Bhutan Economy Profile - Doing Business 2019
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Doing Business 2019 Bhutan
Economy Profile
Bhutan
Page 1
Doing Business 2019 Bhutan
Economy Profile of Bhutan
Doing Business 2019 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality
control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the
electricity supply and the transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration
system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as
well as post-filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2019 Bhutan
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does
present the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that
have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the
Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these
11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2019 Bhutan
Ease of Doing Business in
Region South Asia DB 2019 Rank
190 1
Bhutan
Income Category Lower middle income 81
DB 2019 Ease of doing business score
Population 807,610
0 100
City Covered Thimphu 66.08
DB 2019 Ease of Doing Business Score
0 100
78.45: Thailand (Rank: 27)
73.64: China (Rank: 46)
67.23: India (Rank: 77)
66.08: Bhutan (Rank: 81)
56.71: Regional Average (South Asia)
54.43: Maldives (Rank: 139)
Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies
in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100
represents the best performance. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Bhutan
1
15
28 28
28
54
55
73
88 85
82 91
Rank
109
125
136
163 168
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Ease of Doing Business Score on Doing Business topics - Bhutan
100 94.25
89.28
86.38
80 77.39
72.99
68.85 69.99
Score
60 55.00
46.67
40
20
0.00
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2019 Bhutan
Starting a Business
This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited
liability company to start up and formally operate in each economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10
and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two
types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the
other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a
business. These scores are the simple average of the scores for each of the component indicators.
The most recent round of data collection for the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the
a company (number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
• Preregistration (for example, name verification or
reservation, notarization) The business:
• Registration in the economy’s largest business - Is a limited liability company (or its legal equivalent). If there is more than one type
city
of limited liability company in the economy, the most common among domestic firms
• Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation
registration, company seal) lawyers or the statistical office.
- Operates in the economy’s largest business city. For 11 economies the data are
• Obtaining approval from spouse to start a also collected for the second largest business city.
business or to leave the home to register the
- The entire office space is approximately 929 square meters (10,000 square feet).
company
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
• Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least
company registration and operation or national 100 times income per capita.
identification card - Performs general industrial or commercial activities, such as the production or sale
of goods or services to the public. The business does not perform foreign trade
Time required to complete each procedure
activities and does not handle products subject to a special tax regime, for example,
(calendar days)
liquor or tobacco. It does not use heavily polluting production processes.
• Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the
information amount of the annual lease for the office space is equivalent to the income per
capita.
• Each procedure starts on a separate day (2 - Does not qualify for investment incentives or any special benefits.
procedures cannot start on the same day)
- Has at least 10 and up to 50 employees one month after the commencement of
• Procedures fully completed online are recorded operations, all of whom are domestic nationals.
as ½ day - Has a company deed that is 10 pages long.
• Procedure is considered completed once final The owners:
document is received
- Have reached the legal age of majority. If there is no legal age of majority, they are
• No prior contact with officials assumed to be 30 years old.
Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record.
income per capita) - Are married and the marriage is monogamous and registered with the authorities.
- Where the answer differs according to the legal system applicable to the woman or
• Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the
• No professional fees unless services required by answer used will be the one that applies to the majority of the population.
law or commonly used in practice
Paid-in minimum capital (% of income per
capita)
• Funds deposited in a bank or with third party
before registration or up to 3 months after
incorporation
Page 5Doing Business 2019 Bhutan
Starting a Business - Bhutan
Standardized Company
Legal form Limited Liability Company
Paid-in minimum capital requirement BTN 0
City Covered Thimphu
Indicator Bhutan South Asia OECD high Best Regulatory
income Performance
Procedure – Men (number) 8 7.6 4.9 1 (New Zealand)
Time – Men (days) 12 13.7 9.3 0.5 (New Zealand)
Cost – Men (% of income per capita) 3.5 11.0 3.1 0.0 (Slovenia)
Procedure – Women (number) 8 7.8 4.9 1 (New Zealand)
Time – Women (days) 12 13.9 9.3 0.5 (New Zealand)
Cost – Women (% of income per capita) 3.5 11.0 3.1 0.0 (Slovenia)
Paid-in min. capital (% of income per capita) 0.0 0.2 8.6 0.0 (117 Economies)
Figure – Starting a Business in Bhutan and comparator economies – Ranking and Score
DB 2019 Starting a Business Score
0 100
93.52: China (Rank: 28)
92.72: Thailand (Rank: 39)
89.17: Maldives (Rank: 71)
86.38: Bhutan (Rank: 91)
85.44: Regional Average (South Asia)
80.96: India (Rank: 137)
Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores
are the simple average of the scores for each of the component indicators.
Page 6Doing Business 2019 Bhutan
Figure – Starting a Business in Bhutan – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
12 1.8
1.6
Cost (% of income per capita)
10
1.4
8 1.2
Time (days)
1
6
0.8
4 0.6
0.4
2
0.2
0 0
1 *2 3 4 5 6 7 *8
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2019 Bhutan
Details – Starting a Business in Bhutan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Conduct a company name search 1 to 3 days BTN 1,000
Agency : Company Registry Division - Ministry of Economic Affairs
The entrepreneurs submit a company name search application to verify the
uniqueness of the desired company name. The rules for permitted company
name is defined by the Chapter 5 of the Companies Act, 2016. No company shall
be incorporated with a name which, in the opinion of the Registrar, is undesirable
or is identical with, or too nearly resembles the name by which a company in
existence has been previously registered.
Preliminary search of availability of the name can be done online at
http://www.cra.gov.bt/searchCompanyName . There is an option to conduct
name search and approval online, however, the majority of promoters prefer to
do this in person.
Name search is free of charge, and after approval it is possible to reserve the
name at a fee of Nu. 1,000.
2 Obtain a Security Clearance Certificate (SCC) from the Royal Bhutan Police 1 day (simultaneous no charge
Agency : Royal Bhutan Police with previous
In June 2011, The Ministry of Home and Cultural Affairs launched the Security
procedure)
Clearance Service: an online system to issue Security Clearance Certificates
(SCC). The system was developed in coordination with the Department of
Information Technology and Telecom at the Ministry of Industry and Commerce
in response to the directives issued by the Bhutan Cabinet on March 27, 2009.
The security clearance certificate is valid for one year. It is possible to request
SCC online at www.sec.rbp.bt.
The SCC clearance given by Ministry of home is now integrated with online
single window registry system and verification of a persons SCC status can be
availed simultaneously with company registration through online portal of Office
of the Registrar (www.cra.gov.bt).
3 Submit project proposal to the Industrial Department Division (IDD) of the 4 days BTN 600
Ministry of Economic Affairs
Agency : Industrial Department Division (IDD) of the Ministry of Economic Affairs
An application form along with the project proposal is submitted to the Industrial
Department Division (IDD) of the Ministry of Economic Affairs.
In the case of small and cottage-scale companies with startup capital of up to
BTN 10 million, the Regional Trade & Industry Office of the Department of
Cottage and Small Industries reviews the project proposal. The project proposal
approval is required to verify that the proposed industrial project is in line with
industrial development plans of the country, and for issuance of the industrial
license. The Doing Business case-study does not need location or environmental
clearance.
Online services of the Department of Cottage and Small Industry were introduced
at https://www.citizenservices.gov.bt/moea-services. After submitting the project
proposal online, it may be requested to follow-up in person in order to submit
additional documents or provide further clarifications.
4 Register at the Office of the Registrar 2 days BTN 1,500
Agency : Regulatory Authority for Companies - Ministry of Economic Affairs
Company registration is subject to the Companies Act, 2006. Upon applying for
registration, the entrepreneur must present his/her original citizenship identity
card and submit the following documents to the Regulatory Authority for
Companies:
1. Articles of Incorporation
2. Company name clearance form
3. Consent to act as Directors of the company form
4. Declaration of compliance form signed by the company directors
5. Sectoral clearance from the concerned sectors (if applicable)
6. Name and Address of the first Chief Executive Officer of the company
7. Security Clearance Certificates of company directors
The company receives its certificate of incorporation. Once the documents are
processed, the Registrar of Companies issues the certificate of registration. The
registered company may choose to publish a notice in the Kuensel weekly
newspaper announcing its registration.
Registration fees are as follows:
- For an authorized share capital up to BTN 1 million: BTN 1,000
- For an authorized share capital between BTN 1 million and BTN 2 million: BTN
1,500
- For authorized share capital above BTN 2 million: BTN 2,000
Page 8Doing Business 2019 Bhutan
5 Obtain a business license from the Regional Trade and Industry Office of 1 to 2 days BTN 3,100
the Ministry of Economic Affairs
Agency : Regional Trade and Industry Office
To apply for the license, the following documents must be submitted:
1- Application Form for Industrial License (Form III)
2- Citizenship ID Card
3- Sector Clearance (depending on activity)
4- Location Clearance obtained from the Thimphu City Corporation (Dzongkhag
or Thromde)
5- Valid Security Clearance Certificate
6- Two recent passport size photographs
7- Project Approval from the Department of Cottage & Small Industry for cottage
and small industries and from the Department of industry for medium and large
scale industries.
License fees are as follows:
- For cottage scale industries: BTN 1,600
- For small scale industries: BTN 3,100
- For medium scale industries: BTN 6,100
- For large scale industries: BTN 12,100
Cottage industries are those industries with an investment of less than Nu.1
million and engaging up to 4 people. Small industries are undertakings engaging
between 5 and 19 employees with investment from Nu.1 to Nu.10 million.
Medium industries employ between 20 to 99 people with investment from Nu.10
to Nu.100 million and large industries are undertakings with an investment of
more than Nu.100 million employing 100 or more employees. Where there is a
conflict, investment will take precedence over employment in defining the scale
of business.
Since July 1, 2005, applications forms for trade and industrial licenses can be
downloaded from the Ministry of Trade and Industry’s website
(www.moea.gov.bt). Photocopies of application forms are accepted.
Online licensing portal of the government was launched at
https://www.citizenservices.gov.bt/moea-services. However, the majority of
entrepreneurs prefer to perform the procedure in person.
6 Register for taxes and obtain the Business Identifier Code (BIC) Number 1 day no charge
Agency : Department of Revenue and Customs, Ministry of Finance
Every company must register for corporate income tax. A Business Identification
Code (BIC, also called TPN) is then assigned to the company. This BIC number
must be presented to participate in public tenders and works.
On January 1, 2015, the Department of Revenue and Customs has launched an
online platform RAMIS (available at drc.gov.bt), which can be used to register for
income tax and obtain BIC. However, the majority of entrepreneurs prefers to
perform registration in person.
7 Make a company seal 1 day BTN 100 to BTN
Agency : Seal maker 1,200
According to Section 225 of the Companies Act, 2016, companies may have a
common seal. The company seal is required to open a bank account.
8 Open a bank account 1 day (simultaneous no charge
Agency : Commercial Bank with previous
Majority of companies open the bank account as soon as they register. Company
procedure)
shall submit the bank account details to the Department of Revenue and
Customs.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2019 Bhutan
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all
required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with
Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in May 2018. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
• Submitting all relevant documents and obtaining The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
largest business city. For 11 economies the data are also collected for the second
• Submitting all required notifications and receiving largest business city.
all necessary inspections
- Is 100% domestically and privately owned; has five owners, none of whom is a
• Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage the local association of architects or engineers. BuildCo is not assumed to have any
other employees who are technical or licensed experts, such as geological or
• Registering and selling the warehouse after its topographical experts.
completion
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure upon its completion.
(calendar days)
The warehouse:
• Does not include time spent gathering
- Will be used for general storage activities, such as storage of books or stationery.
information
- Will have two stories, both above ground, with a total constructed area of
• Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately
online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
• Procedure is considered completed once final warehouse is valued at 50 times income per capita.
document is received - Will have complete architectural and technical plans prepared by a licensed
architect. If preparation of the plans requires such steps as obtaining further
• No prior contact with officials documentation or getting prior approvals from external agencies, these are counted
as procedures.
Cost required to complete each procedure (% of
- Will take 30 weeks to construct (excluding all delays due to administrative and
income per capita)
regulatory requirements).
• Official costs only, no bribes
The water and sewerage connections:
Building quality control index (0-15)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
• Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
no sewerage infrastructure, a septic tank in the smallest size available will be
• Quality control before construction (0-1)
installed or built.
• Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
• Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
• Liability and insurance regimes (0-2) gallons) a day.
• Professional certifications (0-4) - Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 10Doing Business 2019 Bhutan
Dealing with Construction Permits - Bhutan
Standardized Warehouse
Estimated value of warehouse BTN 9,778,001.10
City Covered Thimphu
Indicator Bhutan South Asia OECD high Best Regulatory
income Performance
Procedures (number) 21 15.2 12.7 None in 2017/18
Time (days) 150 165.5 153.1 None in 2017/18
Cost (% of warehouse value) 1.0 13.2 1.5 None in 2017/18
Building quality control index (0-15) 12.0 9.2 11.5 15.0 (3 Economies)
Figure – Dealing with Construction Permits in Bhutan and comparator economies – Ranking and Score
DB 2019 Dealing with Construction Permits Score
0 100
73.81: India (Rank: 52)
73.00: Maldives (Rank: 62)
71.86: Thailand (Rank: 67)
68.85: Bhutan (Rank: 88)
65.16: China (Rank: 121)
61.85: Regional Average (South Asia)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with
construction permits. These scores are the simple average of the scores for each of the component indicators.
Figure – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost
Time (days) Cost (% of warehouse value)
1
140
Cost (% of warehouse value)
120 0.8
100
Time (days)
0.6
80
60 0.4
40
0.2
20
0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 * 20 21
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 11Doing Business 2019 Bhutan
Figure – Dealing with Construction Permits in Bhutan and comparator economies – Measure of Quality
15 14.0
12.0
11.1 11.0
Index score
10 9.2
7.0
5
0
Bhutan China India Maldives Thailand South Asia
Details – Dealing with Construction Permits in Bhutan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Request and obtain an official site plan 5 days BTN 100
Agency : Thimphu Thromde
After a fee is paid, the official site plan is obtained from the survey section of the
City Corporation.
2 Request and obtain building permit 90 days BTN 86,022
Agency : Thimphu Thromde (Architecture Section)
During stage 1 of the approval process, the company must submit a duly
completed form to the architecture section of the Thimphu Thromde (City
Corporation), along with the following:
i. Latest Plot/Land Ownership Certificate
ii. Latest/re-validated official site plan issued by Urban Planning Division of
Thimphu Thromde
ii. Certificate of the Architect and design engineers and Construction
Development Board (CDB) registration number of the design Architect
iv. Three sets of Architectural drawings (A3 size) drawn to a suitable scale
v. Three sets of Structural drawings (A3 size)
vi. Three sets of Electrical drawings (A3 size)
vii. Three sets of Sanitary/Sewerage drawings (A3 size)
viii. Three sets of Plumbing/Water supply drawings (A3 size)
ix. Three sets of Utility (Telephone/Internet) drawings (A3 size)
x. Three sets of Drainage drawings (A3 size)
During stage 2 the architecture section will undergo a planning check with the
structural, electrical, sewerage, and water supply sections. Although this is an
internal process carried out by the City Corporation, not the company, BuildCo
must follow up to ensure progress.
During stage 3, the Head of the Architecture Section receives the proposal with
recommendations and findings for final approval. As with stage 2, BuildCo must
follow up on the progress of this internal process.
The cost is the following:
• Amenities fee:
1. Residential and institutional building: BTN 30.00 per sq. m.
2. Commercial and industrial building: BTN 50.00 per sq. m.
• Scrutiny fee: BTN 3,000.00 or BTN 16.14 per sq. m. (the greater of).
3 Notify the Municipality of the beginning of construction 1 day no charge
Agency : Thimphu Thromde
BuildCo must pick up its construction permit. A preconstruction site inspection
must be requested in writing.
Upon starting construction, the company notifies the City Corporation in writing.
4 Receive pre-construction inspection 1 day no charge
Agency : Thimphu Thromde (Building Section)
Upon BuildCo’s request to the City Corporation’s building section, the building
inspector conducts a site inspection. Afterwards, routine inspections occur every
3 weeks. If the work is not conducted according to plan, the City Corporation
issues a notice to rectify the process. If the company does not comply with the
first notice, the utility company disconnects service. If the company does not
comply with the third notice, the structure will be demolished (in the presence of
a building inspector, engineer, architect, surveyor, and police personnel).
Page 12Doing Business 2019 Bhutan
5 Request water connection and inspection 1 day BTN 3,200
Agency : Thimphu Thromde
To obtain a water connection, BuildCo must submit an application to the building
section of the City Corporation and pay a connection fee of BTN 3,200.00 for a
1.5 inch pipe to the revenue section of the water company.
6 Receive inspection of water connection 1 day no charge
Agency : Thimphu Thromde (Building Section)
All connections must be verified in advance to check whether they comply with
water and sanitation rules. The wait time is about 7 -- 9 days.
7 Receive excavation work inspection 1 day no charge
Agency : Thimphu Thromde
Excavation work is inspected about 3 weeks after the previous inspection. Thus,
Buildco does not have to request an inspection. Moreover, BuildCo does not
need to stop work during inspection. However, it must provide the inspector with
transportation to the site.
8 Receive foundation work inspection 1 day no charge
Agency : Thimphu Thromde
Foundation work is inspected about 3 weeks after the previous inspection. Thus,
BuildCo does not have to request an inspection. Moreover, BuildCo does not
need to stop work during the inspection. However, it must provide the inspector
with transportation to the site.
9 Receive ground floor inspection 1 day no charge
Agency : Thimphu Thromde
The ground floor work is inspected about 3 weeks after the previous inspection.
Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does
not need to stop work during the inspection. However, it must provide the
inspector with transportation to the site.
10 Receive drainage inspection 1 day no charge
Agency : Thimphu Thromde
Drainage work is inspected about 3 weeks after the previous inspection. Thus,
BuildCo does not have to request an inspection. Moreover, BuildCo Company
does not need to stop work during the inspection. However, it must provide the
inspector with transportation to the site.
11 Receive first floor inspection 1 day no charge
Agency : Thimphu Thromde
The first floor work is inspected about 3 weeks after the previous inspection.
Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does
not need to stop work during the inspection. However, it must provide the
inspector with transportation to the site.
12 Receive second floor inspection 1 day no charge
Agency : Thimphu Thromde
The second floor work is inspected about 3 weeks after the previous inspection.
Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does
not need to stop work during the inspection. However, it must provide the
inspector with transportation to the site.
13 Receive sanitary inspection 1 day no charge
Agency : Thimphu Thromde
Sanitary conditions are inspected about 3 weeks after the previous inspection.
Thus, BuildCo does not have to request an inspection. Moreover, BuildCo does
not need to stop work during the inspection. However, it must provide the
inspector with transportation to the site.
14 Receive fire inspection 1 day no charge
Agency : Fire Department
Fire conditions are inspected about 3 weeks after the previous inspection. Thus,
BuildCo does not have to request an inspection. Moreover, BuildCo does not
need to stop work during the inspection. However, it must provide the inspector
with transportation to the site.
15 Receive structure inspection 1 day no charge
Agency : Thimphu Thromde
16 Receive inspection of the building surroundings 1 day no charge
Agency : Thimphu Thromde
17 Notify building controller of building completion 1 day no charge
Agency : Thimphu Thromde (Building Section)
A written confirmation, stating that construction is completed, is issued to the
building controller.
Page 13Doing Business 2019 Bhutan
18 Receive final inspection 1 day no charge
Agency : Thimphu Thromde
When the construction (including utility connections) is completed, BuildCo must
notify the City Corporation. Subsequently, the site will be inspected by a team
(architect, engineer, surveyor, the Corporation’s building inspector, and
representatives of electrical, plumbing, and sanitation agencies). The
environmental commission and the telephone company are also informed and
asked to join the team, if necessary. If the team deems that the construction has
been completed according to the agreed standard and plans, it recommends the
issuance of an occupancy certificate. Otherwise, they ask BuildCo to remedy the
deficiencies.
19 Connect to sewage services 25 days BTN 3,000
Agency : Thimphu Thromde
To obtain sewage services, BuildCo submits an application to the head of
sewerage section of Thimpu Thromde through architect cell for new sewerage
connection with a copy of the plan and a connection fee of BTN 3,000. The
application should include the sewerage layout drawings, and ensure that the
distance between the proposed sewer connection and the nearest municipal
sewer do not exceed 70 m (as per the ‘water and sanitation rules, 1995). The
technical feasibility for sewer connection shall be carried out at site.
The application should also include a drawing of the lay out and the alignment of
the sewer. The final connection to the municipal manhole shall be verified and
approved by TCC.
Connect to water services 21 days BTN 3,200
20 Agency : Thimpu Thromde
In order to obtain a new water connection, BuildCo must submit a duly filled
application form to the water supply section. The forms are available at the
Engineering Division and Water Complaint Offices or can be downloaded from
the TCC website. The Building Section will conduct verification check for the
feasibility of the connection, and water Meter will be issued after the approval
from Engineering Division and the payments for connection. BuildCo carries out
necessary works for connection, and TCC will connect the private line to the
municipal main.
v.The property owner shall also be responsible for the maintenance of the water
meter after the installation.
vi.The Meter Chamber must be built according to the Standard Water Meter
Chamber Drawing which can be collected from the office or can be downloaded
from the website. Meter shall be installed only when the meter chamber is ready.
21 Request and obtain occupancy certificate 14 days no charge
Agency : Thimphu Thromde
Takes place simultaneously with previous procedure.
Page 14Doing Business 2019 Bhutan
Details – Dealing with Construction Permits in Bhutan – Measure of Quality
Answer Score
Building quality control index (0-15) 12.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0
Free of charge.
Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid;
Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer.
Quality control during construction index (0-3) 2.0
What types of inspections (if any) are required by law to be carried out during construction? Inspections at 1.0
(0-2) various phases.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 0.0
Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the
law.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance .
Professional certifications index (0-4) 4.0
What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of
experience;
University degree
in architecture or
engineering;
Being a
registered
architect or
engineer.
Page 15Doing Business 2019 Bhutan
What are the qualification requirements for the professional who supervises the construction Minimum number 2.0
on the ground? (0-2) of years of
experience;
University degree
in engineering,
construction or
construction
management;
Being a
registered
architect or
engineer.
Page 16Doing Business 2019 Bhutan
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly
constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of
tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2018. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) warehouse, the electricity connection and the monthly consumption are used.
• Submitting all relevant documents and obtaining The warehouse:
all necessary clearances and permits
- Is owned by a local entrepreneur and is used for storage of goods.
• Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are
receiving all necessary inspections
also collected for the second largest business city.
• Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an
purchasing material for these works area with no physical constraints. For example, the property is not near a railway.
- Is a new construction and is being connected to electricity for the first time.
• Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters
obtaining final supply
(14,000 square feet). The plot of land on which it is built is 929 square meters
Time required to complete each procedure (10,000 square feet).
(calendar days)
The electricity connection:
• Is at least 1 calendar day
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed
• Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1
kilowatt (kW).
• Does not include time spent gathering
information - Has a length of 150 meters. The connection is to either the low- or medium-voltage
distribution network and is either overhead or underground, whichever is more
• Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve
follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all
carried out on public land. There is no crossing of other owners’ private property
Cost required to complete each procedure (% of
because the warehouse has access to a road.
income per capita)
- Does not require work to install the internal wiring of the warehouse. This has
• Official costs only, no bribes already been completed up to and including the customer’s service panel or
switchboard and the meter base.
• Value added tax excluded
The reliability of supply and transparency of The monthly consumption:
tariffs index (0-8)
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00
• Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that
there are no electricity cuts (assumed for simplicity reasons) and the monthly energy
• Tools to monitor power outages (0–1) consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
• Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest
supplier.
• Regulatory monitoring of utilities’ performance
(0–1) - Tariffs effective in January of the current year are used for calculation of the price of
electricity for the warehouse. Although January has 31 days, for calculation
• Financial deterrents limiting outages (0–1) purposes only 30 days are used.
• Transparency and accessibility of tariffs (0–1)
Price of electricity (cents per kilowatt-hour)*
• Price based on monthly bill for commercial
warehouse in case study
*Note: Doing Business measures the price of
electricity, but it is not included in the ease of doing
business score nor the ranking on the ease of
getting electricity.
Page 17Doing Business 2019 Bhutan
Getting Electricity - Bhutan
Standardized Connection
Price of electricity (US cents per kWh) 5.4
Name of utility Bhutan Power Corporation Ltd
City Covered Thimphu
Indicator Bhutan South Asia OECD high Best Regulatory
income Performance
Procedures (number) 4 5.4 4.5 3 (25 Economies)
Time (days) 61 98.3 77.2 18 (3 Economies)
Cost (% of income per capita) 412.3 1054.7 64.2 0.0 (3 Economies)
Reliability of supply and transparency of tariff 4 2.1 7.5 8.0 (27 Economies)
index (0-8)
Figure – Getting Electricity in Bhutan and comparator economies – Ranking and Score
DB 2019 Getting Electricity Score
0 100
98.57: Thailand (Rank: 6)
92.01: China (Rank: 14)
89.15: India (Rank: 24)
77.39: Bhutan (Rank: 73)
59.36: Regional Average (South Asia)
55.60: Maldives (Rank: 145)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are
the simple average of the scores for all the component indicators except the price of electricity.
Page 18Doing Business 2019 Bhutan
Figure – Getting Electricity in Bhutan – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
60 450
400
Cost (% of income per capita)
50
350
40 300
Time (days)
250
30
200
20 150
100
10
50
0 0
1 2 3 4
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Bhutan and comparator economies – Measure of Quality
8
8
7 6.5
6
6
Index score
5
4
4
3
2.1
2
1
0
0
Bhutan China India Maldives Thailand South Asia
Page 19Doing Business 2019 Bhutan
Details – Getting Electricity in Bhutan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to Bhutan Power Corporation and await site inspection 5 calendar days BTN 0
Agency : Bhutan Power Corporation
The customer submits an application, in person, along with the building drawings
to Bhutan Power Corporation and await site the site inspection. There is no
charge for the application and no documents has to be notarized.
2 Receive site inspection and await estimate 7 calendar days BTN 0
Agency : Bhutan Power Corporation
The utility will conducts an external site inspection and a cost estimate will be
provided to the customer.
3 Purchase equipment and carry out external works 42 calendar days BTN 801,290.78
Agency : Electrical contractor
The cost estimate provided to the customer also includes the cost of the required
materials such as a250 KVA substation, rabbit conductor, cables, poles and line
extension. The customer has a choice of getting external connection works done
by either the utility or by a private contractor. In general, customers choose to
have the external done by the private contractor as it can be done faster. All
materials, except the distribution transformer are purchased from the utility as
they have materials of the correct specification. The distribution transformer
needs to be imported, usually from India.
4 Receive internal wiring inspection, transformer testing, meter installation 7 calendar days BTN 5,000
and electricity flow
Agency : Bhutan Power Corporation
The utility inspects the internal wiring, conducts testing of the transformer and
installs the meter. The customer pays the meter deposit charge and electricity is
turned-on by the utility.
Takes place simultaneously with previous procedure.
Page 20Doing Business 2019 Bhutan
Details – Getting Electricity in Bhutan – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 4
Total duration and frequency of outages per customer a year (0-3) 1
System average interruption duration index (SAIDI) 5.4
System average interruption frequency index (SAIFI) 6.6
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0
Mechanisms for monitoring outages (0-1) 0
Does the distribution utility use automated tools to monitor outages? No
Mechanisms for restoring service (0-1) 0
Does the distribution utility use automated tools to restore service? No
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes
supply?
Financial deterrents aimed at limiting outages (0-1) 1
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages Yes
exceed a certain cap?
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online http://www.bpc.bt/?
s=tariff
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff
index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 21Doing Business 2019 Bhutan
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to
purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land
administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in May 2018. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
• Preregistration procedures (for example, The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
- Are located in the periurban area of the economy’s largest business city. For 11
• Registration procedures in the economy's largest economies the data are also collected for the second largest business city.
business city.
- Are 100% domestically and privately owned.
• Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals.
title with municipality) - Perform general commercial activities.
Time required to complete each procedure The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
• Does not include time spent gathering - Is fully owned by the seller.
information - Has no mortgages attached and has been under the same ownership for the past
10 years.
• Each procedure starts on a separate day -
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
though procedures that can be fully completed
online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required.
- Consists of land and a building. The land area is 557.4 square meters (6,000
• Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
document is received located on the land. The warehouse is 10 years old, is in good condition, has no
• No prior contact with officials heating system and complies with all safety standards, building codes and legal
requirements. The property, consisting of land and building, will be transferred in its
Cost required to complete each procedure (% of entirety.
property value) - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
• Official costs only (such as administrative fees, any kind.
duties and taxes).
- Will not be used for special purposes, and no special permits, such as for
• Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural
payments are excluded activities, are required.
- Has no occupants, and no other party holds a legal interest in it.
Quality of land administration index (0-30)
• Reliability of infrastructure index (0-8)
• Transparency of information index (0–6)
• Geographic coverage index (0–8)
• Land dispute resolution index (0–8)
• Equal access to property rights index (-2–0)
Page 22Doing Business 2019 Bhutan
Registering Property - Bhutan
Indicator Bhutan South Asia OECD high Best Regulatory
income Performance
Procedures (number) 3 6.8 4.7 1 (4 Economies)
Time (days) 77 114.1 20.1 1 (New Zealand)
Cost (% of property value) 5.0 6.9 4.2 0.0 (Saudi Arabia)
Quality of the land administration index (0-30) 23.5 8.8 23.0 None in 2017/18
Figure – Registering Property in Bhutan and comparator economies – Ranking and Score
DB 2019 Registering Property Score
0 100
80.80: China (Rank: 27)
72.99: Bhutan (Rank: 54)
69.47: Thailand (Rank: 66)
46.91: Regional Average (South Asia)
43.55: India (Rank: 166)
39.97: Maldives (Rank: 175)
Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These
scores are the simple average of the scores for each of the component indicators.
Figure – Registering Property in Bhutan – Procedure, Time and Cost
Time (days) Cost (% of property value)
6
70
5
Cost (% of property value)
60
50 4
Time (days)
40 3
30
2
20
1
10
0 0
1 2 3
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.
Page 23Doing Business 2019 Bhutan
Figure – Registering Property in Bhutan and comparator economies – Measure of Quality
30
25 23.5 23.7
Index score 19.0
20
15
10 8.7 8.5 8.8
5
0
Bhutan China India Maldives Thailand South Asia
Details – Registering Property in Bhutan – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Complete and submit the Land Transfer Form to the Thimphu District 75 days no charge
Municipality (TDM)
Agency : Thimmphu Thromde
1. A complete set of Land Transfer Form is submitted to the Thimphu Thromdey
(Thimphu Municipality Office), which issues PIN (Personal Identification
Number).
2. As per Section 161 of the Land Act 2007, the Thimphu Thromdey shall post a
notice of the transaction for public viewing for 30 days.
3. If no objection is raised, the Forms are validated and submitted to National
Land Commission Secretariat within 7 Days after completion of the public
viewing (Section 164 of the Land Act 2007).
4. After receipt of the forms by the National Land Commission Secretariat,
ownership changes are effected in the land registration certificate. The certificate
is then sent back to Thimphu Thromde.
5. The Thromde then informs the buyer to pay the transfer tax after which the
certificate is issued to the new landowner.
Since October 2017, the National Land Commission has been working in the
development of a new eCitizen Portal (citizen.nlcs.gov.bt) with the aim to deliver
convenient and efficient services to the public during the process of land and
property transactions.
Nevertheless, up to date, the majority of citizens prefer to go personally to the
Thimphu Thromde, and don't use in practice the online portal due to a lack of
reliability and efficient perceived regarding the online procedure.
For submitting the online transfer Form, a new registration fee of BTN 1,000 is
charged.
2 Buyer pays the transfer tax at the Thimphu Thromde Revenue Section 1 day BTN 488,900.05; (5%
Agency : Thimmphu Thromde of property value)
The buyer pays the transfer tax at the Thimphu Thromde Revenue Section and
collects the Revenue Certificate, as proof of payment (separate building). The
Revenue Section is closed on Thursday and Friday. From Monday, October 18,
2010 the Revenue Section set up an office in the same building as the Land
Records Section and company can pay in the same building. The company will
pick up an already ready Revenue Certificate upon payment. The company must
pay transfer tax with the Thimphu Thromde within 2 months otherwise the buyer
will be asked to pay charges, i.e 5% of the land tax applicable multiplied by the
number of days from the two months payment has to be done with the TT.
3 Buyer collects Ownership Certificate and Revenue Certificate at the 1 day BTN 200
Thimphu Thromde Land Records Section
Agency : Thimmphu Thromde
The ownership certificate guarantees all legal rights to the owner. The certificate
is supported by a site plan/map and is issued upon the landowner's request.
Takes place simultaneously with previous procedure.
Page 24Doing Business 2019 Bhutan
Details – Registering Property in Bhutan – Measure of Quality
Answer Score
Reliability of infrastructure index (0-8) 7.0
What is the institution in charge of immovable property registration? Thimphu
Thromde
In what format are the majority of title or deed records kept in the largest business city—in a Computer/Fully 2.0
paper format or in a computerized format (scanned or fully digital)? digital
Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions No 0.0
and the like)?
Institution in charge of the plans showing legal boundaries in the largest business city: Thimphu
Thromdey &
National land
commission
In what format are the majority of maps of land plots kept in the largest business city—in a Computer/Fully 2.0
paper format or in a computerized format (scanned or fully digital)? digital
Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0
cadastral information (geographic information system)?
Is the information recorded by the immovable property registration agency and the cadastral Different 1.0
or mapping agency kept in a single database, in different but linked databases or in separate databases but
databases? linked
Do the immovable property registration agency and cadastral or mapping agency use the Yes 1.0
same identification number for properties?
Transparency of information index (0–6) 2.5
Who is able to obtain information on land ownership at the agency in charge of immovable Records are not 0.0
property registration in the largest business city? publicly available
Is the list of documents that are required to complete any type of property transaction made Yes, online 0.5
publicly available–and if so, how?
Link for online access: citizen.nlcs.gov.bt
Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5
immovable property registration in the largest business city made publicly available–and if
so, how?
Link for online access: http://www.thimp
hucity.bt/index.ph
p/services/survey
/
Does the agency in charge of immovable property registration commit to delivering a legally Yes, online 0.5
binding document that proves property ownership within a specific time frame–and if so, how
does it communicate the service standard?
Link for online access: http://www.nlcs.g
ov.bt/wp-
content/uploads/
2016/09/The-
Land-Act-of-
Kingdom-of-
Bhutan-2007-
English.pdf
Is there a specific and separate mechanism for filing complaints about a problem that No 0.0
occurred at the agency in charge of immovable property registration?
Contact information:
Are there publicly available official statistics tracking the number of transactions at the Yes 0.5
immovable property registration agency?
Number of property transfers in the largest business city in 2017:
Who is able to consult maps of land plots in the largest business city? Records are not 0.0
publicly available
Page 25You can also read
