Doing Business 2011: Making a Difference for Entrepreneurs - Bulgaria 58383

Bulgaria

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

wb370910

Typewritten Text

58383

© 2010 The International Bank for Reconstruction and Development / The World Bank

1818 H Street NW

Washington, DC 20433

Telephone 202-473-1000

Internet www.worldbank.org

All rights reserved.

1 2 3 4 08 07 06 05

A 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 conclusions

expressed in this volume do not necessarily reflect the views of the Executive Directors of the World Bank or the

governments they represent. The World Bank does not guarantee the accuracy of the data included in this work.

Rights and Permissions

The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without

permission may be a violation of applicable law. The World Bank encourages dissemination of its work and will

normally 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 the

Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax

978-750-4470; Internet www.copyright.com.

All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the

Publisher,The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax 202-522-2422; e-mail

[email protected].

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 to

Reform, Doing Business in 2006: Creating Jobs, Doing Business in 2005: Removing Obstacles to Growth and

Doing Business in 2004:Understanding Regulations may be purchased at www.doingbusiness.org.

ISBN: 978-0-8213-7960-8

E-ISBN: 978-0-8213-8630-9

DOI: 10.1596/978-0-8213-7960-8

ISSN: 1729-2638

Library of Congress Cataloging-in-Publication data has been applied for.

Printed in the United States

Current features News on the Doing Business project

http://www.doingbusiness.org

Rankings How economies rank-from 1 to 183

http://www.doingbusiness.org/rankings/

Reformers Short summaries of DB2011 reforms, lists of reformers since DB2004

and a ranking simulation tool

http://www.doingbusiness.org/reforms/

Historical dataCustomized data sets since DB2004

http://www.doingbusiness.org/custom-query/

Methodology and research The methodologies and research papers underlying Doing Business

http://www.doingbusiness.org/Methodology/

Download reports Access to Doing Business reports as well as subnational and regional

reports, reform case studies and customized country and regional

profiles

http://www.doingbusiness.org/reports/

Subnational and regional projects Differences in business regulations at the subnational and regional

level

http://www.doingbusiness.org/subnational-reports/

Law LibraryOnline collection of business laws and regulations relating to

business and gender issues

http://www.doingbusiness.org/law-library/

http://wbl.worldbank.org/

Local partners More than 8,200 specialists in 183 economies who participate in

Doing Business

http://www.doingbusiness.org/Local-Partners/Doing-Business/

Business Planet Interactive map on the ease of doing business

http://rru.worldbank.org/businessplanet

Contents

Introduction

and Aggregate Rankings

5 - Year Measure of

Cumulative Change

Starting a Business

Dealing with

Construction Permits

Registering Property

Getting Credit

Protecting Investors

Paying Taxes

Trading Across Borders

Enforcing Contracts

Closing a Business

Doing Business 2011

Business Reforms

1

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 Bulgaria. 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 that refers to the period January to December of 2009.

Note: 2008-2010 Doing Business data and rankings have been recalculated to reflect changes to the methodology

and the addition of new economies (in the case of the rankings).

Economy Rankings - Ease of Doing Business

Bulgaria's ranking in Doing Business 2011

Bulgaria - Compared to global good practice economy as well as selected economies:

Bulgaria is ranked 51 out of 183 economies. Singapore is the top ranked economy in the Ease of Doing Business.

Doing Business 2011

Ease of Doing Business 51

Starting a Business 43

Dealing with Construction Permits 119

Registering Property 62

Getting Credit 6

Protecting Investors 44

Paying Taxes 85

Trading Across Borders 108

Enforcing Contracts 87

Closing a Business 83

Rank

2

Summary of Indicators - Bulgaria

Starting a Business Procedures (number) 4

Time (days) 18

Cost (% of income per capita) 1.6

Min. capital (% of income per capita) 0.0

Dealing with Construction Permits Procedures (number) 24

Time (days) 139

Cost (% of income per capita) 442.3

Registering Property Procedures (number) 8

Time (days) 15

Cost (% of property value) 3.0

Getting Credit Strength of legal rights index (0-10) 8

Depth of credit information index (0-6) 6

Public registry coverage (% of adults) 37.0

Private bureau coverage (% of adults) 13.1

Protecting Investors Extent of disclosure index (0-10) 10

Extent of director liability index (0-10) 1

Ease of shareholder suits index (0-10) 7

Strength of investor protection index (0-10) 6.0

Paying Taxes Payments (number per year) 17

Time (hours per year) 616

Profit tax (%) 4.6

Labor tax and contributions (%) 20.4

Other taxes (%) 3.9

Total tax rate (% profit) 29.0

Trading Across Borders Documents to export (number) 5

Time to export (days) 23

Cost to export (US$ per container) 1551

Documents to import (number) 7

Time to import (days) 21

Cost to import (US$ per container) 16663

Enforcing Contracts Procedures (number) 39

Time (days) 564

Cost (% of claim) 23.8

Closing a Business Recovery rate (cents on the dollar) 31.0

Time (years) 3.3

Cost (% of estate) 9

The 5 year measure of cumulative change illustrates how the business regulatory environment has changed in 174 economies

from Doing Business 2006 to Doing Business 2011. Instead of highlighting which countries currently have the most business

friendly environment, this new approach shows the extent to which an economy’s regulatory environment for business has

changed compared with 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 index thanks 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

Doing Business 2011

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

CzechRepublic

Poland SlovakRepublic

Bulgaria Moldova Hungary

Doing

business has

become

easier (DB

change

score)

6

1. Benchmarking Starting a Business Regulations:

Bulgaria is ranked 43 overall for Starting a Business.

Ranking of Bulgaria in Starting a Business - Compared to good practice and selected economies:

7

Procedures

(number)

Time (days) Cost (% of

income per

capita)

Min. capital

(% of income

per capita)

Denmark* 0.0

New Zealand* 1 1 0.0

Good Practice

Economies

Bulgaria 4 18 1.6 0.0

Selected Economy

Czech Republic 9 20 9.3 30.9

Hungary 4 4 8.2 10.2

Moldova 8 10 10.9 11.9

Poland 6 32 17.5 14.7

Slovak Republic 6 16 1.9 22.2

Comparator Economies

The following table shows Starting a Business data for Bulgaria compared to good practice and comparator economies:

* The following economies are also good practice economies for :

Procedures (number): Canada

Cost (% of income per capita): Slovenia

8

Starting a Business data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 50 43

Procedures (number) 9 4 4 4

Time (days) 32 49 18 18

Cost (% of income per capita) 8.4 2.0 1.7 1.6

Min. capital (% of income per capita) 56.3 47.8 20.7 0.0

2. Historical data: Starting a Business in Bulgaria

3. The following graphs illustrate the Starting a Business sub indicators in Bulgaria over the past 4 years:

9

Starting a Business Summary - Bulgaria

Registration Requirements:

STANDARDIZED COMPANY

Legal Form: Druzestvo s Ogranichena Otgovornost (OOD)

City: Sofia

This table summarizes the procedures and costs associated with setting up a business in Bulgaria.

No: Procedure Time to complete Cost to complete

Execute the minutes of the constituent meeting of the shareholders in

the ODD; obtain a notary certified statement of consent and signature

specimen of the manager, and a certified copy of the articles of

incorporation of the ODD.

1 1 BGN 5

Deposit paid-up capital in a bank 2 1 BGN 20

Register with the Commercial Register at the Registry Agency 3 4 BGN 110

Register for VAT 4 12 no charge

10

Procedure Execute the minutes of the constituent meeting of the shareholders in the ODD; obtain a

notary certified statement of consent and signature specimen of the manager, and a

certified copy of the articles of incorporation of the ODD.

1

Time to complete: 1

Cost to complete: BGN 5

Comment: The appointment of manager(s) is evidenced by a resolution passed by the constituent meeting of

interest holders. The statement of consent and signature specimen is embodied into a single

document, and notary certification of manager(s)' signature(s) is required.

Procedure Deposit paid-up capital in a bank 2

Time to complete: 1


Comment: The capital-accruing bank account must be opened either by the company manager or by a person

authorized by a notary-certified power of attorney. Those persons delegated authority over the

bank account must provide a signature specimen in person or a notary-certified specimen. The

amount of capital stays blocked in the bank account until the registry issues a decision on the

company registration. The Commercial Act requires the minimum capital prescribed by law, i.e.

BGN 2, to be paid-in prior to incorporation. After opening the escrow account and despositing the

funds therein the company under incorporation is issued a certificate evidencing the shareholders'

deposit of the capital. The certificate must be presented at the registry.

Procedure Register with the Commercial Register at the Registry Agency 3

Time to complete: 4


Comment: The registration is done using a Standard Application (A4 Form – "Application for registration of

circumstances

related to a limited liability company"). The following documents must be attached to the

application: (1) Agreement of Association, (2) Resolution for appointment of manager(s), (3)

Notary certified consent and signature specimen of manager(s), and (4) Bank certificate for

deposited capital. The state fees are BGN 160 if the documents are filed with the Registry Agency

on paper or BGN 110 if the registration documents are filed with the Registry Agency

electronically.

Procedure Register for VAT 4

Time to complete: 12

Cost to complete: no charge

Comment: The Value Added Tax Act (promulgated on August 4, 2006 in State

Gazette issue 63) became effective on January 1, 2007 (Bulgaria's

EU accession date). Under this new law, the company may

voluntarily register for VAT purposes at any time, because the

Starting a Business Details - Bulgaria

11

current threshold requirement has been abolished. A voluntarily

registered person shall remain VAT-registered for 24 months

starting from the beginning of the year following the year of VAT

registration. The company must register for VAT purposes in

Bulgaria if its turnover for 12 consecutive months exceeds BGN

50,000. Specific grounds for obligatory registration for VAT

purposes apply when: - A person from an EU member state who is

not established in Bulgaria and provides taxable supplies of goods

that are to be assembled or installed in Bulgaria by that person or

at his or her expense (if the recipient is not registered for VAT in

Bulgaria). - A person from another EU member state supplies

goods to Bulgaria exceeding total value of BGN 70,000 under the

conditions of distance sales of goods within a given calendar year.

- A person (whether resident or not) performs taxable

intracommunity acquisitions in Bulgaria exceeding BGN 20,000

within a given calendar year. - A person (whether resident or not)

receives supplies of services under chargeable supplies having

place of performance on Bulgarian territory with respect to which

the VAT is due by the recipient. - A Bulgarian resident performing

supplies of services having place of supply the territory of another

EU member state.

12

13

1. Benchmarking Dealing with Construction Permits Regulations:

Bulgaria is ranked 119 overall for Dealing with Construction Permits.

Ranking of Bulgaria in Dealing with Construction Permits - Compared to good practice and selected economies:

14

Procedures

(number)


income per

capita)

Denmark 6

Qatar 0.8

Singapore 25

Good Practice

Economies

Bulgaria 24 139 442.3

Selected Economy

Czech Republic 36 150 16.4

Hungary 31 189 9.8

Moldova 30 292 120.9

Poland 32 311 121.8

Slovak Republic 13 287 12.7


The following table shows Dealing with Construction Permits data for Bulgaria compared to good practice and comparator

economies:

15

Dealing with Construction Permits data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 117 119


Time (days) 131 139 139 139

Cost (% of income per capita) 499.9 493.6 436.5 442.3

2. Historical data: Dealing with Construction Permits in Bulgaria

3. The following graphs illustrate the Dealing with Construction Permits sub indicators in Bulgaria over

the past 4 years:

16

Dealing with Construction Permits in Bulgaria


BUILDING A WAREHOUSE

City: Sofia

The table below summarizes the procedures, time, and costs to build a warehouse in Bulgaria.


1 Apply and obtain the designing visa from the chief architect of the

municipality

3 days BGN 300

2 Sign preliminary contracts with the water authorities to connect to the

water supply networks and obtain this connection

20 days BGN 162*

3 On-site inspection from water authorities 1 day no charge*

4 Obtain approval from the electricity provider 30 days BGN 205*

5 Receive on-site inspection from Electricity provider 1 day BGN 86

6 Obtain preliminary survey from Telecom provider 15 days no charge

7 Apply for the approval for the investment design with the Chief Architect

of the Municipality

30 days BGN 260

17

8 Request and obtain preliminary assessment of the building for its

compliance with energy efficiency requirements from licensed company

2 days BGN 1,301*

9 Obtain approval of the investment design project from the Fire

Department

30 days BGN 450*

10 Obtain an expert opinion on environmental impact assessment from the

Director of the Regional Inspection for the protection of the environment

30 days BGN 50*

11 Obtain approval of the investment project design from a Hygiene

Epidemiological Expert

25 days BGN 70*

12 Request the chief architect of the municipality to issue the permission for

construction

7 days BGN 11,705*

13 Sign a contract with a surveillance company 5 days BGN 10,405

14 Map the building on the cadastre 1 day BGN 30

15 Sign contract with electricity company and receive connection 30 days BGN 9,600*

16 Sign contract with water provider and receive connection 10 days BGN 500*

17 Sign contract with telephone provider and receive connection 10 days BGN 84*

18 Obtain fire safety certificate 1 day BGN 900

19 The construction surveillance files a report on the completed construction 1 day no charge

20 A technical passport is registered with the Chief Architect of the

municipality

3 days no charge

21 A copy of the registered technical passport is filed with the Cadastre

Agency

1 day BGN 2

22 Request and obtain certificate for energy efficiency 7 days no charge

23 Receive inspection by the municipality 1 day no charge

24 The municipality issues the approval of the building 7 days BGN 750

* Takes place simultaneously with another procedure.

18

Procedure Apply and obtain the designing visa from the chief architect of the municipality 1

Time to complete: 3 days


Agency: Municipality

Comment: To obtain the design permit, BuildCo must submit an application form, a title of property

or proof of ownership, a sketch of the acting regulation plan, and a change proposal with

tax receipts. The time limit for obtaining the design permit is 14 days, according to the

Law of the Spatial Planning (Article 140). The design permit fees are set according to

Decision No 894, Protocol No 93 (dated November 23, 2006) of the Sofia Municipal

Council, Addendum 4, Article 2, as shown below.

Fee schedule for design permit request:

- Residential buildings: BGN 40.

- Nonresidential buildings: BGN 150.

As of January 2009, the design visa can be obtained in fast track option. For

nonresidential buildings it will cost BGN 300.

The documents required for issuance of a designing visa are: an application form, a title

of ownership and a tax receipt.

Procedure Sign preliminary contracts with the water authorities to connect to the water supply

networks and obtain this connection

2



Agency: Water Authorities

Comment: In principle, BuildCo must obtain approval from the water authorities. The approval is

valid for a year. Several documents are necessary to obtain this approval, including proof

of ownership, the plan, the application form, the design permit, and the investment design

by the municipal?s chief architect. Because this procedure is carried out simultaneously

with Procedure 2, the filing is submitted at the same time. On these grounds, the water

company undertakes a preliminary survey and subsequently issues a report that contains

the necessary technical data and the specifications for the network connection.

As of January 2009 the Water Company operating on the territory of Sofia has a new

pricelist for the services provided. The fee amounting at BGN 162 is payable in regard

with the issuance of a report containing the technical data and specifications of the water

network connection. The expedited procedure is not effective anymore. It takes on

average 20 days to complete this procedure.

Procedure On-site inspection from water authorities 3

Time to complete: 1 day



Dealing with Construction Permits Details - Bulgaria

19

Comment:

Procedure Obtain approval from the electricity provider 4



Agency: Natsionalna Elektricheska Kompania (NEK)

Comment: Several documents are necessary to obtain this approval, including the request form, a

copy of the title document, and the design visa obtained in Procedure 2. Electricity

provider experts could provide BuildCo with investment-design project consulting

services, at the following rates:

- Up to 1 hour: 8.22 BGN.

- Up to 2 hours: 16.40 BGN.

A required document to obtain the municipality’s chief architect’s approval of the

investment design is a preliminary contract with the electricity provider.

Procedure Receive on-site inspection from Electricity provider 5




Comment:

Procedure Obtain preliminary survey from Telecom provider 6



Agency: Bulgaria Telecom (BTC)

Comment:

Procedure Apply for the approval for the investment design with the Chief Architect of the

Municipality

7




Comment: The approval of the investment design is the basis for issuing a construction permit.

As of January 2009, after amendment of the Decision No 894, the fees for the approval

of the investment design are BGN 0.20 per sq. m.. for the nonresidential buildings.

20

The procedure for the construction permit may be completed at the same time and within

7 days if the investment designs are grounds for issuing permission for construction. A

respective request must be included in the application for coordination. However, many

opt for separate procedures.

Procedure Request and obtain preliminary assessment of the building for its compliance with

energy efficiency requirements from licensed company

8


Cost to complete: BGN 1,301

Agency: Licensed Company

Comment: Every investment project for construction, reconstruction and modernization, on the basis

of which permission for construction is granted, has to be assessed for its compliance with

the energy efficiency requirements. The assessment is made by a company licensed

thereto. There is no a fixed price for the issuance of a certificate for energy effectiveness.

The rates are subject of negotiation and vary between BGN 1 - BGN 1.5 sq. m.. The

assessment is done by a privately licensed company.

Procedure Obtain approval of the investment design project from the Fire Department 9



Agency: Fire Department

Comment: The fee for this procedure is equal to 50% of the cost of the certificate for fire safety

issued after the completion of the construction. The latter depends on the construction

category that the fire department has classified the warehouse. As of the Law of the

Ministry of Interior (title amend.) SG 86/00: as of Article 31, Point 3a, Tariff No. 4), the

fee formula for warehouses, industrial buildings and premises, and external facilities

classified as a fire hazard "A" and "B" is BGN 250 plus BGN 0.50 per sq. m. As of 4

May 2007 fire safety procedures have been streamlined by an Order “On Conduction Fire

Safety Measures”. The Order does not stipulate any new requirements regarding the

construction process. However, the Order explicitly enumerates the attachments that have

to be submitted together with the application in order to obtain a Certificate for Fire

Safety. The validity of Certificate has been extended to 3 years. The procedure must be

completed within 14 days. However in practice it still takes on average one month.

Procedure Obtain an expert opinion on environmental impact assessment from the Director of the

Regional Inspection for the protection of the environment

10



Agency: Regional Inspection for the Protection of the Environment

Comment: The Law on Environment Protection (Appendix 1 and Appendix 2) defines the investment

projects subject to an environmental impact assessment. The warehouse building for

storing books and stationary does not fall among the investment projects listed in both

appendices. Thus, the issuance of such decision is not obligatory. However, an expert

opinion adopted by the competent body (e.g., the Director of the Regional Inspectorate of

Protection of Environment) is required to confirm that such decision is not necessary. The

expert opinion is issued within 14 days of submitting the request form and paying BGN

50 The decision is valid for 5 years.

21

Procedure Obtain approval of the investment project design from a Hygiene Epidemiological

Expert

11



Agency: Hygiene Epidemiological Expert

Comment: Required documents for the issuance of a hygiene certificate are a request form, a permit

for designing, approval letters from water and electricity authority, expert opinion from

the regional sanitary inspector, and other project documents. The hygiene epidemiological

expert’s fees for consulting services are BGN 4.5 an hour. The overall cost of the

approval is based on two criteria the number of experts involved in the inspection and

billable hours.

Procedure Request the chief architect of the municipality to issue the permission for construction 12




Comment: After the investment design has been approved, the permission for construction is issued

within 7 days of the formal application being received. Both steps could be performed

simultaneously if required in the application. The fees are BGN 9 per sq. m., according to

Decision No 894, Protocol No. 93 (dated November 23, 2006, and amended in February

5, 2008) of the Sofia Municipal Council, Addendum 4, Table 1, assuming suburban Zone

V.

Procedure Sign a contract with a surveillance company 13



Agency: Surveillance Company

Comment: BuildCo should sign a contract with an independent construction supervision firm. This

supervisor must be licensed by the Ministry of Regional Development and Public Works.

The supervisor will sign all acts and records during construction. The firm’s instructions

and orders are binding for BuildCo and the technical manager. Within 3 days of being

issued, objections against supervisory firm’s instructions can be made before the

Directorate for National Construction Control. Construction will be stopped until a

decision is reached, and the decision is considered to be a new set of binding rules. The

supervisor must notify the Regional Directorate For National Construction control of any

irregularities within 3 days of detection. The supervisor will be responsible for damages

caused to the assignor and to the other participants in the construction, and jointly

responsible with BuildCo for damages caused by not complying with the technical rules

and the approved designs. The supervision contract must be valid for the entire

construction process. The rates for a contract are between BGN 6 and BGN 10 per sq. m.

of built area. However, the cost for this procedure is subject to negotiation between the

investor and the surveillance company. There is no legally regulated minimum cost, but

the Bulgarian Association of Architects and Engineers has issued an act containing

recommended fees. The fees depend on the value of the construction work but may not be

less than BGN 800. After the end of the construction, the person exercising construction

supervision will prepare a final report to the assignor.

22

Procedure Map the building on the cadastre 14



Agency: Agency for Geodesy, Cartography and Cadastre

Comment: The Cadastre Agency issues a document after the building has been mapped. As of June

2007 the procedure can be done in fast track option in 4 hours for BGN 30. The fee is

collected in the system of the Ministry of Regional Development and Public Works,

according to Article 42, Paragraph 1, of the Tariff 14 promulgated SG No.94/1998. As of

03.2006 the Agency authorized to map the building on the cadastre is under the name of

Agency for Geodesy, Cartography and Cadastre. The amendment is made by § 7, item 1

of the Law of the Geodesy and Cartography.

Procedure Sign contract with electricity company and receive connection 15




Comment: The fee is BGN 9,600 for connection to utility networks with a length up to 25 meters.

Procedure Sign contract with water provider and receive connection 16




Comment: The decision is valid for 3 years, according to the order of the environmental protection

law.

Procedure Sign contract with telephone provider and receive connection 17



Agency: Bulgaria Telecom (BTC)

Comment:

Procedure Obtain fire safety certificate 18



Agency: Fire Department

23

Comment: The fee for issuing fire certificates for buildings and premises with industrial purpose,

warehouses, and external facilities with fire hazard category "A" and "B" is BGN 250

plus BGN 0.50 per sq. m. This fee is set according to Tariff No. 4 for the Charges

Collected Within the System of the Interior Ministry, Under the Law of the State Fees,

Article 3a (amend. – SG 21/07).

Procedure The construction surveillance files a report on the completed construction 19



Agency: Construction Surveillance

Comment: After the construction is finished, the assignor, the designer, the constructor, and the

supervisor, must issue a document confirming that the construction has been carried out in

accordance with the approved designs, the certified executive documentation, the

requirements of the construction and the conditions of the contract. The records for

conducted trials on the machines and on the facilities should also be attached. The

transfer of the construction by the constructor to the assignor is also implemented.

Procedure A technical passport is registered with the Chief Architect of the municipality 20




Comment: The Law on Spatial Development was supplemented on September 15, 2006, State

Gazette, Issue No. 76. The law contains a new requirement for licensed experts

performing surveillance control. A technical passport for the construction should be

prepared after the completion of construction. This document defines all terms for the

performance of any major or current repairs and contains data on all certificates issued

(those required by the construction legislation). Inspections should also be recorded in the

passport. The technical passport must be prepared by the surveillance company. Either the

surveillance company or the investor files two copies of the technical passport (one for

the investor and one for the chief architect of the municipality) and an electronic copy

with the Chief Architect of the Municipality, Office for Registration. The registration of

the technical passport may take 2 or 3 days (no charge) after which the investor or the

surveillance company may take back their original (it should bear a stamp with the date

and the registration number).

Procedure A copy of the registered technical passport is filed with the Cadastre Agency 21



Agency: Cadastre

Comment: A copy of the registered original technical passport (notarization not required), along with

the original technical passport, should be filed with the Cadastre Agency (this second

procedure costs BGN 2 and is completed in a day). The copy is to be kept by the Cadastre

Agency, while the original (with a stamped registration number) is returned to the

investor.

Procedure Request and obtain certificate for energy efficiency 22

24



Agency: Licensed Company

Comment: After completing a new construction a certificate for energy efficiency (energy passport )

has to be issued, which is a part of the technical passport of the construction. The issuance

of the certificate is performed under a contract signed by the assignor and natural person /

entity, entered in the Register for the persons authorized to perform certification for

energy efficiency.

Procedure Receive inspection by the municipality 23



Agency: National Construction Control Department

Comment: A state commission coordinated by national Construction Control Department grants final

approval of the building construction. The commission is comprised of members from

different authorities, including the Hygienic Epidemiological Institute and the Fire Alarm

Security Service.

Procedure The municipality issues the approval of the building 24




Comment: After finishing the construction and tests of facilities, to obtain an occupancy permit, the

assignor must register before the Chief Architect of the Municipality, present the ultimate

report, the utility provider contracts, and document from the cadastral agency that its

requirement has been fulfilled. In 7 days, the municipality issues the occupancy permit.

25

26

1. Benchmarking Registering Property Regulations:

Bulgaria is ranked 62 overall for Registering Property.

Ranking of Bulgaria in Registering Property - Compared to good practice and selected economies:

27

Procedures

(number)


property

value)

New Zealand* 2

Norway* 1

Saudi Arabia 0.0

Good Practice

Economies

Bulgaria 8 15 3.0

Selected Economy


Hungary 4 17 5.0

Moldova 5 5 0.9

Poland 6 152 0.4



The following table shows Registering Property data for Bulgaria compared to good practice and comparator economies:


Procedures (number): United Arab Emirates

Time (days): Saudi Arabia, Thailand, United Arab Emirates

28

Registering Property data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 56 62


Time (days) 19 19 15 15

Cost (% of property value) 2.3 2.3 2.3 3.0

2. Historical data: Registering Property in Bulgaria

3. The following graphs illustrate the Registering Property sub indicators in Bulgaria over the past 4

years:

29

Registering Property in Bulgaria

STANDARDIZED PROPERTY Property Value: 416,729.05

City: Sofia

This topic examines the steps, time, and cost involved in registering property in Bulgaria.


1 The sketch of the estate is drafted by the respective

Municipality

4 days (express -

simultaneous with

procedures 2, 3, 4, and

5), otherwise 7 or 14

days

BGN 40 for an express

procedure (4 days), BGN 30

for a fast procedure (7

days), BGN 20 for a regular

procedure (14 days)

*

2 Obtain a tax valuation of the property 4 days (simultaneous

with procedures 1, 3,

4, and 5)

BGN 34 for an express

procedure (4 days), BGN 25

for a fast procedure, BGN

17 for a regular procedure

(14 days)

*

3 Issuance of certificate of good standing for seller and

buyer

1 day (simultaneous


4, and 5)

BGN 5 each*


30

4 Obtain a non-encumbrance certificate from the Real

Estate Register

Regular service (7

working days); Fast

service (3 working

days); Express service

(8 hours)

(simultaneous with

procedures 1, 2, 3, and

5)

BGN 50 for Express service

(8 hours), BGN 20 for Fast

service (3 working days),

BGN 10 for regular service

(7 working days)

*

5 Obtain a tax clearance certificate 7 days (simultaneous


3, and 4)

no cost*

31

6 The notary executes the transfer deed 1 day 2.5% of property price

(local tax) + 0.1% of

property price (Registration

fee) + notary’s fees

according to the following

scale and with a maximum

of BGN 3,000:

Value of

Property

Fees

Up to 100 BGN 30

From BGN 100 to 1,000

BGN 30 + 1.5% of

excess over BGN 100

From BGN 1,000 to 10,000

BGN 43.5 + 1.3% of

excess over BGN 1,000

From BGN 10,000 to

50,000 BGN 160.5 +

0.8% of excess over BGN

10,000

From BGN 50,000 to

100,000 BGN 730 + 0.2%

of excess over BGN

100,000

Above BGN 100,000

BGN 1530.5 +

0.1% of excess over BGN

500,000, but no more than 6

000 BGN

The new notary's tarrif

depends on the value fo the

deal and is as follows:

Up to 100

BGN - 30

BGN;

101 - 1000 BGN

- 30 + 1.5 % for the amount

over 100 BGN;

1001 - 10 000 BGN

- 43.50 + 1.3 % for the

amount over 1000 BGN;

10 001 - 50 000 BGN

- 160.50 + 0.8 % for the

amount over 10 000 BGN

50 001 - 100 000 BGN

- 730 BGN + 0.2 % for the

amount over 100 000 BGN;

100 001 - 500 000 лв.

- 1530.50 BGN + 0.1 % for

the amounht over 500 000

BGN, but no more than 6

000 BGN

7 Registration of the notarized deed at the Registry 1-2 days Already paid in Procedure 4

8 Parties receive a copy of the registered deed 1 day no cost

32

* Takes place simultaneously with another procedure.

33

Procedure The sketch of the estate is drafted by the respective Municipality 1

Time to complete: 4 days (express - simultaneous with procedures 2, 3, 4, and 5), otherwise 7 or 14 days

Cost to complete: BGN 40 for an express procedure (4 days), BGN 30 for a fast procedure (7 days), BGN

20 for a regular procedure (14 days)

Agency: Local Cadastre Agency

Comment: The draft of the estate is a graphic sketch of the estate with its borders, square meters, and

number of the area where the estate is situated. This draft is issued at the Cadastre of Real

Estate.

If the skecth is for a real estate in the urban area, principally, the sketch is issued by the local

Cadastre Agency. In case teh sketch is required for agricultural land, the skecth is issued by

the respective municipal agricultual and forest agency. If for the respective territory there is

no cadastre card adopted and approved, then the skecth is then issued by the Municipality.

Procedure Obtain a tax valuation of the property 2

Time to complete: 4 days (simultaneous with procedures 1, 3, 4, and 5)

Cost to complete: BGN 34 for an express procedure (4 days), BGN 25 for a fast procedure, BGN 17 for a

regular procedure (14 days)

Agency: Sofia Municipality - Tax department

Comment: The tax valuation of the property is issued by the respective tax authorities. A tax valuation is

mandatory for every property transfer.

Procedure Issuance of certificate of good standing for seller and buyer 3

Time to complete: 1 day (simultaneous with procedures 1, 2, 4, and 5)

Cost to complete: BGN 5 each

Agency: Registration Agency or Regional Court

Comment: Certificate will be obtained at the Registration Agency or Regional Court depending on

whether the company has re-registration with the Commercial Register. As of January 1, 2008

all companies in Bulgaria are registered by the new centralized Commercial Register. The

companies are to be re-registered until 31 December 2010 with the Commercial Register.

Companies in Bulgaria are registered with the respective regional court depending on the

address of the company. This certificate is issued by the registration court.

The certificate is needed to show that the company is registered and existing, and that the

person who signs on behalf of the company is actually the authorized person to sign. The

certificate can be obtained online since 2009.

Procedure Obtain a non-encumbrance certificate from the Real Estate Register 4

Time to complete: Regular service (7 working days); Fast service (3 working days); Express service (8

hours) (simultaneous with procedures 1, 2, 3, and 5)

Registering Property Details - Bulgaria

34

Cost to complete: BGN 50 for Express service (8 hours), BGN 20 for Fast service (3 working days), BGN

10 for regular service (7 working days)

Agency: Real Estate Registry

Comment: The express procedures are implemented in the Tariff for the taxes collected by the Registry

Agency, published in State Gazette, issue 94 of 25 November 2005, last amended State

Gazette issue 77 of 29 September 2009.

Procedure Obtain a tax clearance certificate 5

Time to complete: 7 days (simultaneous with procedures 1, 2, 3, and 4)

Cost to complete: no cost

Agency: Local Tax Department

Comment: The tax clearance certificate, showing that no taxes are owed, is obtained from the local tax

department for both the buyer and the seller, according to Taxation and Insurance Procedure

Code in effect as of 1 January 2006, namely Art. 87, paragraph 6.

Procedure The notary executes the transfer deed 6


Cost to complete: 2.5% of property price (local tax) + 0.1% of property price (Registration fee) + notary’s

fees according to the following scale and with a maximum of BGN 3,000:

Value of Property Fees

Up to 100 BGN 30

From BGN 100 to 1,000 BGN 30 + 1.5% of excess over BGN 100

From BGN 1,000 to 10,000 BGN 43.5 + 1.3% of excess over BGN 1,000

From BGN 10,000 to 50,000 BGN 160.5 + 0.8% of excess over BGN 10,000

From BGN 50,000 to 100,000 BGN 730 + 0.2% of excess over BGN 100,000

Above BGN 100,000 BGN 1530.5 + 0.1% of excess over BGN 500,000, but no

more than 6 000 BGN

The new notary's tarrif depends on the value fo the deal and is as follows:

Up to 100 BGN - 30 BGN;

101 - 1000 BGN - 30 + 1.5 % for the amount over 100 BGN;

1001 - 10 000 BGN - 43.50 + 1.3 % for the amount over 1000 BGN;

10 001 - 50 000 BGN - 160.50 + 0.8 % for the amount over 10 000 BGN

50 001 - 100 000 BGN - 730 BGN + 0.2 % for the amount over 100 000 BGN;

100 001 - 500 000 лв. - 1530.50 BGN + 0.1 % for the amounht over 500 000 BGN,

but no more than 6 000 BGN

Comment: The notary executes the transfer deed and collects the money for payment of the state fee

(transfer tax) and the registration fee. Usually the notary pays the state and registration fees.

This is done for the clients’ convenience. The parties can pay the fees at the account of the tax

authority where the estate is situated and bring the receipts to the notary.

The local tax is now a subject of determination by each municipality on yearly basis. The local

tax in Sophia increased from 2% to 2.5% in 07.03.2008 according to the Local Taxes and

Fees Act.

Procedure Registration of the notarized deed at the Registry 7

Time to complete: 1-2 days

35

Cost to complete: Already paid in Procedure 4

Agency: Registration Agency

Comment: The notary will register the notarized deed at the registration office with the respective district

court. This can be done by the parties too, but it is most common that the notary will do it (and

it is included in the above fees). The notary will pay registration and state fees collected

previously. Registration should take 1 day, but it can take up to 3 days during busy periods.

According to Art.25, para 5 of the Notary Public and Notarial Activity Law of 2009 (last

amendment of the Notary Public and Notarial Activity Act was promulgated in State Gazette,

issue 82 of 16 October 2009, http://dv.parliament.bg/DVWeb/broeveList.faces), the notary

now has to submit the notarized deed in the same day it is signed. In practice, this generally

happens in Sophia.

If a notary public does not perform their obligation for entry of a notary deed or other notary

certified act with the real estate register, the interested persons are entitled to claim the

suffered damages. Furthermore, the interested persons may address the Notary Chamber

regarding the violations of the notary's obligations. This may entail disciplinary proceedings

against the respective notary public.

This amendment also ensures that the notaries public have access to the National Database

"Population" and to the National Automatic Information Fund for personal identity

documents. It also introduced an obligation for the notaries public to make special checks in

the database and the fund when performing notary certifications connected to rights over real

estates.

Procedure Parties receive a copy of the registered deed 8


Cost to complete: no cost

Comment: Parties will receive a copy of the registered deed the same or next day the deed has been

registered by the notary

36

37

1. Benchmarking Getting Credit Regulations:

Bulgaria is ranked 6 overall for Getting Credit.

Ranking of Bulgaria in Getting Credit - Compared to good practice and selected economies:

38

Strength of

legal rights

index (0-10)

Depth of

credit

information

index (0-6)

Public

registry

coverage (%

of adults)

Private

bureau

coverage (%

of adults)

New Zealand* 100.0

Portugal 67.1

Singapore* 10

United Kingdom 6

Good Practice

Economies

Bulgaria 8 6 37.0 13.1

Selected Economy

Czech Republic 6 5 4.9 73.2

Hungary 7 5 0.0 11.4

Moldova 8 0 0.0 0.0

Poland 9 4 0.0 91.7

Slovak Republic 9 4 2.2 44.5


The following table shows Getting Credit data for Bulgaria compared to good practice and comparator economies:


Strength of legal rights index (0-10): Hong Kong, China, Kenya, Kyrgyz Republic, Malaysia

Private bureau coverage (% of adults): Argentina, Australia, Canada, Iceland, Ireland, Norway, Sweden,

United Kingdom, United States

27 countries have the highest credit information index.

39

Getting Credit data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 6 6

Strength of legal rights index (0-10) 8 8 8 8

Depth of credit information index (0-6) 6 6 6 6

Private bureau coverage (% of adults) 3.0 5.0 6.2 13.1

Public registry coverage (% of adults) 25.4 30.7 34.8 37.0

2. Historical data: Getting Credit in Bulgaria

3. The following graphs illustrate the Getting Credit sub indicators in Bulgaria over the past 4 years:

40

Getting Credit in Bulgaria

The following table summarize legal rights of borrowers and lenders, and the availability and legal framework of credit

registries in Bulgaria.

Getting Credit Indicators (2010) Indicator

Private credit

bureau

Public credit

registry 6 Private bureau coverage (% of adults)

Are data on both firms and individuals distributed? 1Yes Yes

Are both positive and negative data distributed? 1Yes Yes

Does the registry distribute credit information from retailers, trade

creditors or utility companies as well as financial institutions?

1Yes No

Are more than 2 years of historical credit information distributed? 1Yes No

Is data on all loans below 1% of income per capita distributed? 1Yes Yes

Is it guaranteed by law that borrowers can inspect their data in the

largest credit registry?

1Yes Yes

Coverage 37.013.1

Number of individuals 820,250 2,290,160

Number of firms 41,540 137,430

Number of individuals 820,250 2,290,160

Number of firms 41,540 137,430

41

8 Strength of legal rights index (0-10)

Can any business use movable assets as collateral while keeping possession of the assets; and any financial

institution accept such assets as collateral ?

Yes

Does the law allow businesses to grant a non possessory security right in a single category of movable assets,

without requiring a specific description of collateral?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without

requiring a specific description of collateral?

Yes

May a security right extend to future or after-acquired assets, and may it extend automatically to the products,

proceeds or replacements of the original assets ?

Yes

Is a general description of debts and obligations permitted in collateral agreements, so that all types of obligations

and debts can be secured by stating a maximum amount rather than a specific amount between the parties ?

Yes

Is a collateral registry in operation, that is unified geographically and by asset type, as well as indexed by the

grantor's name of a security right ?

No

Do secured creditors have absolute priority to their collateral outside bankruptcy procedures? Yes

Do secured creditors have absolute priority to their collateral in bankruptcy procedures? Yes

During reorganization, are secured creditors' claims exempt from an automatic stay on enforcement? No

Does the law authorize parties to agree on out of court enforcement? Yes

42

43

1. Benchmarking Protecting Investors Regulations:

Bulgaria is ranked 44 overall for Protecting Investors.

Ranking of Bulgaria in Protecting Investors - Compared to good practice and selected economies:

44

Strength of

investor

protection

index (0-10)

New Zealand 9.7

Good Practice

Economies

Bulgaria 6.0

Selected Economy

Czech Republic 5.0

Hungary 4.3

Moldova 4.7

Poland 6.0

Slovak Republic 4.7


The following table shows Protecting Investors data for Bulgaria compared to good practice and comparator economies:

45

Protecting Investors data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 41 44

Strength of investor protection index (0-10) 6.0 6.0 6.0 6.0

2. Historical data: Protecting Investors in Bulgaria

3. The following graph illustrates the Protecting Investors index in Bulgaria compared to best

practice and selected Economies:

9.7

6.0

6.0

5.0

4.7

4.7

4.3

New

Zea

land

Polan

d

Bulgar

ia

Cze

ch

Rep

ublic

Slova

k

Rep

ublic

Mol

dova

Hunga

ry

Note: The higher the score, the greater the investor protection.

46

The table below provides a full breakdown of how the disclosure, director liability, and shareholder suits indexes are

calculated in Bulgaria.

Protecting Investors in Bulgaria

Protecting Investors Data (2010) Indicator

Extent of disclosure index (0-10) 10

What corporate body provides legally sufficient approval for the transaction?3

Whether immediate disclosure of the transaction to the public and/or shareholders is

required?

2

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?

2

Whether an external body must review the terms of the transaction before it takes place?1

Extent of director liability index (0-10) 1

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?0

Whether Mr. James pays damages for the harm caused to the company upon a successful

claim by the shareholder plaintiff?

0

47

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?0

Whether shareholders can sue directly or derivatively for the damage that the Buyer-Seller

transaction causes to the company?

1

Ease of shareholder suits index (0-10) 7

Whether the plaintiff can obtain any documents from the defendant and witnesses during

trial?

4

Whether the plaintiff can directly question the defendant and witnesses during trial?0

Whether the plaintiff can request categories of documents from the defendant without

identifying specific ones?

1

Whether shareholders owning 10% or less of Buyer's shares can request an inspector to

investigate the transaction?

1

Whether the level of proof required for civil suits is lower than that of criminal cases?1

Whether shareholders owning 10% or less of Buyer's shares can inspect transaction

documents before filing suit?

0

Strength of investor protection index (0-10) 6.0

48

49

1. Benchmarking Paying Taxes Regulations:

Bulgaria is ranked 85 overall for Paying Taxes.

Ranking of Bulgaria in Paying Taxes - Compared to good practice and selected economies:

50

Payments

(number per

year)

Time (hours

per year)

Total tax rate

(% profit)

Maldives* 3 0

Timor-Leste 0.2

Good Practice

Economies

Bulgaria 17 616 29.0

Selected Economy


Hungary 14 277 53.3

Moldova 48 228 30.9

Poland 29 325 42.3



The following table shows Paying Taxes data for Bulgaria compared to good practice and comparator economies:


Payments (number per year): Qatar

51

Paying Taxes data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 95 85

Total tax rate (% profit) 36.7 34.9 31.4 29.0

Payments (number per year) 17 17 17 17

Time (hours per year) 616 616 616 616

2. Historical data: Paying Taxes in Bulgaria

3. The following graphs illustrate the Paying Taxes sub indicators in Bulgaria over the past 4 years:

52

The table below addresses the taxes and mandatory contributions that a medium-size company must pay or withhold in

a given year in Bulgaria, as well as measures of administrative burden in paying taxes.

Paying Taxes in Bulgaria

Tax or mandatory

contribution

Payments

(number)

Notes on

Payments

Time

(hours)

Statutory tax

rate

Tax

base

Totaltax rate

(% profit)

Notes on

TTR

value added20.0% 288 online

filing

1 Value added tax (VAT)

gross

expenses

10.0% 1 Final/one-off on

corporate on certain

expenses

0.00per ton of

vehicle

BGN 10 2 Vehicle tax

0.20tax value of

land and

building

0.2% 4 Real estate tax on the

land and building

0.30type of

vehicle

BGN 950 1 Vignette

0.50higher of tax

value and

agreed value

of real estate

notary fees

of BGN

3,000 and

0.1% of sales

price

1 Stamp duty on property

transfer

1.10included in

the price of

fuel

535 per litre 1 Fuel tax

53

1.80tax value of

land and

building

1.0% 4 Fees for municipal

services (garbage

collection fee) - Sofia

4.60taxable profit10.0% 40 online

filing

1 Corporate income tax

20.40gross salaries18.1% 288 online

filing

1 Social security

contributions

Totals 17 616 29.0

54

55

1. Benchmarking Trading Across Borders Regulations:

Bulgaria is ranked 108 overall for Trading Across Borders.

Ranking of Bulgaria in Trading Across Borders - Compared to good practice and selected economies:

56

Documents to

export

(number)

Time to

export (days)

Cost to

export (US$

per

container)

Documents to

import

(number)

Time to

import (days)

Cost to

import (US$

per

container)

Denmark* 5

France 2 2

Malaysia 450

Singapore 4 439

Good Practice

Economies

Bulgaria 5 23 1551 7 21 1666

Selected Economy

Czech Republic 4 17 1060 7 20 1165

Hungary 5 18 1225 7 17 1215

Moldova 6 32 1765 7 35 1960

Poland 5 17 884 5 25 884

Slovak Republic 6 17 1530 8 19 1505


The following table shows Trading Across Borders data for Bulgaria compared to good practice and comparator

economies:


Time to export (days): Estonia

57

Trading Across Borders data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 109 108

Cost to export (US$ per container) 1329 1626 1551 1551

Cost to import (US$ per container) 1377 1776 1666 1666

Documents to export (number) 5 5 5 5

Documents to import (number) 7 7 7 7

Time to export (days) 23 23 23 23

Time to import (days) 21 21 21 21

2. Historical data: Trading Across Borders in Bulgaria

3. The following graphs illustrate the Trading Across Borders sub indicators in Bulgaria over the past 4

years:

58

59

These tables list the procedures necessary to import and export a standardized cargo of goods in Bulgaria. The documents

required to export and import the goods are also shown.

Trading Across Borders in Bulgaria

Nature of Export Procedures (2010) Duration (days) US$ Cost

Documents preparation 15 200

Customs clearance and technical control 2 75

Ports and terminal handling 4 246

Inland transportation and handling 2 1030

Totals 23 1551

Nature of Import Procedures (2010) Duration (days) US$ Cost

Documents preparation 13 250

Customs clearance and technical control 2 140

Ports and terminal handling 4 246

Inland transportation and handling 2 1030

Totals 21 1666

60

Export

Bill of lading

Certificate of origin

Commercial invoice

Customs export declaration

Packing list

Import

Bill of lading

Cargo release order

Certificate of origin

Commercial Invoice

Customs import declaration

Packing list

Technical standard/health certificate

Documents for Export and Import

61

62

1. Benchmarking Enforcing Contracts Regulations:

Bulgaria is ranked 87 overall for Enforcing Contracts.

Ranking of Bulgaria in Enforcing Contracts - Compared to good practice and selected economies:

63

Procedures

(number)


claim)

Bhutan 0.1

Ireland 20

Singapore 150

Good Practice

Economies

Bulgaria 39 564 23.8

Selected Economy


Hungary 35 395 15.0

Moldova 31 365 20.9

Poland 38 830 12.0



The following table shows Enforcing Contracts data for Bulgaria compared to good practice and comparator economies:

64

Enforcing Contracts data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 88 87


Time (days) 564 564 564 564

Cost (% of claim) 23.8 23.8 23.8 23.8

2. Historical data: Enforcing Contracts in Bulgaria

3. The following graphs illustrate the Enforcing Contracts sub indicators in Bulgaria over the past 4

years:

65

Enforcing Contracts in Bulgaria

This topic looks at the efficiency of contract enforcement in Bulgaria.

IndicatorNature of Procedure (2010)

Procedures (number) 39

Time (days) 564

Filing and service 105.0

Trial and judgment 334.0

Enforcement of judgment 125.0

Cost (% of claim)* 23.80

Attorney cost (% of claim) 10.0

Court cost (% of claim) 5.6

Enforcement Cost (% of claim) 8.2

66

* Claim assumed to be equivalent to 200% of income per capita.

Court information: Sofia District Court ("Софийски районен съд")

67

68

1. Benchmarking Closing Business Regulations:

Bulgaria is ranked 83 overall for Closing a Business.

Ranking of Bulgaria in Closing Business - Compared to good practice and selected economies:

69

Recovery rate

(cents on the

dollar)

Time (years) Cost (% of

estate)

Ireland 0.4

Japan 92.7

Singapore* 1

Good Practice

Economies

Bulgaria 31.0 3.3 9

Selected Economy

Czech Republic 55.9 3.2 17

Hungary 37.9 2.0 15

Moldova 28.2 2.8 9

Poland 31.3 3.0 20

Slovak Republic 55.3 4.0 18


The following table shows Closing Business data for Bulgaria compared to good practice and comparator economies:


Cost (% of estate): Colombia, Kuwait, Norway

70

Closing a Business data Doing Business

2008

Doing Business

2009

Doing Business

2010

Doing Business

2011

Rank .. .. 79 83

Time (years) 3.3 3.3 3.3 3.3

Cost (% of estate) 9 9 9 9

Recovery rate (cents on the dollar) 32.4 32.1 32.1 31.0

2. Historical data: Closing Business in Bulgaria

3. The following graphs illustrate the Closing Business sub indicators in Bulgaria over the past 4 years:

71

Since 2004 Doing Business has been tracking reforms aimed at simplifying business regulations, strengthening property

rights, opening access to credit and enforcing contracts by measuring their impact on 10 indicator sets . * Nearly 1,000

reforms have had an impact on these indicators. Doing Business 2011, covering June 2009 to June 2010, reports that 117

economies implemented 216 reforms to make it easier to start a business. 64% of economies measured by Doing

Business have reformed this year, focusing on easing business start-up, lightening the tax burden, simplifying import and

export regulations and improving credit information systems.

Negative Change

Positive Change

Economy

Clo

sin

g a

Bu

sin

ess

En

forc

ing

Con

trac

ts

Tra

din

g A

cros

s B

ord

ers

Pay

ing

Tax

es

Pro

tect

ing

Inve

stor

s

Get

tin

g C

red

it

Reg

iste

rin

g P

rop

erty

Dea

lin

g w

ith

Con

stru

ctio

n

Per

mit

s

Sta

rtin

g a

Bu

sin

ess

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.

The top 10 most-improved in Doing Business 2011

72

Summary of changes to business regulation in top 10 most improved economies in Doing

Business 2011 and selected comparator economies.

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.

Bulgaria Bulgaria eased business start-up by reducing the minimum capital requirement from 5,000 leva

($3,250) to 2 leva ($1.30). Bulgaria reduced employer contribution rates for social security.

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.

Czech Republic The Czech Republic simplified its labor tax processes and reduced employer contribution rates for

social security. The Czech Republic made it easier to deal with insolvency by introducing further legal

amendments to restrict setoffs in insolvency cases and suspending for some insolvent debtors the

obligation to file for bankruptcy.

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.

Moldova Moldova reduced employer contribution rates for social security.

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.

Poland Poland eased property registration by computerizing its land registry.

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.

73

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.

74

75