Overview
Starting a business
27
FIGUR
FIGURE 5.1
Dealing with construction permits
Top 10 reformers in registering property
Employing workers
Average improvement (%) 2008
Registering property
15%
41%
10%
Rankings on the ease of registering property 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
2009
Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Procedures
Time
Mauritius Burkina Faso Kyrgyz Republic Portugal Macedonia, FYR Colombia Latvia Peru Afghanistan Estonia
Regis betw
DB2010 DB2009
66 114 19 52 63 51 58 28 164 13
131 163 52 82 88 78 79 40 176 24
Cost Source: Doing Business database.
When Abdulayeh decided to sell his business property in Ouagadougou this year, he checked the encumbrances on the property, had the sale agreement notarized, obtained a property valuation and applied for the property transfer at the newly created one-stop shop. The process took 4 steps and 59 days. Just 2 years ago it would have taken 8 steps and 182 days. Transfer taxes also fell, from 15% of the property value to 8%. The results speak for themselves: over the past 2 years the number of new title registrations in Ouagadougou boomed. And the easier it is to transfer property, the more likely the newly registered titles will stay formal. Land is a fundamental economic asset in every society. Where property systems are poorly administered or property rights poorly defined, this can prevent land from being turned into producFIGURE 5.1 Table 5.1
Top 10 reformers in registering property Where is registering property easy—and Average improvement (%) where not? 2008
Easiest
15%
Rank
2009 Arabia Saudi
1 2 3 4 5 6 United Arab Emirates 7 Norway 8 Azerbaijan 9 Belarus 10 Georgia New Zealand Lithuania Armenia Thailand
Procedures
Most difficult 41%
Rank 10%
Liberia Sierra Leone Bangladesh Guinea-Bissau Nigeria Brunei Darussalam Maldives Marshall Islands Micronesia, Fed. Sts. Timor-Leste Time
Cost
174 175 176 177 178 179 180 181 182 183
Note: Rankings are the average of the economy’s rankings on the procedures, time and cost to register property. See Data notes for details. Source: Doing Business database.
FIGURE 5.3
tive capital. Hernando de Soto describes ness to purchase a property from another FIGURE 5.3 such land as “dead capital,” registry—a assets whose business and to transfer the property title Computerizing the property big time-saver use is limited or that cannot be used as to the buyer’s name so that the purchasing Time to register property (days) collateral.1 Formal titles can ease access business can securely use it to expand, 956 Croatia to credit. A recent study in Peru suggests use it as collateral in taking new loans Angola that property titles are associated with a or, if needed, sell it to another business Bosniaincrease and Herzegovina 10% in approval rates on public (figure 5.2). sector loans forBelarus construction materials.2 Streamlining property registration Women Portugal and children can particuhas become a popular reform. Econolarly benefit from easier access to land. mies keep finding ways to make the Zambia Time in Time in A study in Guatemala Nepal finds that women who process easier2009 and less costly. 2004 Reforms ownWest landBank areand more empowered and their include practices common in the 10 Gaza 3 Reduction children areEl Salvador healthier. But some coun- economies where property registration is tries, such as Estonia Cameroon, Chile and the easiest, such as centralizing procedures Democratic Republic of Congo, still limit at the registry, digitizing records, lowerGeorgia the ability ofHonduras married women to buy, sell ing transfer taxes and introducing stanor mortgage land without the authorizadard forms (table 5.1). In fact, 9 of the 04 90 180 270 360 tion of their husband. In others, such as top 10 economies on the ease of registerSource: Doing Business database. Tanzania, customary inheritance law can ing property reformed over the past 5 restrict landownership by women.5 years. Some, such as Belarus and Georgia, Making property registration simFIGURE 5.2 ple, fast FIGURE 5.4 and cheap allows entrepreneurs Registering property: transfer of property Bigfocus improvements, but still Property harder toownregister property in Sub-Saharan Africa to on their business. between 2 local companies (days) Average cost (% of property value) ersRankings with formal title invest up to 47% on theAverage ease of time Rankings are based on 3 subindicators 2005 2009property 2009 2005 registering DB2010 DB2009 more in their property, a study in ArgenDays to transfer property As % of property value, South in main city 6 no bribes included 138 106study in Peru66showed 5.6 6.1 131that Asia Mauritius tina1. finds. A 114 to163 Fasoallowed people 2. Burkina property titles work Sub-Saharan 81 9.8 12.4 19 52 Africa Kyrgyz 3.122 away fromRepublic the home more—because 33.3% 33.3% 52 82 4. Portugal Time Cost they had105 less need to stay home keeping Eastern Europe 62 63 2.7 88 & Central Asia 1.9 5. Macedonia, FYR 7 squatters at bay. Another51recent study 78 6. Colombia Asia & looked at impact of a program issu-East 99 98 3.8 4.8 33.3% 58 79 7. Latviathe Pacific Procedures ing8.nearly titles to 40 rural Peru 11 million land 28 Latin America 74 5.6 6.0 households in88Vietnam. It164 found a176 small & Caribbean 9. Afghanistan 13 and 24 10. Estonia increase in investment in crops more Middle East Steps to check encumbrances, obtain 51 38 6.3 7.2 clearance certificates, & North Africa time spent in nonfarm activities.8 prepare deed and transfer title so that the property OECD can be occupied,4.4 sold or4.8 used as collateral 37 25 Business high income Source: Doing Doing Business database. records the full seNote: See Data notes for details. quence of procedures necessary for a busiNote: Data refer to economies included in Doing Business 2005. Additional economies were added in subsequent years. Source: Doing Business database.
Computerizing the property registry—a big time-saver Time to register property (days)
Ranki
Days t in mai
Steps t prepar can be
Note: S