Business Removing

DATA NOTES 83
Assumptions about the property
To make the property comparable across countries, ten assumptions
are employed. The property:
• Has a value of 50 times income per capita.
• Is currently fully-owned by another domestic limited liability
company.
• Has no mortgages attached and has been under the same
ownership for the past 10 years.
• Is adequately measured and filed in the cadastre, registered
in the land register and free of title disputes.
• Is located in a peri-urban commercial zone and no rezoning
is required.
• Consists of land and a building. The land area is 6,000
square feet (557.4 square meters). A warehouse of 10,000
square feet (929 square meters) is located on the land. The
warehouse is 10 years old, in good condition and was constructed
following all safety standards, building codes and
other legal requirements.
• Will not be subject to renovations or additional building
following the purchase;
• Has no trees, natural water sources, natural reserves or
historical monuments of any kind;
• Will not be used for special purposes and no special permits
for residential use, industrial plants, waste storage,
certain types of agricultural activities, etc. are required;
• Has no occupants (legal or illegal) and no other party
holds a legal interest in it. The purchasing company will
take vacant possession of the property.
Procedures measure
A procedure is defined as any interaction of the buying or
selling company, their agents (if the agent is required by law)
or the property itself with external parties, including government
agencies, inspectors, notaries, lawyers, etc. Interactions
between company officers and employees are not considered.
All procedures that are legally required for registering property
are recorded, even if they may be avoided in exceptional
cases. It is assumed that the purchasing company follows the
fastest legal option available. Although the business may use
lawyers or other professionals where necessary in the registration
process, it is assumed that it does not employ an outside
facilitator in the registration unless required to by law.
Cost measure
Only official costs are recorded. These include fees, transfer
taxes, stamp duties, and any other payment to the property
registry, notaries, public agencies or lawyers, if required by
law. Other taxes, such as capital gains tax or value added tax
(VAT) are excluded from the cost measure. If cost estimates
differ among sources, the median reported value is used.
Total costs are expressed as a percentage of the property
value, calculated assuming a property value of 50 times income
per capita.
Time measure
Time is recorded in calendar days. It is assumed that the minimum
time required for each procedure is one day. Time captures
the median duration that property lawyers or registry
officials indicate as necessary to complete a procedure. It is
assumed that the entrepreneur does not waste time and commits
to completing each remaining procedure without delay.
If a procedure can be accelerated for an additional cost, the
fastest procedure is chosen. If procedures may be undertaken
simultaneously, it is assumed that they are. It is assumed that
the parties involved are aware of all regulations and their sequence
from the beginning. Time spent on gathering information
is not considered.
The methodology is developed in “Property,” an ongoing research
project by Simeon Djankov, Facundo Martin and
Caralee McLiesh.
Getting credit
Doing Business constructs measures on credit information
sharing and the legal rights of borrowers and lenders. One set
of indicators measures the coverage, scope, quality and accessibility
of credit information available through public or private
credit registries. A second set describes how well collateral
and bankruptcy laws facilitate lending.
Data on credit information sharing are built in two stages:
first, the respective banking supervision authorities as well as
public information sources are surveyed to confirm the presence
or absence of public credit registries and private credit
information bureaus. Second, when applicable, a detailed
survey on the public or private credit registry’s structure, law,
and associated rules collects data in 5 areas:
• Coverage of the market
• Scope of information collected and distributed
• Access to the data
• Quality of data
• Legal framework for information sharing and quality of
data.
The surveys were adapted from previous versions designed in
cooperation with the “Credit Reporting Systems Project” in
the World Bank Group and with input from Professor Marco
Pagano of the University of Naples. Survey responses are verified
through several rounds of follow-up communication
with respondents as well as by contacting third parties and
consulting public sources. In more than a third of cases, the
survey data are complemented by teleconference calls.