Doing Business 2018 Hong Kong SAR, China

 
Doing Business 2018 Hong Kong SAR, China
Doing Business 2018   Hong Kong SAR, China

                                             Page 1
Doing Business 2018 Hong Kong SAR, China
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 2
Doing 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)

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Doing 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 4
Doing 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.
●
      Submitting all relevant documents and obtaining
      all necessary clearances, licenses, permits and
                                                              The business:
      certificates
●
      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
●
      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
●
      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.
●
      Does not include time spent gathering information       - Performs general industrial or commercial activities, such as the production or sale
●
      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.
●
      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
●
      Procedure is considered completed once final            capita.
      document is received                                    - Does not qualify for investment incentives or any special benefits.
●
      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:
●
      Official costs only, no bribes
●
      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.
●
      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 5
Doing 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 6
Doing 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 7
Doing 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 8
Doing 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.
●
      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
●
      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
●
      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
●
      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)
●
      Does not include time spent gathering information       The warehouse:
●
      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
●
      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.
●
      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.
●
      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)
●
      Sum of the scores of six component indices:             The water and sewerage connections:
●
      Quality of building regulations (0-2)                   - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
●
      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
●
      Quality control during construction (0-3)
                                                              installed or built.
●
      Quality control after construction (0-3)                - Will have an average water use of 662 liters (175 gallons) a day and an average
●
      Liability and insurance regimes (0-2)                   wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
●
      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.

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Doing 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 10
Doing 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 11
Doing 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 12
Doing 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 13
Doing 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 14
Doing 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.
●
      Submitting all relevant documents and obtaining
                                                              The construction company (BuildCo):
      all necessary clearances and permits
●
      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.
●
      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
●
      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.
●
      Is at least 1 calendar day
                                                              The warehouse:
●
      Each procedure starts on a separate day
●
      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
●
      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
●
      Official costs only, no bribes                          architect. If preparation of the plans requires such steps as obtaining further
●
      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).
●
      Duration and frequency of power outages (0–3)
                                                              The water and sewerage connections:
●
      Tools to monitor power outages (0–1)
                                                              - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
●
      Tools to restore power supply (0–1)
                                                              is no water delivery infrastructure in the economy, a borehole will be dug. If there is
●
      Regulatory monitoring of utilities’ performance         no sewerage infrastructure, a septic tank in the smallest size available will be
      (0–1)                                                   installed or built.
●
      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
●
      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
●
      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 15
Doing 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 16
Doing 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 17
Doing 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 18
Doing 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 19
Doing 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.
●
      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).
●
      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.
●
      Postregistration procedures (for example, filling
                                                            - Have 50 employees each, all of whom are nationals.
      title with municipality)
                                                            - Perform general commercial activities.
  Time required to complete each procedure
                                                            The property (fully owned by the seller):
  (calendar days)
                                                            - Has a value of 50 times income per capita, which equals the sale price.
●
      Does not include time spent gathering information
                                                            - Is fully owned by the seller.
●
      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.
●
      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
●
      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
●
      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
●
      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.
●
      Reliability of infrastructure index (0-8)             - Has no occupants, and no other party holds a legal interest in it.
●
      Transparency of information index (0–6)
●
      Geographic coverage index (0–8)
●
      Land dispute resolution index (0–8)
●
      Equal access to property rights index (-2–0)

                                                                                                                                                        Page 20
Doing 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 21
Doing 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 22
Doing 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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