Bhutan Economy Profile - Doing Business 2019

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Bhutan Economy Profile - Doing Business 2019
Doing Business 2019   Bhutan

                               Economy Profile

                               Bhutan

                                                 Page 1
Bhutan Economy Profile - Doing Business 2019
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 2
Doing 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)

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Doing 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 4
Doing 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 5
Doing 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 6
Doing 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 7
Doing 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 8
Doing 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 9
Doing 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 10
Doing 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 11
Doing 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 12
Doing 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 13
Doing 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 14
Doing 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 15
Doing 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 16
Doing 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 17
Doing 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 18
Doing 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 19
Doing 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 20
Doing 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 21
Doing 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 22
Doing 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 23
Doing 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 24
Doing 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

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