Economy Profile 2015 Doing Business 2015
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Doing Business 2015 Burundi 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. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifically reserved. This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http://creativecommons.org/licenses/by/3.0/igo. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: World Bank. 2014. Doing Business 2015: Going Beyond Efficiency. Washington, DC: World Bank Group. DOI: 10.1596/978-1-4648-0351-2. License: Creative Commons Attribution CC BY 3.0 IGO Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. Adaptations—If you create an adaptation of this work, please add the following disclaimer along with the attribution: This is an adaptation of an original work by The World Bank. Views and opinions expressed in the adaptation are the sole responsibility of the author or authors of the adaptation and are not endorsed by The World Bank. Third-party content—The World Bank does not necessarily own each component of the content contained within the work. The World Bank therefore does not warrant that the use of any third-party- owned individual component or part contained in the work will not infringe on the rights of those third parties. The risk of claims resulting from such infringement rests solely with you. If you wish to re-use a component of the work, it is your responsibility to determine whether permission is needed for that re-use and to obtain permission from the copyright owner. Examples of components can include, but are not limited to, tables, figures or images. All queries on rights and licenses should be addressed to the Publishing and Knowledge Division, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: email@example.com. ISBN (paper): 978-1-4648-0351-2 ISBN (electronic): 978-1-4648-0352-9 DOI: 10.1596/978-1-4648-0351-2 ISSN: 1729-2638 Cover design: Corporate Visions, Inc.
Doing Business 2015 Burundi 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 22 Getting electricity ....................................................................................................................... 30 Registering property .................................................................................................................. 36 Getting credit .............................................................................................................................. 43 Protecting minority investors ................................................................................................... 49 Paying taxes ................................................................................................................................ 60 Trading across borders .............................................................................................................. 65 Enforcing contracts .................................................................................................................... 70 Resolving insolvency .................................................................................................................. 77 Labor market regulation ........................................................................................................... 82 Distance to frontier and ease of doing business ranking ...................................................... 88 Resources on the Doing Business website .............................................................................. 91
Doing Business 2015 Burundi 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 Burundi. 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 Burundi 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 Burundi 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: Sub-Saharan Africa based on indicator sets that measure and benchmark regulations applying to domestic small to medium-size Income category: Low income businesses through their life cycle. Economies are ranked from 1 to 189 by the ease of doing business ranking. This Population: 10,162,532 year's report presents results for 2 aggregate measures: the distance to frontier score and the ease of doing GNI per capita (US$): 280 business ranking. The ranking of economies is determined by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 152 The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute DB2014 rank: 150* distance to the best performance in each Doing Business Change in rank: -2 indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the DB 2015 DTF: 51.07 worst performance and 100 the frontier. (See the chapter on the distance to frontier and ease of doing business). DB 2014 DTF: 49.94 The 10 topics included in the ranking in Doing Business 2015: starting a business, dealing with construction Change in DTF: 1.13 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 Burundi 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 Burundi 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 Burundi 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 Burundi 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - Burundi (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - Burundi (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 Burundi 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 Burundi 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 Burundi 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 Burundi Best performer globally Congo, Dem. Rep. Tanzania DB2015 Burundi DB2015 Burundi DB2014 Rwanda DB2015 Uganda DB2015 Indicator France DB2015 Kenya DB2015 DB2015 DB2015 Starting a Business 18 20 172 28 143 112 124 166 New Zealand (1) (rank) Starting a Business (DTF 94.25 93.74 58.53 93.00 74.02 81.66 78.85 63.44 New Zealand (99.96) Score) Procedures (number) 3.0 3.0 7.0 5.0 10.0 8.0 9.0 15.0 New Zealand (1.0)* Time (days) 5.0 5.0 16.0 4.5 30.0 6.5 26.0 32.0 New Zealand (0.5) Cost (% of income per 13.4 17.5 30.0 0.9 42.7 52.3 23.8 64.4 Slovenia (0.0) capita) Paid-in min. capital (% 0.0 0.0 500.0 0.0 0.0 0.0 0.0 0.0 112 Economies (0.0)* of income per capita) Dealing with Hong Kong SAR, Construction Permits 133 146 111 86 95 34 169 163 China (1) (rank) Dealing with Hong Kong SAR, Construction Permits 64.16 60.16 67.72 73.14 71.02 81.55 52.03 54.88 China (95.53) (DTF Score)
Doing Business 2015 Burundi 12 Best performer globally Congo, Dem. Rep. Tanzania DB2015 Burundi DB2015 Burundi DB2014 Rwanda DB2015 Uganda DB2015 Indicator France DB2015 Kenya DB2015 DB2015 DB2015 Hong Kong SAR, Procedures (number) 14.0 14.0 8.0 8.0 8.0 10.0 18.0 15.0 China (5.0) Time (days) 99.0 99.0 119.0 183.0 125.0 77.0 205.0 154.0 Singapore (26.0) Cost (% of warehouse 10.1 12.5 11.6 4.7 9.3 4.1 8.1 11.7 Qatar (0.0)* value) Getting Electricity 182 178 175 60 151 62 87 184 Korea, Rep. (1) (rank) Getting Electricity (DTF 35.27 35.27 43.19 79.87 58.85 79.48 75.28 33.48 Korea, Rep. (99.83) Score) Procedures (number) 5.0 5.0 6.0 5.0 6.0 4.0 4.0 6.0 12 Economies (3.0)* Time (days) 158.0 158.0 65.0 79.0 158.0 34.0 109.0 132.0 Korea, Rep. (18.0)* Cost (% of income per 16,367.3 20,509.0 16,191.8 42.9 1,020.2 3,073.9 1,453.0 11,004.9 Japan (0.0) capita) Registering Property 48 51 142 126 136 15 123 125 Georgia (1) (rank) Registering Property 78.38 77.81 55.39 59.36 56.88 89.20 60.10 59.76 Georgia (99.88) (DTF Score) Procedures (number) 5.0 5.0 7.0 8.0 9.0 3.0 8.0 11.0 4 Economies (1.0)* Time (days) 23.0 26.0 44.0 49.0 72.0 32.0 67.0 43.0 3 Economies (1.0)* Cost (% of property 3.2 3.2 9.5 6.1 4.3 0.1 4.5 2.6 4 Economies (0.0)* value) Getting Credit (rank) 171 169 131 71 116 4 151 131 New Zealand (1) Getting Credit (DTF 10.00 10.00 30.00 50.00 35.00 90.00 25.00 30.00 New Zealand (100) Score) Strength of legal rights 2 2 6 4 7 11 5 6 3 Economies (12)* index (0-12)
Doing Business 2015 Burundi 13 Best performer globally Congo, Dem. Rep. Tanzania DB2015 Burundi DB2015 Burundi DB2014 Rwanda DB2015 Uganda DB2015 Indicator France DB2015 Kenya DB2015 DB2015 DB2015 Depth of credit 0 0 0 6 0 7 0 0 23 Economies (8)* information index (0-8) Credit registry coverage 3.9 0.3 0.2 44.5 0.0 2.4 0.0 0.0 Portugal (100.0) (% of adults) Credit bureau coverage 0.0 0.0 0.0 0.0 4.9 15.7 0.6 4.9 23 Economies (100.0)* (% of adults) Protecting Minority 94 91 146 17 122 117 141 110 New Zealand (1) Investors (rank) Protecting Minority 51.67 51.67 42.50 67.50 45.83 46.67 43.33 47.50 New Zealand (81.67) Investors (DTF Score) Extent of conflict of interest regulation 6.3 6.3 4.0 5.7 4.7 6.3 5.3 5.0 Singapore (9.3)* index (0-10) Extent of shareholder governance index (0- 4.0 4.0 4.5 7.8 4.5 3.0 3.3 4.5 France (7.8)* 10) Strength of minority investor protection 5.2 5.2 4.3 6.8 4.6 4.7 4.3 4.8 New Zealand (8.2) index (0-10) United Arab Emirates Paying Taxes (rank) 124 126 168 95 102 27 148 104 (1)* Paying Taxes (DTF United Arab Emirates 66.78 64.40 46.11 72.12 71.49 85.79 58.95 71.32 Score) (99.44)* Payments (number per Hong Kong SAR, 25.0 25.0 50.0 8.0 30.0 17.0 49.0 31.0 year) China (3.0)* Time (hours per year) 274.0 274.0 316.0 137.0 201.5 107.0 181.0 209.0 Luxembourg (55.0) Trading Across Borders 169 171 175 10 153 164 137 161 Singapore (1) (rank) Trading Across Borders 37.50 33.52 29.09 90.18 54.49 44.67 62.96 48.01 Singapore (96.47)
Doing Business 2015 Burundi 14 Best performer globally Congo, Dem. Rep. Tanzania DB2015 Burundi DB2015 Burundi DB2014 Rwanda DB2015 Uganda DB2015 Indicator France DB2015 Kenya DB2015 DB2015 DB2015 (DTF Score) Documents to export 9 9 7 2 8 7 7 7 Ireland (2)* (number) Time to export (days) 32.0 32.0 44.0 10.0 26.0 26.0 18.0 28.0 5 Economies (6.0)* Cost to export (US$ per 2,905.0 2,905.0 3,365.0 1,335.0 2,255.0 3,245.0 1,090.0 2,800.0 Timor-Leste (410.0) container) Cost to export (deflated 2,905.0 3,295.8 3,365.0 1,335.0 2,255.0 3,245.0 1,090.0 2,800.0 US$ per container) Documents to import 9 9 10 2 9 9 11 10 Ireland (2)* (number) Time to import (days) 43.0 46.0 63.0 11.0 26.0 27.0 26.0 31.0 Singapore (4.0) Cost to import (US$ per 4,420.0 4,420.0 4,290.0 1,445.0 2,350.0 4,990.0 1,615.0 3,375.0 Singapore (440.0) container) Cost to import (deflated 4,420.0 5,014.6 4,290.0 1,445.0 2,350.0 4,990.0 1,615.0 3,375.0 US$ per container) Enforcing Contracts 158 158 176 10 137 62 45 80 Singapore (1) (rank) Enforcing Contracts 42.15 42.15 33.51 77.67 48.96 63.94 66.17 60.48 Singapore (89.54) (DTF Score) Time (days) 832.0 832.0 610.0 395.0 465.0 230.0 515.0 490.0 Singapore (150.0) Cost (% of claim) 38.6 38.6 80.6 17.4 47.2 82.7 14.3 31.3 Iceland (9.0) Procedures (number) 44.0 44.0 43.0 29.0 44.0 23.0 38.0 38.0 Singapore (21.0)* Resolving Insolvency 144 142 189 22 134 101 105 98 Finland (1) (rank) Resolving Insolvency 30.55 30.70 0.00 75.94 33.31 41.77 41.12 42.27 Finland (93.85) (DTF Score)
Doing Business 2015 Burundi 15 Best performer globally Congo, Dem. Rep. Tanzania DB2015 Burundi DB2015 Burundi DB2014 Rwanda DB2015 Uganda DB2015 Indicator France DB2015 Kenya DB2015 DB2015 DB2015 no Time (years) 5.0 5.0 1.9 4.5 2.5 3.0 2.2 Ireland (0.4) practice no Cost (% of estate) 30.0 30.0 9.0 22.0 29.0 22.0 29.5 Norway (1.0) practice Outcome (0 as no piecemeal sale and 1 as 0 0 1 1 0 0 1 practice going concern) Recovery rate (cents on 7.4 7.7 0.0 77.2 27.1 19.5 21.2 37.9 Japan (92.9) the dollar) Strength of insolvency no 8.5 8.5 11.0 6.0 10.0 9.5 7.0 5 Economies (15.0)* framework index (0-16) 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 Burundi 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 Burundi 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in Burundi? 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 3.0 procedures, takes 5.0 days, average of the 2 largest business cities. See the chapter costs 13.4% 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 Burundi 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 Burundi 18 STARTING A BUSINESS Globally, Burundi stands at 18 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 Burundi to The rankings for comparator economies and the regional start a business. Figure 2.2 How Burundi and comparator economies rank on the ease of starting a business Source: Doing Business database.
Doing Business 2015 Burundi 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 Burundi (table 2.1)? Table 2.1 How has Burundi made starting a business easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Burundi made starting a business easier by eliminating the requirements to have company documents notarized, to DB2013 publish information on new companies in a journal and to register new companies with the Ministry of Trade and Industry. Burundi made starting a business easier by allowing registration with the Ministry of Labor at the one-stop shop DB2014 and by speeding up the process of obtaining the registration certificate. 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 Burundi 20 STARTING A BUSINESS What are the details? Underlying the indicators shown in this chapter for STANDARDIZED COMPANY Burundi is a set of specific procedures—the bureaucratic and legal steps that an entrepreneur must complete to incorporate and register a new Legal form: Société à Responsabilité Limitée firm. These are identified by Doing Business through (SARL) - Limited Liability Company collaboration with relevant local professionals and the study of laws, regulations and publicly available Paid in minimum capital requirement: BIF 0 information on business entry in that economy. City: Bujumbura 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 Burundi Time to No. Procedure Cost to complete complete Submit all documents to the one-stop shop (API) and obtain registration certificate and the tax identification number The following documents need to be submitted at the Agence des Promotions des Investissements (API): 1. Application form for the creation of a new company (includes name of the company, type of company, address, initial capital, number of partners and their names, contribution of each partner) 2. Standard company statutes 3. Application form for registration with the Greffe of the Tribunal de Commerce BIF 40,000 for a LLC 4. Application form for registration with the OBR to obtain the NIF performing general 5. Photos of all partners 2 days commercial 1 6. Copy of identities of all partners activities The applicant first deposits all these documents at the API and then pays the registration fees of BIF 40,000 at the API. The applicant will then obtain a certificate of incorporation and a fiscal identification number (NIF) issued by the tax authority (Office Burundais des Recettes). In addition, the applicant can now complete the registration of the company with the National Institute for Social Security at the one-stop shop. Agency: Commercial Registry
Doing Business 2015 Burundi 21 Time to No. Procedure Cost to complete complete Pay the registration fees at the Commercial Bank cashier All new businesses must pay the registration fees at the Commercial Bank cashier. 2 1 day no charge Agency: Bank Make a company seal The company seal is not required by law but it is done in practice. Some banks would require the company seal to issue a loan contract, for 3 example. 2 days BIF 20,000 Agency: Shops dealing with stamp making * 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 Burundi 22 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 Burundi 23 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 Burundi? 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 14.0 procedures, takes 99.0 days and costs frontier and ease of doing business ranking at the end of 10.1% 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 Burundi 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 Burundi 24 DEALING WITH CONSTRUCTION PERMITS Globally, Burundi stands at 133 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 Burundi to legally build a warehouse. Figure 3.2 How Burundi and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database.
Doing Business 2015 Burundi 25 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 Burundi (table 3.1)? Table 3.1 How has Burundi made dealing with construction permits easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Burundi made dealing with construction permits easier by DB2012 reducing the cost to obtain a geotechnical study. Burundi made obtaining a construction permit easier by DB2013 eliminating the requirement for a clearance from the Ministry of Health and reducing the cost of the geotechnical study. Burundi made dealing with construction permits easier by DB2014 establishing a one-stop shop for obtaining building permits and utility connections. 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 Burundi 26 DEALING WITH CONSTRUCTION PERMITS What are the details? The indicators reported here for Burundi 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 BIF 22,359,770 construction : licensing, including architects, civil engineers, construction lawyers, construction firms, utility City : Bujumbura 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 Burundi Time to No. Procedure Cost to complete complete Obtain a geotechnical study Fees are based on a maximum calculation (Maximum d'essais), which comprises all the verifications the National Laboratory of Construction and Public Works has to do. 1 14 days BIF 600,000 Agency: National Laboratory for Building Construction and Public Works (Laboratoire National Du Bâtiment et des Travaux Publics) Submit application for the building permit at the DGHU Documents needed for the building permit are: • One copy of the property title • One copy of the original payment receipt of the “rrais de viabilisation” • One copy of the original “proces Verbal de bornage et d’arpentage” (obtained when the property title is being processed on the bare land) • Construction plans: Vues en plan, facades, coupe, plan d’implantation (4 copies of each) • Original estimated cost of construction: original (3 copies) • Original septic tank plan (3 copies) 1 day no charge 2 • Original structural plan since it is a G1 structure (ground level with 1 floor) • Original geotechnical study since it is a G1 structure The files are submitted at the ‘Service de Control de la DGHU’, who in turn will forward them internally to the Service de L’instruction. Applicants are instructed to return to the DGHU 3 days after submitting their files to check on the status of the applications and to see whether additional information or documents or changes must be made to the plans. Assuming that no modifications are required, BuildCo will accompany the inspector to the site of construction. This is to verify
Doing Business 2015 Burundi 27 Time to No. Procedure Cost to complete complete that the parcel is correct and no construction work has started without a permit. During those 3 days, the service verifies the plans, particularly in terms of “plan d’occupation des sols” (which surface one is allowed to build on). If some remarks and missing documents need to be addressed, the on-premise inspection will occur once all issues are addressed. Agency: Directorate of Urban Planning and Habitat (DGHU) Pay permit fees and the construction tax at the Banque de la Republique du Burundi Payment of the permit fees and the construction tax is made at the Banque de la Republique du Burundi. The cost of the permit is 0.6% of estimated construction cost per square meter (BIF 750,000.00 x 1,300.6). 3 1 day BIF 654,399 In addition, the urban development cost must also be paid and the amount depends on the location of construction. For the Doing Business case study, the location of the warehouse is the “quartier des usines.” For this specific location, the cost is BIF 400 per square meter of the building (BIF 400 * 1,300.6). Agency: Banque de la Republique du Burundi Present proof of payment of the construction tax (taxe de batisse) to the DGHU The proof of payment must be provided to the DGHU. 1 day no charge 4 Agency: Directorate of Urban Planning and Habitat (DGHU) Obtain building permit There are two signatures on a building permit. The Director of DGHU signs the file which is then forwarded to the Director General of DGHU for his signature. There are no mechanisms to inform applicants that 5 their construction permit has been processed. It is the responsibility of 14 days no charge the applicant to follow up. Agency: Directorate of Urban Planning and Habitat (DGHU) Request certificate of conformity and proof of development Once the construction is completed, the owner requests an ‘attestation de mise en valeur et de conformité’ from DGHU. This attestation 1 day no charge 6 validates that the construction has been built in accordance to the approved plans. To complete the attestation, DGHU will inspect the site of construction.
Doing Business 2015 Burundi 28 Time to No. Procedure Cost to complete complete The application for a certificate of conformity must be accompanied by a picture of the newly constructed building. Agency: Directorate of Urban Planning and Habitat (DGHU) Receive inspection from DGHU 7 1 day no charge Agency: Directorate of Urban Planning and Habitat (DGHU) Obtain certificate of conformity and proof of development 8 1 day no charge Agency: Directorate of Urban Planning and Habitat (DGHU) Deposit request for the modification of the "proces verbal de bornage et d'arpentage" at the Cadastre Once a building has been completed, it must be registered at the Land Registry to have a property tile. Therefore, the “process verbal de bornage et d’arpentage” must be modified to reflect the new 9 constructed building. A new “process verbal de bornage et 1 day no charge d’arpentage" will be issued. This is required in order for the Land Registry to issue the property title. Agency: Direction National du Cadastre Receive site inspection from the Cadastre 10 1 day no charge Agency: Direction National du Cadastre Obtain updated "proces verbal de bornage et d'arpentage" from the Cadastre 11 3 days no charge Agency: Direction National du Cadastre Request and receive updated property title from the land registry 12 60 days BIF 2,500 Agency: Department of Land Titles (Ministry of Justice)
Doing Business 2015 Burundi 29 Time to No. Procedure Cost to complete complete * Obtain water connection 13 30 days BIF 500,000 Agency: REGIDESO * Obtain sewage connection 14 15 days BIF 500,000 Agency: SETEMU * 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 Burundi 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 Burundi 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 Burundi? According to data collected by Doing business city of an economy, except for 11 economies for Business, getting electricity there requires 5.0 procedures, which the data are a population-weighted average of the takes 158.0 days and costs 16367.3% of income per 2 largest business cities. See the chapter on distance to 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 Burundi 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 Burundi 32 GETTING ELECTRICITY Globally, Burundi stands at 182 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 Burundi to connect The rankings for comparator economies and the regional a warehouse to electricity. Figure 4.2 How Burundi and comparator economies rank on the ease of getting electricity Source: Doing Business database.
Doing Business 2015 Burundi 33 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 practices and internal wiring installations. In an effort to Burundi (table 4.1)? Table 4.1 How has Burundi made getting electricity easier—or not? By Doing Business report year from DB2010 to DB2015 DB year Reform Burundi made getting electricity easier by eliminating the electricity utility’s monopoly on the sale of materials needed DB2014 for new connections and by dropping the processing fee for new connections. Source: Doing Business database.
Doing Business 2015 Burundi 34 GETTING ELECTRICITY What are the details? The indicators reported here for Burundi 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— Régie de Production et identified by Doing Business. Data are collected from the Name of utility: Distribution d'Eau et distribution utility, then completed and verified by d'Electricité (Regideso) electricity regulatory agencies and independent professionals such as electrical engineers, electrical City: Bujumbura contractors and construction companies. The electricity The procedures are those that apply to a warehouse and distribution utility surveyed is the one serving the area electricity connection matching the standard (or areas) in which warehouses are located. If there is a assumptions used by Doing Business in collecting the choice of distribution utilities, the one serving the largest data (see the section in this chapter on what the number of customers is selected. 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 Burundi Time to No. Procedure Cost to complete complete Client submits application at one of REGIDESO's customer service centers, await and receive estimate Applications cannot be submitted online. The customer goes to a REGIDESO customer service office in person and completes a form to request the connection. The documents needed for the application do not need to be notarized. The customer must specify the location of the warehouse. The customer has to provide copies of two documents, the national identification card and the family composition certificate. There is an application fee to be paid. A few days after the external inspection, the customer goes to the office of REGIDESO to obtain the estimate and to pay it. Once payment is made, REGIDESO will prepare a report of the 1 works. This is an internal report listing all the material necessary for the 16 calendar days BIF 0 connection. The report is then transmitted to the department in charge of the actual connection work. No internal inspection and no certificate regarding the safety of the internal wiring has to be submitted. The electrician must be a licensed one, but not necessarily with REGIDESO. The customer takes the entire responsibility regarding the safety of the internal wiring with signing the contract. Agency: REGIDESO-Burundi
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