. Agency: Comisión Federal de Electricidad (CFE) * The Comisión Federal de Electricidad (CFE) carries out a technical inspection in order to approve the design of the connection This external inspection is necessary to validate the design of the 3 connection works. 1 calendar day MXN 0 Agency: Comisión Federal de Electricidad (CFE) The private electrical company hired to do the design carries out the external connection works according to the approved design. The installation of the transformer substation and the external connection works are the responsibility of the private contractor hired by 20 calendar days MXN 280,000 4 the client Agency: Comisión Federal de Electricidad (CFE) * The customer must obtain approval of his internal wiring installations from a specialized firm. The monitoring of the internal wiring installations is done by a specialized firm (Unidad de Verificación de Instalaciones Eléctricas ) which is responsible for checking that the wiring was done according to Mexican standards. The applicant must go to a Unidad de Verificación de Instalaciones Eléctricas (UVIE), accredited with the Entidad Mexicana de Acreditamiento (EMA) and registered with the Ministry of Energy 5 (Secretaria de Energia). The firm will verify that the electrical installation 2 calendar days MXN 25,000 meets the safety standards established in NOM 001-SEDE; the UVIE also oversees the external work that is performed by the client (construction of the electrical substation). A certificate issued at the end of the inspection is needed by the time the supply contract is signed. This procedure may be performed simultaneously with other procedures. The costs associated with this procedure are determined by the Unidad Verificadora and the applicant. If the wiring is done within the provisions of the Mexican Standards, usually one inspection is sufficient to issue the approval (Dictamen de Verificación), but if the applicant did not perform Doing Business 2015 Mexico 52 Time to No. Procedure Cost to complete complete its electrical work within the rules, then the Unidad Verificadora must make several visits to ensure that the wiring corresponds to the standards. Agency: Private company The customer signs the supply contract, pays a security deposit and awaits the installation of the meter by the Comisión Federal de Electricidad (CFE). At the signing of the contract for providing electrical service connection the certificate of verification for the internal wiring installation must be submitted. The process of signing the supply contract is done after the 6 security deposit has been paid for. Payment is made at the offices of the 4 calendar days MXN 4,553.64 company. It is possible to settle the security deposit with a bank guarantee. The meter installation is done by the Área comercial which coordinates with the Departamento de Distribuccion. Agency: Comisión Federal de Electricidad (CFE) * Takes place simultaneously with another procedure. Source: Doing Business database. Doing Business 2015 Mexico 53 REGISTERING PROPERTY Ensuring formal property rights is fundamental. WHAT THE REGISTERING PROPERTY Effective administration of land is part of that. If INDICATORS MEASURE formal property transfer is too costly or complicated, formal titles might go informal again. And where property is informal or poorly Procedures to legally transfer title on administered, it has little chance of being accepted immovable property (number) as collateral for loans—limiting access to finance. Preregistration (for example, checking for liens, notarizing sales agreement, paying property What do the indicators cover? transfer taxes) Doing Business records the full sequence of Registration in the economy’s largest business procedures necessary for a business to purchase city 2 property from another business and transfer the property title to the buyer’s name. The transaction is Postregistration (for example, filing title with the municipality) considered complete when it is opposable to third parties and when the buyer can use the property, Time required to complete each procedure use it as collateral for a bank loan or resell it. The (calendar days) ranking of economies on the ease of registering Does not include time spent gathering property is determined by sorting their distance to information frontier scores for registering property. These scores are the simple average of the distance to frontier Each procedure starts on a separate day. scores for each of the component indicators. To Procedures that can be fully completed online are recorded as ½ day. make the data comparable across economies, several assumptions about the parties to the Procedure considered completed once final transaction, the property and the procedures are document is received used. No prior contact with officials The parties (buyer and seller): Cost required to complete each procedure  Are limited liability companies, 100% (% of property value) domestically and privately owned and Official costs only, no bribes perform general commercial activities. No value added or capital gains taxes included  Are located in the economy’s largest business city . 2  Is located in a periurban commercial zone, and no rezoning is required.  Have 50 employees each, all of whom are nationals.  Has no mortgages attached, has been under the same ownership for the past 10 years. The property (fully owned by the seller):  Consists of 557.4 square meters (6,000 square  Has a value of 50 times income per capita. feet) of land and a 10-year-old, 2-story The sale price equals the value. warehouse of 929 square meters (10,000  Is registered in the land registry or cada- square feet). The warehouse is in good stre, or both, and is free of title disputes. condition and complies with all safety standards, building codes and legal  Property will be transferred in its entirety. requirements. There is no heating system. 2 For the 11 economies with a population of more than 100 million, data for a second city have been added. Doing Business 2015 Mexico 54 REGISTERING PROPERTY Where does the economy stand today? What does it take to complete a property transfer in Most indicator sets refer to a case scenario in the largest Mexico? According to data collected by Doing Business, business city of an economy, except for 11 economies for registering property there requires 6.8 procedures, takes which the data are a population-weighted average of the 63.6 days and costs 5.1% of the property value (figure 2 largest business cities. See the chapter on distance to 5.1). frontier and ease of doing business ranking at the end of this profile for more details. Figure 5.1 What it takes to register property in Mexico - Mexico City What it takes to register property in Mexico - Monterrey Doing Business 2015 Mexico 55 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database. Doing Business 2015 Mexico 56 REGISTERING PROPERTY Globally, Mexico stands at 110 in the ranking of 189 regional average ranking provide other useful economies on the ease of registering property (figure information for assessing how easy it is for an 5.2). The rankings for comparator economies and the entrepreneur in Mexico to transfer property. Figure 5.2 How Mexico and comparator economies rank on the ease of registering property Source: Doing Business database. Doing Business 2015 Mexico 57 REGISTERING PROPERTY What are the details? The indicators reported here are based on a set of STANDARD PROPERTY TRANSFER specific procedures—the steps that a buyer and seller must complete to transfer the property to the buyer’s name—identified by Doing Business through information collected from local property lawyers, Property value: MXN 6,441,849 notaries and property registries. These procedures are those that apply to a transaction matching the Mexico City, City: standard assumptions used by Doing Business in Monterrey collecting the data (see the section in this chapter on The procedures, along with the associated time and what the indicators cover). cost, are summarized below. Table 5.2 Summary of time, cost and procedures for registering property in Mexico Time to No. Procedure Cost to complete complete The notary obtains the non-encumbrance certificate and gives the pre-preventive notice (aviso pre-preventivo) to the Public Registry (IRCNL) The non-encumbrance certificate contains information including the MXN 202 for the description of the property and information regarding any charges, liens, non-encumbrance mortgages or other encumbrances. certificate (3 daily To complete the procedure the notary must present the non- minimum wages at encumbrance certificate form (original and copy) with the information MXN 67.29 per included in the deed. The pre-preventive notice serves as a notification minimum wage for of the intention to conduct the transfer of a property and as a protection 2 days the geographic 1 of the transfer against the registration of any encumbrances by third (simultaneous area A parties such as mortgages. with procedure 2) corresponding to The procedure is regulated by Art. 2910 of the Civil Code of the State of Monterrey) and Nuevo León, Art. 8 Section VII and Articles 59, 61 and 63 of the Regulatory Law of the Property and Commercial Public Registry of the MXN 269 for the State of Nuevo León. The cost is regulated by Art. 271 Sections X and XII pre-preventive of the Finance Law of the State of Nuevo León. notice (4 daily minimum wages) Agency: Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL) * Obtain the cadastral value of the property from the Cadaster (Dirección de Catastro - IRCNL) Less than 1 day The property transfer tax is calculated based on the cadastral value (online obtained through this procedure. The notaries can complete this MXN 269 (4 daily 2 procedure, procedure online through the Cadaster’s online platform receiving the minimum wages) simultaneous response immediately. with procedure 1) If the value is requested in person the following documents are required: a. Application form (original and copy) b. Receipt of payment of property tax “predial” (copy) Doing Business 2015 Mexico 58 Time to No. Procedure Cost to complete complete c. ID of the owner d. Document identifying the applicant as the legal representative of the company (when requested on behalf of a company, copy) e. Public deed or sale agreement (copy) f. Receipt of payment of fees The procedure is regulated by Art. 34 of the Regulatory Law of the Cadaster Law. The cost is regulated by Art. 276, Section III-A of the Finance Law of the State of Nuevo León. Agency: Cadaster (Dirección del Catastro - IRCNL) The notary prepares and executes the public deed, and collects and pays the property transfer (ISAI) tax at the municipality Currently there is not an official fee schedule for notary fees in Monterrey. Notaries in would normay charge 1% of the property value. To complete the payment of the property transfer tax the notarey would go the municipality and present the following documents: a. Public deed b. Cadastral value (obtained in procedure 2) MXN 191,887 (2% c. Receipt of payment of property tax “predial” of the property d. Statement of payment value for the The procedure is regulated by Art. 28 Bis fo the Finance Law for the 12 days property transfer 3 Municipalities of the State of Nuevo León. The property transfer taxi is tax + 1% of the based on the highest value between the sale price or the cadastral value. property value for With the entry into force in July 2013 of the Federal Law for the Prevention and Identification of Operations with Illicit Resources (Ley notary fees) Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita) the notaries have to notify the Ministry of Finance (Secretaría de Hacienda y Crédito Público) if they provide services related with the transfer of a property above a certain amount. Agency: Notary The notary gives the preventive notice to the Public Registry (IRCNL) Once the deed is signed the notary gives notice to the Public Registry informing of the conclusion of the transaction. The notice will have a validity of 60 days during which this transaction will have the priority over any other recordable action on the property. MXN 269 (4 daily 4 To complete this procedure the notary must present the following: 1 day minimum wages) a. Notice with the names of the parties of the transaction b. The purpose of the transaction c. The deed number d. Signature date The notary must bring the documentation to the Public Registry, pay the corresponding fees and receive the confirmation that the notice has been processed by the Registry. The procedure is regulated by Art. 2910 Doing Business 2015 Mexico 59 Time to No. Procedure Cost to complete complete of the Civil Code of the State of Nuevo León. The cost is regulated by Art. 271, Section XII of the Finance Law of the State of Nuevo León. Agency: Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL) The deed is registered at the Public Registry (IRCNL) To complete the registration the notary must bring the following documents: a. Notarized public deed b. Receipt of payment of transfer tax (ISAI) c. Paymet of Income Tax d. Non-encumbrance certificate e. Cadastral value The notary must bring the documentation to the Public Registry and pay the corresponding fees. Once the procedure is completed the notary will MXN 31,981 (MXN come back to the registry to pick up the documentation. The cost is 3 days 5 for every MXN 5 for every thousand or fraction of the property value with a (simultaneous thousand or 5 minimum of 5 daily minimum wages (MXN 336) and a maximum of 570 with procedure 6) fraction of the daily minimum wages (MXN 38,355). property value) The procedure is regulated by Art. 8, Section IV and Arts. 21, 22 and 23 of the Regulatory Law of the Commercial and Property Public Registry of the State of Nuevo León as well as by Arts. 2901, 2904 and 2910 of the Civil Code of the State of Nuevo León. The cost is regulated by Art. 271, Section I of the Finance Law of the State of Nuevo León. Agency: Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL) * The notary gives notice of the sale to the Cadaster (Dirección del Catastro – IRCNL) In this procedure the changes in property ownership are recorded in the cadastral registry through the notice provided by the notary. To complete this procedure the following documents are presented by the notary: a. Notification of sale form (original) b. Copy of the receipt of payment of the property tax (predial) 1 day c. Description of the property (simultaneous no cost 6 The notary presents the sale notice at the Tax Payer Service Department with procedure 5) with the required documents. The documents are reviewed and processed by the corresponding department for their approval. After their evaluation the notary returns for the results of the procedure. The procedure is regulated by Art. 29 of the Cadastral Law and Art. 28 of the Regulatory Law of the Cadastral Law. Agency: Cadaster (Dirección del Catastro - IRCNL) Doing Business 2015 Mexico 60 * Takes place simultaneously with another procedure. Note: Online procedures account for 0.5 days in the total time calculation. Source: Doing Business database. Doing Business 2015 Mexico 61 GETTING CREDIT Two types of frameworks can facilitate access to WHAT THE GETTING CREDIT INDICATORS credit and improve its allocation: credit information MEASURE systems and borrowers and lenders in collateral and bankruptcy laws. Credit information systems enable Strength of legal rights index (0–12) 3 lenders’ rights to view a potential borrower’s financial history (positive or negative)—valuable information to Rights of borrowers and lenders through consider when assessing risk. And they permit collateral laws borrowers to establish a good credit history that will Protection of secured creditors’ rights through allow easier access to credit. Sound collateral laws bankruptcy laws enable businesses to use their assets, especially Depth of credit information index (0–8) 4 movable property, as security to generate capital— while strong creditors’ rights have been associated Scope and accessibility of credit information with higher ratios of private sector credit to GDP. distributed by credit bureaus and credit registries What do the indicators cover? Credit bureau coverage (% of adults) Doing Business assesses the sharing of credit information and the legal rights of borrowers and Number of individuals and firms listed in lenders with respect to secured transactions through largest credit bureau as percentage of adult 2 sets of indicators. The depth of credit information population index measures rules and practices affecting the Credit registry coverage (% of adults) coverage, scope and accessibility of credit Number of individuals and firms listed in information available through a credit registry or a credit registry as percentage of adult credit bureau. The strength of legal rights index population measures whether certain features that facilitate lending exist within the applicable collateral and bankruptcy laws. Doing Business uses two case scenarios, Case A and Case B, to determine the scope of the secured transactions system, involving a  Has up to 50 employees. secured borrower and a secured lender and  Is 100% domestically owned, as is the lender. examining legal restrictions on the use of movable collateral (for more details on each case, see the Data The ranking of economies on the ease of getting Notes section of the Doing Business 2015 report). credit is determined by sorting their distance to These scenarios assume that the borrower: frontier scores for getting credit. These scores are the distance to frontier score for the strength of legal  Is a private limited liability company. rights index and the depth of credit information  Has its headquarters and only base of index. operations in the largest business city. For the 11 economies with a population of more than 100 million, data for a second city have been added. 3 For the legal rights index, 2 new points are added in Doing Business 2015 for new data collected to assess the overall legal framework for secured transactions and the functioning of the collateral registry. 4 For the credit information index, 2 new points are added in Doing Business 2015 for new data collected on accessing borrowers’ credit information online and availability of credit scores. Doing Business 2015 Mexico 62 GETTING CREDIT Where does the economy stand today? How well do the credit information system and collateral Globally, Mexico stands at 12 in the ranking of 189 and bankruptcy laws in Mexico facilitate access to credit? economies on the ease of getting credit (figure 6.1). The The economy has a score of 8 on the depth of credit rankings for comparator economies and the regional information index and a score of 8 on the strength of average ranking provide other useful information for legal rights index (see the summary of scoring at the end assessing how well regulations and institutions in Mexico of this chapter for details). Higher scores indicate more support lending and borrowing. credit information and stronger legal rights for borrowers and lenders. Figure 6.1 How Mexico and comparator economies rank on the ease of getting credit Source: Doing Business database. Doing Business 2015 Mexico 63 GETTING CREDIT One way to put an economy’s score on the getting credit rights index for Mexico and shows the scores for indicators into context is to see where the economy comparator economies as well as the regional average stands in the distribution of scores across economies. score. Figure 6.3 shows the same for the depth of credit Figure 6.2 highlights the score on the strength of legal information index. Figure 6.2 How strong are legal rights for borrowers Figure 6.3 How much credit information is shared — and lenders? and how widely? Economy scores on strength of legal rights index Economy scores on depth of credit information index Note: Higher scores indicate that collateral and bankruptcy Note: Higher scores indicate the availability of more credit laws are better designed to facilitate access to credit. information, from either a credit registry or a credit bureau, Source: Doing Business database. to facilitate lending decisions. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Source: Doing Business database. Doing Business 2015 Mexico 64 GETTING CREDIT When economies strengthen the legal rights of lenders information, they can increase entrepreneurs’ access to and borrowers under collateral and bankruptcy laws, and credit. What credit reforms has Doing Business recorded increase the scope, coverage and accessibility of credit in Mexico (table 6.1)? Table 6.1 How has Mexico made getting credit easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico strengthened its secured transactions system by DB2012 implementing a centralized collateral registry with an electronic database that is accessible online. Mexico improved access to credit by amending its insolvency proceedings law and establishing clear grounds for relief from a DB2015 stay of enforcement actions by secured creditors during reorganization procedures. This reform applies to both Mexico City and Monterrey. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 65 GETTING CREDIT What are the details? The getting credit indicators reported here for Mexico The data on the legal rights of borrowers and lenders are are based on detailed information collected in that gathered through a survey of financial lawyers and economy. The data on credit information sharing are verified through analysis of laws and regulations as well collected through a survey of a credit registry and/or as public sources of information on collateral and credit bureau (if one exists). To construct the depth of bankruptcy laws. For the strength of legal rights index, a credit information index, a score of 1 is assigned for each score of 1 is assigned for each of 10 aspects related to of 8 features of the credit registry or credit bureau (see legal rights in collateral law and 2 aspects in bankruptcy summary of scoring below). law. Mexico City Monterrey Strength of legal rights index (0–12) Index score: 8 Index score: 8 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional Yes Yes 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 requiring a specific description No No of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of Yes Yes collateral? May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the No No original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between Yes Yes 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 unified geographically and by asset type, with Yes Yes an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional Yes Yes equivalents can be registered? Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any Yes Yes interested third party? Doing Business 2015 Mexico 66 Mexico City Monterrey Strength of legal rights index (0–12) Index score: 8 Index score: 8 Are secured creditors paid first (i.e. before tax claims and employee No No claims) when a debtor defaults outside an insolvency procedure? Are secured creditors paid first (i.e. before tax claims and employee No No claims) when a business is liquidated? Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law Yes Yes 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 allow the secured creditor Yes Yes to sell the collateral through public auction and private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Depth of credit information index (0–8) Credit bureau Credit registry Index score: 8 Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - Yes No 1 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on Yes No 1 defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per Yes No 1 capita distributed? By law, do borrowers have the right to access their Yes No 1 data in the credit bureau or credit registry? Can banks and financial institutions access borrowers’ credit information online (for example, through an Yes No 1 online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value- added service to help banks and financial institutions Yes No 1 assess the creditworthiness of borrowers? Note: Prior to Doing Business 2015, the depth of credit information index covered only the first 6 features listed above. An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or Doing Business 2015 Mexico 67 covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Credit bureau Credit registry Coverage (% of adults) (% of adults) Number of firms 3,300,000 0 Number of individuals 88,100,000 0 Percent of total 100.0 0.0 Source: Doing Business database. Doing Business 2015 Mexico 68 PROTECTING MINORITY INVESTORS Protecting minority investors matters for the ability of companies to raise the capital they need to grow, WHAT THE PROTECTING MINORITY innovate, diversify and compete. Effective regulations INVESTORS INDICATORS MEASURE define related-party transactions precisely, promote clear and efficient disclosure requirements, require shareholder participation in major decisions of the Extent of disclosure index (0–10) company and set detailed standards of accountability Review and approval requirements for related-party for company insiders. transactions ; Disclosure requirements for related-party transactions What do the indicators cover? Doing Business measures the protection of minority Extent of director liability index (0–10) investors from conflicts of interest through one set of Ability of minority shareholders to sue and hold interested indicators and shareholders’ rights in corporate directors liable for prejudicial related-party transactions; governance through another. The ranking of economies Available legal remedies (damages, disgorgement of on the strength of minority investor protections is profits, fines, imprisonment, rescission of the transaction) determined by sorting their distance to frontier scores Ease of shareholder suits index (0–10) for protecting minority investors. These scores are the Access to internal corporate documents; Evidence simple average of the distance to frontier scores for the obtainable during trial and allocation of legal expenses extent of conflict of interest regulation index and the extent of shareholder governance index. To make the Extent of conflict of interest regulation index data comparable across economies, a case study uses (0–10) several assumptions about the business and the Sum of the extent of disclosure, extent of director liability transaction. and ease of shareholder indices, divided by 3 The business (Buyer): Extent of shareholder rights index (0-10.5)  Is a publicly traded corporation listed on the Shareholders’ rights and role in major corporate decisions economy’s most important stock exchange (or at least a large private company with Strength of governance structure index (0- multiple shareholders). 10.5) Governance safeguards protecting shareholders from  Has a board of directors and a chief executive undue board control and entrenchment officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not Extent of corporate transparency index (0-9) specifically required by law. Corporate transparency on ownership stakes, The transaction involves the following details: compensation, audits and financial prospects  Mr. James, a director and the majority Extent of shareholder governance index shareholder of the company, proposes that (0–10) the company purchase used trucks from Sum of the extent of shareholders rights, strength of another company he owns. governance structure and extent of corporate transparency indices, divided by 3  The price is higher than the going price for used trucks, but the transaction goes forward. Strength of investor protection index (0–10)  All required approvals are obtained, and all Simple average of the extent of conflict of interest required disclosures made, though the regulation and extent of shareholder governance indices transaction is prejudicial to Buyer.  Shareholders sue the interested parties and the members of the board of directors. Doing Business 2015 Mexico 69 PROTECTING MINORITY INVESTORS Where does the economy stand today? How strong are minority investor protections against protection index (figure 7.1). While the indicator does self-dealing in Mexico? The economy has a score of 5.8 not measure all aspects related to the protection of on the strength of minority investor protection index, minority investors, a higher ranking does indicate that an with a higher score indicating stronger protections. economy’s regulations offer stronger minority investor protections against self-dealing in the areas measured. Globally, Mexico stands at 62 in the ranking of 189 economies on the strength of minority investor Figure 7.1 How Mexico and comparator economies perform on the strength of minority investor protection index Source: Doing Business database. Doing Business 2015 Mexico 70 PROTECTING MINORITY INVESTORS One way to put an economy’s scores on the protecting indices for Mexico in 2014. A summary of scoring for the minority investors indicators into context is to see where protecting minority investors indicators at the end of this the economy stands in the distribution of scores across chapter provides details on how the indices were comparator economies. Figures 7.2 through 7.7 highlight calculated. the scores on the various minority investor protection Figure 7.2 How extensive are disclosure Figure 7.3 How extensive is the liability regime for directors? requirements? Extent of director liability index (0-10) Extent of disclosure index (0-10) Note: Higher scores indicate greater liability of directors. Note: Higher scores indicate greater disclosure. Source: Doing Business database. Source: Doing Business database. Doing Business 2015 Mexico 71 PROTECTING MINORITY INVESTORS Figure 7.4 How easy is accessing internal corporate documents? Ease of shareholder suits index (0-10) Note: Higher scores indicate greater minority shareholder access to evidence before and during trial. Source: Doing Business database. Doing Business 2015 Mexico 72 PROTECTING MINORITY INVESTORS Figure 7.5 How extensive are shareholder rights? Extent of shareholder rights index (0-10.5) Note: The higher the score, the stronger the protections. Source: Doing Business database. Figure 7.6 How strong is the governance structure? Strength of governance structure index (0-10.5) Note: Higher scores indicate more stringent governance structure requirements. Source: Doing Business database. Doing Business 2015 Mexico 73 Figure 7.7 How extensive is corporate transparency? Extent of corporate transparency index (0-9) Note: Higher scores indicate greater transparency. Source: Doing Business database. Doing Business 2015 Mexico 74 PROTECTING MINORITY INVESTORS What are the details? The protecting minority investors indicators reported to disclosure, director liability, shareholder suits, here for Mexico are based on detailed information shareholder rights, governance structure and corporate collected through a survey of corporate and securities transparency in a standard case study (for more details, lawyers about securities regulations, company laws and see the Data Notes section of the Doing Business 2015 court rules of evidence and procedure. To construct the report). The summary below shows the details underlying six indicators on minority investor protection, scores are the scores for Mexico. assigned to each based on a range of conditions relating Table 7.2 Summary of scoring for the protecting minority investors indicators in Mexico Answer (Mexico Score (Mexico Answer Score City) City) (Monterrey) (Monterrey) Extent of disclosure index (0-10) 8.0 8.0 Board of Board of directors directors Which corporate body can provide legally sufficient approval excluding 2 excluding 2 for the Buyer-Seller transaction? (0-3) interested interested members members Existence of a Existence of a Is disclosure by the interested director to the board of conflict without 1 conflict without 1 directors required? (0-2) any specifics any specifics Disclosure on Disclosure on the the transaction Is disclosure of the transaction in published periodic filings transaction and 2 and on the 2 (annual reports) required? (0-2) on the conflict of conflict of interest interest Disclosure on Disclosure on the the transaction Is immediate disclosure of the transaction to the public transaction and 2 and on the 2 and/or shareholders required? (0-2) on the conflict of conflict of interest interest Must an external body review the terms of the transaction Yes 1 Yes 1 before it takes place? (0-1) Extent of director liability index (0-10) 5.0 5.0 Can shareholders sue directly or derivatively for the damage Yes 1 Yes 1 caused by the Buyer-Seller transaction to the company? (0-1) Can shareholders hold the interested director liable for the Liable if unfair or Liable if unfair 2 2 damage caused by the transaction to the company? (0-2) prejudicial or prejudicial Can shareholders hold members of the approving body Liable if liable for the damage cause by the transaction to the Liable if negligent 1 1 negligent company? (0-2) Must the interested director pay damages for the harm caused to the company upon a successful claim by a Yes 1 Yes 1 shareholder plaintiff? (0-1) Must the interested director repay profits made from the No 0 No 0 transaction upon a successful claim by a shareholder Doing Business 2015 Mexico 75 plaintiff? (0-1) Can both fines and imprisonment be applied against the No 0 No 0 interested indrector? (0-1) Only in case of Can a court void the transaction upon a successful claim by a Only in case of 0 fraud or bad 0 shareholder plaintiff? (0-2) fraud or bad faith faith Ease of shareholder suits index (0-10) 5.0 5.0 Before filing suit, can shareholders owning 10% of the company’s share capital inspect the transaction documents? Yes 1 Yes 1 (0-1) Documents that Documents directly prove that directly Can the plaintiff obtain any documents from the defendant specific facts in 2 prove specific 2 and witnesses during trial? (0-3) the plaintiff’s facts in the claim plaintiff’s claim Can the plaintiff request categories of documents from the No 0 No 0 defendant without identifying specific ones? (0-1) Can the plaintiff directly question the defendant and No 1 No 1 witnesses during trial? (0-2) Is the level of proof required for civil suits lower than that of No 0 No 0 criminal cases? (0-1) Can shareholder plaintiffs recover their legal expenses from Yes if Yes if successful 1 1 the company? (0-2) successful Strength of minority investor protection index (0-10) 5.8 5.8 Extent of conflict of interest regulation index (0-10) 6.0 6.0 Extent of shareholder rights index (0-10.5) 7.0 7.0 Can shareholders amend company bylaws or statutes with a Yes 1.5 Yes 1.5 simple majority? Can shareholders owning 10% of the company's share Yes for listed Yes for listed 1 1 capital call for an extraordinary meeting of shareholders? companies companies Can shareholders remove members of the board of directors Yes 1.5 Yes 1.5 before the end of their term. Must a company obtain its shareholders’ approval every time Yes 1.5 Yes 1.5 it issues new shares? Are shareholders automatically granted subscription rights Yes 1.5 Yes 1.5 on new shares? Must shareholders approve the election and dismissal of the No 0 No 0 external auditor? Can shareholders freely trade shares prior to a major No 0 No 0 corporate action or meeting of shareholders? Strength of governance structure index (0-10.5) 5.5 5.5 Is the CEO barred from also serving as chair of the board of Yes 1.5 Yes 1.5 directors? Must the board of directors include independent board Yes for listed Yes for listed 1 1 members? companies companies Yes for listed Yes for listed Must a company have a separate audit committee? 1 1 companies companies Must changes to the voting rights of a series or class of shares be approved only by the holders of the affected Yes 1.5 Yes 1.5 shares? Must a potential acquirer make a tender offer to all Yes for listed Yes for listed 1 1 shareholders upon acquiring 50% of a company? companies companies Doing Business 2015 Mexico 76 Is cross-shareholding between 2 independent companies No 0 No 0 limited to 10% of outstanding shares? Is a subsidiary barred from acquiring shares issued by its No 0 No 0 parent company? Extent of corporate transparency index (0-9) 4.0 4.0 Must ownership stakes representing 10% be disclosed? No 0 No 0 Must information about board members’ other directorships Yes for listed Yes for listed as well as basic information on their primary employment be 1 1 companies companies disclosed? Must the compensation of individual managers be disclosed? No 0 No 0 Must financial statements contain explanatory notes on Yes for listed Yes for listed significant accounting policies, trends, risks, uncertainties 1 1 companies companies and other factors influencing the reporting? Must annual financial statements be audited by an external Yes for listed Yes for listed 1 1 auditor? companies companies Yes for listed Yes for listed Must audit reports be disclosed to the public? 1 1 companies companies Extent of shareholder governance index (0-10) 5.5 5.5 Source: Doing Business database. Doing Business 2015 Mexico PAYING TAXES Taxes are essential. The level of tax rates needs to be carefully chosen—and needless complexity in tax WHAT THE PAYING TAXES INDICATORS rules avoided. Firms in economies that rank better MEASURE on the ease of paying taxes in the Doing Business study tend to perceive both tax rates and tax Tax payments for a manufacturing company administration as less of an obstacle to business in 2013 (number per year adjusted for according to the World Bank Enterprise Survey electronic and joint filing and payment) research. Total number of taxes and contributions paid, What do the indicators cover? including consumption taxes (value added tax, sales tax or goods and service tax) Using a case scenario, Doing Business measures the taxes and mandatory contributions that a medium- Method and frequency of filing and payment size company must pay in a given year as well as the Time required to comply with 3 major taxes administrative burden of paying taxes and (hours per year) contributions. This case scenario uses a set of financial statements and assumptions about Collecting information and computing the tax payable transactions made over the year. Information is also compiled on the frequency of filing and payments as Completing tax return forms, filing with well as time taken to comply with tax laws. The proper agencies ranking of economies on the ease of paying taxes is Arranging payment or withholding determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are Preparing separate tax accounting books, if required the simple average of the distance to frontier scores for each of the component indicators, with a Total tax rate (% of profit before all taxes) threshold and a nonlinear transformation applied to Profit or corporate income tax one of the component indicators, the total tax rate . 5 The financial statement variables have been updated Social contributions and labor taxes paid by to be proportional to 2012 income per capita; the employer previously they were proportional to 2005 income Property and property transfer taxes per capita. To make the data comparable across Dividend, capital gains and financial economies, several assumptions are used. transactions taxes  TaxpayerCo is a medium-size business that Waste collection, vehicle, road and other taxes started operations on January 1, 2012.  Taxes and mandatory contributions include  The business starts from the same financial corporate income tax, turnover tax and all position in each economy. All the taxes labor taxes and contributions paid by the and mandatory contributions paid during company. the second year of operation are recorded.  A range of standard deductions and  Taxes and mandatory contributions are exemptions are also recorded. measured at all levels of government. 5 The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is defined as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis. It is calculated and adjusted on a yearly basis. The threshold is not based on any economic theory of an “optimal tax rate” that minimizes distortions or maximizes efficiency in the tax system of an economy overall. Instead, it is mainly empirical in nature, set at the lower end of the distribution of tax rates levied on medium-size enterprises in the manufacturing sector as observed through the paying taxes indicators. This reduces the bias in the indicators toward economies that do not need to levy significant taxes on companies like the Doing Business standardized case study company because they raise public revenue in other ways—for example, through taxes on foreign companies, through taxes on sectors other than manufacturing or from natural resources (all of which are outside the scope of the methodology). This year’s threshold is 26.1%. Doing Business 2015 Mexico 78 PAYING TAXES Where does the economy stand today? What is the administrative burden of complying with 2 largest business cities. See the chapter on distance to taxes in Mexico—and how much do firms pay in taxes? frontier and ease of doing business ranking at the end of On average, firms make 6.0 tax payments a year, spend this profile for more details. 334.0 hours a year filing, preparing and paying taxes and Globally, Mexico stands at 105 in the ranking of 189 pay total taxes amounting to 51.8% of profit (see the economies on the ease of paying taxes (figure 8.1). The summary at the end of this chapter for details). Most rankings for comparator economies and the regional indicator sets refer to a case scenario in the largest average ranking provide other useful information for business city of an economy, except for 11 economies for assessing the tax compliance burden for businesses in which the data are a population-weighted average of the Mexico. Figure 8.1 How Mexico and comparator economies rank on the ease of paying taxes Source: Doing Business database. Doing Business 2015 Mexico 79 PAYING TAXES Economies around the world have made paying taxes concrete results. Some economies simplifying tax faster and easier for businesses—such as by payment and reducing rates have seen tax revenue rise. consolidating filings, reducing the frequency of What tax reforms has Doing Business recorded in Mexico payments or offering electronic filing and payment. (table 8.1)? Many have lowered tax rates. Changes have brought Table 8.1 How has Mexico made paying taxes easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made paying taxes easier for companies by introducing DB2010 electronic payment systems for payroll, property and social security taxes. Mexico increased taxes on companies by raising several tax rates, including the corporate income tax and the rate on cash DB2011 deposits. At the same time, the administrative burden was reduced slightly with more options for online payment and increased use of accounting software. Mexico continued to ease the administrative burden of paying taxes for firms by ending the requirement to file a yearly value DB2012 added tax return and reduced filing requirements for other taxes Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 80 PAYING TAXES What are the details? The indicators reported here for Mexico are based on LOCATION OF STANDARDIZED COMPANY the taxes and contributions that would be paid by a standardized case study company used by Doing Business in collecting the data (see the section in this City: Mexico City, Monterrey chapter on what the indicators cover). Tax practitioners are asked to review a set of financial statements as well as a standardized list of assumptions and transactions that the company The taxes and contributions paid are listed in the completed during its 2nd year of operation. summary below, along with the associated number of Respondents are asked how much taxes and payments, time and tax rate. mandatory contributions the business must pay and how these taxes are filed and paid. Table 8.2 Summary of tax rates and administration Total tax Notes on Mexico City: Tax or Payments Notes on Time Statutory Tax base rate (% of total tax mandatory contribution (number) payments (hours) tax rate profit) rate taxable Corporate income tax 1 online filing 170 30% 25 profit Employer paid - Social various gross 1 online filing 64 23 security contributions rates salaries gross Employer paid - Payroll tax 1 online filing 0 2.5% 2.8 salaries various property Property tax 1 online filing 0 0.9 rates value various value of Vehicle tax 1 online filing 0 0 rates vehicle IETU not Business flat tax (IETU) 0 online filing 0 17.5% taxable 0 included profits not Value added tax (VAT) 1 online filing 100 16% sales price 0 included Employee paid - Social various gross 0 paid jointly 0 0 withheld security contributions rates salaries Totals 6.0 334.0 51.7 Doing Business 2015 Mexico 81 Total tax Notes on Monterrey: Tax or Payments Notes on Time Statutory Tax base rate (% of total tax mandatory contribution (number) payments (hours) tax rate profit) rate taxable Corporate income tax 1 online filing 170 30% 24.8 profit Employer paid - Social various gross 1 online filing 64 23 security contributions rates salaries gross Employer paid - Payroll tax 1 online filing 0 3% 3.4 salaries various property Property tax 1 online filing 0 0.9 rates value various value of Vehicle tax 1 online filing 0 0 rates vehicle IETU not Business flat tax (IETU) 0 online filing 0 17.5% taxable 0 included profits not Value added tax (VAT) 1 online filing 100 16% sales price 0 included Employee paid - Social various gross 0 paid jointly 0 0 withheld security contributions rates salaries Totals 6.0 334.0 52.1 Source: Doing Business database. Doing Business 2015 Mexico 82 TRADING ACROSS BORDERS In today’s globalized world, making trade between WHAT THE TRADING ACROSS BORDERS economies easier is increasingly important for INDICATORS MEASURE business. Excessive document requirements, burdensome customs procedures, inefficient port operations and inadequate infrastructure all lead to Documents required to export and import extra costs and delays for exporters and importers, (number) stifling trade potential. Research shows that Bank documents exporters in developing countries gain more from a Customs clearance documents 10% drop in their trading costs than from a similar reduction in the tariffs applied to their products in Port and terminal handling documents global markets. Transport documents What do the indicators cover? Time required to export and import (days) Doing Business measures the time and cost Obtaining, filling out and submitting all the (excluding tariffs and the time and cost for sea documents transport) associated with exporting and importing a Inland transport and handling standard shipment of goods by sea transport, and the number of documents necessary to complete the Customs clearance and inspections transaction. The indicators cover predefined stages Port and terminal handling such as documentation requirements and procedures Does not include sea transport time at customs and other regulatory agencies as well as at the port. They also cover trade logistics, including Cost required to export and import (US$ per the time and cost of inland transport to the largest container) business city. The ranking of economies on the ease All documentation of trading across borders is determined by sorting their distance to frontier scores for trading across Inland transport and handling borders. These scores are the simple average of the Customs clearance and inspections distance to frontier scores for each of the component Port and terminal handling indicators. To make the data comparable across economies, Doing Business uses several assumptions Official costs only, no bribes about the business and the traded goods. The business:  Is located in the economy’s largest The traded product: business city. For the 11 economies with a population of more than 100 million, data  Is not hazardous nor includes military items. for a second city have been added.  Does not require refrigeration or any other  Is a private, limited liability company, special environment. domestically owned and does not operate  Do not require any special phytosanitary or with special export or import privileges. environmental safety standards other than  Conducts export and import activities, but accepted international standards. does not have any special accreditation  Is one of the economy’s leading export or such as an authorized economic operator import products. status.  Is transported in a dry-cargo, 20-foot full container load. Doing Business 2015 Mexico 83 TRADING ACROSS BORDERS Where does the economy stand today? What does it take to export or import in Mexico? population-weighted average of the 2 largest business According to data collected by Doing Business, exporting cities. See the chapter on distance to frontier and ease of a standard container of goods requires 4 documents, doing business ranking at the end of this profile for more takes 12.0 days and costs $1499.3. Importing the same details. container of goods requires 4 documents, takes 11.2 Globally, Mexico stands at 44 in the ranking of 189 days and costs $1887.6 (see the summary of four economies on the ease of trading across borders (figure predefined stages and documents at the end of this 9.1). The rankings for comparator economies and the chapter for details). Most indicator sets refer to a case regional average ranking provide other useful scenario in the largest business city of an economy, information for assessing how easy it is for a business in except for 11 economies for which the data are a Mexico to export and import goods. Figure 9.1 How Mexico and comparator economies rank on the ease of trading across borders Source: Doing Business database. Doing Business 2015 Mexico 84 TRADING ACROSS BORDERS In economies around the world, trading across borders systems. These changes help improve the trading as measured by Doing Business has become faster and environment and boost firms’ international easier over the years. Governments have introduced competitiveness. What trade reforms has Doing Business tools to facilitate trade—including single windows, risk- recorded in Mexico (table 9.1)? based inspections and electronic data interchange Table 9.1 How has Mexico made trading across borders easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made trading across borders easier by implementing DB2014 an electronic single-window system. Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 85 TRADING ACROSS BORDERS What are the details? The indicators reported here for Mexico are based on LOCATION OF STANDARDIZED COMPANY a set of specific predefined stages for trading a standard shipment of goods by ocean transport (see the section in this chapter on what the indicators Port Name - Mexico City: Manzanillo (Import) cover). Information on the required documents and and Veracruz (Export) the time and cost to complete export and import is collected from local freight forwarders, shipping lines, Port Name - Monterrey: Manzanillo (Import) customs brokers, port officials and banks. and Altamira (Export) City: Mexico City, Monterrey The predefined stages, and the associated time and cost, for exporting and importing a standard shipment of goods are listed in the summary below, along with the required documents. Mexico City Monterrey Stages to export Time (days) Cost (US$) Time (days) Cost (US$) Customs clearance and inspections 2 150 3 370 Documents preparation 5 200 10 200 Inland transportation and handling 2 900 2 870 Ports and terminal handling 2 200 2 300 Totals 11 1,450 17 1,740 Mexico City Monterrey Stages to import Time (days) Cost (US$) Time (days) Cost (US$) Customs clearance and inspections 2 300 2 300 Documents preparation 4 290 4 290 Inland transportation and handling 2 950 3 1,230 Ports and terminal handling 3 300 3 300 Totals 11 1,840 12 2,120 Doing Business 2015 Mexico 86 Documents to export Bill of lading Commercial invoice Customs export declaration Packing List Documents to import Bill of lading Commercial invoice Customs import declaration Packing list Source: Doing Business database. Doing Business 2015 Mexico 87 ENFORCING CONTRACTS Effective commercial dispute resolution has many WHAT THE ENFORCING CONTRACTS benefits. Courts are essential for entrepreneurs INDICATORS MEASURE because they interpret the rules of the market and protect economic rights. Efficient and transparent courts encourage new business relationships because Procedures to enforce a contract through businesses know they can rely on the courts if a new the courts (number) customer fails to pay. Speedy trials are essential for Steps to file and serve the case small enterprises, which may lack the resources to Steps for trial and judgment stay in business while awaiting the outcome of a long court dispute. Steps to enforce the judgment What do the indicators cover? Time required to complete procedures (calendar days) Doing Business measures the efficiency of the judicial system in resolving a commercial dispute before Time to file and serve the case local courts. Following the step-by-step evolution of Time for trial and obtaining judgment a standardized case study, it collects data relating to Time to enforce the judgment the time, cost and procedural complexity of resolving a commercial lawsuit. The ranking on the ease of Cost required to complete procedures (% of enforcing contracts is the simple average of the claim) percentile rankings on its component indicators: Average attorney fees procedures, time and cost. Court costs The dispute in the case study involves the breach of a sales contract between 2 domestic businesses. The Enforcement costs case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. To make the data comparable across economies, Doing Business uses several assumptions about the case:  The seller and buyer are located in the economy’s largest business city. For the 11 economies with a population of more than  The seller requests a pretrial attachment to 100 million, data for a second city have secure the claim. been added.  The dispute on the quality of the goods  The buyer orders custom-made goods, requires an expert opinion. then fails to pay.  The judge decides in favor of the seller; there  The seller sues the buyer before a is no appeal. competent court.  The seller enforces the judgment through a  The value of the claim is 200% of the public sale of the buyer’s movable assets. income per capita or the equivalent in local currency of USD 5,000, whichever is greater. Doing Business 2015 Mexico 88 ENFORCING CONTRACTS Where does the economy stand today? How efficient is the process of resolving a commercial cities. See the chapter on distance to frontier and ease of dispute through the courts in Mexico? According to data doing business ranking at the end of this profile for more collected by Doing Business, contract enforcement takes details. 388.9 days, costs 30.9% of the value of the claim and Globally, Mexico stands at 57 in the ranking of 189 requires 36.8 procedures (see the summary at the end of economies on the ease of enforcing contracts (figure this chapter for details). Most indicator sets refer to a 10.1). The rankings for comparator economies and the case scenario in the largest business city of an economy, regional average ranking provide other useful except for 11 economies for which the data are a benchmarks for assessing the efficiency of contract population-weighted average of the 2 largest business enforcement in Mexico. Figure 10.1 How Mexico and comparator economies rank on the ease of enforcing contracts Source: Doing Business database. Doing Business 2015 Mexico 89 ENFORCING CONTRACTS Economies in all regions have improved contract reducing backlogs by introducing periodic reviews to enforcement in recent years. A judiciary can be improved clear inactive cases from the docket and by making in different ways. Higher-income economies tend to look procedures faster. What reforms making it easier (or for ways to enhance efficiency by introducing new more difficult) to enforce contracts has Doing Business technology. Lower-income economies often work on recorded in Mexico (table 10.1)? Table 10.1 How has Mexico made enforcing contracts easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made enforcing contracts easier by creating small DB2014 claims courts, with oral proceedings, that can hear both civil and commercial cases. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 90 ENFORCING CONTRACTS What are the details? The indicators reported here for Mexico are based COURT NAME on a set of specific procedural steps required to resolve a standardized commercial dispute through the courts (see the section in this chapter on what Claim value - Mexico the indicators cover). These procedures, and the time MXN 255,849 City: and cost of completing them, are identified through study of the codes of civil procedure and other court Claim value - regulations, as well as through questionnaires MXN 255,849 Monterrey: completed by local litigation lawyers (and, in a quarter of the economies covered by Doing Business, Court name - Mexico Mexico City First Instance by judges as well). City: Oral Civil Court Court name - Monterrey First Instance Monterrey: Oral Civil Court City: Mexico City, Monterrey Table 10.2 Summary of time, cost and procedures for enforcing a contract in Mexico Latin America & Indicator Mexico City Monterrey Caribbean average Time (days) 400 335 737 Filing and service 42 15 Trial and judgment 175 160 Enforcement of judgment 183 160 Cost (% of claim) 31 30.4 30.6 Attorney cost (% of claim) 20 20.4 Court cost (% of claim) 5 5 Enforcement Cost (% of claim) 6 5 Procedures (number) 37 36 40 Number of procedures (without bonus points) 37 37 Specialized commercial courts Total number of procedures (including bonus points) 37 37 Doing Business 2015 Mexico 91 Doing Business 2015 Mexico 92 No. Mexico City Procedures Filing and service: 1 Plaintiff hires a lawyer: Plaintiff hires a lawyer. Plaintiff files a summons and complaint: Plaintiff files a summons and complaint with the court (orally or * in writing). Registration of court case: Registration of court case by the court administration (this can include 2 assigning a reference number to the case). Assignment of court case to a judge: Assignment of court case to a judge (through a random procedure, * automated system, ruling of an administrative judge, court officer, etc). Judicial scrutiny of summons and complaint: Judge examines Plaintiff's summons and complaint for 3 formal requirements as a matter of law or standard practice. Judge admits summons and complaint: Judge admits summons and complaint (after verifying the formal * requirements). 4 Court order for service: Upon Plaintiff’s request, judge orders proc ess be served on Defendant. Arrangements for physical delivery of summons and complaint: Plaintiff takes the necessary steps to * arrange for physical service of process on Defendant (e.g. instructing a court officer or a private bailiff). Attempt at physical delivery: An attempt to physically deliver summons and complaint to Defendant is 5 made. Second attempt at physical delivery: If a first attempt is not ordinarily successful, a second attempt to 6 physically deliver the summons and complaint to Defendant is required by law or standard practice. (Check ‘yes’ only if a first attempt at physical delivery is not ordinarily successful) Application for pre-judgment attachment: Plaintiff submits an application in writing for the attachment of * Defendant's property prior to judgment. Decision on pre-judgment attachment: Judge decides whether to grant Plaintiff’s request for pre- * judgment attachment of Defendant’s property and notifies Plaintiff and Defendant of the decision. Pre-judgment attachment order: Defendant's property is attached prior to judgment. Attachment order 7 either involves physical attachment, or is achieved by freezing, registering, marking, or otherwise separating and restricting Defendant’s movement of specific moveable assets. Custody of assets attached prior to judgment: If physical attachment is ordered, Defendant's attached 8 assets are placed in the custody or control of an enforcement officer or private bailiff. Trial and judgment: Defendant files preliminary objections.: Defendant presents preliminary objections to the court. * (Preliminary exemptions differ from answers on the merits. Examples of preliminary motions are motions to dismiss on the basis of the statute of limitations or jurisdictional objections, etc.) Checke Doing Business 2015 Mexico 93 No. Mexico City Procedures Plaintiff’s answer to preliminary motions: Plaintiff responds to preliminary motions raised by Defendant. * Checked as ‘yes’ if preliminary motions are commonly raised (step 30) and if Plaintiff responds to them immediately. Judge’s resolution on preliminary objections: Judge decides on preliminary objections separately from the 9 merits of the case. Checked as ‘yes’ if preliminary objections are commonly made (step 30) and if judge resolves the question before rendering his decision. Defendant files an answer to Plaintiff’s claim: Defendant files a written pleading which includes his answer 10 or defense on the merits of the case (see assumption 4). Deadline for Plaintiff to reply to Defendant's defense or answer: Judge sets a deadline for Plaintiff ’s 11 submission of a reply to the Defendant's defense or answer. Plaintiff’s written reply to Defendant's answer: Plaintiff responds to Defendant’s answer with a written 12 pleading, which may or may not include witness statements or expert (witness) statements. Court appointment of independent expert: Judge appoints, either at the parties' request or at his own * initiative, an independent expert to decide whether the quality of the goods Plaintiff delivered to Defendant is adequate. (see assumption 5-b). Notification of court-appointment of independent expert: The court notifies both parties that the court is 13 appointing an independent expert (see assumption 5-b). Delivery of expert report by court-appointed expert: The independent expert, appointed by the court, * delivers his or her expert report to the court (see assumption 5-b). Oral hearing (prevalent in civil law): The parties argue the merits of the case at an oral hearing before the 14 judge. Witnesses and a court-appointed independent expert may be heard and questioned at the oral hearing. 15 Closing of the evidence period: The court makes the formal decision to close the evidence period. Order for submission of final arguments: The judge sets a deadline for the submission of final factual and 16 legal arguments. Final arguments: The parties present their final factual and legal arguments to the court either by oral * presentation or by a written submission. 17 Judgment date: The judge sets a date for delivery of the judgment. 18 Notification of judgment in court: The parties are notified of the judgment at a court hearing. 19 Writing of judgment: The judge produces a written copy of the judgment. Registration of judgment: The court office registers the judgment after receiving a written copy of the 20 judgment. Enforcement of judgment: Plaintiff hires a lawyer: Plaintiff hires a lawyer to enforce the judgment or continues to be represented by * a lawyer during the enforcement of judgment phase. Plaintiff retains an enforcement agent to enforce the judgment.: Plaintiff retains the services of a court 21 enforcement officer such as a court bailiff or sheriff, or a private bailiff. Doing Business 2015 Mexico 94 No. Mexico City Procedures 22 Publication of judgment: The judgment is published in an official journal, gazette or local newspaper. Plaintiff requests an enforcement order: Plaintiff applies to the court to obtain the enforcement order * ('seal' on judgment). 23 Plaintiff advances enforcement fees: Plaintiff pays the fees related to the enforcement of the judgment. Attachment of enforcement order to judgment: The judge attaches the enforcement order (‘seal’) to the 24 judgment. Delivery of enforcement order: The court's enforcement order is delivered to a court enforcement officer * or a private bailiff. Plaintiff’s request for physical enforcement: As Plaintiff commonly fears that Defendant might physically * resist the taking into custody of its previously attached movable assets, Plaintiff requests the judge or the police authorities to obtain police assistance during the physical enforcement of the Judge's order for physical enforcement: Judge orders the police to assist with the physical enforcement of 25 the attachment of Defendant's movable assets. Check as “yes” only if the pretrial order of attachment for Defendant’s moveable assets does not ordinarily involve physical seizure of the as Request to Defendant to comply voluntarily with judgment: Plaintiff, a court enforcement officer or a 26 private bailiff requests Defendant to voluntarily comply with the judgment. Identification of Defendant's assets by court official or Defendant for purposes of enforcement: The judge, 27 a court enforcement officer, a private bailiff or the Defendant himself identifies Defendant's movable assets for the purposes of enforcing the judgment through a sale of Defendant’s assets. Contestation of selection of assets identified for sale: A party, Plaintiff or Defendant, which was not 28 involved in the designation of the assets for attachment, contests the selection of assets for enforcement of judgment through a sale. 29 Plaintiff identifies Defendant's assets for attachment: Plaintiff identifies Defendant's assets for attachment. Attachment: Defendant’s movable goods are attached (physically or by registering, marking or separating 30 assets). Report on execution of attachment: A court enforcement officer or private bailiff delivers a report on the 31 attachment of Defendant's movable goods to the judge. Valuation or appraisal of attached movable goods: The court or court-appointed valuation expert 32 evaluates the attached goods. Enforcement disputes before court: The enforcement of the judgment is delayed because Defendant 33 opposes aspects of the enforcement process before the judge. Call for public auction: Judge calls a public auction by, for example, advertising or publication in the 34 newspapers. 35 Sale through public auction: The Defendant’s movable property is sold at public auction. 36 Judge's decision on bids: Judge determines the adequacy of the bids presented at public auction. 37 Payment: Court orders that the proceeds of the public auction or the direct sale be delivered to Plaintiff. Doing Business 2015 Mexico 95 No. Monterrey Procedures Filing and service: * Not counted in the total number of procedures. Source: Doing Business database. Doing Business 2015 Mexico 96 RESOLVING INSOLVENCY A robust bankruptcy system functions as a filter, WHAT THE RESOLVING INSOLVENCY ensuring the survival of economically efficient INDICATORS MEASURE companies and reallocating the resources of inefficient ones. Fast and cheap insolvency proceedings result in the speedy return of businesses Time required to recover debt (years) to normal operation and increase returns to Measured in calendar years creditors. By improving the expectations of creditors Appeals and requests for extension are and debtors about the outcome of insolvency included proceedings, well-functioning insolvency systems can facilitate access to finance, save more viable Cost required to recover debt (% of debtor’s businesses and thereby improve growth and estate) sustainability in the economy overall. Measured as percentage of estate value What do the indicators cover? Court fees Doing Business studies the time, cost and outcome of Fees of insolvency administrators insolvency proceedings involving domestic legal Lawyers’ fees entities. These variables are used to calculate the recovery rate, which is recorded as cents on the Assessors’ and auctioneers’ fees dollar recouped by secured creditors through Other related fees reorganization, liquidation or debt enforcement (foreclosure) proceedings. To determine the present Outcome value of the amount recovered by creditors, Doing Whether business continues operating as a Business uses the lending rates from the International going concern or business assets are sold Monetary Fund, supplemented with data from piecemeal central banks and the Economist Intelligence Unit. Recovery rate for creditors In addition, Doing Business evaluates the adequacy Measures the cents on the dollar recovered and integrity of the existing legal framework by secured creditors applicable to liquidation and reorganization proceedings through the strength of insolvency Outcome for the business (survival or not) determines the maximum value that can be framework index. The index tests whether economies recovered adopted internationally accepted good practices in four areas: commencement of proceedings, Official costs of the insolvency proceedings management of debtor’s assets, reorganization are deducted proceedings and creditor participation. Depreciation of furniture is taken into The ranking of the Resolving Insolvency indicator is account based on the recovery rate and the total score of the Present value of debt recovered strength of insolvency framework index. The Strength of insolvency framework index (0- Resolving Insolvency indicator does not measure 16) insolvency proceedings of individuals and financial institutions. The data are derived from survey Sum of the scores of four component indices: responses by local insolvency practitioners and Commencement of proceedings index (0-3) verified through a study of laws and regulations as well as public information on bankruptcy systems. Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Doing Business 2015 Mexico 97 RESOLVING INSOLVENCY Where does the economy stand today? Combination of quality regulations and efficient practice According to data collected by Doing Business, Mexico characterize the top-performing economies. How scores 2.5 out of 3 points on the commencement of efficient are insolvency proceedings in Mexico? proceedings index, 5.5 out of 6 points on the According to data collected by Doing Business, resolving management of debtor’s assets index, 1.5 out of 3 points insolvency takes 1.8 years on average and costs 18.0% of on the reorganization proceedings index, and 2.0 out of the debtor’s estate, with the most likely outcome being 4 points on the creditor participation index. Mexico’s that the company will be sold as going concern. The total score on the strength of insolvency framework average recovery rate is 68.1 cents on the dollar. Most index is 11.5 out of 16. indicator sets refer to a case scenario in the largest Globally, Mexico stands at 27 in the ranking of 189 business city of an economy, except for 11 economies for economies on the ease of resolving insolvency (figure which the data are a population-weighted average of the 11.1). The rankings for comparator economies and the 2 largest business cities. See the chapter on distance to regional average ranking provide other useful frontier and ease of doing business ranking at the end of benchmarks for assessing the efficiency of insolvency this profile for more details. proceedings in Mexico. Figure 11.1 How Mexico and comparator economies rank on the ease of resolving insolvency Doing Business 2015 Mexico 98 Source: Doing Business database. Doing Business 2015 Mexico 99 Figure 11.2 Recovery Rate (0-100) - Mexico Source: Doing Business database. Figure 11.3 Strength of insolvency framework index (0-16) - Mexico Source: Doing Business database. Doing Business 2015 Mexico 100 RESOLVING INSOLVENCY A well-balanced bankruptcy system distinguishes change. Many recent reforms of bankruptcy laws have companies that are financially distressed but been aimed at helping more of the viable businesses economically viable from inefficient companies that survive. What insolvency reforms has Doing Business should be liquidated. But in some insolvency systems recorded in Mexico (table 11.1)? even viable businesses are liquidated. This is starting to Table 11.1 How has Mexico made resolving insolvency easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Mexico made resolving insolvency easier by clarifying several rules, shortening the time extensions allowed during reorganization, facilitating the electronic submission of DB2015 documents and improving the legal rights of creditors and other parties involved in bankruptcy procedures. This reform applies to both Mexico City and Monterrey. Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports for these years, available at http://www.doingbusiness.org. Source: Doing Business database. Doing Business 2015 Mexico 101 LABOR MARKET REGULATION Doing Business measures flexibility in the regulation of Doing Business 2015 presents the data for the labor employment, specifically as it affects the hiring and market regulation indicators in an annex. The report redundancy of workers and the rigidity of working hours. does not present rankings of economies on these This year, for the first time, the indicators measuring indicators nor include the topic in the aggregate distance flexibility in labor market regulations focus on those to frontier score or ranking on the ease of doing affecting the food retail industry, using a standardized business. Detailed data collected on labor market case study of a cashier in a supermarket. Also new is that regulations are available on the Doing Business website Doing Business collects data on regulations applying to (http://www.doingbusiness.org). The data on labor employees hired through temporary-work agencies as market regulations are based on a detailed survey of well as on those applying to permanent employees or employment regulations that is completed by local employees hired on fixed-term contracts. The indicators lawyers and public officials. Employment laws and also cover additional areas of labor market regulation, regulations as well as secondary sources are reviewed to including social protection schemes and benefits as well ensure accuracy. To make the data comparable across as labor disputes. economies, several assumptions about the worker and the business are used. Over the period from 2007 to 2011 improvements were made to align the methodology for the labor market The worker: regulation indicators (formerly the employing workers  Is a cashier in a supermarket or a grocery store indicators) with the letter and spirit of the International  Is a full-time employee Labour Organization (ILO) conventions. Only 6 of the 188  Is not a member of the labor union, unless ILO conventions cover areas measured by Doing membership is mandatory Business: employee termination, weekend work, holiday The business: with pay, night work, protection against unemployment  Is a limited liability company (or the equivalent and medical care and sickness benefits. The Doing in the economy) with 60 employees. Business methodology is fully consistent with these 6  Operates a supermarket or grocery store in the conventions. The ILO conventions covering areas related economy’s largest business city. For 11 to the labor market regulation indicators do not include economies the data are also collected for the the ILO core labor standards—8 conventions covering second largest business city. the right to collective bargaining, the elimination of  Is subject to collective bargaining agreements if forced labor, the abolition of child labor and equitable such agreements cover more than 50% of the treatment in employment practices. food retail sector and they apply even to firms that are not party to them. Between 2009 and 2011 the World Bank Group worked  Abides by every law and regulation but does not with a consultative group—including labor lawyers, grant workers more benefits than those employer and employee representatives, and experts mandated by law, regulation or (if applicable) from the ILO, the Organisation for Economic Co- collective bargaining agreements. operation and Development (OECD), civil society and the private sector—to review the methodology for the labor market regulation indicators and explore future areas of research. A full report with the conclusions of the consultative group is available at: http://www.doingbusiness.org/methodology/employing-workers. Doing Business 2015 Mexico LABOR MARKET REGULATION What are the details? The data reported here for Mexico are based on a Employment laws and regulations as well as secondary detailed survey of labor market regulation that is sources are reviewed to ensure accuracy. completed by local lawyers and public officials. Difficulty of hiring index Difficulty of hiring covers 4 areas: (i) whether fixed-term wage to the average value added per worker. The contracts are prohibited for permanent tasks; (ii) the average value added per worker is the ratio of an maximum cumulative duration of fixed-term contracts; economy’s GNI per capita to the working-age population (iii) the minimum wage for a cashier, age 19, with 1 year as a percentage of the total population. of work experience; and (iv) the ratio of the minimum Mexico City Monterrey Difficulty of hiring index Data Data Fixed-term contracts prohibited for permanent tasks? Yes Yes Maximum length of a single fixed-term contract (months) No limit No limit Maximum length of fixed-term contracts, including renewals (months) No limit No limit Minimum wage applicable to the worker assumed in the case study 174.50 174.50 (US$/month) Ratio of minimum wage to value added per worker 0.14 0.14 Source: Doing Business database. Doing Business 2015 Mexico 103 LABOR MARKET REGULATION Rigidity of hours index Rigidity of hours covers 7 areas: (i) whether the premium for work on a weekly rest day (as a percentage workweek can extend to 50 hours or more (including of hourly pay); (v) whether there are restrictions on night overtime) for 2 months in a year to respond to a work; (vi) whether there are restrictions on weekly seasonal increase in workload; (ii) the maximum number holiday work; and (vii) the average paid annual leave for of days allowed in the workweek; (iii) the premium for workers with 1 year of tenure, 5 years of tenure and 10 night work (as a percentage of hourly pay); (iv) the years of tenure. Mexico City Monterrey Rigidity of hours index Data Data 50-hour workweek allowed for 2 months a year in case of a seasonal Yes Yes increase in workload? Maximum working days per week 6.0 6.0 Premium for night work (% of hourly pay) 0% 0% Premium for work on weekly rest day (% of hourly pay) 25% 25% Major restrictions on night work? No No Major restrictions on weekly holiday? No No Paid annual leave for a worker with 1 year of tenure (in working days) 6.0 6.0 Paid annual leave for a worker with 5 years of tenure (in working days) 14.0 14.0 Paid annual leave for a worker with 10 years of tenure (in working 16.0 16.0 days) Paid annual leave (average for workers with 1, 5 and 10 years of tenure, 12.0 12.0 in working days) Source: Doing Business database. Doing Business 2015 Mexico 104 LABOR MARKET REGULATION Difficulty of redundancy index Difficulty of redundancy index looks at 9 questions: (i) whether the employer needs approval from a third party what the length is in months of the maximum to terminate 1 redundant worker; (vi) whether the probationary period; (ii) whether redundancy is employer needs approval from a third party to terminate disallowed as a basis for terminating workers; (iii) a group of 9 redundant workers; (vii) whether the law whether the employer needs to notify a third party (such requires the employer to reassign or retrain a worker as a government agency) to terminate 1 redundant before making the worker redundant; (viii) whether worker; (iv) whether the employer needs to notify a third priority rules apply for redundancies; and (ix) whether party to terminate a group of 9 redundant workers; (v) priority rules apply for reemployment. Mexico City Monterrey Difficulty of redundancy index Data Data Maximum length of probationary period (months) 1.0 1.0 Dismissal due to redundancy allowed by law? Yes Yes Third-party notification if 1 worker is dismissed? Yes Yes Third-party approval if 1 worker is dismissed? Yes Yes Third-party notification if 9 workers are dismissed? Yes Yes Third-party approval if 9 workers are dismissed? Yes Yes Retraining or reassignment obligation before redundancy? No No Priority rules for redundancies? Yes Yes Priority rules for reemployment? Yes Yes Source: Doing Business database. Doing Business 2015 Mexico 105 LABOR MARKET REGULATION Redundancy cost Redundancy cost measures the cost of advance notice requirements and severance payments applicable to a requirements, severance payments and penalties due worker with 1 year of tenure, a worker with 5 years and when terminating a redundant worker, expressed in a worker with 10 years is considered. One month is weeks of salary. The average value of notice recorded as 4 and 1/3 weeks. Mexico City Monterrey Redundancy cost indicator (in salary weeks) Data Data Notice period for redundancy dismissal for a worker with 1 year of 0.0 0.0 tenure Notice period for redundancy dismissal for a worker with 5 years of 0.0 0.0 tenure Notice period for redundancy dismissal for a worker with 10 years of 0.0 0.0 tenure Notice period for redundancy dismissal (average for workers with 1, 5 0.0 0.0 and 10 years of tenure) Severance pay for redundancy dismissal for a worker with 1 year of 14.6 14.6 tenure Severance pay for redundancy dismissal for a worker with 5 years of 21.4 21.4 tenure Severance pay for redundancy dismissal for a worker with 10 years of 30.0 30.0 tenure Severance pay for redundancy dismissal (average for workers with 1, 5 22.0 22.0 and 10 years of tenure) Source: Doing Business database. Social protection schemes and benefits & Labor disputes Doing Business collects data on the existence of unemployment protection schemes as well as data on whether employers are legally required to provide health insurance for employees with permanent contracts. Doing Business also assesses the mechanisms available to resolve labor disputes. More specifically, it collects data on what courts would be competent to hear labor disputes and whether the competent court is specialized in resolving labor disputes. Doing Business 2015 Mexico 106 Mexico City Monterrey Social protection schemes and benefits & Labor disputes indicator Data Data Availability of unemployment protection scheme? Yes Yes Health insurance existing for permanent employees? Yes Yes Availability of courts or court sections specializing in labor disputes? Yes Yes Source: Doing Business database. Doing Business 2015 Mexico 107 DISTANCE TO FRONTIER AND EASE OF DOING BUSINESS RANKING This year’s report presents results for 2 aggregate defined as the total tax rate at the 15th percentile of the measures: the distance to frontier score and the ease of overall distribution for all years included in the analysis. doing business ranking, which for the first time this year For the time to pay taxes the frontier is defined as the is based on the distance to frontier score. The ease of lowest time recorded among all economies that levy the doing business ranking compares economies with one 3 major taxes: profit tax, labor taxes and mandatory another; the distance to frontier score benchmarks contributions, and value added tax (VAT) or sales tax. In economies with respect to regulatory best practice, addition, the cost to export and cost to import for each showing the absolute distance to the best performance year are divided by the GDP deflator, to take the general on each Doing Business indicator. When compared price level into account when benchmarking these across years, the distance to frontier score shows how absolute-cost indicators across economies with different much the regulatory environment for local entrepreneurs inflation trends. The base year for the deflator is 2013 for in an economy has changed over time in absolute terms, all economies. while the ease of doing business ranking can show only In the same formulation, to mitigate the effects of how much the regulatory environment has changed extreme outliers in the distributions of the rescaled data relative to that in other economies. for most component indicators (very few economies Distance to Frontier need 700 days to complete the procedures to start a business, but many need 9 days), the worst performance The distance to frontier score captures the gap between is calculated after the removal of outliers. The definition an economy’s performance and a measure of best of outliers is based on the distribution for each practice across the entire sample of 31 indicators for 10 component indicator. To simplify the process, 2 rules Doing Business topics (the labor market regulation were defined: the 95th percentile is used for the indicators are excluded). For starting a business, for indicators with the most dispersed distributions example, Canada and New Zealand have the smallest (including time, cost, minimum capital and number of number of procedures required (1), and New Zealand the payments to pay taxes), and the 99th percentile is used shortest time to fulfill them (0.5 days). Slovenia has the for number of procedures and number of documents to lowest cost (0.0), and Australia, Colombia and 110 other trade. No outlier was removed for component indicators economies have no paid-in minimum capital bound by definition or construction, including legal requirement (table 15.1 in the Doing Business 2015 index scores (such as the depth of credit information report). index, extent of conflict of interest regulation index and strength of insolvency framework index) and the Calculation of the distance to frontier score recovery rate (figure 15.1 in the Doing Business 2015 Calculating the distance to frontier score for each report). economy involves 2 main steps. First, individual Second, for each economy the scores obtained for component indicators are normalized to a common unit individual indicators are aggregated through simple where each of the 31 component indicators y (except for averaging into one distance to frontier score, first for the total tax rate) is rescaled using the linear each topic and then across all 10 topics: starting a transformation (worst − y)/(worst − frontier). In this business, dealing with construction permits, getting formulation the frontier represents the best performance electricity, registering property, getting credit, protecting on the indicator across all economies since 2005 or the minority investors, paying taxes, trading across borders, third year after data for the indicator were collected for enforcing contracts and resolving insolvency. More the first time. For legal indicators such as those on complex aggregation methods—such as principal getting credit or protecting minority investors, the components and unobserved components—yield a frontier is set at the highest possible value. For the total ranking nearly identical to the simple average used by tax rate, consistent with the use of a threshold in Doing Business . Thus Doing Business uses the simplest 6 calculating the rankings on this indicator, the frontier is 6 See Djankov, Manraj and others (2005). Principal components and unobserved components methods yield a ranking nearly identical to Doing Business 2015 Mexico 108 method: weighting all topics equally and, within each overall tax system. Instead, it is mainly empirical in topic, giving equal weight to each of the topic nature. The nonlinear transformation along with the components . threshold reduces the bias in the indicator toward 7 economies that do not need to levy significant taxes on An economy’s distance to frontier score is indicated on a companies like the Doing Business standardized case scale from 0 to 100, where 0 represents the worst study company because they raise public revenue in performance and 100 the frontier. All distance to frontier other ways—for example, through taxes on foreign calculations are based on a maximum of 5 decimals. companies, through taxes on sectors other than However, indicator ranking calculations and the ease of manufacturing or from natural resources (all of which are doing business ranking calculations are based on 2 outside the scope of the methodology). In addition, it decimals. The difference between an economy’s distance acknowledges the need of economies to collect taxes to frontier score in any previous year and its score in from firms. 2014 illustrates the extent to which the economy has closed the gap to the regulatory frontier over time. And Calculation of scores for economies with 2 cities in any given year the score measures how far an covered economy is from the best performance at that time. For each of the 11 economies for which a second city Treatment of the total tax rate was added in this year’s report, the distance to frontier score is calculated as the population-weighted average This year, for the first time, the total tax rate component of the distance to frontier scores for the 2 cities covered of the paying taxes indicator set enters the distance to (table 12.1). This is done for the aggregate score, the frontier calculation in a different way than any other scores for each topic and the scores for all the indicator. The distance to frontier score obtained for the component indicators for each topic. total tax rate is transformed in a nonlinear fashion before it enters the distance to frontier score for paying taxes. Table 12.1 Weights used in calculating the distance to As a result of the nonlinear transformation, an increase in frontier scores for economies with 2 cities covered the total tax rate has a smaller impact on the distance to Economy City Weight (%) frontier score for the total tax rate—and therefore on the Dhaka 78 distance to frontier score for paying taxes—for Bangladesh Chittagong 22 economies with a below-average total tax rate than it São Paulo 61 would have in the calculation done in previous years (line Brazil Rio de Janeiro 39 B is smaller than line A in figure 15.2 of the Doing Shanghai 55 China Business 2015 report). And for economies with an Beijing 45 extreme total tax rate (a rate that is very high relative to Mumbai 47 India the average), an increase has a greater impact on both Delhi 53 these distance to frontier scores than before (line D is Jakarta 78 Indonesia bigger than line C in figure 15.2 of the Doing Business Surabaya 22 Tokyo 65 2015 report). Japan Osaka 35 The nonlinear transformation is not based on any Mexico City 83 Mexico economic theory of an “optimal tax rate” that minimizes Monterrey 17 distortions or maximizes efficiency in an economy’s Lagos 77 Nigeria Kano 23 Karachi 65 Pakistan that from the simple average method because both these methods Lahore 35 assign roughly equal weights to the topics, since the pairwise Moscow 70 Russian Federation correlations among indicators do not differ much. An alternative to the St. Petersburg 30 simple average method is to give different weights to the topics, New York 60 depending on which are considered of more or less importance in the United States Los Angeles 40 context of a specific economy. Source: United Nations, Department of Economic and Social 7 For getting credit, indicators are weighted proportionally, according to their contribution to the total score, with a weight of 60% assigned Affairs, Population Division, World Urbanization Prospects, to the strength of legal rights index and 40% to the depth of credit 2014 Revision. http://esa.un.org/unpd/wup/CD- information index. Indicators for all other topics are assigned equal ROM/Default.aspx. weights Doing Business 2015 Mexico 109 Economies that improved the most across 3 or more Selecting the economies that implemented regulatory Doing Business topics in 2013/14 reforms in at least 3 topics and had the biggest improvements in their distance to frontier scores is Doing Business 2015 uses a simple method to calculate intended to highlight economies with ongoing, broad- which economies improved the ease of doing business based reform programs. The improvement in the the most. First, it selects the economies that in 2013/14 distance to frontier score is used to identify the top implemented regulatory reforms making it easier to do improvers because this allows a focus on the absolute business in 3 or more of the 10 topics included in this improvement—in contrast with the relative improvement year’s aggregate distance to frontier score. Twenty-one shown by a change in rankings—that economies have economies meet this criterion: Azerbaijan; Benin; the made in their regulatory environment for business. Democratic Republic of Congo; Côte d’Ivoire; the Czech Republic; Greece; India; Ireland; Kazakhstan; Lithuania; the former Yugoslav Republic of Macedonia; Poland; Ease of Doing Business ranking Senegal; the Seychelles; Spain; Switzerland; Taiwan, China; Tajikistan; Togo; Trinidad and Tobago; and the The ease of doing business ranking ranges from 1 to 189. United Arab Emirates. Second, Doing Business sorts these The ranking of economies is determined by sorting the economies on the increase in their distance to frontier aggregate distance to frontier scores, rounded to 2 score from the previous year using comparable data. decimals. Doing Business 2015 Mexico 110 RESOURCES ON THE DOING BUSINESS WEBSITE Current features Law library News on the Doing Business project Online collection of business laws and regulations http://www.doingbusiness.org relating to business http://www.doingbusiness.org/law-library Rankings How economies rank—from 1 to 189 Contributors http://www.doingbusiness.org/rankings More than 10,700 specialists in 189 economies who participate in Doing Business Data http://www.doingbusiness.org/contributors/doing- All the data for 189 economies—topic rankings, business indicator values, lists of regulatory procedures and details underlying indicators Entrepreneurship data http://www.doingbusiness.org/data Data on business density (number of newly registered companies per 1,000 working-age Reports people) for 139 economies Access to Doing Business reports as well as http://www.doingbusiness.org/data/exploretopics/ent subnational and regional reports, reform case repreneurship studies and customized economy and regional profiles Distance to frontier http://www.doingbusiness.org/reports Data benchmarking 189 economies to the frontier in regulatory practice Methodology http://www.doingbusiness.org/data/distance-to- The methodologies and research papers underlying frontier Doing Business http://www.doingbusiness.org/methodology Information on good practices Showing where the many good practices identified Research by Doing Business have been adopted Abstracts of papers on Doing Business topics and http://www.doingbusiness.org/data/good-practice related policy issues http://www.doingbusiness.org/research Doing Business iPhone App Doing Business at a Glance—presenting the full Doing Business reforms report, rankings and highlights for each topic for Short summaries of DB2015 business regulation the iPhone, iPad and iPod touch reforms, lists of reforms since DB2008 and a ranking http://www.doingbusiness.org/specialfeatures/ simulation tool iphone http://www.doingbusiness.org/reforms Historical data Customized data sets since DB2004 http://www.doingbusiness.org/custom-query Doing Business 2015 Mexico 111