Doing Business 2018 Hong Kong SAR, China
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Doing Business 2018 Hong Kong SAR, China
Page 1
Doing Business 2018 Hong Kong SAR, China
Economy Profile of Hong Kong SAR, China
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 Hong Kong SAR, China
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 Hong Kong SAR, China
Ease of Doing Business in DB 2018 Rank
Region East Asia & Pacific
190 1
Hong Kong SAR, China
Income Category High income 5
DB 2018 Distance to Frontier (DTF)
Population 7,346,700
0 100
City Covered Hong Kong 83.44
DB 2018 Distance to Frontier (DTF)
0 100
83.92: Korea, Rep. (Rank: 4)
83.44: Hong Kong SAR, China (Rank: 5)
78.43: Malaysia (Rank: 24)
75.68: Japan (Rank: 34)
65.29: China (Rank: 78)
62.70: Regional Average (East Asia & Pacific)
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 - Hong Kong SAR, China
3 5 4 3
1 9
29 31 28
28
43
55
55
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 - Hong Kong SAR, China
98.14 99.02 98.82
100 93.56
84.86
80 75.00 76.67
73.54
69.13
65.69
60
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 Hong Kong SAR, China
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 Hong Kong SAR, China
Starting a Business - Hong Kong SAR, China
Standardized Company
Legal form Limited Liability Company
Paid-in minimum capital requirement HKD 0
City Covered Hong Kong
Indicator Hong Kong East Asia & OECD high Overall Best
SAR, China Pacific income Performer
Procedure – Men (number) 2 7.0 4.9 1.00 (New Zealand)
Time – Men (days) 1.5 22.7 8.5 0.50 (New Zealand)
Cost – Men (% of income per capita) 1.1 18.4 3.1 0.00 (United Kingdom)
Procedure – Women (number) 2 7.0 4.9 1.00 (New Zealand)
Time – Women (days) 1.5 22.8 8.5 0.50 (New Zealand)
Cost – Women (% of income per capita) 1.1 18.4 3.1 0.00 (United Kingdom)
Paid-in min. capital (% of income per capita) 0.0 15.1 8.7 0.00 (113 Economies)
Figure – Starting a Business in Hong Kong SAR, China and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
98.14: Hong Kong SAR, China (Rank: 3)
95.83: Korea, Rep. (Rank: 9)
85.47: China (Rank: 93)
84.37: Japan (Rank: 106)
83.78: Malaysia (Rank: 111)
82.32: Regional Average (East Asia & Pacific)
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 Hong Kong SAR, China
Figure – Starting a Business in Hong Kong SAR, China – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1.2
1.4
Cost (% of income per capita)
1
1.2
1 0.8
Time (days)
0.8
0.6
0.6
0.4
0.4
0.2
0.2
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 Hong Kong SAR, China
Details – Starting a Business in Hong Kong SAR, China – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Choose a company name and obtain a certificate of incorporation Less than one day HKD 1,720
Agency : Companies Registry (online procedure) application fee + HKD
A company name (which may be in English, traditional Chinese or both) can be searched 250 for business
online free of charge at the Companies Registry (www.icris.cr.gov.hk). When an registration levy +
application is delivered online at the e-Registry, the applicant will be informed of the
HKD 2,000 business
acceptability of the company name before he/she proceeds with the payment process.
fee
A certificate of incorporation and a business registration certificate will be issued upon
the filing of an incorporation form signed by the founder member(s) (for companies
limited by shares this is a Form NNC1), a copy of the articles of association and a Notice
to Business Registration Office (IRBR1). The incorporation form contains
comprehensive information on the address of the registered office and particulars of the
first secretary and first directors of a company. Paper submissions for incorporation
normally require approximately four working days for the certificates to be issued.
With the implementation of the "e-Registry" in 2011, applicants can now complete the
incorporation and business registration process by submitting electronic applications
online to the Companies Registry (www.eregistry.gov.hk). In straightforward cases, this
enables registered users to complete the relevant procedures and download the electronic
Certificate of Incorporation and Business Registration Certificate within one day.
2 Sign up Employee's Compensation Insurance and Mandatory Provident 1 day no charge
Fund (MPF) Schemes with a private company or a bank
Agency : Labour Department; Mandatory Provident Fund Schemes Authority
(MPFA)
Pursuant to the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong
Kong) ("ECO"), an employer must take out insurance to cover liabilities for his
employees (both full- and part-time) who experience accidents arising out of and in the
course of employment, and resulting in injuries or fatalities.
In addition, except for persons exempted from joining a Mandatory Provident Fund
(“MPF”) scheme, employers must enroll their regular employees (i.e. employees who are
at least 18 but under 65 years of age and employed for 60 days or more) and where
applicable, their casual employees (i.e. employees are at least 18 but under 65 years of
age and employed in the construction or catering industry on a day-to-day basis or for a
fixed period of less than 60 days) in an MPF scheme administered by any MPF approved
trustee in Hong Kong and make MPF contributions accordingly. Scheme enrollment can
be arranged through MPF registered intermediaries, which include banks and insurance
companies.
The newly incorporated company can apply for setting up the Employee's Compensation
Insurance and MPF Scheme anytime after incorporation.
The procedure can be done online via various private insurance providers’ web portals.
However, most businesses prefer to have advisory meeting with insurance service
provider rather than reviewing all information online by themselves.
Takes place simultaneously with previous procedure.
Page 8Doing Business 2018 Hong Kong SAR, China
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 Hong Kong SAR, China
Dealing with Construction Permits - Hong Kong SAR, China
Standardized Company
Estimated value of warehouse HKD 17,524,597.00
City Covered Hong Kong
Indicator Hong Kong East Asia & OECD high Overall Best
SAR, China Pacific income Performer
Procedures (number) 11 15.2 12.5 7.00 (Denmark)
Time (days) 72 138.2 154.6 27.5 (Korea, Rep.)
Cost (% of warehouse value) 0.7 2.2 1.6 0.10 (5 Economies)
Building quality control index (0-15) 12.0 8.9 11.4 15.00 (3 Economies)
Figure – Dealing with Construction Permits in Hong Kong SAR, China and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
84.86: Hong Kong SAR, China (Rank: 5)
82.19: Malaysia (Rank: 11)
77.74: Korea, Rep. (Rank: 28)
73.36: Japan (Rank: 50)
69.60: Regional Average (East Asia & Pacific)
47.28: China (Rank: 172)
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 Hong Kong SAR, China – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
0.35
70
0.3
Cost (% of income per capita)
60
50 0.25
Time (days)
40 0.2
30 0.15
20 0.1
10 0.05
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 Hong Kong SAR, China
Figure – Dealing with Construction Permits in Hong Kong SAR, China and comparator economies – Measure of Quality
15
13.0
12.0
11.0
Index score
10 9.6
8.9
8.0
5
0
Hong Kong SAR, China China Japan Korea, Rep. Malaysia East Asia & Pacific
Details – Dealing with Construction Permits in Hong Kong SAR, China – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain approval by submitting applications to the One Stop Center 45 days HKD 57,799
Agency : Hong Kong One Stop Center (OSC)
BuildCo must submit the following documents for approval:
• Building plans (Forms BA5, BD24)
• General building plans
• Spread footing plans
• Hoarding plans
• Site formation plans
• Fire service installation plan (Form FSI/314)
• Drainage plan
In December 2008 a One Stop Center was established for Warehouse Construction
Permits under the administration of the Efficiency Unit (EU) for receiving all relevant
building license applications to 6 government departments and 2 private utilities (i.e.
telephone line and electricity supply) and coordinating their joint inspections for two-
storey warehouse projects.
Property developers can use Form OSC-1 to submit to the One Stop Centre which
combines all applications relating to building plans approval and consent for
commencement of building works from Buildings Department, technical audit of water
supply connection works and issue of water supply certificate by Water Supplies
Department, and road excavation permit from both the Police and Highways Department.
This new arrangement simplifies the submission process by combing the following
procedures:
(i) Obtain building plans approval, HKD 38,360.
(ii) Apply and pay for technical audit of water supply connection works and submit
application for issue of water supply certificate, HKD 17,319.
(iii) Apply, pay and receive road excavation work permission from Highways
Department, HKD 2,120.
(iv) Notify and obtain approval from Police Department
(v) Obtain building consent from Building Department
2 Hire an external supervising engineer to conduct inspections during 1 day HKD 50,000
construction
Agency : Authorised person (AP), registered structural engineer (RSE) and
registered geotechnical engineer (RGE)
BuildCo has to hire external engineers (i.e., an authorized person (AP), registered
structural engineer (RSE) and registered geotechnical engineer (RGE) registered under
the building law) to conduct inspections according to the schedule of inspections
specified in a statutory supervision plan. Supervision plan is prepared by the designers
and the contractor which sets out the plan of safety management of the construction
works prepared in accordance with a technical memorandum issued under the building
law.
The cost estimate for hiring an independent third-party engineer to conduct inspections
for a 2-story, 1300 sq. meters warehouse which has a 7-month construction period would
be HKD 40,000 to HKD 60,000.
3 Receive inspection by the Building Department on the site formation 1 day no charge
Agency : Buildings Department and Geotechnical Engineering Office of Civil
Engineering Development Department
The Building Department will conduct approximately three scheduled inspections (i.e.,
one inspection at the site formation stage, one at foundation stage and one inspection at
superstructure construction stage) and several unscheduled surprise inspections at various
stages of construction.
Page 11Doing Business 2018 Hong Kong SAR, China
4 Request and receive inspection of foundation strata 2 days no charge
Agency : Buildings Department
At the approval stage for building foundation plans, the Buildings Department normally
imposes some requirements and conditions for the construction of the foundation to
ensure that the approved plans and the required standards are complied with. Upon the
completion of the foundation, Form BA 14 and as-built foundation records must be
submitted to notify the Buildings Department that the foundation work has been
completed. The form must be approved by the Buildings Department before the next
stage of construction can begin. The construction site is inspected within 1 day of the
notification.
5 Receive inspection by the Building Department on the superstructure 1 day no charge
construction
Agency : Buildings Department and Geotechnical Engineering Office of Civil
Engineering Development Department
6 Receive an unscheduled inspection by the Building Department - I 1 day no charge
Agency : Buildings Department and Geotechnical Engineering Office of Civil
Engineering Development Department
7 Receive an unscheduled inspection by the Building Department - II 1 day no charge
Agency : Buildings Department and Geotechnical Engineering Office of Civil
Engineering Development Department
8 Submit notification of project completion and relevant applications 1 day HKD 8,510
Agency : Hong Kong One Stop Center (OSC)
Upon completion of construction, the following applications/notifications can be
submitted in one go to the One Stop Centre for referral:
(a) Application to the Drainage Services Department for technical audit for drainage
connection works (cost: HKD 4,380)
(b) Application to the Fire Services Department for issue of Fire Services Certificate (F.S.
172) (cost: HKD 4,130)
(c) Application to the Buildings Department for Occupation Permit (free of charge);
(d) Application to the Lands Department for issue of Certificate of Compliance (free of
charge);
(e) Notification to Water Supplies Department for completion of plumbing works via the
Composite Form (free of charge)
(f) Application for a joint inspection, if preferred (cost: nil).
The following certificates are obtained through the One Stop Centre after the final
inspection:
(a) Fire Services Certificate (F.S. 172);
(b) Occupation Permit;
(c) Certificate of Compliance; and
(d) Water Supply Certificate.
9 Obtain relevant certificates through the One Stop Center 18 days no charge
Agency : Hong Kong One Stop Center
10 Receive joint and final inspection of relevant licensing authorities 1 day no charge
coordinated by the One Stop Center
Agency : Hong Kong One Stop Center (OSC)
11 Obtain water connection 1 day no charge
Agency : Hong Kong Water Supplies Department (WSD)
The application for water connection is done earlier when applying and paying for
technical audit of water supply connection works. The inspection for water connection is
conducted in the procedure "Receive joint and final inspection of relevant licensing
authorities coordinated by the One Stop Center". Water connection is obtained after the
joint inspection.
Takes place simultaneously with previous procedure.
Page 12Doing Business 2018 Hong Kong SAR, China
Details – Dealing with Construction Permits in Hong Kong SAR, China – 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;
In official gazette.
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; Private
firm.
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;
Inspections by
external engineer
or firm;
Unscheduled
inspections;
Inspections at
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; Yes, in-
house engineer
submits report for
final inspection;
Yes, external
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) 2.0
Which parties (if any) are held liable by law for structural flaws or problems in the building Architect or 1.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer;
Professional in
charge of the
supervision;
Construction
company.
Page 13Doing Business 2018 Hong Kong SAR, China
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 1.0
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 ;
Insurance is
commonly taken
in practice.
Professional certifications index (0-4) 2.0
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;
Passing a
certification
exam.
What are the qualification requirements for the professional who supervises the construction Minimum number 0.0
on the ground? (0-2) of years of
experience;
Being a
registered
architect or
engineer;
Passing a
certification
exam.
Page 14Doing Business 2018 Hong Kong SAR, China
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
warehouse is valued at 50 times income per capita.
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 15Doing Business 2018 Hong Kong SAR, China
Getting Electricity - Hong Kong SAR, China
Standardized Company
Price of electricity (US cents per kWh) 15.1
Name of utility CLP Power Hong Kong Ltd.
City Covered Hong Kong
Indicator Hong Kong East Asia & OECD high Overall Best
SAR, China Pacific income Performer
Procedures (number) 3 4.5 4.7 2 (United Arab
Emirates)
Time (days) 27 71.6 79.1 10 (United Arab
Emirates)
Cost (% of income per capita) 1.4 712.0 63.0 0.00 (Japan)
Reliability of supply and transparency of tariff 8 3.7 7.4 8.00 (28 Economies)
index (0-8)
Figure – Getting Electricity in Hong Kong SAR, China and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
99.89: Korea, Rep. (Rank: 2)
99.02: Hong Kong SAR, China (Rank: 4)
94.33: Malaysia (Rank: 8)
89.88: Japan (Rank: 17)
72.23: Regional Average (East Asia & Pacific)
68.83: China (Rank: 98)
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 16Doing Business 2018 Hong Kong SAR, China
Figure – Getting Electricity in Hong Kong SAR, China – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1.6
25
1.4
Cost (% of income per capita)
20 1.2
Time (days)
1
15
0.8
10 0.6
0.4
5
0.2
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 Hong Kong SAR, China and comparator economies – Measure of Quality
8 8 8 8
8
7
6
6
Index score
5
4 3.7
3
2
1
0
Hong Kong SAR, China China Japan Korea, Rep. Malaysia East Asia & Pacific
Page 17Doing Business 2018 Hong Kong SAR, China
Details – Getting Electricity in Hong Kong SAR, China – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to CLP Power and await technical conditions 3 calendar days HKD 0
Agency : CLP Power HK Ltd
In the project planning phase upon receipt of supply application together with a location
map and proposed cable termination and metering point from customer in a printed copy,
photo or any other format, CLP will then conduct its site inspection (which customers &
their electrical contractors will not need to be invovled), folllowed by supply project
preparation and approval. CLP power then sends out standard supply condition letter to
customer and initatites permit application upon completion of supply project prepration.
2 Receive external works from CLP Power 24 calendar days HKD 0
Agency : CLP Power HK Ltd
(a) Application for excavation permit
An excavation permit is required for the excavation of cable trench in public areas. The
utility is required to apply to the relevant government departments for the permit.
The excavation permit application will be submitted after the project planning stage.
Before applying for the permit, the utility will confirm with the client the target supply
date and the target completion date of the work required by the client e.g. duct and draw
pit. The excavation permit application is not billed to clients as part of their cost for
connection.
To reduce the time to obtain an excavation permit, a liaison group has been set up. The
liaison group has representatives of differemt relevant government departments (e.g.
Highway Department, Police Force, Transport Department, etc) to streamline the
procedures related to applications. As a result, applications are typically processed under
9 days.
(b) Installation Work
Processing time includes LV cable laying and jointing work on a trench (150m) with road
crossing. (Construction phase)
It excludes the advance notification for commencement of the works submitted to
government departments after obtaining the excavation permit. This is also a time taken
for manpower mobilization and material preparation. This is the Resource programming
phase.
3 Receive meter installation and final connection from CLP Power 1 calendar day HKD 4,769.62
Agency : CLP Power HK Ltd
The utility inspects the internal wiring and installs the meter. The Registered Electrical
Worker representing the client must be present
According to the Electricity (Wiring) Regulations, Cap. 406E, any fixed electrical
installation shall be inspected after completion and before it is energized for use. The
installation is thus tested and certified with a Work Completion Certificate (Form WR1)
by a registered electrical worker and contractor. In case of repair or alteration, only the
affected parts of the installation need to be inspected, tested and certified with a Work
Completion Certificate (Form WR1) by a registered electrical worker and contractor. A
copy of the Work Completion Certificate (Form WR1) together with copies of Certificate
of Registration of Electrical Contractor and Certificate of Registration of Electrical
Worker should be forwarded to the Licensing Office as proof of compliance with the
electricity safety requirements.
The Registered Electrical Worker in charge of the internal installation and final inspection
signs the WR1 form, and submits it to the utility at the appointment for electricity turn-
on. The client requests a final inspection for meter installation from CLP Power through
the installation inspection appointment system of the utility. The final inspection does not
cover the entire internal wiring, but only the interface with the external circuit. The WR1
form is enough to guarantee the wiring has been done in accordance with the electricity
regulations.
The meter will be installed and supply connected after satisfactory inspection of the
internal wiring (not entire inspection; only for the interface with external network). The
service pledge is to install the meter within the same day of the satisfactory inspection of
the internal wiring.
Takes place simultaneously with previous procedure.
Page 18Doing Business 2018 Hong Kong SAR, China
Details – Getting Electricity in Hong Kong SAR, China – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 8
Total duration and frequency of outages per customer a year (0-3) 3
System average interruption duration index (SAIDI) 0.4
System average interruption frequency index (SAIFI) 0.2
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
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 https://www.clp.com.
hk/en/customer-
service/tariff/busines
s-and-other-
customers
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 19Doing Business 2018 Hong Kong SAR, China
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
residential use, industrial plants, waste storage or certain types of agricultural
Quality of land administration index (0-30)
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 20Doing Business 2018 Hong Kong SAR, China
Registering Property - Hong Kong SAR, China
Standardized Company
Property value HKD 17,524,597.00
City Covered Hong Kong
Indicator Hong Kong East Asia & OECD high Overall Best
SAR, China Pacific income Performer
Procedures (number) 5 5.5 4.6 1.00 (4 Economies)
Time (days) 27.5 74.5 22.3 1.00 (3 Economies)
Cost (% of property value) 7.7 4.3 4.2 0.00 (5 Economies)
Quality of the land administration index (0-30) 27.5 15.8 22.7 29.00 (Singapore)
Figure – Registering Property in Hong Kong SAR, China and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
76.34: Korea, Rep. (Rank: 39)
76.15: China (Rank: 41)
76.06: Malaysia (Rank: 42)
73.92: Japan (Rank: 52)
73.54: Hong Kong SAR, China (Rank: 55)
57.21: Regional Average (East Asia & Pacific)
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 Hong Kong SAR, China – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
8
25
7
Cost (% of income per capita)
6
20
Time (days)
5
15
4
10 3
2
5
1
0 0
1 2 3 *4 *5
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 21Doing Business 2018 Hong Kong SAR, China
Figure – Registering Property in Hong Kong SAR, China and comparator economies – Measure of Quality
30 27.5 27.5 27.5
24.5
25
Index score
20 18.3
15.8
15
10
5
0
Hong Kong SAR, China China Japan Korea, Rep. Malaysia East Asia & Pacific
Details – Registering Property in Hong Kong SAR, China – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Purchaser’s solicitor does a land search at the Land Registry Less than a day HKD 25
Agency : Land Registry and online (online procedure)
It is a common Procedure that the Buyer's solicitor will conduct a land search before
execution of the Agreement for Sale and Purchase (ASP) to ensure that the previous
registration title of the property is complete and that no unusual encumbrance is
registered against the property. All land records are available for search by the public by
doing an online search. The service hours of an online search services have been
extended from 16 to 20 hours daily since August 2010. In 2010/11, searches conducted
online constituted about 91% of the total search volume. It is a common Procedure that
the Purchaser’s solicitor conducts a land search online on the day of execution of the
agreement for sale and purchase as a due diligence check. The prescribed fee is HK$25
for a full land search (which provides all historical and current data affecting the
property) and HK$10 for an up-date land search (which provides the current data). This
will take about one (1) day and in fact, immediately if it is done through the online
internet service provided by the Land Registry, which many law firms in Hong Kong
would have subscribed to such service.
2 Preparation of (i) Sale and Purchase Agreement and (ii) Assignment 5 days HKD 30,000 + 0.25%
Agency : Solicitors' firm of value exceeding
The Property Assignment will give the purchaser legal title and possession of the HKD 5,000,000
property. (solicitor’s fee
according to
Solicitors -General-
Costs Rules (Cap.
159G) which is
negotiable).
3 Execution of Sale and Purchase Agreement and filing at the Land Registry 14 days - 30 days HKD 210
Agency : Land Registry
The Purchaser’s solicitor registers the executed agreement for sale and purchase with the
Land Registry. At this time, the Purchaser usually gives a 10% down payment on the
property and has time to arrange financing for the remainder owed. During the 30-day
period, the Purchaser’s solicitor prepares an Assignment deed. In addition, during this
period of time, the Buyer's solicitor will complete perusal of title deeds and clarify any
title issues with the Seller's solicitors and confirm good title to the Buyer (through a final
land search on the property to ensure there has not been any competing deed lodged with
the Land Registry after the executed agreement for sale and purchase has been registered
with the Land Registry).
Page 22Doing Business 2018 Hong Kong SAR, China
4 The Purchaser's solicitor settles the stamp duty payable with the Stamp Less than a day 7.5% stamp duty for
Office via e-stamping (online procedure, non-residential
Agency : Stamp Office simultaneous with property
All necessary forms and documents for stamping can be submitted online procedure 3)
(www.gov.hk/estamping.) or in paper. The process of submission and payment is straight
forward, details of the transaction are submitted over the internet, a stamp invoice is
issued immediately which can be printed. After the online payment of stamp duty,
solicitors can print the stamp certificates and attach them to the instruments as evidence
of stamping. Payment of the stamp duty can be done using different methods, (PPS,
MasterCard, and Visa). The current payment limits for credit cards are HK$5,000. If the
duty amount exceeds the payment limits, payment can be made offline by printing a
payment notice for settlement by telephone, bank ATM, internet or in person at the Stamp
Office or Post Offices. After payment of stamp duty, a stamp certificate will be issued
instantly and available for printing. Each stamp certificate will have its own "Stamp
Certificate Number".
For online payments and e-stamping, it is not required to present the original instruments
to the Stamp Office. Details of the e-Stamping service in Hong Kong are available at
www.ird.gov.hk/eng/tax/e_stamp.htm.
Both methods fulfill the stamping requirement equally. Under the conventional method
no stamp certificate is issued, instead, the relevant document (e.g. the assignment) would
be stamped by the Stamp Office with the value of stamp duty paid.
5 Purchaser’s solicitor registers the Property Assignment at the Land 1 day (simultaneous HKD 450
Registry with procedure 3)
Agency : Land Registry
The duly stamped Assignment will then be presented by the solicitors to the Land
Registry. The purchaser’s solicitor shall register the Assignment at the Land Registry
within 30 days from the date of Assignment so as to preserve its priority under the law.
After receipt of the original Assignment by the Land Registry,the Land Registry will
complete the registration and return the Assignment to the solicitor’s office. The title is
legally property of the purchaser once the Property Assignment is submitted to the Land
Registry on the first day. The remaining days (or months) account for the Registry to
document the transfer in microfilm and other media.
Takes place simultaneously with previous procedure.
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