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Argentina Argentina Document Transcript

  • Argentina
  • © 2011 The International Bank for Reconstruction and Development / The World Bank1818 H Street NWWashington, DC 20433Telephone 202-473-1000Internet www.worldbank.orgAll rights reserved.1 2 3 4 08 07 06 05A copublication of The World Bank and the International Finance Corporation.This volume is a product of the staff of the World Bank Group. The findings, interpretations and conclusionsexpressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or thegovernments they represent. The World Bank does not guarantee the accuracy of the data included in this work.Rights and PermissionsThe material in this publication is copyrighted. Copying and/or transmitting portions or all of this work withoutpermission may be a violation of applicable law. The World Bank encourages dissemination of its work and willnormally grant permission to reproduce portions of the work promptly.For permission to photocopy or reprint any part of this work, please send a request with complete information to theCopyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax978-750-4470; Internet www.copyright.com.All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of thePublisher,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax 202-522-2422; e-mailpubrights@worldbank.org.Additional copies of Doing Business 2011: Making a Difference for Entrepreneurs, Doing Business 2010:Reforming through Difficult Times, Doing Business 2009, Doing Business 2008, Doing Business 2007: How toReform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth andDoing Business in 2004:Understanding Regulations may be purchased at www.doingbusiness.org.ISBN: 978-0-8213-7960-8E-ISBN: 978-0-8213-8630-9DOI: 10.1596/978-0-8213-7960-8ISSN: 1729-2638Library of Congress Cataloging-in-Publication data has been applied for.Printed in the United States
  • Current featuresNews on the Doing Business projecthttp://www.doingbusiness.orgRankingsHow economies rank-from 1 to 183http://www.doingbusiness.org/rankings/ ContentsBusiness reformersShort summaries of DB2011 business reforms, lists of reformers Introductionsince DB2004 and a ranking simulation tool and Aggregate Rankingshttp://www.doingbusiness.org/reforms/ 5 - Year Measure ofHistorical data Cumulative ChangeCustomized data sets since DB2004http://www.doingbusiness.org/custom-query/ Starting a BusinessMethodology and research Dealing withThe methodologies and research papers underlying Doing Business Construction Permitshttp://www.doingbusiness.org/Methodology/ Registering PropertyDownload reportsAccess to Doing Business reports as well as subnational and regional Getting Creditreports, reform case studies and customized country and regionalprofiles Protecting Investorshttp://www.doingbusiness.org/reports/ Paying TaxesSubnational and regional projectsDifferences in business regulations at the subnational and regional Trading Across Borderslevelhttp://www.doingbusiness.org/subnational-reports/ Enforcing ContractsLaw library Closing a BusinessOnline collection of business laws and regulations relating tobusiness and gender issues Doing Business 2011http://www.doingbusiness.org/law-library/ Business Reformshttp://wbl.worldbank.org/ContributorsMore than 8,200 specialists in 183 economies who participate inDoing Businesshttp://www.doingbusiness.org/contributors/Doing-Business/Business PlanetInteractive map on the ease of doing businesshttp://rru.worldbank.org/businessplanet
  • Doing Business 2011: Making a Difference for Entrepreneurs is the eighth in a series of annual reports investigating regulations that enhance business activity and those that constrain it. Doing Business presents quantitative indicators on business regulations and the protection of property rights that can be compared across 183 economies, from Afghanistan to Zimbabwe, over time. A set of regulations affecting 9 stages of a business ’s life are measured: starting a business, dealing with construction permits, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business. Data in Doing Business 2011 are current as of June 1, 2010*. The indicators are used to analyze economic outcomes and identify what reforms have worked, where, and why. The Doing Business methodology has limitations. Other areas important to business such as an economy ’s proximity to large markets, the quality of its infrastructure services (other than those related to trading across borders), the security of property from theft and looting, the transparency of government procurement, macroeconomic conditions or the underlying strength of institutions, are not studied directly by Doing Business. To make the data comparable across economies, the indicators refer to a specific type of business, generally a local limited liability company operating in the largest business city. Because standard assumptions are used in the data collection, comparisons and benchmarks are valid across economies. The data not only highlight the extent of obstacles to doing business; they also help identify the source of those obstacles, supporting policymakers in designing reform. The data set covers 183 economies: 46 in Sub-Saharan Africa, 32 in Latin America and the Caribbean, 25 in Eastern Europe and Central Asia, 24 in East Asia and Pacific, 18 in the Middle East and North Africa and 8 in South Asia, as well as 30 OECD high-income economies. The following pages present the summary Doing Business indicators for Argentina. The data used for this economy profile come from the Doing Business database and are summarized in graphs. These graphs allow a comparison of the economies in each region not only with one another but also with the “good practice” economy for each indicator. The good-practice economies are identified by their position in each indicator as well as their overall ranking and by their capacity to provide good examples of business regulation to other countries. These good-practice economies do not necessarily rank number 1 in the topic or indicator, but they are in the top 10. More information is available in the full report. Doing Business 2011: Making a Difference for Entrepreneurs presents the indicators, analyzes their relationship with economic outcomes and recommends reforms. The data, along with information on ordering the report, are available on the Doing Business website (www.doingbusiness.org).* Except for the Paying Taxes indicator, which covers the period January to December of 2009.Note: Doing Business 2010 data and rankings have been recalculated to reflect changes to the methodology. 1
  • Economy Rankings - Ease of Doing BusinessArgentina is ranked 115 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business.Argentina - Compared to global good practice economy as well as selected economies:Argentinas ranking in Doing Business 2011 Rank Doing Business 2011 Ease of Doing Business 115 Starting a Business 142 Dealing with Construction Permits 168 Registering Property 118 Getting Credit 65 Protecting Investors 109 Paying Taxes 143 Trading Across Borders 115 Enforcing Contracts 45 Closing a Business 77 2
  • Summary of Indicators - ArgentinaStarting a Business Procedures (number) 14 Time (days) 26 Cost (% of income per capita) 14.2 Paid-in Min. Capital (% of income per capita) 2.7Dealing with Construction Permits Procedures (number) 28 Time (days) 338 Cost (% of income per capita) 133.9Registering Property Procedures (number) 6 Time (days) 52 Cost (% of property value) 7.0Getting Credit Strength of legal rights index (0-10) 4 Depth of credit information index (0-6) 6 Public registry coverage (% of adults) 30.8 Private bureau coverage (% of adults) 100.0Protecting Investors Extent of disclosure index (0-10) 6 Extent of director liability index (0-10) 2 Ease of shareholder suits index (0-10) 6 Strength of investor protection index (0-10) 4.7Paying Taxes Payments (number per year) 9 Time (hours per year) 453 Profit tax (%) 2.8 Labor tax and contributions (%) 29.4 Other taxes (%) 76.0 Total tax rate (% profit) 108.2Trading Across Borders Documents to export (number) 9 Time to export (days) 13 Cost to export (US$ per container) 1480 Documents to import (number) 7 Time to import (days) 16 Cost to import (US$ per container) 1810 3
  • Enforcing Contracts Procedures (number) 36 Time (days) 590 Cost (% of claim) 16.5Closing a Business Recovery rate (cents on the dollar) 32.8 Time (years) 2.8 Cost (% of estate) 12
  • The 5-year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies* fromDoing Business 2006 to Doing Business 2011. Instead of highlighting which economies currently have the most business friendlyenvironment, this new approach shows the extent to which an economy’s regulatory environment for business has changed comparedwith 5 years ago.This snapshot reflects all cumulative changes in an economy’s business regulation as measured by the Doing Business indicators --such as a reduction in the time to start a business thanks to a one-stop shop or an increase in the strength of investor protection indexthanks to new stock exchange rules that tighten disclosure requirements for related-party transactions.This figure shows the distribution of cumulative change across the 9 indicators and time between Doing Business 2006 and DoingBusiness 2011. DB change score 0.16 Doing 0.12 business has become easier 0.08 0.04 Doing business has 0.00 become more difficult or more costly -0.04 Peru Mexico Brazil Ecuador Bolivia ArgentinaNote: This years DB change score ranges from -0.1 to 0.54. More details on how the DB change score is constructed can be foundin the methodology section of the website.* Bahrain, The Bahamas, Brunei, Cyprus, Kosovo, Liberia, Luxembourg, Montenegro and Qatar do not feature in the new metricbecause they were included in the Doing Business report in years subsequent to the Doing Business 2005 report and hence, 5 yearsof data are not yet available.
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  • 1. Benchmarking Starting a Business Regulations Argentina is ranked 142 overall for Starting a Business.Ranking of Argentina in Starting a Business - Compared to good practice and selected economies: 7
  • The following table shows Starting a Business data for Argentina compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of Paid-in Min. (number) income per Capital (% of Economies capita) income per capita) Denmark 0.0 New Zealand 1 1 0.0 Selected Economy Argentina 14 26 14.2 2.7 Comparator Economies Bolivia 15 50 100.8 2.5 Brazil 15 120 7.3 0.0 Ecuador 13 56 32.6 4.9 Mexico 6 9 12.3 9.2 Peru 6 27 13.6 0.0 8
  • 2. Historical data: Starting a Business in Argentina Starting a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 137 142 Procedures (number) 13 14 14 14 Time (days) 30 31 26 26 Cost (% of income per capita) 9.7 9.0 11.0 14.2 Paid-in Min. Capital (% of income per capita) 4.8 3.7 2.9 2.73. Starting a Business sub indicators in Argentina over the past 4 years 9
  • 4. Overview of the steps to Starting a Business in Argentina It requires 14 procedures, takes 26 days, and costs 14.15 % GNI per capita to start a business in Argentina. Time to completeNo: Procedure Cost to complete (days)1 The name of the company is verified by the Office of 1 ARS 75 Corporations (Inspección General de Justicia) (IGJ)2 Certify signatures of partners by a notary public 1 ARS 650 (cost of 5 notarized signatures)3 Deposit initial capital in National Bank (Banco de la Nación 1 ARS 30 Argentina) and obtain proof of payment4 Publish the new company’s notice in the official paper 2 ARS 2,035 (Boletín Oficial) (expedited publication fee)+ ARS 100 (legalization of signature)5 Payment of the incorporation fee 1 ARS 306 Registration with the IGJ, entity operating the Public 5 ARS 250 Registry of Commerce in the City of Buenos Aires.7 Buy special books 1 fees included in procedure 8 10
  • 8 Get a form from the Public Notaries College and have a 5 ARS 610 notary public submit the company books for rubrication by IGJ9 Corporate manager needs to obtain a Fiscal Code (Clave 1 no charge Fiscal)10 Obtain a tax identification number (CUIT) from the National 4 no charge Tax Office (Administración Federal de Ingresos Públicos, AFIP) and register for social security11 Register turnover tax at local level at the Dirección General 1 ARS 50 de Rentas (DGR) in the City of Buenos Aires12 Register with the Unified System for Labor Registration 1 no charge (USLR)13 Contract an insurance for employees with a risk labor 1 no charge company (ART, Aseguradora de Riesgos del Trabajo)14 Rubricate books of wages in the Ministerio de Trabajo 1 ARS 75 (Ministry of Labor) 11
  • 5. Details on Starting a Business in Argentina This table summarizes the procedures and costs associated with setting up a business in Argentina. STANDARDIZED COMPANY Legal Form: Sociedad de Responsabilidad Limitada (SRL) Paid-in Minimum Capital: 2.7 (% of income per capita) City: Buenos Aires (Ciudad autonoma de) Procedure 1 The name of the company is verified by the Office of Corporations (Inspección General de Justicia) (IGJ)Time to complete(days): 1Cost to complete: ARS 75Comment: The corporate name must be reserved to incorporate any new company or make any change to an existing name. A request must be submitted using the reservation of name form (reserva de nombre) for a cost of ARS 75. Such request expires in 30 days. The Inspección General de Justicia also provides online services for name verification of reservation http://www.jus.gov.ar/registros/IGJ/ Procedure 2 Certify signatures of partners by a notary publicTime to complete(days): 1Cost to complete: ARS 650 (cost of 5 notarized signatures)Comment: The company is not obliged to notarize its bylaws, which can be formally constituted under a private document. However, the signatures of the founding partners have to be certified by a notary public. Each signature certification costs about ARS 130. Signature of managers and statutory 12
  • auditors (if applicable) of the company must also be certified by a notary public. At the first meeting of partners, draft bylaws are approved and capital is fully subscribed and paid in, except in case of cash contributions were only 25% of the start up capital must be paid in at constitution and the balance has to be paid in within the next 2 years. Procedure 3 Deposit initial capital in National Bank (Banco de la Nación Argentina) and obtain proof of paymentTime to complete(days): 1Cost to complete: ARS 30Comment: The company must deposit at least 25% of the subscribed capital, which must be no less than ARS 3,000, in the National Bank, and also obtain proof of payment. The deposit must be made at the central office of the Argentine National Bank (Banco de la Nación Argentina), or at the branch corresponding to the companys domicile. It can be withdrawn once the companys bylaws are registered by the Office of Corporations. Procedure 4 Publish the new company’s notice in the official paper (Boletín Oficial)Time to complete(days): 2Cost to complete: ARS 2,035 (expedited publication fee)+ ARS 100 (legalization of signature)Comment: According to Resolution No. 63/2009 of the SLyT published in the Official Gazette on December 24, 2009, there are 3 kinds of publication services : Ordinary Procedure (72 hours): For each line of text up to 70 spaces: AR$ 23,20. Total: AR$ 1276 Semi-expeditous procedure (48 hours): For each line of text up to 70 spaces: AR$ 31,50. Total: AR$ 1732,5. Expeditous procedure (24 hours) For each line of text up to 70 spaces AR$ 37. Total: AR$ 2035. If the notice is signed by an attorney, to the cost of publication it should be added the cost of legalizing by the Attorneys Bar Association his/her signature (ARS 50), while if it is signed by the manager of the company, the cost for the legalization of his/her signature is ARS 100. The publication fee ranges from AR$ 1,300 to AR$ 2,100, approximately; depending on the length of the notice and the kind of publication chosen. Procedure 5 Payment of the incorporation feeTime to complete(days): 1Cost to complete: ARS 30Comment: Procedure 6 Registration with the IGJ, entity operating the Public Registry of Commerce in the City of Buenos Aires.Time to complete(days): 5Cost to complete: ARS 250Comment: Companies located in the City of Buenos Aires must register their by-laws and other documents related to their incorporation with the ICG. The Company must file the proposed Articles of Association and By-laws, the publication in the Official Gazette, evidence of managers and syndics (the latter, if applicable) acceptance of position, evidence of the deposit of the cash contributions in the Banco de la Nación Argentina (or other applicable documentation if non-cash contributions are made), evidence of compliance with the managers guarantee regime (filing of managers performance bonds) and evidence of the reservation of the corporate name, for approval with the Office of Corporations. Public Registry of Commerce is under the jurisdiction of the local commercial court. During the 13
  • formation period (that is, after the inaugural meeting and before the final registration at the Public Registry of Commerce), the corporation may validly operate (with the exception of customs clearing) under its name by adding the words "en formación." However, its partners and managers are jointly responsible and are not protected by limitation of liability during this period unless their actions have been expressly authorized in the inaugural meeting deed. Filing Time: - Regular filing: 5 to 20 days ( 10 days, if no objection). - Special and urgent filing: 1 to 5 days. According to Resolution 7/2005 (effective as of February 7, 2005), the company directors must put forth a guarantee. The cost is borne by the directors not the company. The guarantee to be furnished by Directors should be in an amount not less than AR$10,000. Its objetive is to ensure the faithful discharge of the duties of Directors, no matter the corporate purpose, capital or duties assigned to or performed by each them. Such a guarantee may be created by direct funding into the S.R.L., or through public bonds, securities, sureties or bank bonds or the taking of liability insurance. Procedure 7 Buy special booksTime to complete(days): 1Cost to complete: fees included in procedure 8Comment: The books are purchased at commercial bookstores. Once purchased, they should be recorded at the Office of Corporations, as detailed in the following procedure. Procedure 8 Get a form from the Public Notaries College and have a notary public submit the company books for rubrication by IGJTime to complete(days): 5Cost to complete: ARS 610Comment: Once the IGJ registers the SRL, the company must obtain the rubric of at least a Book of Minutes of Partners and Managers Meetings and four accounting books (Buyers VAT Book, Sellers VAT Book, Inventory and Balance Book, and Journal). This procedure can only be started once the company is registered. A notary public has to request a form from the Notary Publics College and submit the rubric request of the company books to the IGJ. The form includes up to five books for their rubric. If the company needs to obtain the rubric for more than five books, another form of the same value has to be filed. The cost includes: (i) cost of 5 books (ARS 200) (ii) cost of the IGJ form (ARS 130) (ii) notary fees (about ARS 250) (iii) book registration fees (ARS 30) Procedure 9 Corporate manager needs to obtain a Fiscal Code (Clave Fiscal)Time to complete(days): 1Cost to complete: no chargeComment: "Fiscal Codes" are required for individuals and companies to file affidavits and information with the National Tax Office (AFIP) through the online tax system. Pursuant to National Tax Regulations (AFIP) No.2239/2007, local companies shall make filings through the referred online tax system once their Tax Identification Number (Clave Unica de Identificación Tributaria or CUIT) is linked with the Fiscal Code of the manager appointed as sole legal representative or the manager appointed as "administrator" (if more than one manager have been appointed legal representative). The sole legal representative or the "administrator", to obtain his/her Fiscal Code, must file the AFIP form 3282/A, signed and certified by a notary public, with the corresponding 14
  • AFIP agency, along with a copy of the companys bylaws certified by a notary public and evidence that he/she has first obtained his/her CUIT (as manager of local companies). The form includes information about the fiscal address where the individuals will render services as corporate managers -the corporate domicile of the company. Procedure 10 Obtain a tax identification number (CUIT) from the National Tax Office (Administración Federal de Ingresos Públicos, AFIP) and register for social securityTime to complete(days): 4Cost to complete: no chargeComment: Tax and social security registration can be done jointly at the National Tax Office (Administración Federal de Ingresos Públicos, AFIP). For a company to obtain its Tax Identification Number (Código de Identificación Tributaria, CUIT), all of the individuals that have been appointed as managers of such company need to have previously obtained their respective CUITs (as managers of local companies) and the sole legal representative or the "administrator" (if more than one manager has been appointed legal representative) needs to have obtained his/her Fiscal Code (Clave Fiscal) (see procedure 9). Since 2007, pursuant to AFIPs General Resolution 2337/2007, the sole legal representative or the "administrator" with Fiscal Code must file AFIP form F. 420/J though the online tax system. If the form is correctly completed, an "approval certificate" will be issued by such online tax system. Upon that, the sole legal representative or the "administrator" will have to file with the corresponding agency of the AFIP: (a) the AFIP form F. 420/J ( listing the number of employees and the date of hire), as filed with the online tax system, signed by this individual before a notary public; (b) evidence of filing of such form with the online tax system; (c) the "approval certificate"; (d) a certified copy of the SRLs bylaws, duly registered with the Office of Corporations; (e) two documents evidencing the SRLs fiscal domicile (i.e. any service invoice, polices domicile certification, lease or commodatum agreement, etc.). Upon approval of the filed documentation, the AFIP will issue the SRLs CUIT. Afterwards, the sole legal representative or the "administrator" should link his/her personal Fiscal Code with the SRLs CUIT (by evidencing that he/she is the sole legal representative or the "administrator" at the SRL; in the latter case by filing with the AFIP the form detailed as Annex IV to AFIPs General Resolution 2239/2007, signed before a notary public). Once the company is registered with AFIP, registration for pension with the Argentine Retirement and Pensions Integrated System is done automatically when. This joint registration is in force since 24/03/1993 (Official Gazette dated 25/03/1993) as a result of the issuance of Decree 507/93. Procedure 11 Register turnover tax at local level at the Dirección General de Rentas (DGR) in the City of Buenos AiresTime to complete(days): 1Cost to complete: ARS 50Comment: Each of the 24 jurisdictions -23 Argentine Provinces and the City of Buenos Aires- impose a tax on turnover (sales) generated within its boundaries, regardless whether the beneficiary of such sales maintains a domicile or place of business in its jurisdiction. The related rates of tax, rules, and other assessment procedures are determinable solely by each jurisdictions government authority. Main activities are included in the following items but there are many special rates depending on the activity. - Primary production: 1% - Production of woods: 3% (special activities: 4.9%) - Industrial production: 1% - Financial activities: between 5 and 5.50% The following documentation must be filed with the General Directory of Income (Dirección General de Rentas, DGR): (a) duly completed form FN 009/0024 (download: http://www.agip.gov.ar/web/impuestos/archivos/IB_F%20009-0024(frente).pdf ) executed by the SRLs legal representative or partner, before a notary public or bank; (b) national identity card of 15
  • the legal representative or partner who signs the above form; (c) documentation evidencing the registration of the partner or legal representative as SRLs manager with the Office of Corporations; (d) power of attorney of the individual who carries out the filing, if applicable; (e) evidence of the SRLs CUIT; (f) SRLs by laws registered with the Office of Corporations; and (g) document evidencing SRLs commercial domicile (e.g. any public service invoice, polices commercial domicile certification or lease agreement). Procedure 12 Register with the Unified System for Labor Registration (USLR)Time to complete(days): 1Cost to complete: no chargeComment: Once the employer files the registration of its employees before the AFIP, they are automatically registered in the Unified System for Labor Registration (USLR). To pay its social security contributions, the company has to fill out and submit electronically with its Fiscal Code the AFIP form 931 in order to obtain the registration. Employers must make social security withholdings and pay contributions to the USLR, calculated on the salaries paid to employees under labor relationship. This entity manages (a) the retirement pension fund, (b) the family allowances fund, (c) the social security fund, and (d) the unemployment fund. Procedure 13 Contract an insurance for employees with a risk labor company (ART, Aseguradora de Riesgos del Trabajo)Time to complete(days): 1Cost to complete: no chargeComment: Risk Labor Companies (Aseguradora de Riesgos del Trabajo, ART) are private companies. Procedure 14 Rubricate books of wages in the Ministerio de Trabajo (Ministry of Labor)Time to complete(days): 1Cost to complete: ARS 75Comment: Every jurisdiction has its own rules regarding the cost of rubricating books of wages in the Argentine Ministry of Labor. In the City of Buenos Aires, books of wages are registered with the Dirección General de Protección del Trabajo de la Ciudad de Buenos Aires (Labor Protection Agency of the City of Buenos Aires). 16
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  • 1. Benchmarking Dealing with Construction Permits Regulations Argentina is ranked 168 overall for Dealing with Construction Permits.Ranking of Argentina in Dealing with Construction Permits - Compared to good practice and selected economies: 18
  • The following table shows Dealing with Construction Permits data for Argentina compared to good practice andcomparator economies: Good Practice Procedures Time (days) Cost (% of (number) income per Economies capita) Denmark 6 Qatar 0.8 Singapore 25 Selected Economy Argentina 28 338 133.9 Comparator Economies Bolivia 17 249 109.1 Brazil 18 411 46.6 Ecuador 19 155 213.2 Mexico 11 105 117.0 Peru 19 188 128.1 19
  • 2. Historical data: Dealing with Construction Permits in Argentina Dealing with Construction Permits data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 169 168 Procedures (number) 28 28 28 28 Time (days) 338 338 338 338 Cost (% of income per capita) 234.1 183.3 145.1 133.93. Dealing with Construction Permits sub indicators in Argentina over the past 4 years 20
  • 4. Overview of the steps to Building a Warehouse in Argentina It requires 28 procedures, takes 338 days, and costs 133.94 % GNI per capita to build a warehouse in Argentina. Time to completeNo: Procedure Cost to complete (days)1 Cadastral consultation with authorities 1 day ARS 352 Request and obtain perimetral measurements 2 days ARS 303 Request and obtain land title (nomenclatura parcelaria) from 2 days ARS 30 Cadastral System (Sistema Cadastrales Sociedad Anonima)4 Request and obtain certificate of level (la certificacion de 2 days ARS 33 nivel)5 Obtain certificate of line and dimensions (Certificado de 2 days ARS 33 Linea y Dimensiones de Manzana)6 Obtain construction work use form (formulario Uso 1 day ARS 33 Conforme)7 Request and obtain certificate of project drawings 1 day ARS 480 (Certificado de Encomienda) from College of Professional Architects8 Present the designs and layouts to Cadastral System 3 days ARS 3,447 (Sistema Cadastrales Sociedad Anonima) 21
  • 9 * Request and obtain a form for construction works 1 day ARS 1510 * Request and obtain a “Volante Ochava” form 1 day ARS 3011 * Request and obtain sanitary installation plans (Plano de 45 days ARS 3,902 Instalación Sanitaria)12 * Request and obtain electricity installation plans (Plano de 44 days ARS 3,902 Instalación Eléctrica)13 * Request and obtain delineation and construction rights 1 day ARS 5,202 (Derechos de delineación y construcción)14 Request and obtain a new construction project permit 90 days ARS 5,202 (Permiso de Obra Nueva)15 * Request and obtain environmental impact assessment 60 days ARS 124 certificate16 Receive construction startup inspection 1 day ARS 12,48617 Notify the GCBA on completion of the construction work 1 day no charge foundation and receive inspection18 Notify the GCBA on completion of the construction work 1 day no charge structure and receive inspection19 Notify the GCBA on completion of the construction work 1 day no charge masonry and receive inspection20 Notify the GCBA on completion of construction work and 1 day no charge receive inspection21 Notify the ENRE on completion of the construction work 1 day no charge and receive inspection22 Request and obtain electricity inspection certificate 1 day ARS 1923 Notarize the forms required for final authorization 7 days ARS 50024 Request and obtain final authorization (Habilitacion 173 days ARS 335 Municipal)25 Register the building 1 day no charge26 * Request and connect to telephone services 30 days ARS 18227 * Request and connect to water services 14 days ARS 66228 * Request and connect to electricity services 14 days ARS 275* Takes place simultaneously with another procedure. 22
  • 5. Details on Building a Warehouse in ArgentinaThe table below summarizes the procedures, time, and costs to build a warehouse in Argentina.BUILDING A WAREHOUSEEstimated warehouse value:ARS 1,248,576City: Buenos Aires (Ciudad autonoma de) Procedure 1 Cadastral consultation with authorities Time to complete: 1 day Cost to complete: ARS 35 Agency: General Directorate of Fiscalization, Works and Cadaster (Dirección General de Fiscalización de Obras y Catastro DGFOC) Comment: Consultation is a prerequisite for clarifying subsequent procedures. The land ownership certificate, the plot surface area, and the terrain and cadastral measurements are confirmed. Proof is issued. Procedure 2 Request and obtain perimetral measurements Time to complete: 2 days Cost to complete: ARS 30 Agency: General Directorate of Fiscalization, Works and Cadaster (Dirección General de Fiscalización de Obras y Catastro DGFOC) 23
  • Comment:Procedure 3 Request and obtain land title (nomenclatura parcelaria) from Cadastral System (Sistema Cadastrales Sociedad Anonima)Time to complete: 2 daysCost to complete: ARS 30Agency: General Directorate of Fiscalization, Works and Cadaster (Dirección General de Fiscalización de Obras y Catastro DGFOC)Comment:Procedure 4 Request and obtain certificate of level (la certificacion de nivel)Time to complete: 2 daysCost to complete: ARS 33Comment: According to the Decree on Fiscal Fees and Tariffs for 2007, the fee for the certificate of level is ARS 27 plus VAT (21%). The certificate is required for areas that do not have definite leveling maps. Nonelevated industrial zones have updated, precise level outlines. Along with the land specifications (parcel nomenclature), the authority will require this certificate and will make a note in the “certificate of line and dimensions of district” (Certificate de Línea y Dimensions de Manzana).Procedure 5 Obtain certificate of line and dimensions (Certificado de Linea y Dimensiones de Manzana)Time to complete: 2 daysCost to complete: ARS 33Comment:Procedure 6 Obtain construction work use form (formulario Uso Conforme)Time to complete: 1 dayCost to complete: ARS 33Agency: General Directorate of Fiscalization, Works and Cadaster (Dirección General de Fiscalización de Obras y Catastro DGFOC)Comment: Similar to a zoning certificate, the form is issued according to the Urban Planning Code.Procedure 7 Request and obtain certificate of project drawings (Certificado de Encomienda) from College of Professional ArchitectsTime to complete: 1 day 24
  • Cost to complete: ARS 480Agency: College of ArchitectsComment: Effective February 1, 2008, the fee for the certificate of project drawings is ARS 480 for areas between 1,000 sq. m and 2,500 sq. m.Procedure 8 Present the designs and layouts to Cadastral System (Sistema Cadastrales Sociedad Anonima)Time to complete: 3 daysCost to complete: ARS 3,447Agency: General Directorate of Fiscalization, Works and Cadaster (Dirección General de Fiscalización de Obras y Catastro DGFOC)Comment: The fee is ARS 2.65 per sq. m. On average, the time required is 48–72 hours.Procedure 9 Request and obtain a form for construction worksTime to complete: 1 dayCost to complete: ARS 15Comment:Procedure 10 Request and obtain a “Volante Ochava” formTime to complete: 1 dayCost to complete: ARS 30Comment:Procedure 11 Request and obtain sanitary installation plans (Plano de Instalación Sanitaria)Time to complete: 45 daysCost to complete: ARS 3,902Comment:Procedure 12 Request and obtain electricity installation plans (Plano de Instalación Eléctrica)Time to complete: 44 daysCost to complete: ARS 3,902 25
  • Comment:Procedure 13 Request and obtain delineation and construction rights (Derechos de delineación y construcción)Time to complete: 1 dayCost to complete: ARS 5,202Comment: The fee for this procedure is ARS 3.31 per square meter plus VAT, which amounts to ARS 4.00 per sq. m. This fee base is provided for by the Classification of Tariff Law. After completing the form and paying the fee, the company representative receives an attestation.Procedure 14 Request and obtain a new construction project permit (Permiso de Obra Nueva)Time to complete: 90 daysCost to complete: ARS 5,202Agency: GCBA - Dirección de Fiscalización de Obras y CatasComment: The permit fee is ARS 4 per sq. m. In this case, the total fee would be about ARS 5,202.40. To request and obtain a new construction project permit, BuildCo must submit the following plans and documentation: - Affidavit for the construction project. - Particulars on the signatory. - Building company details. - Certificate of use pursuant to the provisions contained in the Urban Planning Code. - Property titles and purchase agreement (boleto de compra de venta), which is proof of ownership of land for warehouse construction. - Project plans. -- Cadastral plan, delimiting the plot for warehouse construction. -- Fire station installation map. -- Sanitary installation plan. -- Electromechanical plans (elevators, pumps). -- Structure plan. -- Land survey. -- Excavation record, if applicable. -- Land titles (certificados parcelarios) of construction work layout. After the application, the city of Buenos Aires (Gobierno de la Ciudad de Buenos Aires, GCBA) approves the companys project drawings (which determine the cost) and issues the project record number. If construction work has not yet started during a 3-year period (from the plan registration date to the granting of the respective permit), the permit and the respective record will expire. The construction fees and approved delineation will be forfeited. After the Accounting Department (Dirección de Fiscalización de Obras y Catastro) issues the relevant resolution (disposición), the expired record is sent to the general files for permanent and final storage. The developer must notify the Instituto de Estadistica y Registro de la Industria de la Constrccion (IERIC) once during its "existence," but it is compelled to notify each construction startup through the completion of an enclosed form. Before starting construction, the company posts the announcement of machinery works. 26
  • Procedure 15 Request and obtain environmental impact assessment certificateTime to complete: 60 daysCost to complete: ARS 124Agency: Ministries of the Environment and Regional Development, Urban Planning, and Industry, Commerce and Labor (Secretarías de Medio Ambiente y Desarrollo Regional, de Planeamiento Urbano y de Industria, Comercio y Trabajo), acting on a joint basis.Comment: Other documents needed include the following: - Environmental Assessment Impact form (Formulario Categorización Impacto Ambiental Tipo Ie). - DDJJ through Form Annex II Dcto 1352/02. - Formula Polinómica s/ Annex VIII de Resol. 873–SSMAMB/ 04. - Aide memoire (memoria descriptiva) with the signature of the main representative (firma del titular) s/ Annex Vd Decree 1352/02 that includes: -- Description of the activity, including materials and inputs, supply and storage processes, operation and location of the machinery used, logistics to deliver products and services, and the like. -- Further details or clarifications on emissions, solid waste, noise vibrations from machinery, and so forth (including results from the formula polinómica). -- Detailed information on cargo-handling logistics. -- Detailed information of construction projects designed to mitigate negative impacts. -- Detailed information on land usage. -- Fire prevention plan. -- Waste management plan. - Environmental impact map. - Registration number in the Registry for Consultants and Professionals (Reg. No. 344 Evaluac. Ambtal. 4/10/00). - Encomienda to the Professional Council. - Notarized copy of the property title. According to O.F. and T. 2007, the environmental assessment fee for a warehouse larger than 500 sq. m. is stipulated in the modifications to Law No. 123 through Resolution No. 873–SSMAMB/ 04. If the report is complete, the certificate should be issued in 30 days.Procedure 16 Receive construction startup inspectionTime to complete: 1 dayCost to complete: ARS 12,486Agency: GCBAComment: A record of inspection agents may be found at the city of Buenos Aires Web site (www.buenosaires.gov.ar). 1.2.1.3. Inspection Schedule (Building Code) All inspections must be completed within 24 hours of such request, no matter where the building is located, and according to construction industry schedules and working days, except for municipal schedules and holidays. After the application is submitted at the public works office counter, the inspection schedule will be fixed for the following day, depending on the radius within which the construction work is located. In practice, inspectors visit the location in 7–14 days. Suspension of construction is not required. There are four inspections for each type of 27
  • work, but each one is processed through professional supervisors (Profesionales Verificadores de Obra, PVO). The inspection fee is paid, before registration, together with that for construction rights. The construction inspection fee is 1% of project value. The inspection fee is paid while applying for construction rights. The average wait time is 7–10 days.Procedure 17 Notify the GCBA on completion of the construction work foundation and receive inspectionTime to complete: 1 dayCost to complete: no chargeAgency: GCBAComment: In practice, the inspectors visit the location in 7–14 days. Suspension of construction is not required.Procedure 18 Notify the GCBA on completion of the construction work structure and receive inspectionTime to complete: 1 dayCost to complete: no chargeAgency: GCBAComment: In practice, the inspectors visit the location in 7–14 days. Suspension of construction is not required.Procedure 19 Notify the GCBA on completion of the construction work masonry and receive inspectionTime to complete: 1 dayCost to complete: no chargeAgency: GCBAComment: In practice, the inspectors visit the location in 7–14 days. Suspension of construction is not required.Procedure 20 Notify the GCBA on completion of construction work and receive inspectionTime to complete: 1 dayCost to complete: no chargeAgency: GCBAComment: To receive a work completion notice, BuildCo must submit the following documents to the city of Buenos Aires: - A document from Directorate of Real Estate and Registry, proving the sworn declaration of completed work. That form is obtained in that directorate and displays the proprietor’s signature, in addition to a simple heliographic copy of the building plan. - Original plan of the work in fabric or film transparent polyester, which can be unified (architecture and structures) or displayed in two separated originals. 28
  • - Architecture plans (six heliographic copies) and structure plans (six heliographic copies). - Plans on fire protection (two copies). - Descriptive record with detail of materials and elements used in the completed work (original and copy). - Form of statistics. - Request of sworn declaration of completion (triplicate). - Plan showing medical facility. BuildCo must submit an affidavit on completion of the construction work. After that, the administrative authority has 60 working days to verify the affidavit’s accuracy and truthfulness. According to the Building Code, this action releases contractors involved in the construction from liability, leaving the owner as the sole liable party. Even so, neither the final approval nor the affidavit nor the final construction plans are required for municipal approval of the warehouse. In practice, the inspectors visit the location in 7–14 days. Suspension of construction is not required. The city of Bueno Aires verifies compliance of construction work with the approved plans and grants a fire inspection certificate (previously a fire department responsibility).Procedure 21 Notify the ENRE on completion of the construction work and receive inspectionTime to complete: 1 dayCost to complete: no chargeAgency: National Electricity Regulatory Agency (Ente Nacional Regulador de la Electricidad – ENRE )Comment: In general, the National Regulatory Agency for Electricity (Ente Nacional Regulador de la Electricidad, ENRE) completes the inspection within 7 days of notification.Procedure 22 Request and obtain electricity inspection certificateTime to complete: 1 dayCost to complete: ARS 19Agency: National Electricity Regulatory Agency (Ente Nacional Regulador de la Electricidad – ENRE )Comment:Procedure 23 Notarize the forms required for final authorizationTime to complete: 7 daysCost to complete: ARS 500Agency: Notary Public (Escribano Público)Comment: A notary public draws up the authorization deed (escritura de habilitación). Although the average fee is ARS 500, the fee depends on the size of the work.Procedure 24 Request and obtain final authorization (Habilitacion Municipal) 29
  • Time to complete: 173 daysCost to complete: ARS 335Agency: General Building Authorization and Permit Department (Dirección General de Habilitaciones y Permisos – DGHP)Comment: According to applicable regulations, authorization may be granted provisionally (pending final authorization) for the construction of either (a) a new facility or any of its parts or (b) any extension or modification to an existing one. However, the use must coincide with that stated on the documents for the project approved for execution, provided that the relevant part has been completed pursuant to applicable regulations. Final authorization must be requested within 30 days of work completion. In practice, this takes 6 months after the authorization file is submitted. As required by the type of authorization procedure, the construction professional (architect, engineer, construction foreman, land surveyor) must prepare the documents. The following forms must be purchased from the corresponding professional board (consejo profesional): - Request for authorization. - Usage certificate (certificado de uso conforme). - Building design affidavit (declaración jurada de conformación del local). - Overload certificate (certificado de sobrecarga), if applicable. - Site layout, if applicable. - Plans or final certificate of fire, ventilation, and mechanical installation, if applicable. - Certificate or supporting document attesting to the submittal of the environmental aptitude application (solicitud de aptitud ambiental) (Law 123, Law 452, and regulatory decrees). For this purpose, if requested, the construction professional must verify whether the site’s building conditions conforms to the pertinent zoning. If necessary, the professional must also consult with the Urban Planning Institute (Consultora Planificacion Urbana, CPU) before starting the procedure. The cost is ARS 1,635.60 (ARS 335 plus an honorarium for the participating independent professional of 1 ARS/ sq. m.). In this case, the professional can be part BuildCo.Procedure 25 Register the buildingTime to complete: 1 dayCost to complete: no chargeAgency: Dirección de RentasComment: The building must be registered at the Revenue Department (Dirección de Rentas) by submitting final approved plans.Procedure 26 Request and connect to telephone servicesTime to complete: 30 daysCost to complete: ARS 182Agency: Telecom S.A. or Telefónica S.A.Comment: No additional requirements exist for obtaining telephone service. Within 10 working days of the phone request, an installation invoice is issued. The connection is made within 17 30
  • working days.Procedure 27 Request and connect to water servicesTime to complete: 14 daysCost to complete: ARS 662Agency: Aguas y Saneamientos Argentinos S.A.Comment: To obtain a connection to potable water service, the final construction work layout (with the relevant certificate issued by the municipal authorities) must be submitted at the commercial office in the zone where the construction site is located. On submittal, a provisional invoice will be issued according to the size of the construction site. Once the application for connection is filed, an inspector visits the construction site to verify the type of connection required. The connection is made within 72–92 hours of that determination.Procedure 28 Request and connect to electricity servicesTime to complete: 14 daysCost to complete: ARS 275Agency: Edenor S.A. or Edesur S.A.Comment: A copy of the building permit, issued by the city of Buenos Aires, must be submitted to obtain an electric power connection (servicio de conexión). Once the application is filed, the work verification is issued within 5 working days. The connection order is sent soon after. Within 5 working days, an electrical connection is established. The connection fee is ARS 275.30 for the single-phase energy and ARS 420.89 for three-phase energy. 31
  • 32
  • 1. Benchmarking Registering Property Regulations Argentina is ranked 118 overall for Registering Property.Ranking of Argentina in Registering Property - Compared to good practice and selected economies: 33
  • The following table shows Registering Property data for Argentina compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) property Economies value) New Zealand 2 Norway 1 Saudi Arabia 0.0 Selected Economy Argentina 6 52 7.0 Comparator Economies Bolivia 7 92 4.8 Brazil 14 42 2.7 Ecuador 9 16 2.2 Mexico 5 74 5.2 Peru 4 7 3.3 34
  • 2. Historical data: Registering Property in Argentina Registering Property data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 114 118 Procedures (number) 5 5 6 6 Time (days) 51 51 52 52 Cost (% of property value) 7.0 7.0 7.0 7.03. Registering Property sub indicators in Argentina over the past 4 years 35
  • 4. Overview of the steps to Registering Property in Argentina It requires 6 procedures, takes 52 days, and costs 6.99 % of property value to register the property in Argentina. Time to completeNo: Procedure Cost to complete (days)1 * Seller must obtain a certificate of ownership ("dominio") 7 days (regular Domain Certificate: and a certificate of good standing ("inhibiciones") from the procedure for domain ARS 143 (urgent) or Real Property Registry certificate and personal ARS 75 (regular)Personal annotation certificate), 1 Annotation day (urgent procedure) Certificate: ARS 131 (simultaneous with (urgent) or ARS 68 procedures 2 and 3) (regular)2 * Obtain a catastral certificate ("certificado catastral") 1 day (simultaneous ARS 39 with procedures 1 and 3)3 * Obtain a certificate stating that no local taxes related to the 1 day (simultaneous ARS 50 property are due (ABL) with procedures 1 and 2)4 Obtain "Code of Offer of Transfer of a Property" (COTI) at 1 day no cost tax agency AFIP 36
  • 5 The public deed is executed by the parties with the 14-28 days Notary public fees: intervention of a notary public 1-1.5% of the purchase price (usually paid by buyer)Stamp Tax: 2.5 % of the purchase price (usually paid jointly)Transfer Tax: 3% of the purchase price (paid by seller) 6 The notary public files the property transfer for registration 28 days ARS 113.5 (regular) with the Real Property Register or ARS 251.5 (urgent) + 0.2% property price additional stamp tax* Takes place simultaneously with another procedure. 37
  • 5. Details on Registering Property in ArgentinaThis topic examines the steps, time, and cost involved in registering property in Argentina.STANDARDIZED PROPERTYProperty Value: ARS 1,379,566.91City: Buenos Aires (Ciudad autonoma de) Procedure 1 Seller must obtain a certificate of ownership ("dominio") and a certificate of good standing ("inhibiciones") from the Real Property Registry Time to complete: 7 days (regular procedure for domain certificate and personal annotation certificate), 1 day (urgent procedure) (simultaneous with procedures 2 and 3) Cost to complete: Domain Certificate: ARS 143 (urgent) or ARS 75 (regular)Personal Annotation Certificate: ARS 131 (urgent) or ARS 68 (regular) Agency: Real Property Registry (Registro de la propiedad inmueble de la Capital Federal) Comment: The certificate of ownership ("Certificado de dominio") proves that the property is free and clear of liens and or encumbrances. The certificate of good standing ("Certificado de inhibiciones") proves that there is no judicial order restraining the seller from encumbering or disposing of his assets. The domain certificate and a personal annotation are valid for 15 days, and they are both requested with a unified form. According to Executive Order No. 2080/80, article 8, it is mandatory to obatin the non-encumbrance certificate. When a notary from the Capital Federal requests a domain certificate, the property is “reserved” for 60 days. If a new Domain certificate is requested during this period, it will state that a transaction is in process. Pursuant to Technical Resolution N°5/2008 of the Registry of Property dated September 5, 2008, the certificate of good standing can be obtained online at the Registry website www.dnrpi.jus.gov.ar, with a cost of AR$ 46. Only interested parties pursuant to sections 6,7 and 22, Law No. 17,801 can obtain the certificate online, and they also need to be registered in the website (notaries, accountants, lawyers,...). 38
  • Procedure 2 Obtain a catastral certificate ("certificado catastral")Time to complete: 1 day (simultaneous with procedures 1 and 3)Cost to complete: ARS 39Agency: City of Buenos Aires government (“Oficina catastral”)Comment: The notary requests the cadastral certificate (with measures, boundaries and fiscal valuation) at the Cadastral office (“Oficina catastral”). The certificate is valid for one year. In the Capital Federal, there is no need of a surveyor measuring the property. Note: for some type of properties, it is possible to obtain the certificate on-line in the Province of Buenos Aires.Procedure 3 Obtain a certificate stating that no local taxes related to the property are due (ABL)Time to complete: 1 day (simultaneous with procedures 1 and 2)Cost to complete: ARS 50Agency: Notaries’ association ("Colegio de Escribanos")Comment: This certificate ("Certificado de libre deuda de impuestos municipales-ABL") is obtained at the Notaries’ association ("Colegio de Escribanos"). Local taxes related to the property being sold are known as ABL (“alumbrado, barrido y limpieza”, street light and cleaning). The certificate is valid for 30 days (or the current month), according to the 2009 “Código Fiscal” of the city of Buenos Aires, which shortened the original 1 year validity.Procedure 4 Obtain "Code of Offer of Transfer of a Property" (COTI) at tax agency AFIPTime to complete: 1 dayCost to complete: no costAgency: Tax Agency (AFIP)Comment: For every transfer of a property made for properties over AR$ 300.000, the seller shall declare it before the tax authorities in the City (AFIP). In order to declare such transaction the Seller shall get the "Code of Offer of Transfer of a Property" (COTI) from AFIP, by informing the names of buyer and seller, the property and the value of the transaction. The procedure can be done though AFIP’s website, by phone or text message. The COTI has a validity of 24 months (extendable 12 months if a construction will be made), and started to be implemented since March 1st 2008 through the Resolución General N° 2371 Año 2007 from 14/12/2007 in order to fight tax evasion. The "Code of Offer of Transfer of a Property" (COTI) may be obtained: - online: through www.afip.gov.ar, acessing to the system with a tax code; or -via phone (0800-999-2347), in which case it will be necessary to print a certificate afterwards from www.afip.gov.ar, acessing to the system with a tax code; or - via sms, texting 2347. The user will receive a reply with the number of procedure and will be contacted later by the Information Call Center to continue with the procedure.Procedure 5 The public deed is executed by the parties with the intervention of a notary public 39
  • Time to complete: 14-28 daysCost to complete: Notary public fees: 1-1.5% of the purchase price (usually paid by buyer)Stamp Tax: 2.5 % of the purchase price (usually paid jointly)Transfer Tax: 3% of the purchase price (paid by seller)Comment: The public deed is the only document which is mandatory by law to transfer a propertys ownership. Transactions subject to Capital Gains Tax are not subject to Transfer Tax (this is the case when companies are parties to the transaction). Capital Gains Tax is paid by the seller. However, this tax is not applicable if the money collected by seller for the transfer of property is used to buy another property within a year of the sale or for the construction of a new property. In this last case, for the tax waiver to apply, the construction has to start a year after or a year before the transaction and it has to be completed 4 years after the date of the transaction. The notary will retain the 3% for the transfer tax, but if the transaction is subject to Capital Gains Tax (CGT), he will use this amount to pay the CGT. If the transaction has been arranged through a broker, his fees will be about 3% of the purchase priceProcedure 6 The notary public files the property transfer for registration with the Real Property RegisterTime to complete: 28 daysCost to complete: ARS 113.5 (regular) or ARS 251.5 (urgent) + 0.2% property price additional stamp taxAgency: Real Property Registry (Registro de la propiedad inmueble de la Capital Federal)Comment: Upon registration, the buyer will have perfect and complete title to the property, opposable to third parties. The registration fees are usually paid by the buyer. The notary has 45 days to register the property transfer. At this stage, the property title can be used as a collateral for a loan, or the property can be resold. The majority of operations are made through the regular procedure. 40
  • 41
  • 1. Benchmarking Getting Credit Regulations Argentina is ranked 65 overall for Getting Credit.Ranking of Argentina in Getting Credit - Compared to good practice and selected economies: 42
  • The following table shows Getting Credit data for Argentina compared to good practice and comparator economies: Good Practice Strength of Depth of Public Private legal rights credit registry bureau Economies index (0-10) information coverage (% coverage (% index (0-6) of adults) of adults) New Zealand 100.0 Portugal 67.1 Singapore 10 United Kingdom 6 Selected Economy Argentina 4 6 30.8 100.0 Comparator Economies Bolivia 1 6 11.3 31.4 Brazil 3 5 26.9 53.5 Ecuador 3 5 36.5 45.0 Mexico 5 6 0.0 71.6 Peru 7 6 25.5 33.3 43
  • 2. Historical data: Getting Credit in Argentina Getting Credit data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 61 65 Strength of legal rights index (0-10) 4 4 4 4 Depth of credit information index (0-6) 6 6 6 6 Private bureau coverage (% of adults) 100.0 100.0 100.0 100.0 Public registry coverage (% of adults) 25.5 31.2 34.3 30.83. Getting Credit sub indicators in Argentina over the past 4 years 44
  • 4. Details on Getting Credit in ArgentinaThe following table summarize legal rights of borrowers and lenders, and the availability and legal framework of creditregistries in Argentina. Getting Credit Indicators (2010) Indicator Private credit Public credit Private bureau coverage (% of adults) 6 bureau registry Are data on both firms and individuals distributed? Yes Yes 1 Are both positive and negative data distributed? Yes Yes 1 Does the registry distribute credit information from retailers, trade Yes No 1 creditors or utility companies as well as financial institutions? Are more than 2 years of historical credit information distributed? Yes No 1 Is data on all loans below 1% of income per capita distributed? Yes Yes 1 Is it guaranteed by law that borrowers can inspect their data in the Yes Yes 1 largest credit registry? Coverage 100.0 30.8 Number of individuals .. 9,123,380 Number of firms .. 133,772 45
  • Strength of legal rights index (0-10) 4Can any business use movable assets as collateral while keeping possession of the assets; and any financial Yesinstitution accept such assets as collateral ?Does the law allow businesses to grant a non possessory security right in a single category of movable assets, Nowithout requiring a specific description of collateral?Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without Norequiring a specific description of collateral?May a security right extend to future or after-acquired assets, and may it extend automatically to the products, Noproceeds or replacements of the original assets ?Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations Yesand debts can be secured by stating a maximum amount rather than a specific amount between the parties ?Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the Nograntors name of a security right ?Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? YesDo secured creditors have absolute priority to their collateral in bankruptcy procedures? NoDuring reorganization, are secured creditors claims exempt from an automatic stay on enforcement? YesDoes the law authorize parties to agree on out of court enforcement? No 46
  • 47
  • 1. Benchmarking Protecting Investors Regulations Argentina is ranked 109 overall for Protecting Investors.Ranking of Argentina in Protecting Investors - Compared to good practice and selected economies: 48
  • The following table shows Protecting Investors data for Argentina compared to good practice and comparator economies: Good Practice Strength of investor Economies protection index (0-10) New Zealand 9.7 Selected Economy Argentina 4.7 Comparator Economies Bolivia 4.0 Brazil 5.3 Ecuador 4.0 Mexico 6.0 Peru 6.7 49
  • 2. Historical data: Protecting Investors in Argentina Protecting Investors data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 108 109 Strength of investor protection index (0-10) 4.7 4.7 4.7 4.73. The following graph illustrates the Protecting Investors index in Argentina compared to bestpractice and selected Economies: 9.7 6.7 6.0 5.3 4.7 4.0 4.0 o il ru ic nd a r ia az ex do tin Pe liv Br a M ua al en Bo Ze Ec rg A ew NNote: The higher the score, the greater the investor protection. 50
  • 4. Details on Protecting Investors in ArgentinaThe table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes arecalculated in Argentina. Protecting Investors Data (2010) Indicator Extent of disclosure index (0-10) 6 2 What corporate body provides legally sufficient approval for the transaction? 2 Whether immediate disclosure of the transaction to the public and/or shareholders is required? 0 Whether disclosure of the transaction in published periodic filings (annual reports) is required? 2 Whether disclosure of the conflict of interest by Mr. James to the board of directors is required? 0 Whether an external body must review the terms of the transaction before it takes place? Extent of director liability index (0-10) 2 0 Whether shareholders can hold Mr. James liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether shareholders can hold the approving body (the CEO or board of directors) liable for the damage that the Buyer-Seller transaction causes to the company? 0 Whether a court can void the transaction upon a successful claim by a shareholder plaintiff? 1 Whether Mr. James pays damages for the harm caused to the company upon a successful claim by the shareholder plaintiff? 51
  • 0 Whether Mr. James repays profits made from the transaction upon a successful claim by the shareholder plaintiff? 0 Whether fines and imprisonment can be applied against Mr. James? 1 Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller transaction causes to the company?Ease of shareholder suits index (0-10) 6 4 Whether the plaintiff can obtain any documents from the defendant and witnesses during trial? 0 Whether the plaintiff can directly question the defendant and witnesses during trial? 1 Whether the plaintiff can request categories of documents from the defendant without identifying specific ones? 1 Whether shareholders owning 10% or less of Buyers shares can request an inspector to investigate the transaction? 0 Whether the level of proof required for civil suits is lower than that of criminal cases? 0 Whether shareholders owning 10% or less of Buyers shares can inspect transaction documents before filing suit?Strength of investor protection index (0-10) 4.7 52
  • 53
  • 1. Benchmarking Paying Taxes Regulations Argentina is ranked 143 overall for Paying Taxes.Ranking of Argentina in Paying Taxes - Compared to good practice and selected economies: 54
  • The following table shows Paying Taxes data for Argentina compared to good practice and comparator economies: Good Practice Payments Time (hours Total tax rate (number per per year) (% profit) Economies year) Maldives 3 0 Timor-Leste 0.2 Selected Economy Argentina 9 453 108.2 Comparator Economies Bolivia 42 1080 80.0 Brazil 10 2600 69.0 Ecuador 8 654 35.3 Mexico 6 404 50.5 Peru 9 380 40.2 55
  • 2. Historical data: Paying Taxes in Argentina Paying Taxes data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 137 143 Total tax rate (% profit) 108.1 108.1 108.1 108.2 Payments (number per year) 19 9 9 9 Time (hours per year) 453 453 453 4533. Paying Taxes sub indicators in Argentina over the past 4 years 56
  • 4. Details on Paying Taxes in ArgentinaThe table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold ina given year in Argentina, as well as measures of administrative burden in paying taxes. Tax or mandatory Payments Notes on Time Statutory tax Tax Totaltax rate Notes on contribution (number) Payments (hours) rate base (% profit) TTR Value added tax (VAT) 1 online 240 21.0% value added filing Subway tax 0 paid jointly 10.0% vehicle tax 0.00 paid Vehicle tax 1 2.3% fiscal value of 0.30 vehicle Fuel tax 1 ARS liter 0.80 0.44/liter consumption Stamp tax on sale of a 1 50% of 2.5% sale price 0.80 real estate Corporate income tax 1 online 105 35.0% taxable profit 2.80 filing Labor Risk Insurance 0 paid jointly 3% (+ ARS gross salaries 3.40 0.6 per employee per month) 57
  • Property tax 1 online varies fiscal value of 3.50 filing (0,562% plus building and ARS 14,364 land )Tax on financial (check) 1 0.6% any amount 17.60transactions debited or credited to bank accountsSocial security 1 online 108 23.0% gross salaries 25.90contributions filingTurnover tax by City of 1 online 3.0% turnover 53.00Buenos Aires filingTotals 9 453 108.2 58
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  • 1. Benchmarking Trading Across Borders Regulations Argentina is ranked 115 overall for Trading Across Borders.Ranking of Argentina in Trading Across Borders - Compared to good practice and selected economies: 60
  • The following table shows Trading Across Borders data for Argentina compared to good practice and comparatoreconomies: Good Practice Documents to Time to Cost to Documents to Time to Cost to export export (days) export (US$ import import (days) import (US$ Economies (number) per (number) per container) container) Denmark 5 France 2 2 Malaysia 450 Singapore 4 439 Selected Economy Argentina 9 13 1480 7 16 1810 Comparator Economies Bolivia 8 19 1425 7 23 1747 Brazil 8 13 1790 7 17 1730 Ecuador 9 20 1345 7 29 1332 Mexico 5 12 1420 4 12 1880 Peru 6 12 860 8 17 880 61
  • 2. Historical data: Trading Across Borders in Argentina Trading Across Borders data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 113 115 Cost to export (US$ per container) 1325 1480 1480 1480 Cost to import (US$ per container) 1825 1810 1810 1810 Documents to export (number) 9 9 9 9 Documents to import (number) 7 7 7 7 Time to export (days) 16 13 13 13 Time to import (days) 20 18 16 163. Trading Across Borders sub indicators in Argentina over the past 4 years 62
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  • 4. Details on Trading Across Borders in ArgentinaThese tables list the procedures necessary to import and export a standardized cargo of goods in Argentina. Thedocuments required to export and import the goods are also shown. Nature of Export Procedures (2010) Duration (days) US$ Cost Documents preparation 6 510 Customs clearance and technical control 2 120 Ports and terminal handling 2 500 Inland transportation and handling 3 350 Totals 13 1480 Nature of Import Procedures (2010) Duration (days) US$ Cost Documents preparation 8 610 Customs clearance and technical control 3 150 Ports and terminal handling 3 700 Inland transportation and handling 2 350 Totals 16 1810 64
  • Documents for Export and Import Export Bill of lading Cargo release order Certificate of origin Commercial invoice Customs export declaration Foreign exchange authorization Packing list Tax certificate Terminal handling receipts Import Bill of lading Certificate of origin Commercial invoice Customs import declaration Packing list Technical standard/health certificate Terminal handling receipts 65
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  • 1. Benchmarking Enforcing Contracts Regulations Argentina is ranked 45 overall for Enforcing Contracts.Ranking of Argentina in Enforcing Contracts - Compared to good practice and selected economies: 67
  • The following table shows Enforcing Contracts data for Argentina compared to good practice and comparator economies: Good Practice Procedures Time (days) Cost (% of (number) claim) Economies Bhutan 0.1 Ireland 20 Singapore 150 Selected Economy Argentina 36 590 16.5 Comparator Economies Bolivia 40 591 33.2 Brazil 45 616 16.5 Ecuador 39 588 27.2 Mexico 38 415 32.0 Peru 41 428 35.7 68
  • 2. Historical data: Enforcing Contracts in Argentina Enforcing Contracts data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 45 45 Procedures (number) 36 36 36 36 Time (days) 590 590 590 590 Cost (% of claim) 16.5 16.5 16.5 16.53. Enforcing Contracts sub indicators in Argentina over the past 4 years 69
  • 4. Details on Contract Enforcement in Argentina This topic looks at the efficiency of contract enforcement in Argentina. Court information: Buenos Aires First Instance ("Juzgado Nacional de Primera Instancia en lo Comercial") Court, Commercial Section Nature of Procedure (2010) Indicator Procedures (number) 36 Time (days) 590 Filing and service 150.0 Trial and judgment 320.0 Enforcement of judgment 120.0 Cost (% of claim)* 16.50 Attorney cost (% of claim) 11.0 Court cost (% of claim) 4.5 Enforcement Cost (% of claim) 1.0 * Claim assumed to be equivalent to 200% of income per capita. 70
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  • 1. Benchmarking Closing Business Regulations Argentina is ranked 77 overall for Closing a Business.Ranking of Argentina in Closing Business - Compared to good practice and selected economies: 72
  • The following table shows Closing Business data for Argentina compared to good practice and comparator economies: Good Practice Recovery rate Time (years) Cost (% of (cents on the estate) Economies dollar) Ireland 0.4 Japan 92.7 Singapore 1 Selected Economy Argentina 32.8 2.8 12 Comparator Economies Bolivia 39.3 1.8 15 Brazil 17.1 4.0 12 Ecuador 17.0 5.3 18 Mexico 66.7 1.8 18 Peru 27.2 3.1 7 73
  • 2. Historical data: Closing Business in Argentina Closing a Business data Doing Business Doing Business Doing Business Doing Business 2008 2009 2010 2011 Rank .. .. 87 77 Time (years) 2.8 2.8 2.8 2.8 Cost (% of estate) 12 12 12 12 Recovery rate (cents on the dollar) 34.4 29.8 29.8 32.83. Closing Business sub indicators in Argentina over the past 4 years 74
  • Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening propertyrights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing Businesshave reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and exportregulations and improving credit information systems.The top 10 most-improved in Doing Business 2011 Dealing with Construction Trading Across Borders Positive Change Registering Property Enforcing Contracts Protecting Investors Starting a Business Closing a Business Negative Change Getting Credit Paying Taxes Permits Economy Kazakhstan Rwanda Peru Vietnam Cape Verde Tajikistan Zambia Hungary Grenada Brunei Darussalam * For Doing Business 2011 the Employing Workers indicator is not included in the aggregate ease of doing business ranking. 75
  • Summary of changes to business regulation in top 10 most improved economies in DoingBusiness 2011 and selected comparator economies.Brazil Brazil eased business start-up by further enhancing the electronic synchronization between federal and state tax authorities.Brunei Darussalam Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. The introduction of an electronic customs system in Brunei Darussalam made trading easier.Cape Verde Cape Verde made start-up easier by eliminating the need for a municipal inspection before a business begins operations and computerizing the system for delivering the municipal license. Cape Verde eased property registration by switching from fees based on a percentage of the property value to lower fixed rates. Cape Verde abolished the stamp duties on sales and checks.Ecuador Ecuador made starting a business easier by introducing an online registration system for social security.Grenada Grenada eased business start-up by transferring responsibility for the commercial registry from the courts to the civil administration. The appointment of a registrar focusing only on property cut the time needed to transfer property in Grenada by almost half. Grenada’s customs administration made trading faster by simplifying procedures, reducing inspections, improving staff training and enhancing communication with users.Hungary Hungary implemented a time limit for the issuance of building permits. Hungary reduced the property registration fee by 6% of the property value. Hungary simplified taxes and tax bases. Amendments to Hungary’s bankruptcy law encourage insolvent companies to consider reaching agreements with creditors out of court so as to avoid bankruptcy.Kazakhstan Kazakhstan eased business start-up by reducing the minimum capital requirement to 100 tenge ($0.70) and eliminating the need to have the memorandum of association and company charter notarized. Kazakhstan made dealing with construction permits easier by implementing a one-stop shop related to technical conditions for utilities. Kazakhstan strengthened investor protections by requiring greater corporate disclosure in company annual reports. Kazakhstan speeded up trade through efforts to modernize customs, including implementation of a risk management system and improvements in customs automation.Mexico Mexico launched an online one-stop shop for initiating business registration. Mexico improved construction permitting by merging and streamlining procedures related to zoning and utilities. Mexico increased taxes on companies by raising several tax rates, including the corporate income tax and the rate on cash deposits. At the same time, the administrative burden was reduced slightly with more options for online payment and increased use of accounting software.Peru Peru eased business start-up by simplifying the requirements for operating licenses and creating an online one-stop shop for business registration. Peru streamlined construction permitting by implementing administrative reforms. Peru introduced fast-track procedures at the land registry, cutting by half the time needed to register property. Peru made trading easier by implementing a new web-based electronic data interchange system, risk-based inspections and payment deferrals.Rwanda Rwanda made dealing with construction permits easier by passing new building regulations at the end of April 2010 and implementing new time limits for the issuance of various permits. Rwanda enhanced access to credit by allowing borrowers the right to inspect their own credit report and mandating that loans of all sizes be reported to the central bank’s public credit registry. Rwanda reduced the number of trade documents required and enhanced its joint border management procedures with Uganda and other neighbors, leading to an improvement in the trade logistics environment.Tajikistan Tajikistan made starting a business easier by creating a one-stop shop that consolidates registration with the state and the tax authority. Tajikistan strengthened investor protections by requiring greater corporate disclosure in the annual report and greater access to corporate information for minority investors. Tajikistan lowered its corporate income tax rate. 76
  • Vietnam Vietnam eased company start-up by creating a one-stop shop that combines the processes for obtaining a business license and tax license and by eliminating the need for a seal for company licensing. Vietnam made dealing with construction permits easier by reducing the cost to register newly completed buildings by 50% and transferring the authority to register buildings from local authorities to the Department of National Resources and Environment. Vietnam improved its credit information system by allowing borrowers to examine their own credit report and correct errors.Zambia Zambia eased business start-up by eliminating the minimum capital requirement. Zambia eased trade by implementing a one-stop border post with Zimbabwe, launching web-based submission of customs declarations and introducing scanning machines at border posts. Zambia improved contract enforcement by introducing an electronic case management system in the courts that provides electronic referencing of cases, a database of laws, real-time court reporting and public access to court records. 77
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