Doing Business 2018 Georgia
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Doing Business 2018 Georgia
Page 1
Doing Business 2018 Georgia
Economy Profile of Georgia
Doing Business 2018 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, 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 and total tax rate for a firm to comply with all tax regulations as well as post-
filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2018 Georgia
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 distance to frontier 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.
The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance
observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is
reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business
ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to
two decimals.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2018 Georgia
Ease of Doing Business in DB 2018 Rank
Region Europe & Central Asia
190 1
Georgia
Income Category Lower middle income 9
DB 2018 Distance to Frontier (DTF)
Population 3,719,300
0 100
City Covered Tbilisi 82.04
DB 2018 Distance to Frontier (DTF)
0 100
82.04: Georgia (Rank: 9)
75.06: Belarus (Rank: 38)
72.51: Armenia (Rank: 47)
71.91: Bulgaria (Rank: 50)
71.33: Regional Average (Europe & Central Asia)
70.19: Azerbaijan (Rank: 57)
Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the
indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the
lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Georgia
4 4 2
1 7
12
22
29 30
28
57
55 62
82
Rank
109
136
163
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
Distance to Frontier (DTF) on Doing Business topics - Georgia
100 97.84
92.85
85.00 87.14
84.32 82.43
81.67
80 77.57 75.97
60 55.59
DTF
40
20
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2018 Georgia
Starting a Business
This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited
liability company to start up and formally operate in 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 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 distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators.
The most recent round of data collection for the project was completed in June 2017. 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) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
â—
Submitting all relevant documents and obtaining
all necessary clearances, licenses, permits and
The business:
certificates
â—
Submitting all required notifications and receiving - Is a limited liability company (or its legal equivalent). If there is more than one type
all necessary inspections of limited liability company in the economy, the most common among domestic firms
is chosen. Information on the most common form is obtained from incorporation
â—
Obtaining utility connections for water and
lawyers or the statistical office.
sewerage
- Operates in the economy’s largest business city and the entire office space is
â—
Registering and selling the warehouse after its approximately 929 square meters (10,000 square feet). For 11 economies the data
completion are also collected for the second largest business city.
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
Time required to complete each procedure
and has a start-up capital of 10 times income per capita and has a turnover of at
(calendar days)
least 100 times income per capita.
â—
Does not include time spent gathering information - Performs general industrial or commercial activities, such as the production or sale
â—
Each procedure starts on a separate day (2 of goods or services to the public. The business does not perform foreign trade
procedures cannot start on the same day) activities and does not handle products subject to a special tax regime, for example,
liquor or tobacco. It does not use heavily polluting production processes.
â—
Procedures fully completed online are recorded
- Leases the commercial plant or offices and is not a proprietor of real estate and the
as ½ day
amount of the annual lease for the office space is equivalent to 1 times income per
â—
Procedure is considered completed once final capita.
document is received - Does not qualify for investment incentives or any special benefits.
â—
No prior contact with officials - Has at least 10 and up to 50 employees one month after the commencement of
operations, all of whom are domestic nationals.
Cost required to complete each procedure (% of - Has a company deed 10 pages long.
income per capita)
The owners:
â—
Official costs only, no bribes
â—
No professional fees unless services required by - Have reached the legal age of majority. If there is no legal age of majority, they are
law or commonly used in practice assumed to be 30 years old.
- Are sane, competent, in good health and have no criminal record.
Paid-in minimum capital (% of income per capita - Are married and the marriage is monogamous and registered with the authorities.
â—
Funds deposited in a bank or with third party - Where the answer differs according to the legal system applicable to the woman or
before registration or up to 3 months after man in question (as may be the case in economies where there is legal plurality), the
incorporation answer used will be the one that applies to the majority of the population.
Page 5Doing Business 2018 Georgia
Starting a Business - Georgia
Standardized Company
Legal form Limited Liability Company
Paid-in minimum capital requirement GEL 0
City Covered Tbilisi
Indicator Georgia Europe & OECD high Overall Best
Central Asia income Performer
Procedure – Men (number) 2 5.2 4.9 1.00 (New Zealand)
Time – Men (days) 2 10.1 8.5 0.50 (New Zealand)
Cost – Men (% of income per capita) 2.5 4.4 3.1 0.00 (United Kingdom)
Procedure – Women (number) 2 5.2 4.9 1.00 (New Zealand)
Time – Women (days) 2 10.1 8.5 0.50 (New Zealand)
Cost – Women (% of income per capita) 2.5 4.4 3.1 0.00 (United Kingdom)
Paid-in min. capital (% of income per capita) 0.0 3.4 8.7 0.00 (113 Economies)
Figure – Starting a Business in Georgia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
97.84: Georgia (Rank: 4)
94.47: Armenia (Rank: 15)
94.36: Azerbaijan (Rank: 18)
92.91: Belarus (Rank: 30)
90.62: Regional Average (Europe & Central Asia)
85.37: Bulgaria (Rank: 95)
Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a
business. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 6Doing Business 2018 Georgia
Figure – Starting a Business in Georgia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
2 3
Cost (% of income per capita)
2.5
1.5
2
Time (days)
1 1.5
1
0.5
0.5
0 0
1 2
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2018 Georgia
Details – Starting a Business in Georgia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Pay registration fee, register the company with the Entrepreneurial Register 1 day GEL 100 (regular
and obtain an identification number and certificate of state and tax registration) or GEL
registration 200 (expedited
Agency : NAPR registration) + GEL 1
The following documents need to be submitted for LLC registration:
(bank charges) +
(a) Certified Application for Registration;
GEL 5 for certification
(b) Certified Memorandum of Association;
per document
(c) Certified consent of the owner of premises to use the address as legal address.
Payment of the registration fee can be done at the same place where the documents are
submitted. Alternatively, founders can provide the document evidencing the payment of
the registration fees.
The application must be signed by all founding partners of the company. The information
contained in the application may be included in the charter of the company or partners'
agreement (in this case no separate application shall be required). The application,
charter/partners agreement, and consent of the owner of premises need to be executed
before a public notary or at the registry (in that case, a certification fee applies). In
addition, though not specifically required by law, in accordance with the registration
instruction, the applicant must submit a document confirming lawful occupation of the
premises to be used as a legal address of the company (lease agreement) and the written
consent of the appointed director (manager) to serve on this position. A signature sample
may also be accepted instead of the said consent.
Submission of application for registration may be carried out by one of the founding
partners of the Company (in which case the documents must be preliminary certified by
notary), the appointed director or by a person appointed by the partner (or partners) by
virtue of a duly issued and certified power of attorney. In such cases as well, all
documents to be submitted to the registration agency must be preliminary certified by
notary.
According to the amendment on registration of a company NAPR requires companies to
provide e-mail and alternative address, which differs from company's legal address, in
order to simplify formal contact with the company (e.g.: for Revenue Service,
administrative agencies, Courts, creditors, etc.). This regulation is mandatory upon initial
registration of a company, as well as for registration of changes in constituent documents.
Georgian legislation provides for a possibility to open a bank account while registering
the company at NAPR.
2 Registration for VAT 1 day no charge
Agency : Revenue Service under Ministry of Finance of Georgia
According to Article 157 of the Tax Code of Georgia, “A person/entity, which carries out
an economic activity and the total amount of VAT taxable transactions carried out in any
continuous period up to 12 calendar months exceeds GEL 100 000”, shall apply for a
VAT registration to Revenue Service under Ministry of Finance of Georgia. A company
can also perform voluntary registration.
In both cases, the company representative makes an application with the request to
register the company as a VAT taxpayer. The application is made at the Revenue Service
territorial service center. The applicant is considered as a VAT taxpayer from the moment
of a such request. VAT taxpayer number in Georgia is the same as the Identification
Number of the company, which is obtained while registering the company with the
NAPR.
Takes place simultaneously with previous procedure.
Page 8Doing Business 2018 Georgia
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 June 2017. 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.
â—
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
â—
Submitting all required notifications and receiving largest business city. For 11 economies the data are also collected for the second
all necessary inspections largest business city.
- Is 100% domestically and privately owned; has five owners, none of whom is a
â—
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
â—
Registering and selling the warehouse after its other employees who are technical or licensed experts, such as geological or
completion topographical experts.
- 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)
â—
Does not include time spent gathering information The warehouse:
â—
Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or stationery.
though procedures that can be fully completed - Will have two stories, both above ground, with a total constructed area of
online are an exception to this rule approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
â—
Procedure is considered completed once final meters (9 feet, 10 inches) high and will be located on a land plot of approximately
document is received 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
warehouse is valued at 50 times income per capita.
â—
No prior contact with officials
- Will have complete architectural and technical plans prepared by a licensed
Cost required to complete each procedure (% of architect. If preparation of the plans requires such steps as obtaining further
income per capita) documentation or getting prior approvals from external agencies, these are counted
as procedures.
â—
Official costs only, no bribes
- Will take 30 weeks to construct (excluding all delays due to administrative and
regulatory requirements).
Building quality control index (0-15)
â—
Sum of the scores of six component indices: The water and sewerage connections:
â—
Quality of building regulations (0-2) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â—
Quality control before construction (0-1) 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
â—
Quality control during construction (0-3)
installed or built.
â—
Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
â—
Liability and insurance regimes (0-2) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â—
Professional certifications (0-4) 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
gallons) a day.
- 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 9Doing Business 2018 Georgia
Dealing with Construction Permits - Georgia
Standardized Company
Estimated value of warehouse GEL 431,463.90
City Covered Tbilisi
Indicator Georgia Europe & OECD high Overall Best
Central Asia income Performer
Procedures (number) 11 16.0 12.5 7.00 (Denmark)
Time (days) 63 168.3 154.6 27.5 (Korea, Rep.)
Cost (% of warehouse value) 0.3 4.0 1.6 0.10 (5 Economies)
Building quality control index (0-15) 7.0 11.4 11.4 15.00 (3 Economies)
Figure – Dealing with Construction Permits in Georgia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
78.34: Belarus (Rank: 22)
77.57: Georgia (Rank: 29)
73.35: Bulgaria (Rank: 51)
68.09: Regional Average (Europe & Central Asia)
67.99: Armenia (Rank: 89)
54.90: Azerbaijan (Rank: 161)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for
dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component
indicators.
Figure – Dealing with Construction Permits in Georgia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
0.18
60
0.16
Cost (% of income per capita)
50 0.14
0.12
40
Time (days)
0.1
30
0.08
20 0.06
0.04
10
0.02
0 0
1 *2 3 4 5 6 7 8 9 10 11
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 10Doing Business 2018 Georgia
Figure – Dealing with Construction Permits in Georgia and comparator economies – Measure of Quality
15
13.0 13.0
12.0
11.4
Index score
10
8.0
7.0
5
0
Georgia Armenia Azerbaijan Belarus Bulgaria Europe & Central Asia
Details – Dealing with Construction Permits in Georgia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain topographic study of the land plot 4 days GEL 700
Agency : Private licensed company
A topographic study of the land plot is obtained by BuildCo prior to developing the
architectural plans of the warehouse.
2 Obtain technical conditions for water and sewage 3 days no charge
Agency : Georgian Water and Power
BuildCo obtains technical conditions for water and sewage connection in order to design
the project. Technical conditions are not requested at the time of requesting a building
permit, but they are an essential component of the project design phase.
3 Request and obtain terms of construction from Tbilisi Architecture at the 5 days no charge
Tbilisi Hall
Agency : Tbilisi Architecture at the Tbilisi Hall
The applicant requests terms of construction from the Tbilisi City Hall, which acts as
preliminary permission to build on the land plot and to design the project. Within 5 days
of when the application is submitted Tbilisi Hall provides general instructions of what
type of building the applicant may construct, how much of the land the project may
occupy on the land plot, and how the landscape is to be utilized. This information is
needed in order to complete the architectural design of the project.
4 Request and obtain design approval from Tbilisi Architecture at the Tbilisi 15 days no charge
Hall
Agency : Tbilisi Architecture at the Tbilisi Hall
Once the architectural design is complete, based on the terms of construction provided,
the applicant submits a request for approval to the Tbilisi Architecture at Tbilisi Hall.
City Hall then has 15 days to grant its approval. When this approval is obtained, BuildCo
may submit all the documents to obtain a building permit.
5 Request and obtain building permit from Tbilisi Architecture 10 days GEL 650
Agency : Tbilisi Architecture
The cost is determined by the project value. According to Tbilisi Government Resolution
No 2-21, as of February 28, 2008, the fee has been increased to GEL 1.00 per sq. m. and
only the ground floor space is counted. Thus, the breakdown in the case considered here
is 1300.6/2 x GEL 1.00 = GEL 650.30.
According to GOG Resolution No. 57 as of March 24 2009, construction projects are
classified into risk-based categories. Depending on the complexity of each category,
different types of procedures are to be followed by applicants. The first category is the
lowest risk, and the fifth is the most complex one. The Doing Business case study
warehouse falls under category III, which does not require project expertise and entails a
simplified process of approval that also excludes the need for approval of Architectural-
Construction Design.
6 Receive an inspection during construction from the Tbilisi Supervisory 1 day no charge
Service Agency
Agency : Tbilisi Supervisory Service Agency
The Tbilisi Supervisory Service Agency will conduct inspections twice a year or at its
discretion to check whether there are any deviation from the approved project.
7 Notify Tbilisi Supervisory Agency of the completion of construction works 1 day no charge
Agency : Tbilisi Supervisory Service Agency
When construction works are complete, BuildCo notifies Tbilisi Supervisory Service
Agency that the site is ready for a final inspection.
8 Receive final inspection from the Tbilisi Supervisory Service Agency 1 day no charge
Agency : Tbilisi Supervisory Service Agency
The Tbilisi Supervisory Service Agency will conduct a final inspection after the
completion of construction.
Page 11Doing Business 2018 Georgia
9 Request and receive connection to water and sewage service 10 days no charge
Agency : Georgian Water and Power
Having obtained the conditions from the water authority, BuildCo starts building the
water and sewage pipes to the main water pipeline. Once there is a connection to the
main pipeline, the inspector from private water company (Georgian Water and Power)
comes to confirm the connection and sign the protocol.
10 Request and obtain exploitation of building construction from Tbilisi 15 days no charge
Supervisory Service Agency
Agency : Tbilisi Supervisory Service Agency
After the completion of construction and prior to registration at the Public Registry,
BuildCo submits a request to the Department of Supervision of Tbilisi for a decision on
completion/occupancy permission. The list of documents required for the submission are
approved by the Resolution of Government of Georgia № 57 on March 24, 2009 "On the
Procedures and Conditions of Issuance of Construction Permits", Article 96, Paragraph 3.
11 Register the building with the National Public Registry 1 day GEL 150
Agency : National Public Registry
The company must submit the document obtained in the previous procedure and the
exploitation permit. The time line is faster under the Georgian Law on Registration of
Rights on Immovable Property (December 28, 2005).
Takes place simultaneously with previous procedure.
Page 12Doing Business 2018 Georgia
Details – Dealing with Construction Permits in Georgia – Measure of Quality
Answer Score
Building quality control index (0-15) 7.0
Quality of building regulations index (0-2) 1.0
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 0.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid.
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.
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 by in- 1.0
(0-2) house engineer;
Unscheduled
inspections.
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; Yes, in-
house engineer
submits report for
final inspection.
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 Owner or 0.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) investor.
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) 0.0
What are the qualification requirements for the professional responsible for verifying that the There are no 0.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) specific
requirements.
What are the qualification requirements for the professional who supervises the construction There are no 0.0
on the ground? (0-2) specific
requirements.
Page 13Doing Business 2018 Georgia
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 June 2017. 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) construction company, the warehouse project and the utility connections are used.
â—
Submitting all relevant documents and obtaining
The construction company (BuildCo):
all necessary clearances and permits
â—
Completing all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the economy’s
receiving all necessary inspections largest business city. For 11 economies the data are also collected for the second
largest business city.
â—
Obtaining external installation works and possibly
- Is 100% domestically and privately owned; has five owners, none of whom is a
purchasing material for these works
legal entity. Has a licensed architect and a licensed engineer, both registered with
â—
Concluding any necessary supply contract and the local association of architects or engineers. BuildCo is not assumed to have any
obtaining final supply other employees who are technical or licensed experts, such as geological or
topographical experts.
Time required to complete each procedure
- Owns the land on which the warehouse will be built and will sell the warehouse
(calendar days)
upon its completion.
â—
Is at least 1 calendar day
The warehouse:
â—
Each procedure starts on a separate day
â—
Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery.
- Will have two stories, both above ground, with a total constructed area of
â—
Reflects the time spent in practice, with little
approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
follow-up and no prior contact with officials
meters (9 feet, 10 inches) high and will be located on a land plot of approximately
Cost required to complete each procedure (% of 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
income per capita) warehouse is valued at 50 times income per capita.
- Will have complete architectural and technical plans prepared by a licensed
â—
Official costs only, no bribes architect. If preparation of the plans requires such steps as obtaining further
â—
Value added tax excluded documentation or getting prior approvals from external agencies, these are counted
as procedures.
The reliability of supply and transparency of - Will take 30 weeks to construct (excluding all delays due to administrative and
tariffs index (0-8) regulatory requirements).
â—
Duration and frequency of power outages (0–3)
The water and sewerage connections:
â—
Tools to monitor power outages (0–1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â—
Tools to restore power supply (0–1)
is no water delivery infrastructure in the economy, a borehole will be dug. If there is
â—
Regulatory monitoring of utilities’ performance no sewerage infrastructure, a septic tank in the smallest size available will be
(0–1) installed or built.
â—
Financial deterrents limiting outages (0–1) - Will have an average water use of 662 liters (175 gallons) a day and an average
wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â—
Transparency and accessibility of tariffs (0–1)
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
Price of electricity (cents per kilowatt-hour)* gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the
â—
Price based on monthly bill for commercial
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
warehouse in case study
the sewerage connection.
*Note: Doing Business measures the price of
electricity, but it is not included in the distance to
frontier score nor the ranking on the ease of getting
electricity.
Page 14Doing Business 2018 Georgia
Getting Electricity - Georgia
Standardized Company
Price of electricity (US cents per kWh) 7.4
Name of utility Telasi JSC
City Covered Tbilisi
Indicator Georgia Europe & OECD high Overall Best
Central Asia income Performer
Procedures (number) 3 5.4 4.7 2 (United Arab
Emirates)
Time (days) 71 113.7 79.1 10 (United Arab
Emirates)
Cost (% of income per capita) 176.8 344.3 63.0 0.00 (Japan)
Reliability of supply and transparency of tariff 5 5.3 7.4 8.00 (28 Economies)
index (0-8)
Figure – Getting Electricity in Georgia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
86.04: Belarus (Rank: 25)
84.32: Georgia (Rank: 30)
78.53: Armenia (Rank: 66)
70.35: Regional Average (Europe & Central Asia)
67.98: Azerbaijan (Rank: 102)
54.80: Bulgaria (Rank: 141)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting
electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 15Doing Business 2018 Georgia
Figure – Getting Electricity in Georgia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
70 100
Cost (% of income per capita)
60
80
50
Time (days)
60
40
30
40
20
20
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.
Figure – Getting Electricity in Georgia and comparator economies – Measure of Quality
8
8
7
6
6 5.3
Index score
5 5 5
5
4
3
2
1
0
Georgia Armenia Azerbaijan Belarus Bulgaria Europe & Central Asia
Page 16Doing Business 2018 Georgia
Details – Getting Electricity in Georgia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to Telasi and await technical conditions and project 16 calendar days GEL 7,627
design
Agency : Telasi
The application for an electricity connection can be submitted online or in person. It
includes the applicant's bank account in order for the Utility company to pay the 50% fine
if the prescribed time is not met. The applicant also submits a document certifying
property rights or lending rights for the space/buildings where applicant’s electrical
installation is located is attached to the application; and a receipt of payment of the 50%
of the connection fee.
In a few days after the application has been submitted, Telasi visits the premises during
which the preliminary specifications of the connection are discussed. After the
inspection, the 50% of the connection fee has to be paid if it has been suggested that the
connection is to be 380/220 V. After the inspection technical conditions related to the
external connection only and a project design which outlines in detail specifications of
the connection are issued and the connection contract is signed.
The Technical conditions generally include instructions for construction of a new
substation; lining of high-voltage and low-voltage cables; in a case of reconstruction
works - participation of the customer in the required works.
2 Receive external site inspection by Telasi 7 calendar days GEL 0
Agency : Telasi
After the application is submitted in order to prepare the technical conditions, Telasi
carries out an external review of the site. Somebody from the applicant’s party is required
to be present during the review.
3 Await completion of external works, meter installation and electricity 55 calendar days GEL 7,627
supply by Telasi
Agency : Telasi
After the technical conditions are issued the external connection works can be completed
by an electrical contractor and/or Telasi.
Before the contractor can start his work he needs to receive a number of permits for his
work: from water agency (Водоканал), telephone agency, Mayor’s office and other
institutions depending on the whether the connection passes any roads, etc.
Takes place simultaneously with previous procedure.
Page 17Doing Business 2018 Georgia
Details – Getting Electricity in Georgia – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 5
Total duration and frequency of outages per customer a year (0-3) 1
System average interruption duration index (SAIDI) 11.4
System average interruption frequency index (SAIFI) 7.4
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
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://telasi.ge/ru/cus
tomers/tariffs
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 18Doing Business 2018 Georgia
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 June 2017.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.
â—
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).
â—
Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. For 11
business citya. economies the data are also collected for the second largest business city.
- Are 100% domestically and privately owned.
â—
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.
â—
Does not include time spent gathering information
- Is fully owned by the seller.
â—
Each procedure starts on a separate day - though - Has no mortgages attached and has been under the same ownership for the past
procedures that can be fully completed online are 10 years.
an exception to this rule
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
â—
Procedure is considered completed once final - Is located in a periurban commercial zone, and no rezoning is required.
document is received - Consists of land and a building. The land area is 557.4 square meters (6,000
â—
No prior contact with officials square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
located on the land. The warehouse is 10 years old, is in good condition, has no
Cost required to complete each procedure (% of heating system and complies with all safety standards, building codes and legal
property value) requirements. The property, consisting of land and building, will be transferred in its
â—
Official costs only (such as administrative fees, entirety.
duties and taxes). - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
â—
Value Added Tax, Capital Gains Tax and illicit
any kind.
payments are excluded
- Will not be used for special purposes, and no special permits, such as for
Quality of land administration index (0-30) residential use, industrial plants, waste storage or certain types of agricultural
activities, are required.
â—
Reliability of infrastructure index (0-8) - Has no occupants, and no other party holds a legal interest in it.
â—
Transparency of information index (0–6)
â—
Geographic coverage index (0–8)
â—
Land dispute resolution index (0–8)
â—
Equal access to property rights index (-2–0)
Page 19Doing Business 2018 Georgia
Registering Property - Georgia
Standardized Company
Property value GEL 431,463.90
City Covered Tbilisi
Indicator Georgia Europe & OECD high Overall Best
Central Asia income Performer
Procedures (number) 1 5.3 4.6 1.00 (4 Economies)
Time (days) 1 20.4 22.3 1.00 (3 Economies)
Cost (% of property value) 0.0 2.5 4.2 0.00 (5 Economies)
Quality of the land administration index (0-30) 21.5 19.8 22.7 29.00 (Singapore)
Figure – Registering Property in Georgia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
92.85: Georgia (Rank: 4)
92.19: Belarus (Rank: 5)
87.78: Armenia (Rank: 13)
82.07: Azerbaijan (Rank: 21)
76.02: Regional Average (Europe & Central Asia)
69.30: Bulgaria (Rank: 67)
Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering
property. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Figure – Registering Property in Georgia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1 0.045
0.04
Cost (% of income per capita)
0.8
0.035
0.03
Time (days)
0.6
0.025
0.02
0.4
0.015
0.01
0.2
0.005
0 0
1
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 20Doing Business 2018 Georgia
Figure – Registering Property in Georgia and comparator economies – Measure of Quality
30
25 23.5
21.5 21.5
Index score 19.0 19.8
20
14.5
15
10
5
0
Georgia Armenia Azerbaijan Belarus Bulgaria Europe & Central Asia
Details – Registering Property in Georgia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
Page 21Doing Business 2018 Georgia
1 Register the purchaser’s title with the district Public Registry Same day Expedited procedure:
Agency : National Agency of Public Registry procedure - 1 Super fast procedure
The sale purchase agreement is not required to be notarized, as of the amended Civil calendar day (1 calendar day) -
Code of March 2007, clause 183. The extract can be obtained by following ways: GEL 200;
1 business day (1-2
a) online,
calendar days) 1 business day (1-2
calendar days)- 150
b) visit to the Registry and get it there,
Regular procedure GEL (including VAT
c) in case of registering property via authorized entities (banks, notaries or real estate (4 business days) (18%);
companies) extract can be received on the spot.
Regular procedure (4
business days) is 50
The new online registry of property was launched in 2007-2008. Online business registry GEL (including VAT
was launched in 2010. Above-mentioned registers are unified under the Georgian (18%).
National Agency of Public Registry - NAPR (www.napr.gov.ge), which is widely used.
Registration fees may be paid at any commercial bank in Georgia. If registration is
completed at the NAPR, the payment can be done with the bank representative, who is
There is also an
always presented at every NAPR office. Registration can be also conducted by an
option available to
authorized users (all banks), notaries, real estate companies). In this registration fee is
apply for an extract
applied on the spot. Online payment of registration fee is also possible.
electronically via the
Georgian National
All properties in Tbilisi have been systematically transferred into the electronic database. Agency of Public
All the system operations are fully computerized, including Old Bureau of Technical Registry (NAPR)
Inventory files that have been scanned. website with fees
being as follows: 1
working day - 10 GEL
The NAPR may conduct registration process and issue an Ownership Certificate (including VAT (18%)
(exctract) at the same day of submission documents, in 1 business day and in 4 days
and at the day of
(ordinary registration procedure).
application - 40 GEL
(including VAT (18%).
The documentation shall include:
(1) Sale and Purchase agreement
(2) Copy of ID document of seller and buyer
(3) Receipt confirming payment of Public Registry registration fee.
It is also possible to submit the transaction at one of the 500 authorized users. These can
be banks, notaries or real estate companies. These entities can verify the transaction and
submit the purchase and sale agreement to the National Public Registry. The employees
dealing with these transactions receive a training provided by the National Public
Registry and a memorandum is signed between the National Public Registry and the
entity. The most commonly used authorized users are banks.
The authorized entity receiving the application will verify the identity of the buyer and
seller, as well as the ownership of the property. Once the information is submitted though
a specific software, the National public registry employee will verify again the ownership
and the existence of the individuals (in the Civil registry database that they can access
electronically) and process the transfer. Another software is used at this stage.
Georgian legislation provides for the possibility of accelerated proceedings, therefore if
the buyer wishes to register property transfer on the same day of submission of all
necessary documents, the fee is respectively GEL 200. If registration is carried out on the
day following the day of submission, the fee totals to GEL 150. GEL 50 is a fee paid for
ordinary registration procedures, which take 4 business days following the submission of
all required documents to the Public Registry. The payment is done at any commercial
bank.
There is also an option available to apply for an extract electronically via the Georgian
National Agency of Public Registry (NAPR) website with fees being as follows: 1
working day - 10 GEL and at the day of application - 40 GEL.
The 2% immovable property transfer tax has been abolished. A new Tax Code specifies
“Income Tax” for physical persons and “Profit Tax” for legal entities in case of property
sale, only if sale of property takes place within 2 years after its purchase and equals to
20% (for physical persons) and 15% (for legal entities) of the difference between
purchase and sale price. These are capital gains taxes. If the sale of property takes place
after 2 years since its purchase, physical persons are exempted from paying "Income
Tax".
Page 22Doing Business 2018 Georgia
Takes place simultaneously with previous procedure.
Page 23Doing Business 2018 Georgia
Details – Registering Property in Georgia – Measure of Quality
Answer Score
Quality of the land administration index (0-30) 21.5
Reliability of infrastructure index (0-8) 8.0
What is the institution in charge of immovable property registration? National Agency
of Public Registry
under Ministry of
Justice of
Georgia
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 Yes 1.0
and the like)?
Institution in charge of the plans showing legal boundaries in the largest business city: National Agency
of Public Registry
under Ministry of
Justice of
Georgia
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 Single database 1.0
or mapping agency kept in a single database, in different but linked databases or in separate
databases?
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) 4.5
Who is able to obtain information on land ownership at the agency in charge of immovable Anyone who 1.0
property registration in the largest business city? pays the official
fee
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: http://napr.gov.ge
/c/30
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://napr.gov.ge
/p/455
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://napr.gov.ge
/c/30
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 2016: 499109.0
Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5
by anyone
Page 24Doing Business 2018 Georgia
Is the applicable fee schedule for accessing maps of land plots made publicly available— Yes, online 0.5
and if so, how?
Link for online access: http://napr.gov.ge
/p/455
Does the cadastral or mapping agency commit to delivering an updated map within a Yes, online 0.5
specific time frame—and if so, how does it communicate the service standard?
Link for online access: http://napr.gov.ge
/c/30
Is there a specific and separate mechanism for filing complaints about a problem that No 0.0
occurred at the cadastral or mapping agency?
Contact information:
Geographic coverage index (0–8) 2.0
Are all privately held land plots in the economy formally registered at the immovable property No 0.0
registry?
Are all privately held land plots in the largest business city formally registered at the No 0.0
immovable property registry?
Are all privately held land plots in the economy mapped? No 0.0
Are all privately held land plots in the largest business city mapped? Yes 2.0
Land dispute resolution index (0–8) 7.0
Does the law require that all property sale transactions be registered at the immovable Yes 1.5
property registry to make them opposable to third parties?
Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5
Is there a specific compensation mechanism to cover for losses incurred by parties who Yes 0.5
engaged in good faith in a property transaction based on erroneous information certified by
the immovable property registry?
Does the legal system require a control of legality of the documents necessary for a property Yes 0.5
transaction (e.g., checking the compliance of contracts with requirements of the law)?
If yes, who is responsible for checking the legality of the documents? Registrar; Notary.
Does the legal system require verification of the identity of the parties to a property Yes 0.5
transaction?
If yes, who is responsible for verifying the identity of the parties? Registrar; Notary.
Is there a national database to verify the accuracy of identity documents? Yes 1.0
For a standard land dispute between two local businesses over tenure rights of a property Tbilisi City Court
worth 50 times gross national income (GNI) per capita and located in the largest business
city, what court would be in charge of the case in the first instance?
How long does it take on average to obtain a decision from the first-instance court for such a Between 1 and 2 2.0
case (without appeal)? years
Are there any statistics on the number of land disputes in the first instance? Yes 0.5
Number of land disputes in the largest business city in 2016: 1767 were filed
for trial in 2016
Equal access to property rights index (-2–0) 0.0
Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0
Do married men and married women have equal ownership rights to property? Yes 0.0
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