Economy Profile 2015 Doing Business 2015
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Doing Business 2015 West Bank and Gaza
Economy Profile 2015
West Bank and Gaza
Doing Business 2015 West Bank and Gaza 2
© 2014 The International Bank for Reconstruction and Development /
The World Bank
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ISBN (paper): 978-1-4648-0351-2
ISBN (electronic): 978-1-4648-0352-9
DOI: 10.1596/978-1-4648-0351-2
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Cover design: Corporate Visions, Inc.Doing Business 2015 West Bank and Gaza 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 23 Getting electricity ....................................................................................................................... 30 Registering property .................................................................................................................. 36 Getting credit .............................................................................................................................. 43 Protecting minority investors ................................................................................................... 50 Paying taxes ................................................................................................................................ 60 Trading across borders .............................................................................................................. 64 Enforcing contracts .................................................................................................................... 69 Resolving insolvency .................................................................................................................. 77 Labor market regulation ................................................................ Error! Bookmark not defined. Distance to frontier and ease of doing business ranking ...................................................... 85 Resources on the Doing Business website .............................................................................. 88
Doing Business 2015 West Bank and Gaza 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 West Bank and Gaza. To allow useful information on ordering Doing Business 2015, are
comparison, it also provides data for other selected available on the Doing Business website at
economies (comparator economies) for each indicator. http://www.doingbusiness.org.
The data in this report are current as of JuneDoing Business 2015 West Bank and Gaza 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 West Bank and Gaza 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: Middle East & North Africa
based on indicator sets that measure and benchmark
regulations applying to domestic small to medium-size Income category: Lower middle income
businesses through their life cycle. Economies are ranked
from 1 to 189 by the ease of doing business ranking. This Population: 4,169,506
year's report presents results for 2 aggregate measures:
the distance to frontier score and the ease of doing GNI per capita (US$): 1,665
business ranking. The ranking of economies is determined
by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 143
The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute DB2014 rank: 139*
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: 53.62
worst performance and 100 the frontier. (See the chapter
on the distance to frontier and ease of doing business). DB 2014 DTF: 53
The 10 topics included in the ranking in Doing Business
2015: starting a business, dealing with construction Change in DTF: 0.62
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 West Bank and Gaza
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 West Bank and Gaza 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 West Bank and Gaza 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 West Bank and Gaza 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - West Bank and Gaza (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - West Bank and Gaza (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 West Bank and Gaza 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 West Bank and Gaza 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 West Bank and Gaza 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 West Bank and Gaza Egypt, Arab Rep. DB2015
Best performer globally
Syrian Arab Republic
West Bank and Gaza
West Bank and Gaza
Lebanon DB2015
Turkey DB2015
Jordan DB2015
Indicator
Libya DB2015
DB2015
DB2014
DB2015
DB2015
Starting a Business
162 155 73 86 119 144 152 79 New Zealand (1)
(rank)
Starting a Business (DTF
66.53 66.37 88.14 85.61 80.80 73.50 69.23 86.86 New Zealand (99.96)
Score)
Procedures (number) 9.0 9.0 7.0 7.0 5.0 10.0 7.0 7.0 New Zealand (1.0)*
Time (days) 44.0 45.0 8.0 12.0 9.0 35.0 13.0 6.5 New Zealand (0.5)
Cost (% of income per
86.2 85.5 9.2 21.4 73.0 19.9 14.4 16.4 Slovenia (0.0)
capita)
Paid-in min. capital (%
0.0 0.0 0.0 0.0 33.0 33.8 272.1 12.1 112 Economies (0.0)*
of income per capita)
Dealing with
Hong Kong SAR,
Construction Permits 173 169 142 126 164 189 189 136
China (1)
(rank)
Dealing with
Hong Kong SAR,
Construction Permits 48.62 48.89 62.06 66.02 54.38 0.00 0.00 63.10
China (95.53)
(DTF Score)Doing Business 2015 West Bank and Gaza 12
Egypt, Arab Rep. DB2015
Best performer globally
Syrian Arab Republic
West Bank and Gaza
West Bank and Gaza
Lebanon DB2015
Turkey DB2015
Jordan DB2015
Indicator
Libya DB2015
DB2015
DB2014
DB2015
DB2015
no no Hong Kong SAR,
Procedures (number) 15.0 15.0 20.0 16.0 18.0 18.0
practice practice China (5.0)
no no
Time (days) 82.0 82.0 179.0 63.0 244.0 169.0 Singapore (26.0)
practice practice
Cost (% of warehouse no no
19.6 19.4 1.9 9.5 4.4 3.5 Qatar (0.0)*
value) practice practice
Getting Electricity
83 74 106 44 57 65 76 34 Korea, Rep. (1)
(rank)
Getting Electricity (DTF
76.26 76.31 71.31 82.95 80.24 79.10 77.91 85.12 Korea, Rep. (99.83)
Score)
Procedures (number) 5.0 5.0 7.0 5.0 5.0 4.0 5.0 4.0 12 Economies (3.0)*
Time (days) 63.0 63.0 54.0 50.0 75.0 118.0 71.0 70.0 Korea, Rep. (18.0)*
Cost (% of income per
1,484.4 1,472.2 304.6 315.9 93.2 206.2 801.5 433.3 Japan (0.0)
capita)
Registering Property
99 98 84 107 106 189 140 54 Georgia (1)
(rank)
Registering Property
65.08 65.08 69.13 63.45 63.69 0.00 55.46 76.38 Georgia (99.88)
(DTF Score)
no
Procedures (number) 8.0 8.0 8.0 7.0 8.0 4.0 6.0 4 Economies (1.0)*
practice
no
Time (days) 56.0 56.0 63.0 21.0 25.0 19.0 6.0 3 Economies (1.0)*
practice
Cost (% of property no
3.0 3.0 0.7 7.5 5.9 27.8 4.0 4 Economies (0.0)*
value) practice
Getting Credit (rank) 116 111 71 185 116 185 165 89 New Zealand (1)
Getting Credit (DTF
35.00 35.00 50.00 0.00 35.00 0.00 15.00 45.00 New Zealand (100)
Score)Doing Business 2015 West Bank and Gaza 13
Egypt, Arab Rep. DB2015
Best performer globally
Syrian Arab Republic
West Bank and Gaza
West Bank and Gaza
Lebanon DB2015
Turkey DB2015
Jordan DB2015
Indicator
Libya DB2015
DB2015
DB2014
DB2015
DB2015
Strength of legal rights
0 0 2 0 2 0 1 3 3 Economies (12)*
index (0-12)
Depth of credit
7 7 8 0 5 0 2 6 23 Economies (8)*
information index (0-8)
Credit registry coverage
9.0 8.8 5.8 2.2 20.3 0.5 7.7 63.6 Portugal (100.0)
(% of adults)
Credit bureau coverage
0.0 0.0 21.8 0.0 0.0 0.0 0.0 0.0 23 Economies (100.0)*
(% of adults)
Protecting Minority
141 130 135 154 106 188 78 13 New Zealand (1)
Investors (rank)
Protecting Minority
43.33 43.33 44.17 41.67 49.17 12.50 55.00 69.17 New Zealand (81.67)
Investors (DTF Score)
Extent of conflict of
interest regulation 5.3 5.3 4.7 3.3 5.0 2.0 5.0 7.0 Singapore (9.3)*
index (0-10)
Extent of shareholder
governance index (0- 3.3 3.3 4.2 5.0 4.8 0.5 6.0 6.8 France (7.8)*
10)
Strength of minority
investor protection 4.3 4.3 4.4 4.2 4.9 1.3 5.5 6.9 New Zealand (8.2)
index (0-10)
United Arab Emirates
Paying Taxes (rank) 51 79 149 45 40 157 117 56
(1)*
Paying Taxes (DTF United Arab Emirates
80.29 73.77 58.84 81.19 82.44 55.25 68.54 79.80
Score) (99.44)*
Payments (number per Hong Kong SAR,
28.0 39.0 29.0 25.0 19.0 19.0 19.0 11.0
year) China (3.0)*
Time (hours per year) 162.0 170.0 392.0 151.0 183.0 889.0 336.0 226.0 Luxembourg (55.0)
Trading Across Borders 130 123 99 54 97 139 146 90 Singapore (1)Doing Business 2015 West Bank and Gaza 14
Egypt, Arab Rep. DB2015
Best performer globally
Syrian Arab Republic
West Bank and Gaza
West Bank and Gaza
Lebanon DB2015
Turkey DB2015
Jordan DB2015
Indicator
Libya DB2015
DB2015
DB2014
DB2015
DB2015
(rank)
Trading Across Borders
64.43 64.59 71.56 78.92 71.96 61.72 58.57 73.26 Singapore (96.47)
(DTF Score)
Documents to export
6 6 8 5 4 7 8 7 Ireland (2)*
(number)
Time to export (days) 23.0 23.0 12.0 12.0 22.0 23.0 18.0 13.0 5 Economies (6.0)*
Cost to export (US$ per
1,750.0 1,735.0 625.0 825.0 1,080.0 1,140.0 1,995.0 990.0 Timor-Leste (410.0)
container)
Cost to export (deflated
1,750.0 1,735.0 625.0 825.0 1,080.0 1,140.0 1,995.0 990.0
US$ per container)
Documents to import
6 6 10 7 7 9 9 8 Ireland (2)*
(number)
Time to import (days) 38.0 38.0 15.0 15.0 30.0 37.0 24.0 14.0 Singapore (4.0)
Cost to import (US$ per
1,425.0 1,390.0 790.0 1,235.0 1,365.0 1,255.0 2,410.0 1,235.0 Singapore (440.0)
container)
Cost to import (deflated
1,425.0 1,390.0 790.0 1,235.0 1,365.0 1,255.0 2,410.0 1,235.0
US$ per container)
Enforcing Contracts
105 104 152 114 110 126 175 38 Singapore (1)
(rank)
Enforcing Contracts
56.65 56.65 44.02 54.04 55.40 51.42 35.17 67.92 Singapore (89.54)
(DTF Score)
Time (days) 540.0 540.0 1,010.0 689.0 721.0 690.0 872.0 420.0 Singapore (150.0)
Cost (% of claim) 21.2 21.2 26.2 31.2 30.8 27.0 29.3 24.9 Iceland (9.0)
Procedures (number) 44.0 44.0 42.0 39.0 37.0 43.0 55.0 35.0 Singapore (21.0)*
Resolving Insolvency
189 189 126 145 136 189 146 109 Finland (1)
(rank)Doing Business 2015 West Bank and Gaza 15
Egypt, Arab Rep. DB2015
Best performer globally
Syrian Arab Republic
West Bank and Gaza
West Bank and Gaza
Lebanon DB2015
Turkey DB2015
Jordan DB2015
Indicator
Libya DB2015
DB2015
DB2014
DB2015
DB2015
Resolving Insolvency
0.00 0.00 36.17 30.17 33.03 0.00 30.15 40.00 Finland (93.85)
(DTF Score)
no no no
Time (years) 2.5 3.0 3.0 4.1 3.3 Ireland (0.4)
practice practice practice
no no no
Cost (% of estate) 22.0 20.0 15.0 9.0 14.5 Norway (1.0)
practice practice practice
Outcome (0 as
no
piecemeal sale and 1 as 0 0 0 0 0 0 0
practice
going concern)
Recovery rate (cents on
0.0 0.0 26.6 27.0 32.3 0.0 27.0 27.9 Japan (92.9)
the dollar)
Strength of insolvency no no no
7.0 5.0 5.0 5.0 8.0 5 Economies (15.0)*
framework index (0-16) practice practice practice
Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such
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 West Bank and Gaza 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 city1
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.
owned1.
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 West Bank and Gaza 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in West Bank and the largest business city of an economy, except for 11 Gaza? According to data collected by Doing Business, economies for which the data are a population-weighted starting a business there requires 9.0 procedures, takes average of the 2 largest business cities. See the chapter 44.0 days, costs 86.2% of income per capita and requires on distance to frontier and ease of doing business paid-in minimum capital of 0.0% of income per capita ranking at the end of this profile for more details. (figure 2.1). Most indicator sets refer to a case scenario in Figure 2.1 What it takes to start a business in West Bank and Gaza Paid-in minimum capital (% of income per capita): 0.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database.
Doing Business 2015 West Bank and Gaza 18 STARTING A BUSINESS Globally, West Bank and Gaza stands at 162 in the other useful information for assessing how easy it is for ranking of 189 economies on the ease of starting a an entrepreneur in West Bank and Gaza to start a business (figure 2.2). The rankings for comparator business. economies and the regional average ranking provide Figure 2.2 How West Bank and Gaza and comparator economies rank on the ease of starting a business Source: Doing Business database.
Doing Business 2015 West Bank and Gaza 19
STARTING A BUSINESS
Economies around the world have taken steps making it they often are part of a larger regulatory reform
easier to start a business—streamlining procedures by program. Among the benefits have been greater firm
setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses,
or faster by introducing technology and reducing or financial resources and job opportunities.
eliminating minimum capital requirements. Many have
What business registration reforms has Doing Business
undertaken business registration reforms in stages—and
recorded in West Bank and Gaza (table 2.1)?
Table 2.1 How has West Bank and Gaza made starting a business easier—or not?
By Doing Business report year from DB2010 to DB2015
DB year Reform
West Bank and Gaza made starting a business more difficult by
DB2010
increasing the minimum capital requirement.
West Bank and Gaza made starting a business more difficult by
DB2011 increasing the lawyers’ fees that must be paid for
incorporation.
West Bank and Gaza made starting a business less costly by
DB2014
eliminating the paid-in minimum capital requirement.
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 West Bank and Gaza 20
STARTING A BUSINESS
What are the details?
Underlying the indicators shown in this chapter for
STANDARDIZED COMPANY
West Bank and Gaza is a set of specific procedures—
the bureaucratic and legal steps that an entrepreneur
must complete to incorporate and register a new Legal form: Private Limited Liability Company
firm. These are identified by Doing Business through
collaboration with relevant local professionals and Paid in minimum capital requirement: USD 0
the study of laws, regulations and publicly available City: Ramallah
information on business entry in that economy.
Following is a detailed summary of those procedures, Start-up Capital: 10 times GNI per capita
along with the associated time and cost. These
procedures are those that apply to a company
matching the standard assumptions (the
“standardized company”) used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators measure).
Table 2.2 Summary of time, cost and procedures for starting a business in West Bank and Gaza
Time to
No. Procedure Cost to complete
complete
Reserve a unique company name
The proposed company name can be checked and reserved at the
Companies Registry. If the name is available for registration, payment of
the name reservation fees should be paid to the account of the Ministry fees included in
1 1 day
of Trade or the Ministry of Finance at the Bank of Palestine. procedure 3
Agency: Ministry of Trade
The hired lawyer signs the company documents
Hiring a lawyer to draft the articles of association and the company
bylaws is recommended. These documents must then be stamped by
the Lawyers Bar association before being filed at the companies'
controller. The associated fees (at least 1000 USD) should be deposited 2 days on average USD 1,000
2
with the Bar which will retain 10% of the fee and transfer the remaining
90% to the lawyer. This decision came into force in January 2010.
Agency: Lawyer
Register at the Companies Registry
The following documents are required for submission in order to 2 days on average see comments
3
register at the Companies Registry:
- Articles of association (3 copies)
- Company bylaws (3 copies)Doing Business 2015 West Bank and Gaza 21
Time to
No. Procedure Cost to complete
complete
- Shareholders identification card (copies)
- Verified company name
- Registration application (3 copies)
- Powers of attorney
Fee schedule for company registration:
- Company name verification: ILS 87 (included in Procedure 1)
- Application: ILS 285
- Signature verification: ILS 84 per signature (minimum number of
required signatures is two to form a private limited company or seven
to form a public limited company). Note that signing must occur before
the Company Registrar
- Initial deposit of 1/1,000 of the stated capital
There are two separate types of fees, one that varies with the number of
shareholders and another that is a percentage of the stated capital.
Agency: Companies Registry
Pay the registration fees
Registration fees must be paid to the account of the Ministry of
National Economy/Companies Controller at the Bank of Palestine upon
submission of the registration documents. The Ministry will not review fees included in
4 1 day
the application until the fee is paid. procedure 3
Agency: Bank of Palestine
Register for income and VAT tax
The tax offices are located at the Ministry of Finance; the company
receives the same unique registration number for both VAT and income
5 tax. In most cases, accountants register the company for these taxes. 2 days on average no charge
Agency: Tax office
Register with the Chamber of Commerce
Registration with the Chamber is optional; however most businesses
prefer to do it to qualify for business boarders permits. The fee to
register with the Chamber of Commerce depends on the company’s
capital and on the nature of business. For a Grade B with registered
6 capital between USD 20,000 and USD 50,000, the membership fee is JD 1 day USD 158
100 (about $143), the initial administrative fee of ILS 50 (about $15),
and the annual fee of USD 80.
Agency: Chamber of CommerceDoing Business 2015 West Bank and Gaza 22
Time to
No. Procedure Cost to complete
complete
* Obtain the business license from the Municipality
The time and cost for obtaining a business license varies from sector to
sector. However, for general trading the time is about 3 weeks and the
fees are about ILS 20 for application and ILS 100 for the license. The
municipality previously sent notices to the health and the relevant
security authorities, such as the civil defense, to proceed with their 36 days
inspections of the company premises. Since January 2014, a civil (simultaneous with
7 defense employee from the Fire Department and a doctor from the ILS 120
previous
Ministry of Health were appointed at the municipality in order to carry
procedure)
out the necessary inspections and grant approvals for the business
license as soon as the entrepreneur applies. Nevertheless, the business
premises must still undergo inspection by these officials.
Agency: Municipality
* Obtain approval from the Fire Department
The fire department approval granted by the civil defense employee
located at the municipality is necessary to obtain the business license.
The fee depends on the space of the workplace, as follows:
1. Less than 100 square meters: ILS 65
2. 200-300 square meters: ILS 120 2 days on average
3. More than 300 square meters: ILS 175 (simultaneous with 0.15 USD per
8
previous square meter
Furthermore, in order to obtain the fire department's approval, a small procedure)
office is obliged to obtain a fire extinguisher and other safety supplies.
In addition, a larger office (a whole floor for example) needs to setup a
fire alarm system.
Agency: Fire Department
* Obtain approval from the Ministry of Health
According to the Business and Industry Law No. 16/1953 and its
amendments No. 1/1960 and No. 82/1960, every company undergoes 3 days
health inspection of the company premises conducted by the Ministry (simultaneous with
9 of Health to ensure that the employees operate in a safe working no charge
previous
environment.
procedure)
Agency: Ministry of Health
* 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 West Bank and Gaza 23
DEALING WITH CONSTRUCTION PERMITS
Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION
public. But it needs to be efficient, to avoid excessive
PERMITS INDICATORS MEASURE
constraints on a sector that plays an important part in
every economy. Where complying with building
regulations is excessively costly in time and money, Procedures to legally build a warehouse
many builders opt out. They may pay bribes to pass (number)
inspections or simply build illegally, leading to Submitting all relevant documents and
hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses,
Where compliance is simple, straightforward and permits and certificates
inexpensive, everyone is better off. Submitting all required notifications and
What do the indicators cover? receiving all necessary inspections
Doing Business records the procedures, time and cost Obtaining utility connections for water and
for a business in the construction industry to obtain sewerage
all the necessary approvals to build a warehouse in Registering the warehouse after its
the economy’s largest business city, connect it to completion (if required for use as collateral or
basic utilities and register the warehouse so that it for transfer of the warehouse)
can be used as collateral or transferred to another Time required to complete each procedure
entity. (calendar days)
The ranking of economies on the ease of dealing with Does not include time spent gathering
construction permits is determined by sorting their information
distance to frontier scores for dealing with
Each procedure starts on a separate day.
construction permits. These scores are the simple
Procedures that can be fully completed online
average of the distance to frontier scores for each of
are recorded as ½ day.
the component indicators.
Procedure considered completed once final
To make the data comparable across economies, document is received
Doing Business uses several assumptions about the
business and the warehouse, including the utility No prior contact with officials
connections. Cost required to complete each procedure (%
The business: of warehouse value)
Official costs only, no bribes
Is a limited liability company operating in
the construction business and located in Will have complete architectural and
the largest business city. For the 11 technical plans prepared by a licensed
economies with a population of more than architect or engineer.
100 million, data for a second city have
Will be connected to water and sewerage
been added. Is domestically owned and
(sewage system, septic tank or their
operated.
equivalent). The connection to each utility
Has 60 builders and other employees. network will be 150 meters (492 feet) long.
The warehouse: Will be used for general storage, such as of
books or stationery (not for goods requiring
Is valued at 50 times income per capita.
special conditions).
Is a new construction (there was no
Will take 30 weeks to construct (excluding all
previous construction on the land).
delays due to administrative and regulatory
requirements).Doing Business 2015 West Bank and Gaza 24 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 West Bank and Gaza? According to data which the data are a population-weighted average of the collected by Doing Business, dealing with construction 2 largest business cities. See the chapter on distance to permits there requires 15.0 procedures, takes 82.0 days frontier and ease of doing business ranking at the end of and costs 19.6% of the warehouse value (figure 3.1). this profile for more details. Most 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 West Bank and Gaza 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 West Bank and Gaza 25 DEALING WITH CONSTRUCTION PERMITS Globally, West Bank and Gaza stands at 173 in the provide other useful information for assessing how easy ranking of 189 economies on the ease of dealing with it is for an entrepreneur in West Bank and Gaza to legally construction permits (figure 3.2). The rankings for build a warehouse. comparator economies and the regional average ranking Figure 3.2 How West Bank and Gaza and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database.
Doing Business 2015 West Bank and Gaza 26
DEALING WITH CONSTRUCTION PERMITS
What are the details?
The indicators reported here for West Bank and Gaza
BUILDING A WAREHOUSE
are based 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 ILS 313,815
construction :
licensing, including architects, civil engineers,
construction lawyers, construction firms, utility
City : Ramallah
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 West Bank and
Gaza
Time to
No. Procedure Cost to complete
complete
Obtain location map from municipality
BuildCo must obtain a location map from the municipality to check that
the proposed constructions project is allowed on this land. The location
map will also describe the setbacks and will identify guidelines for
construction such as the percentage of the land BuildCo may build on,
height limitations, etc.
1 7 days ILS 154
According to Article 49 of the Local Committees Building and Planning
Regulation By-Law No. (30), issued on 24 August 1996 by the Higher
Planning Council, the fee is 30 Jordanian dinars, which is approximately
ILS 154.
Agency: Municipality
Obtain survey map from a licensed surveyor
The survey map is usually at a scale of 1:500 or 1:250 and shows, in
addition to the boundaries, the levels and/ or contour lines, the site,
and the surroundings, including sewerage, electricity, telephone, and 10 days ILS 1,200
2
water connections.
Agency: Licensed Surveyor
Make soil test
A law requiring a soil exam went into effect in 2001, but because of the
economic situation, some companies do not comply with it. However,
3 since January 2005, the Engineers Syndicate stopped approving any 14 days ILS 7,000
plan without the soil test for projects exceeding 200 sq. m. A minimum
of 3 boreholes must be made on the proposed site. If the building is an
extension above an existing building, a report about the state of the
existing building must be submitted.Doing Business 2015 West Bank and Gaza 27
Time to
No. Procedure Cost to complete
complete
Agency: Private Building Laboratory
Hire independent syndicate engineer to review building plans and
approve them for submission
As required by the Engineers’ Syndicate, BuildCo must hire an outside
engineer to submit the plans. Each project has to be licensed by a
locally registered and licensed engineering/ architecture office even if
the project has in house engineers and architects. Drawings are 21 days ILS 29,914
4
checked in Ramallah, but a jury from outside the city will check the
plans. The cost is a fixed fee of 4.5 Jordanian dinars per square meter
(approximately ILS 23 / sq. m).
Agency: Independent Syndicate Engineer
Obtain building permit from the municipality
To obtain a building permit from the municipality, BuildCo must submit
the following documents in five copies, one copy each for the
consulting office, the municipality, the Ministry of Tourism and
Antiquities, and the engineer, as well as one copy that will be returned
to BuildCo:
• Land property title, including, site map, location map, city-land parcel
number, and area regulations signed by a surveyor
• Documents about dimensions
• Project drawings: the proposed site plan and architectural plans,
including dimensions, furniture, and reflected ceiling; and elevation,
sections, and area diagrams with door and window schedules
• Structural drawings, including foundation plans, slabs, and details 21 days USD 5,202
5
• Plans for utilities, lighting, and earthling diagrams
• Mechanical plans for hot and cold water supplies, heating/cooling,
ventilation, and sewerage
• Soil test
• Application form
The municipality must approve all copies mentioned above. The
Ministry of Tourism and Antiquities must also approve BuildCo’s set of
copies, as do the utility companies.
Agency: Municipality
* Obtain no objection letter from the Water and Sewage Company
regarding the connection to utilities
6 1 day no charge
Agency: Water and Sewage Company (GEKA)Doing Business 2015 West Bank and Gaza 28
Time to
No. Procedure Cost to complete
complete
* Obtain tax clearance from the Municipality
7 1 day no charge
Agency: Municipality
* Obtain civil defense permit
To obtain a civil defense permit, BuildCo must submit the following
documents:
• Land property title
• Documents about dimensions
• Project drawings
8 • Certificate of professional engineer 14 days no charge
• Project acceptance from the Engineers Syndicate
• Application form
Agency: Civil Defense
Receive foundation inspection
During construction the municipality randomly inspects the excavation
work to ensure it complies with the building laws and regulations. The
Syndicate Engineer however is the one responsible for inspecting the
9 construction work as it relates to the engineering. Any building over 1 day no charge
600 sq. m. must have a supervising engineer on site at all times.
Agency: Municipality
Submit concrete casting permit to Engineers Syndicate for
stamping
This is required by law although it is rarely done in practice. 1 day no charge
10
Agency: Engineers Syndicate
Submit stamped concrete casting permit to the Municipality
This is required by law although it is rarely done in practice.
11 1 day no charge
Agency: Municipality
Request and receive final inspection
According to Article 49 of the Local Committees Building and Planning
Regulation By-Law No. (30), issued on 24 August 1996 by the Higher 1 day ILS 128
12
Planning Council, the fee is 25 Jordanian dinars, which is approximately
ILS 128.
Agency: MunicipalityDoing Business 2015 West Bank and Gaza 29
Time to
No. Procedure Cost to complete
complete
Submit municipal letters of approval to Water and Sewage
Company (GEKA) and request an appointment for inspection
13 1 day no charge
Agency: Water and Sewage Company (GEKA)
Receive water and sewage inspection
14 1 day no charge
Agency: Water and Sewage Company (GEKA)
Obtain water and sewage connection
15 3 days ILS 3,500
Agency: Water and Sewage Company (GEKA)
* 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 West Bank and Gaza 30
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 West Bank and Gaza 31
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 West Bank and Gaza? According to data collected by business city of an economy, except for 11 economies for
Doing Business, getting electricity there requires 5.0 which the data are a population-weighted average of the
procedures, takes 63.0 days and costs 1484.4% of 2 largest business cities. See the chapter on distance to
income per capita (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 West Bank and Gaza
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 West Bank and Gaza 32 GETTING ELECTRICITY Globally, West Bank and Gaza stands at 83 in the ranking perspective in assessing how easy it is for an of 189 economies on the ease of getting electricity entrepreneur in West Bank and Gaza to connect a (figure 4.2). The rankings for comparator economies and warehouse to electricity. the regional average ranking provide another Figure 4.2 How West Bank and Gaza and comparator economies rank on the ease of getting electricity Source: Doing Business database.
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