SUBNATIONAL

2012

Doing Business in Russia 2012

COMPARING REGULATION FOR DOMESTIC FIRMS IN 30 CITIES AND WITH 183 ECONOMIES © 2012 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

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Copies of the Doing Business global reports: Doing Business 2012: Doing Business in a More Transparent World; 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; DoingBusiness in 2004: Understanding Regulations may be obtained at www.doingbusiness.org. SUBNATIONAL

2012

Doing Business in Russia 2012

COMPARING REGULATION FOR DOMESTIC FIRMS IN 30 CITIES AND WITH 183 ECONOMIES

A COPUBLICATION OF THE WORLD BANK AND THE INTERNATIONAL FINANCE CORPORATION ii DOING BUSINESS 2012

THE DOING BUSINESS WEBSITE Doing Business in Russia 2012 report Download reports http://www.doingbusiness.org/russia Access to Doing Business reports as well as Current features subnational and regional reports, reform case studies News on the Doing Business project and customized economy and regional profiles http://www.doingbusiness.org http://www.doingbusiness.org/Reports Doing Business reforms Subnational and regional projects Short reform summaries Differences in business regulations at the http://www.doingbusiness.org/Reforms subnational and regional level http://www.doingbusiness.org/Subnational-Reports Methodology and research The methodology and research papers underlying Law library Doing Business Online collection of laws and regulations relating to http://www.doingbusiness.org/Methodology business and gender issues http://www.doingbusiness.org/Research http://www.doingbusiness.org/Law-library http://wbl.worldbank.org Business Planet Interactive map on the ease of doing business http://rru.worldbank.org/businessplanet SUBNATIONALS

2012

Contents

1 Executive summary 7 About Doing Business and Doing Business in Russia 2012 14 Starting a business 19 Dealing with construction permits 25 Getting electricity 31 Registering property

37 Data notes 43 City tables 50 Doing Business indicators 52 List of procedures 52 Starting a business 77 Dealing with construction permits 121 Getting electricity 138 Registering property

147 Acknowledgments

Doing Business in Russia 2012 is the second sub- more transparent world—the ninth in a series of national report in the Doing Business series in annual reports published by The World Bank Russia. In 2009, quantitative indicators on busi- and International Finance Corporation. The in- ness regulations were published for 10 cities: dicators in Doing Business in Russia 2012 are also Irkutsk, Kazan, Moscow, Perm, Petrozavodsk, comparable with more than 352 cities from 54 Rostov-on-Don, Saint Petersburg, Tomsk, Tver, economies benchmarked in other subnational and Voronezh. This year, Doing Business in Rus- Doing Business studies. All data and reports are sia in 2012 documents improvements in the 10 available at http://subnational.doingbusiness. cities previously measured and expands the org and www.doingbusiness.org. analysis to 20 new cities across the nation: Doing Business investigates the regulations that Kaliningrad, Kaluga, Kemerovo, Khabarovsk, enhance business activity and those that con- Kirov, Murmansk, Novosibirsk, Omsk, Samara, strain it. Regulations affecting 4 stages of the Saransk, Stavropol, Surgut, Ulyanovsk, Vladika- life of a business are measured at the subna- vkaz, Vladivostok, Volgograd, Vyborg, Yakutsk, tional level in Russia: starting a business, deal- Yaroslavl, and Yekaterinburg. Data for Moscow ing with construction permits, getting electric- is taken from the annual Doing Business report. ity, and registering property. These indicators The selection criteria include the level of urban- were selected because they cover areas of local ization, population, economic activity, political jurisdiction or practice. The indicators are used and geographical diversity, and other factors. to analyze economic outcomes and identify The cities were selected by the Ministry of Eco- what reforms have worked, where and why. The nomic Development of the Russian Federation. data in Doing Business in Russia 2012 are current Comparisons with other economies are based as of November 2011. on Doing Business 2012—Doing Business in a

1

Executive summary

The Russian Federation is a vast country nearly 73% live in cities.7 Economic activity investment.13 In 2011 the government com- of great capacity. Over the past decade its is also highly concentrated. In 2010 Moscow mitted to making Russia one of the most GDP has grown by an annual average of had the country’s highest gross regional inviting places to do business, and a national 4.9%,1 doubling real disposable income and product—more than five times that of Saint initiative has been created to spearhead enabling the emergence of a middle class. Petersburg, which was second. Muscovites improvements in the investment climate This growth has been fueled primarily by rev- had an income per capita of about 730,000 for all businesses—domestic and foreign.14 enues from commodity producers. Russia’s rubles ($25,000), many times that in other The investment climate agenda includes emerging economy depends on oil and gas regions and two and a half times national comprehensive policy reforms ranging from commodities, which in 2011 accounted for income per capita ($9,900).8 easing doing business to simplifying regula- about half of federal revenue and nearly two- tion, privatization, improving competition thirds of exports.2 Much of the difference in regional eco- and supporting innovation. nomic performance is caused by natural Despite the abundance of natural resources, resources. For example, in Omsk Oblast WHAT DOES DOING BUSINESS IN Russia has not grown at the same pace as just over two-thirds of goods and services RUSSIA 2012 MEASURE? other large emerging economies. Over the are produced by the oil and coal industries.9 Doing Business tracks business regulations past 20 years, China’s GDP has increased But Novosibirsk, for instance, has a legacy that affect small and medium-size domestic 10% a year on average and India’s by 6%.3 of scientific research. Kaluga Oblast has at- limited liability companies.15 Moscow rep- The global financial crisis of 2008/09 drew tracted significant foreign direct investment resents Russia in the annual Doing Business attention to the fragility of growth based on in recent years, particularly from foreign car publication, which compares 183 economies natural resources. Weak competition, poor manufacturers. worldwide. But entrepreneurs in Russia investment and lack of innovation constrain face different local practices depending on growth.4 Promoting small and medium-size firms as an engine of growth, employment and rev- where they establish their businesses. Doing According to the World Bank’s Enterprise enue diversification has become a focus of Business in Russia 2009 was the first sub- Surveys, in 2009 Russian managers spent government policy.10 In 2010 the government national project to go beyond Moscow and 20% of their time dealing with government invested 600 million euros ($777 million) capture regional regulatory differences in 10 regulations—more than twice as much as in start-up grants, micro loans, support for cities on 4 Doing Business topics: starting a their peers in the 10 EU emerging countries.5 youth entrepreneurship, and business train- business, dealing with construction permits, According to the World Economic Forum ing, and 140,000 jobs were created.11 Still, registering property, and trading across 2011–12 rankings, Russia is in the bottom small and medium-size firms account for borders. decile on the burden of government regula- 20% of employment in Russia, less than in This report updates the information from tion, with its weak institutional framework Brazil (25%), Turkey (35%) or USA (42%).12 2008 and tracks the progress in implemen- cited as a key obstacle to growth. Even when tation of business reforms on 3 topics— laws and regulations do not obstruct firms’ The government aims to remove structural starting a business, dealing with construc- entry and exit, application and enforcement barriers to growth to further boost small tion permits, and registering property. It also of rules often remain inconsistent. and medium-size enterprises. The strategy for economic development through 2020 measures a new indicator—getting electric- Russia has significant differences between emphasizes increasing competition, creating ity—and expands the analysis to cover 20 regions. More than 80% of the population an economic environment that encour- additional cities. The summary results are lives in the Western part of the country,6 and ages long-term investment and promoting presented in table 1.1. 2 DOING BUSINESS IN RUSSIA 2012

TABLE 1.1 Doing Business in Russia 2012—where is it easier? registering property in 2009 and continues to be among the top performers on these Ease of Ease of dealing with Ease of Ease of indicators, despite the addition of 20 new Agreggate starting a construction getting registering cities. Irkutsk remained ranked in the top City Region rank business permits electricity property third of cities measured for starting a busi- Ulyanovsk Ulyanovsk Oblast 13458 ness and dealing with construction permits, Saransk Republic of Mordovia 2 20 8 1 8 thanks to continuous reforms. Republic of Vladikavkaz North Ossetia– Alania 3 27 11 2 2 Third, no city does equally well in all areas. Rostov-on-Don Rostov Oblast 4 26 15 3 4 For example, Rostov-on-Don ranks well Kazan Republic of Tatarstan 5 4 14 17 4 on getting electricity and registering prop- Kaluga Kaluga Oblast 6 17 9 15 1 erty, but lags behind on starting a business.

Stavropol Stavropol Kray 742919Kaliningrad ranks third on the ease of deal- ing with construction permits, but in the Yaroslavl Yaroslavl Oblast 8 7 17 6 16 bottom third on getting electricity and reg- Khanty-Mansiisk Surgut Autonomous Okrug – Yugra 9 30 1 19 8 istering property. Saint Petersburg climbed to the top of the classification on starting Irkutsk Irkutsk Oblast 10 8 6 10 18 a business due to reforms, but lags in Petrozavodsk Republic of Karelia 11 6 16 21 8 other areas. These results can guide policy Kirov Kirov Oblast 12 13 5 4 20 makers on areas where improvements are Omsk Omsk Oblast 13 19 20 13 4 possible without major legislative changes. Vyborg Leningrad Oblast 14 10 23 12 8 Cities can share experiences and learn from Vladivostok Primorsky Kray 15 18 22 23 3 each other.

Volgograd Volgograd Oblast 16 2 27 26 4 Finally, the demand for business services is Voronezh Voronezh Oblast 17 15 28 16 8 usually lower in smaller cities than in large Tver Tver Oblast 18 21 25 14 8 business centers. That can lead to bottle- Kaliningrad Kaliningrad Oblast 19 11 3 22 22 necks and higher costs for services in large Tomsk Tomsk Oblast 20 15 6 10 25 cities, but these also benefit from economies

Samara Samara Oblast 21 22 24 28 8 of scale and might have more resources to

St. Petersburg St. Petersburg 22 1 9 24 27 invest in administrative modernization.

Khabarovsk Khabarovsk Kray 23 24 29 8 17 Yekaterinburg Sverdlovsk Oblast 24 29 13 19 20 RUSSIA FROM A GLOBAL Perm Perm Kray 25 13 12 18 27 PERSPECTIVE Murmansk Murmansk Oblast 26 12 19 27 23 From a global perspective Russia, rep- Kemerovo Kemerovo Oblast 27 28 21 7 29 resented by Moscow, ranks 120 of 183 Yakutsk Republic of Sakha – Yakutia 28 8 26 25 30 economies on the ease of doing business

Novosibirsk Novosibirsk Oblast 29 23 18 29 24 across 10 indicators according to Doing Business in 2012: Doing Business in a More Moscow Moscow 30 25 30 30 26 Transparent World. While Russia does well Note: The aggregate rank is based on the starting a business, dealing with construction permits, getting electricity and registering on some indicators, especially enforcing property indicators. See Data notes for details. Source: Doing Business database. contracts and registering property, it lags on others, including those measured by Some observations should be made. First, also be attributed to recent updates to the this report. this year’s aggregate ranking should not dealing with construction permits indicator 16 Over the past 7 years, 163 economies have be compared to the one in Doing Business methodology. In addition, 20 new cities were added. made regulation more business-friendly. in Russia 2009 for various reasons. The Russia is among the 30 economies that new aggregate ranking includes getting Second, consistent performers stay at the improved the most. Since 2005 it has electricity, while the old ranking included top—Kazan, for example, was already doing made 15 improvements across 9 indicators trading across borders. Some changes can well on the areas of starting a business and (table 1.2). EXECUTIVE SUMMARY 3

TABLE 1.2 Russia reformed in 9 of 10 areas covered by Doing Business over the last 7 years lines and power grids from Mosgorgeotrest (Sketch No 2), its approval from the Moscow DB DB DB DB DB DB DB Indicator 2012 2011 2010 2009 2008 2007 2006 Total Architecture Committee, the approval of Starting a business 1 1 2 transport routes from the Moscow City Dealing with construction permits 1 1 Transport Agency and the construction pass- port from Mosgorgeotrest—were removed, Getting electricity 1 1 and delays were reduced by 31 days.17 Registering property 1 1 2 Getting credit 1 1 2 BUSINESS REFORMS SINCE 2008 Protecting investors - IN 10 CITIES Paying taxes 1 1 2 Doing Business in Russia 2009 identified Trading across borders 1 1 2 good practices, pointed out bottlenecks and Enforcing contracts 1 1 recommended improvements in 10 cities.18 Resolving insolvency 1 1 2 This report tracks progress in each. The Total 423-12315 findings are encouraging: 27 improvements

Note: Getting electricity reforms are recorded for the first time in Doing Business 2012. made it easier to do business since 2008, Source: Doing Business database. making it simpler, cheaper or faster to complete the 3 transactions measured. For Policy makers increasingly recognize the change varies widely across the areas starting a business, 7 of the 10 cities mea- importance of measuring improvements measured (figure 1.1). sured twice showed progress in gradually in their countries over time and assess- implementing federal law at the local level. ing how much they have narrowed the Since 2005, much progress has been made For dealing with construction permits and gap with the regulatory systems of top- in some of the areas where Russia was registering property, each of the 10 cities performing economies, such as Singapore lagging—including dealing with construc- had improvements (table 1.3). or New Zealand. Comparing Russia’s tion permits. Since Doing Business 2012 performance between 2005 and 2011 was published, further improvements were TABLE 1.3 All 10 cities benchmarked in 2008 introduced improvements in at on each indicator shows how far it has documented. In the fall of 2011, Moscow least 2 out of 3 areas moved toward the most efficient global issued regulations to streamline approvals Dealing with for construction permits with the goal of Starting a Registering practices and regulations on each area City construction business property covered by Doing Business. The pace of eliminating about half of preconstruction permits requirements. Four approvals—the certifi- Irkutsk   cate of compliance with the communication Kazan  Moscow  FIGURE 1.1 Between 2005 and 2011, Russia* moved closer to the frontier in regulatory practice Perm     DB2006 DB2012 Petrozavodsk 0 HIGHEST PERFORMANCE GLOBALLY Rostov-on-Don   10 St. Petersburg   20 Tomsk   30 Tver  40 Voronzeh   50  Doing Business reform making it easier to do business. 60 Source: Doing Business database.

Percentage points 70 Thanks to better one-stop shops for com- 80 pany and tax registration and improved 90 coordination between one-stop shops, 100 the statistics office and social funds, 2 Registering Starting a Enforcing Paying taxes Resolving Protecting Trading Getting Dealing with property business contracts insolvency investors across credit construction to 4 business start-up procedures were borders permits eliminated in 7 cities.19 Moreover, a federal *Represented by Moscow regulation passed in January 2011 stipulates Note: The distance to frontier measure illustrates the distance between an economy’s current performance and a measure of best practice worldwide on 9 of the Doing Business indicator sets (it does not include employing workers and getting electricity). The vertical that medical insurance registration can be axis represents the distance to the frontier and the horizontal line across at the top of the chart captures the most efficient regulatory done through the pension fund.20 As a re- environment. The data refer to the 174 economies included in Doing Business 2006. Additional economies were added in subsequent years. Source: Doing Business database. sult, in Irkutsk, Rostov-on-Don, Tomsk and Voronezh a separate visit to the medical 4 DOING BUSINESS IN RUSSIA 2012

fund office is no longer required. These ar- by almost 40%, from 520 days in 2008 to 16 steps are needed in Murmansk and 20 rangements are working especially well in 269 in 2011. In Moscow it took almost 2 in Novosibirsk—but 47 in Moscow. The Saint Petersburg, where the one-stop shop years to complete the paperwork to obtain a variations, due to regulatory differences, are consolidates the reception of notifications, construction permit in 2008—today it takes most marked during the preconstruction saving entrepreneurs 5 days. 392 days(figure 1.2). phase, with 6 steps in Murmansk, Surgut, and Yekaterinburg, but 21 requirements in But in other cities, fewer personal visits do Property registration has been streamlined Moscow and 18 in Voronezh. As a result of not automatically translate into time sav- across Russia since 2008. A 2008 law the different complexities of the construction ings for entrepreneurs because registration created the Federal Service of Registration, permitting systems across cities, there is also notifications take time to arrive by mail. This Cadastre and Cartography Rosreestr, unifying considerable variation in the time it takes, from is why in some cities, like Novosibirsk, entre- management of ownership registration and about 5 months in Surgut to a year or more in preneurs prefer to go through 11 procedures land cadastre. Since 2009 cadastral infor- Moscow, Tver and Voronezh. The variation in 22 days—the 10th fastest time in Russia— mation on buildings is being transferred to in costs across cities is due to the varying rather than wait. In addition to physical one- the property registry Rosreestr. The database costs of connecting to utilities and conducting stop shops, some cities allow businesses to combining the cadastre and the register of topographic and geodesic surveys. register online. And a 2006 regulation that property rights can facilitate planning and banks should not request notarized copies of local development. It makes procedures Getting electricity incorporation and registration documents for simpler for entrepreneurs wanting to register To get electricity, Russian entrepreneurs opening a company bank account eliminated property because all information can be must complete 6 to 10 steps that take from the practice of notarizing registration notifi- found in one place. 4 months in Saransk and Vladikavkaz to 1 cations in most cities.21 year in Yekaterinburg. Design approval is a particularly complicated stage. It might COMPARING REGULATIONS IN Significant changes have taken place in involve several trips to public agencies and 30 CITIES Russia’s construction regulations since last from 30 days in Surgut to 120 days in 2008. The 2004 Federal Urban Development Starting a business Murmansk and Petrozavodsk. In Kemerovo, Code led to improvements across Russian Starting a business takes on average 9 proce- Perm, Rostov-on-Don, Samara, Stavropol cities. Four years ago, the average number of dures, 23 days and costs 2.3% of income per and Yakutsk, utilities complete the connec- procedures needed to deal with construction capita in the 30 cities studied. It is easiest to tion design, its approvals and external con- permits across the 10 cities measured was start a business in Saint Petersburg and more nection works in-house. 35. Today it is 25. The average time dropped cumbersome in Surgut. After registering at one-stop shops, entrepreneurs can either In other cities customers hire electrical FIGURE 1.2 Moscow made dealing with pick up in person the necessary certificates design firms and contractors. Connecting construction permits more from the medical, social security and pen- a building to electricity costs an average efficient since 2008—but sion funds, as well as the statistics office, or of 661.5% of income per capita, more than still faces challenges wait for them by mail. in Brazil (130%), Turkey (624%) or China Procedures and time to deal with (641%), but less than in Nigeria (1,056%) or construction permits Depending on the option most com- Vietnam (1,343%). Connection costs consist monly chosen, the number of interactions of fees charged by distribution utilities and ranges from 7 in Kirov, Murmansk, Perm, fees charged by private firms for connection

632 Petrozavodsk, Saint Petersburg, Stavropol, design and works. In Omsk the cost is 112% Yakutsk and Yaroslavl to 12 in Vladikavkaz. of income per capita, while in Samara and The time needed varies from 16 days in Moscow it is far more expensive at 1,153% Kaliningrad to 33 in Yekaterinburg. The and 1,852% of income per capita ($114,259 average start-up cost of 2.3% of income per and $183,575), respectively. capita places Russia among the 30 cheapest 392 economies to start a business. The cost varies Registering property

61 from 1.7% of income per capita in Kazan to Registering property is easy and cheap in 3% in Khabarovsk and Surgut. Because the Russia. Russian entrepreneurs carry out on 47 Procedures Time (days) registration fee is regulated by federal law, lo- average 4 procedures over 35 days, paying cal variations are due to different fees charged 0.23% of property value to transfer property by banks, notaries and seal makers. titles, similar to the OECD average of 5 pro- DB09 DB12 cedures and 31 days. Of the 30 cities studied, Dealing with construction permits Source: Doing Business database. 18 require only 3 procedures to verify proper To comply with requirements for building ownership, check buyer and seller informa- a warehouse and connecting it to utilities, tion and register transfers at the property EXECUTIVE SUMMARY 5

registry. Other cities have 1 or 2 additional Moscow and most other cities are among simplifying the construction permitting pro- steps. For example, in Kirov, Murmansk, Saint the top 10 economies worldwide when it cess or the requirements and delays to get Petersburg, Tomsk and Yekaterinburg entre- comes to the low cost of registering prop- an electricity connection, adoption of good preneurs usually notarize official documents, erty. Starting a business is also inexpensive: local practices would still leave the country though it is not required by law. In Khabarovsk Kazan’s cost of 1.73% of income per capita lagging behind other countries. Looking beyond its borders to regional and global registering property takes only 13 days—while is similar to Norway’s. Reducing property good practices could help identify better and in Saint Petersburg it takes 44 days. registration requirements to 3 procedures lasting 13 days, like in Khabarovsk, would more efficient practices which would allow Registration fees are among the lowest in the mean that the hypothetical city ranks 12 on the authorities to formulate policies aimed at making additional improvements in cities world. They vary from 0.2% of property value the number of requirements and 28 on the across Russia. in 26 of the 30 cities to 0.53% in Kaliningrad delay. If a city were to adopt Omsk’s low cost to get electricity, entrepreneurs would pay and 0.4% in Yakutsk—well below the OECD Benchmarking exercises like Doing Business 112% of income per capita for an electricity average of 4.4% of property value. inspire governments to improve business connection, cheaper than in three-quarters regulation. They uncover bottlenecks and LEARNING FROM EACH OTHER of economies measured by Doing Business. identify where policymakers can look for good practices. Comparisons between cities Reform-minded local governments can use If it took 150 days like in Surgut to obtain a in the same country can be drivers of reform Doing Business indicators to motivate and construction permit, the hypothetical city’s because it is harder for local governments to sustain reform efforts. There is no need to time would rank 78 globally. With Kazan’s justify why doing business in their cities is reinvent the wheel: it is sufficient to start cost of 40% of income per capita to obtain more burdensome than in neighboring cities. by introducing improvements successfully a construction permit, it would have a cost Sharing a national legal framework facilitates implemented in other cities (table 1.4).22 similar to Brazil or Switzerland. However, for implementation of good local practices. TABLE 1.4 Good practices in Russian cities compared internationally National governments can also use Doing Global Rank DB 2012* Best practice in Russia Business data to monitor how efficiently lo- cal branches of agencies implement national Indicator Sub-Indicator Rank Rank Value (1-183) Value (1-183) City regulation. Cost to start a business (as 2 28 1.7 21 Kazan % of income per capita) Consistent reformers have a long-term Starting a Kirov, Murmansk, Perm, agenda and continuously push forward. They business Number of procedures to Petrozavodsk, St. Peters- 9 124 7 86 stay focused by setting specific goals and start a business burg, Stavropol, Yakutsk

and Yaroslavl regularly monitor progress. The top-ranked economy on the ease of doing business, Days to start a business 30 126 16 87 Kaliningrad Singapore, introduces business reforms Cost to deal with construction permits 183.8 113 40 46 Kazan every year. Other policymakers—such as Dealing with (as % of income per capita) the Dutch Advisory Board on Administrative construction Number of procedures permits Burden and the UK Better Regulation to deal with construction 51 181 16 103 Murmansk

permits Executive—routinely assess existing regula-

tion and manage the flow of new regulation. Days to deal with construc- 423 173 150 78 Surgut tion permits In the UK a program between 2005 and

Cost to get electricity 2010 reduced the burden of regulatory 1852.4 140 112.2 47 Omsk (as % of income per capita) compliance by a quarter, saving firms £3.5 Getting 23 Number of procedures Kemerovo, Perm, Rostov- billion ($5.53 billion). New initiatives are electricity to obtain an electricity 10 182 6 121 on-Don, Samara and under way. connection Yakutsk Days to get electricity 281 178 120 120 Vladikavkaz Cumulative business reforms across a Cost to register 16 cities including range of topics produce the best results. property (as % of 0.2 9 0.2 9 Kaluga, Kazan and the property value) Surgut Cooperation across differentgovernment Registering agencies, at both local and national levels, is property 18 cities including Number of procedures to 549312Irkutsk, Rostov-on-Don necessary for wide-ranging reforms. Political register property and Tver will and vision coming from a reform cham- Days to get electricity 43 104 13 28 Khabarovsk pion—whether the president, minister, or mayor—is central to success. Moreover, * Data published in Doing Business in 2012, as measured for Moscow by June 2011. Source: Doing Business database. consistent reformers are inclusive—involv- ing all relevant stakeholders, including the 6 DOING BUSINESS IN RUSSIA 2012

private sector, and institutionalizing the European countries that joined the European 14. National Entrepreneurship Initiative reform effort. Union in 2004: the Czech Republic, Estonia, “Improvement of Investment Climate in Hungary, Latvia, Lithuania, Poland, the the Russian Federation” supported by the Payoffs from business reforms can be large. Slovak Republic and Slovenia; and Bulgaria Agency for Strategic Initiatives, www.asi.ru and Romania, that joined the EU in 2007, Saving time and money are often the imme- 15. In addition to limited liability companies, “EU 10 Regular Economic Report,” World there are several other forms of incorpora- diate benefits for firms. In Mexico, local one- Bank, 2011. tion in Russia. Sole proprietors are also an stop shops cut the time to start a business 6. Deutsche Bank Research, “The Russian important part of the business landscape. from 58 to 13 days. A recent study reports Regions: Moscow is not Everything,” Of the 3.1 million active SMEs in Russia 1.9 the payoffs: the number of new firm registra- September 18, 2009, Deutsche Bank. million are individual entrepreneurs (http;// tions rose by 5%, employment increased by 7. World Bank, Urban Population Database, www.gks.ru/free_doc/new_site/business/ prom/small_business/pred_itog.htm). 2.2%, and prices fell by nearly 1% because http://data.worldbank.org. 16. Because getting electricity was including in of the competition from new entrants.24 8. Rosstat, gross regional product per capita in current prices 1998–2010, (see http:// the aggregate ease of doing business rank- In India, the progressive elimination of the www.gks.ru/wps/wcm/connect/rosstat/ ing, the procedures, time and cost related license raj—a system of central controls on rosstatsite/main/account/#). RUB/USD to the electricity connection were removed entry and production—led to a 6% increase exchange converted on May 3, 2012, at a from the dealing with construction permits in new firm registrations and highly produc- rate of 0.033 RUB to USD. indicator. See Data notes for details. tive firms entering the market experienced 9. Rosstat, Omsk Oblast (see http://www.gks. 17. Moscow City Government Resolution No. 263 from June 14, 2011. larger increases in real output than less ru/bgd/regl/b11_14s/IssWWW.exe/Stg/ sibir/omsk.htm). 18. Irkutsk, Kazan, Moscow, Perm, Petrozavodsk, productive ones.25 10. Russia defines a micro company as having Rostov-on-Don, Saint Petersburg, Tomsk, Tver, Voronezh. To the extent that an easing of needlessly 1 to 15 employees and a turnover of RUB 60 mln, a small company as having 16 to 19. Irkutsk, Perm, Petrozavodsk, Rostov-on-Don, bureaucratic regulations and red tape con- 100 employees and an annual turnover of Saint Petersburg, Tomsk, Voronezh. tributes to improve the cost structure of RUB 400 mln. A medium-size company 20. Federal Law of November 29, 2010 No. firms, they also enhance their competitive- is defined as having 101 to 250 employees 326-FZ “On Mandatory Medical Insurance ness and their ability to compete abroad. and an annual turnover of RUB 1 bln. Source: in the Russian Federation,” article 17. European Commission. Enterprise and Improvements in the regulatory framework 21. Instruction of the Central Bank of Russia of Industry. Small and medium-size enter- faced by the private sector—as captured September 14, 2006 No. 28-I “On Opening prises (SMEs): SME Definition; Federal law and Closure of Bank Accounts, Deposits” by the Doing Business indicators—can be a #209-FZ “On small and medium business (with amendments of May 14, 2008, powerful tool to facilitate the integration of development in Russian Federation.” November 25, 2009). the country into the global economy. The http://www.doingbusiness.ru/definition- 22. This calculation is based on Doing Business countries that, over the past several decades, of-sme/support-contacts/sme-support/ definition-of-sme-eu-vs-russia/item. 2012: Doing business in a more transparent have managed to increase their footprint in world data under the assumption that data 11. APEC: Asia Pacific Economic Cooperation, the global marketplace are also countries for all other economies remain unchanged. “The SME Sector Progress in Russia that have made sustained efforts to create is a Pavestone in the Road to APEC 23. Nineteen U.K. government departments a more conducive environment for private Summit—2012”, http://www.google.com/ participated in the program, which started with an extensive quantification exercise sector development and better and more url?q=http://smb.gov.ru/content/download/ in the summer of 2005. In May 2010 the efficient rules have been an integral part of attached,1441/download.php&sa=U&ei=gZ eQT4ORBcH26AHXwqWLBA&ved=0CBE target was met: a total cost reduction for these efforts. QFjAA&sig2=t6gVfublMnnFQ-ozDEtXmQ businesses of £3.5 billion. Based on this &usg=AFQjCNGzEeu2ASKUVDhEVcadq71 experience, a new target was set: to cut the CB1bWPw. ongoing costs of regulation by another £6.5 NOTES billion by 2015. Available at http://www.bis. 12. Micro, Small and Medium Enterprise gov.uk. 1. World Bank, GDP Growth Database, http:// Country Indicators (MSME-CI), 2012. data.worldbank.org. MSME-CI is the result of the joint work 24. Bruhn, Miriam. 2011. “License to Sell: The 2. “World Bank—Russian Federation between IFC’s Access to Finance and Effect of Business Registration Reform on Partnership. Country Program Snapshot, Sustainable Business Advisory Business Entrepreneurial Activity in Mexico.Review of April 2012, World Bank, http://www. Lines and the Global Indicators and Analysis Economics and Statistics 93 (1): 382-86. worldbank.org/content/dam/Worldbank/ Department. http://www1.ifc.org/wps/ 25. Aghion, Philippe, Robin Burgess, Stephen J. document/Russia-Snapshot.pdf. wcm/connect/Industry_EXT_Content/ Redding and Fabrizio Zilibotti. 2008. “The 3. World Bank, GDP Growth Database, http:// IFC_External_Corporate_Site/Industries/ Unequal Effects of Liberalization: Evidence data.worldbank.org. Financial+Markets/msme+finance/ from Dismantling the License Raj in India.” American Economic Review 98 (4): 1397-412. 4. Country Partnership Strategy for the Russian sme+banking/msme-countryindicators. Federation, 2012–2016, November 18, 2011, 13. Russia’s 2020 Strategic Economic Goals and World Bank. the Role of International Integration, Center 5. The EU 10 countries include the 8 Central for Strategic and International Studies, July 2008 and updated in March 2012. 7

About Doing Business and Doing Business in Russia 2012

A vibrant private sector—with firms mak- them. Doing Business goes beyond identifying regulation, such as completing business ing investments, creating jobs and raising problems and points to regulations that may start-up formalities in a one-stop shop. productivity—promotes growth and expands need reform. And its quantitative measures opportunities for poor people. To foster a enable research on how regulations affect Doing Business in Russia 2012 encompasses vibrant private sector, governments around firm behavior and economic outcomes. time and motion indicators that measure the the world have implemented wide-ranging efficiency and complexity of achieving a regu- reforms, including price liberalization and The first Doing Business report, published in latory goal, such as granting the legal identity macroeconomic stabilization programs. But 2003, covered 5 indicators and 133 econo- of a business. Cost estimates are recorded governments committed to the economic mies. This year’s report covers 11 indicators from official fee schedules where applicable. health of their country and opportunities for and 183 economies. Ten topics are included A regulatory process such as starting a busi- their citizens focus on more than macroeco- in the aggregate rankings on the ease of do- ness or registering property is broken down nomic conditions. They also pay attention to ing business. The project has benefited from into clearly defined steps and procedures. laws, regulations and institutional arrange- feedback from governments, academics, Doing Business builds on Hernando de Soto’s ments that shape daily economic activity. practitioners and reviewers.1 The initial goal pioneering work in applying the time and mo- remains: to provide an objective basis for tion approach first used by Frederick Taylor to Until 10 years ago there were no globally understanding and improving the regulatory revolutionize the production of the Model T available indicator sets for monitoring such environment for business. Ford. De Soto used the approach in the 1980s microeconomic factors and analyzing their to show the obstacles to setting up a garment relevance. The first efforts, in the 1980s, DOING BUSINESS IN factory on the outskirts of Lima, Peru. 2 drew on perceptions data from expert or WHAT DOES RUSSIA 2012 business surveys that often capture onetime COVER? WHAT DOING BUSINESS IN RUSSIA experiences of businesses. Such surveys can Doing Business in Russia 2012 provides 2012 DOES NOT COVER be useful gauges of economic and policy quantitative measures of national and local conditions. But few perception surveys pro- regulations for 4 Doing Business indicators: Just as important as knowing what Doing vided indicators with annually updated starting a business, dealing with construc- Business in Russia 2012 does is to know what global coverage. tion permits, getting electricity and register- it does not. ing property as they apply to domestic small The Doing Business project takes a different Limited in scope and medium-size enterprises. approach from perception surveys. It looks Doing Business in Russia 2012 focuses on at domestic, mainly small and medium-size A fundamental premise of Doing Business is 4 topics with the goal of measuring the companies, and measures the regula- that economic activity requires good rules. regulation and red tape that affect small and tions applied to them in life cycles. Based These include rules that establish and clarify medium-size firms. Accordingly, the report on standardized case studies, it presents property rights and reduce the costs of re- does not: quantitative indicators on regulation that solving disputes, rules that increase the pre- Ė Measure all 11 indicators covered in the can be compared across 183 economies dictability of economic interactions and rules global Doing Business report. The report and over time. This approach complements that provide contractual partners with core covers 4 areas of regulation that are the perception surveys in exploring the major protections against abuse. The goal: regula- provenance of local governments and constraints for businesses, as experienced tions designed efficient and simple in their where local differences exist: starting a by businesses and in the regulations applied implementation to all who need to use them. business, dealing with construction per- to them. Accordingly, some Doing Business indicators mits, getting electricity and registering Regulations are under the control of poli- give a higher score for more regulation, such property. cymakers—and policymakers intending to as stricter disclosure requirements in related- Ė Measure all aspects of the business change the experiences of businesses often party transactions. Some give a higher score environment that matter to firms or start by changing regulations that affect for a simplified way of implementing existing investors—or all factors that affect 8 DOING BUSINESS IN RUSSIA 2012

competitiveness. It does not, for example, Or they may avoid legally required proce- of them large emerging markets—are highly measure security, macroeconomic stabil- dures—for example, by not registering for correlated with those on the ease of doing ity, corruption, labor skills, institutional social security. business, with a correlation of 0.72. strength or all aspects of infrastructure quality. Nor does it focus on regulations Where regulation is onerous, informality is Similarly, there is a high correlation (0.82) specific to foreign investment. higher. Informality comes at a cost: firms between rankings on the ease of doing in the informal sector typically grow more business and those on the World Economic Ė Cover all regulations, or regulatory goals, slowly, have poorer access to credit and in any city. As economies and technology Forum’s Global Competitiveness Index, a employ fewer workers—and their workers advance, more areas of economic activ- much broader measure capturing such fac- remain outside the protections of labor law.3 ity are being regulated. For example, the tors as macroeconomic stability, aspects All this may be even more so for female- European Union’s body of laws has ex- of human capital, the soundness of public owned businesses.4 Informal firms are panded to 14,500 rule sets. Doing Business institutions and the sophistication of the also less likely to pay taxes. Doing Business in Russia 2012 measures just 4 phases of business community. Economies that do well measures one set of factors that help ex- a company’s life cycle. The indicator sets on Doing Business indicators tend to do well plain the occurrence of informality and give also do not cover all aspects of regulation on the OECD market regulation indicators policy makers insights into potential areas of in the particular area. For example, the and the Global Competitiveness Index and reform. Gaining a fuller understanding of the 6 indicator on starting a business does not vice versa. cover all aspects of commercial legislation. broader business environment, and a broad- er perspective on policy challenges, requires A bigger question is whether the issues on Based on standardized case combining insights from Doing Business with which Doing Business focuses matter for scenarios data from other sources, such as the World advancing development and reducing pov- Bank Enterprise Surveys.5 erty. The World Bank study Voices of the Poor The indicators in Doing Business in Russia 2012 are based on standardized case scenarios asked 60,000 poor people around the world with specific assumptions, such as that the WHY THIS FOCUS how they thought they might escape pover- 7 business is located in one of the 30 Russian Doing Business functions as a kind of cho- ty. The answers were unequivocal: women cities measured by the report. Economic indi- lesterol test for the regulatory environment and men alike pin their hopes on income cators commonly make limiting assumptions for domestic businesses. A cholesterol test from their businesses or wages. Enabling of this kind. Inflation statistics, for example, does not tell us everything about the state of growth—and ensuring that poor people are often based on prices of consumer goods our health. But it does measure something can participate in its benefits—requires an in a few urban areas. Such assumptions allow important for our health. And it puts us on environment where new entrants with drive global coverage and enhance comparability, watch to change behaviors in ways that will and good ideas, regardless of their gender or but they come at the expense of generality. improve not only our cholesterol rating but ethnic origin, can get started in business and also our overall health. good firms can invest and grow, generating In areas where regulation is complex and jobs. highly differentiated, the standardized case One way to test whether Doing Business used to construct each indicator in the serves as a proxy for the broader business Small and medium-size enterprises are report needs to be carefully defined. Where environment and for competitiveness key drivers of competition, growth and job relevant, the standardized case assumes is to look at correlations between Doing creation, particularly in developing econo- a limited liability company. This choice is Business rankings and other major economic mies. But in these economies up to 80% of partly empirical: limited liability companies benchmarks. Closest to Doing Business in economic activity takes place in the informal are the most prevalent business form in what it measures are the indicators on sector. Excessive bureaucracy and regulation most economies. The choice also reflects a product market regulation compiled by the may prevent firms from entering the formal focus of Doing Business: expanding oppor- Organization for Economic Co-operation and sector. Even firms in the formal sector might tunities for entrepreneurship. Investors are Development (OECD). These indicators are not have equal access to transparent rules encouraged to venture into business when designed to help assess the extent to which and regulations, affecting their ability to potential losses are limited to their capital the regulatory environment promotes or compete, innovate and grow. participation. inhibits competition. They include measures of the extent of price controls, the licensing Where regulation is burdensome and com- Focused on the formal sector and permit system, the simplicity of rules petition limited, firms’ success tends to de- In constructing the indicators, Doing Business and procedures, administrative burdens and pend more on whom their owners know than in Russia 2012 assumes that entrepreneurs legal and regulatory barriers, the prevalence on what they can do. But where regulation are knowledgeable about all regulations and of discriminatory procedures, and the de- is transparent, efficient and implemented in comply with them. In practice, entrepreneurs gree of government control over business a simple way, it becomes easier for aspiring may spend considerable time finding out enterprises. The rankings on these indica- entrepreneurs, regardless of their connec- where to go and what documents to submit. tors—for the 39 economies covered, several tions, to operate under the rule of law and ABOUT DOING BUSINESS AND DOING BUSINESS IN RUSSIA 2012 9

to benefit from the opportunities and protec- WHAT RESEARCH SHOWS ON costs can boost legal certainty: businesses tions that it provides. THE EFFECTS OF BUSINESS entering the formal sector gain access to the REGULATION legal system, to the benefit of themselves In this sense Doing Business values good rules 16 Nine years of Doing Business data, together and their customers and suppliers. as a key to social inclusion. It also provides a with other datasets, have enabled a growing Assessing the impact of policy reforms basis for studying effects of regulations and body of research on how specific areas of poses challenges. While correlations their application. For example, Doing Business business regulation—and reforms—relate 2004 found that faster contract enforcement to social and economic outcomes. Some across economies can appear strong, it is was associated with perceptions of greater 873 articles have been published in peer- difficult to isolate the effect of regulations judicial fairness—suggesting that justice reviewed academic journals, and about given all the other factors that vary at the delayed is justice denied.8 2,332 working papers are available through economy level. Such correlations usually Google Scholar.9 do not show whether a specific outcome is DOING BUSINESS IN RUSSIA 2012 caused by a specific regulation or whether AS A BENCHMARKING EXERCISE Much attention has been given to exploring it coincides with factors such as a more links to microeconomic outcomes, such positive economic situation. So how is it Doing Business in Russia 2012, in capturing as firm creation and employment. Recent possible to know whether things would have key dimensions of regulatory regimes, can be research focuses on how business regula- been different without a specific reform? useful for benchmarking. Any benchmark- tions affect the behavior of firms by creating Some studies have been able to test this by ing—for individuals, firms or economies—is incentives (or disincentives) to register and investigating variations in an economy over necessarily partial: it is valid and useful if it operate formally, create jobs, innovate and time. Other studies have investigated policy helps sharpen judgment, less so if it substi- 10 raise productivity. Many studies have also changes that affected only certain firms or tutes for judgment. looked at the role played by courts, credit groups. Several economy-specific impact bureaus and insolvency and collateral laws Doing Business in Russia 2012 provides 2 takes studies have concluded that simpler entry in providing incentives for creditors and regulations encourage the establishment of on the data it collects: it presents “absolute” investors to increase access to credit. The more firms: indicators for each city for each of the 4 literature has produced a range of findings. regulatory topics it addresses and provides Ė In Mexico one study found that a program rankings of cities by indicator. Judgment is Lower costs for business registration that simplified municipal licensing led to a required in interpreting these measures for encourage entrepreneurship and enhance 5% increase in the number of registered any city and in determining a sensible, politi- firm productivity. Economies with efficient businesses and a 2.2% increase in wage cally feasible path for reform. business registration have a higher entry employment, while competition from rate by new firms as well as greater busi- new entrants lowered prices by 0.6% and Reviewing the Doing Business rankings in iso- ness density.11 Economies where registering the income of incumbent businesses by lation may show unexpected results. Some a new business takes less time see more 3.2%.17 Other research found that the cities might rank unexpectedly high on some businesses register in industries with the same licensing reform led to a 4% in- indicators. And some cities that have had greatest potential for growth, such as those crease in start-ups and that the program rapid growth or attracted a lot of investment with higher global demand or new technol- was more effective in municipalities with 12 might rank lower than others that appear ogy. Reforms making it easier to start a less corruption and lower costs for other less dynamic. business tend to have a significantly positive registration procedures.18 effect on investment in product market in- Ė In India the progressive elimination of the dustries such as transport, communications But for reform-minded local governments, “license raj” led to a 6% increase in new and utilities, which are often sheltered from how much the regulatory environment for firm registrations, and highly produc- competition.13 There is also evidence that local entrepreneurs improves matters more tive firms entering the market saw larger more efficient business entry regulations im- than their relative ranking. As cities develop, increases in real output than did less pro- prove firm productivity and macroeconomic they strengthen and add to regulations to ductive firms.19 Simpler entry regulation performance.14 protect investor and property rights. They and labor market flexibility were found also find more efficientways to implement Simpler business registration translates to be complementary. States with more existing regulations and cut outdated ones. into greater employment opportunities in flexible employment regulations saw a One finding of Doing Business is that dynamic the formal sector. Reducing start-up costs 25% larger decrease in informal firms and growing economies continually reform for new firms resulted in higher take-up rates and 17.8% larger gains in real output than and update their regulations and their way for education, higher rates of job creation did states with less flexible labor regula- of implementing them—while many poor for highly skilled labor and higher average tions.20 The licensing reform also led to economies still work with regulatory sys- productivity because new firms are often set a productivity improvement of 22% for tems dating to the late 1800s. up by highly skilled workers.15 Lowering entry firms affected by it.21 10 DOING BUSINESS IN RUSSIA 2012

Ė In Colombia new firm registrations in- credit is a major constraint to businesses.30 Most reformers start out by seeking ex- creased by 5.2% after the creation of a Good credit information systems and strong amples, and Doing Business helps in this one-stop shop for businesses.22 collateral laws can help alleviate financing effort (boxes 2.1 and 2.2). For example, Saudi constraints. In 12 transition economies found Arabia used the company law of France In Portugal the introduction of a one-stop Ė that strengthening collateral laws increased as a model of for revising its own. Many shop for businesses led to a 17% increase 31 the supply of bank loans by 13.7%. Creditor economies in Africa look to Mauritius—the in firm registrations and 7 new jobs for rights and the existence of credit registries, region’s strongest performer on Doing every 100,000 inhabitants compared with public or private, are both associated with a Business indicators—as a source of good economies that did not implement the higher ratio of private credit to GDP.32 And practices for reform of business regulation. reform.23 sharing more information through credit In the words of Luis Guillermo Plata, the bureaus is associated with higher bank prof- A sound regulatory environment leads former minister of commerce, industry and itability and lower bank risk.33 to stronger trade performance. Efforts to tourism of Colombia: streamline the institutional environment for Economy-specific research assessed the It’s not like baking a cake where you follow trade (such as by making customs more ef- effect of efficient debt recovery and exit 24 the recipe. No. We are all different. But we ficient) have benefits for trade. One study processes in determining conditions of credit found that an inefficient trade environment can take certain things, certain key lessons, and in ensuring that less productive firms are was among the main factors in poor trade and apply those lessons and see how they restructured or exit the market: performance in Sub-Saharan economies.25 work in our environment. Ė The establishment of specialized debt Another study identified government’s recovery tribunals in India sped up the ability to formulate and implement sound resolution of debt recovery claims and BOX 2.1 How economies have used Doing policies and regulations that promote private allowed lenders to seize more collateral Business in regulatory reform sector development, customs efficiency, on defaulting loans. It also increased the infrastructure quality and access to finance To ensure coordination of efforts across probability of repayment by 28% and as important factors in improving trade.26 agencies, economies such as Colombia, lowered interest rates on loans by 1–2 per- The same study found that economies with Rwanda and Sierra Leone have formed regu- centage points.34 more constrained access to foreign markets latory reform committees reporting directly benefit more from improvements in the Ė Following a broad bankruptcy reform in to the president that use Doing Business indi- investment climate than those with easier Brazil in 2005 that, among other things, cators as one input to inform their programs access. improved the protection of creditors, the for improving business environments. More cost of debt fell by 22% and the level of than 20 other economies have formed such 35 Research also shows that an economy’s credit rose by 39%. committees at the interministerial level, in- ability to enforce contracts is an important Ė Improving insolvency regimes that stream- cluding India, Malaysia, Taiwan (China) and determinant of its comparative advantage lined mechanisms for reorganization Vietnam in East and South Asia; the Arab in the global economy. Among compa- reduced the number of liquidations by Republic of Egypt, Morocco, Saudi Arabia, rable economies, those with good contract 8.4% in Belgium and by 13.6% in Colombia the Syrian Arab Republic, the United Arab enforcement tend to produce and export because more viable firms opted for re- Emirates and the Republic of Yemen in the more customized products than those with 36 organization. In Colombia the new law Middle East and North Africa; Georgia, poor contract enforcement.27 Another study better distinguished viable and nonviable Kazakhstan, the Kyrgyz Republic, Moldova shows that in many developing economies, firms, making survival more likely for finan- and Tajikistan in Eastern Europe and Central production of high-quality output is a pre- cially distressed but viable firms. condition for firms to become exporters: Asia; Kenya, Liberia, Malawi and Zambia in institutional reforms that lower the cost of Sub-Saharan Africa; and Guatemala, Mexico HOW GOVERNMENTS USE and Peru in Latin America. Governments high-quality production increase the posi- DOING BUSINESS tive effect that facilitating trade can have on have reported more than 300 regulatory income.28 Removing barriers to trade should Quantitative data and benchmarking can be reforms that have been informed by Doing be accompanied by other reforms—such as useful in stimulating debate about policy, by Business since 2003. making labor markets more flexible—to raise exposing potential challenges and identify- productivity and growth.29 ing where policy makers might look for les- sons and good practices. For governments, Over the past 9 years there has been much Regulations and institutions that form part a common first reaction is to doubt the activity by governments in reforming regula- of financial market infrastructure—includ- quality and relevance of Doing Business data. tion. Most reforms related to Doing Business ing courts, credit information systems, and Yet the debate typically proceeds to a deeper topics were nested in broader programs collateral, creditor and insolvency laws— discussion exploring the relevance of the aimed at enhancing economic competitive- help ease access to credit. The World Bank’s data to the economy and areas where reform ness. In structuring their reform programs for Enterprise Surveys show that access to might make sense. the business environment, governments use ABOUT DOING BUSINESS AND DOING BUSINESS IN RUSSIA 2012 11

multiple data sources and indicators. And and regulations as well as administrative Doing Business uses a simple averaging ap- reformers respond to many stakeholders and requirements. (For a detailed explanation of proach for weighting sub-indicators and interest groups, all of whom bring important the Doing Business in Russia 2012 methodol- calculating rankings. Other approaches issues and concerns to the reform debate. ogy, see data notes). were explored, including using principal World Bank Group dialogue with govern- components and unobserved components. ments on the investment climate is designed Information sources for the data The principal components and unobserved to encourage critical use of the data, sharpen Most of the indicators are based on laws and components approaches yielded results judgment, avoid a narrow focus on improving regulations. In addition, most of the cost in- nearly identical to those of simple averaging. The tests show that each set of indicators Doing Business rankings and encourage dicators are backed by official fee schedules. provide sufficiently broad coverage across broadly based reforms that enhance the in- Doing Business in Russia in 2012 respondents topics. So the simple averaging approach is vestment climate. The World Bank Group both fill out written surveys and provide used. uses a vast range of indicators and analytics references to the relevant laws, regulations in this policy dialogue, including its Global and fee schedules, aiding data checking and Improvements to the methodology Poverty Monitoring Indicators, Logistics quality assurance. The methodology has undergone continual Performance Indicators and many others. All improvement over the years. Changes have indicators are available to the public at For some indicators part of the cost compo- been made mainly in response to sugges- nent (where fee schedules are lacking) and http://data.worldbank.org. tions from client economies. In accordance the time component are based on actual with the Doing Business methodology, these practices rather than laws on the books. This changes have been incorporated into Doing BOX 2.2 How regional economic forums use approach introduces a degree of subjectiv- Doing Business Business in Russia 2012. ity. Thus the Doing Business approach has The Asia-Pacific Economic Cooperation been to work with legal practitioners or For starting a business, for example, the (APEC) organization uses Doing Business to identify potential areas of regulatory re- professionals who regularly conduct the minimum capital requirement can be an form, champion economies that can help transactions involved. Following the stan- obstacle for potential entrepreneurs. Initially, others improve and set measurable targets. dard methodological approach for time and Doing Business measured the required mini- In 2009 APEC launched the Ease of Doing motion studies, Doing Business breaks down mum capital regardless of whether it had to Business Action Plan with the goal of mak- each process or transaction, such as start- be paid up front. In many economies only ing it 25% cheaper, faster and easier to do ing and legally operating a business, into part of the minimum capital has to be paid business in the region by 2015. The action up front. To reflect the actual potential bar- plan sets specific targets, such as making it separate steps to ensure a better estimate rier to entry, the paid-in minimum capital has 25% faster to start a business by reducing of time. The time estimate for each step is been used since 2004. the average time by 1 week. given by practitioners with significant and Drawing on a firm survey, planners iden- routine experience in the transaction. This year’s report removes procedures tified 5 priority areas: starting a business, related to getting an electricity connection getting credit, enforcing contracts, trad- The Doing Business approach to data col- from dealing with construction permits indi- ing across borders and dealing with con- lection contrasts with that of enterprise or cators. This has been done to avoid double struction permits. APEC economies then firm surveys, which often capture one-time selected 6 “champion economies” for the counting because the Doing Business report perceptions and experiences of businesses. priority areas: New Zealand and the United includes an 11th indicator this year—getting States (starting a business), Japan (getting A corporate lawyer registering 100–150 electricity.37 Doing Business in Russia 2012 has credit), the Republic of Korea (enforcing businesses a year will be more familiar with reflected the removal of procedures related contracts), Singapore (trading across bor- the process than an entrepreneur, who will to getting an electricity connection from ders) and Hong Kong SAR, China (dealing register a business once or maybe twice. A dealing with construction permits to allow with construction permits). In 2010 and bankruptcy judge deciding dozens of cases for international comparability. 2011 several of the champion economies a year will have more insight into bankruptcy organized workshops to develop programs All changes in methodology are explained in to build capacity in their areas of expertise. than a company that undergoes the process. the data notes section of this report as well Source: APEC (Asia-Pacific Economic Development of the methodology as on the Doing Business website. In addition, Cooperation). 2010. “APEC Ease of Doing data time series for each indicator and city Business Action Plan (2010-2015).” http:// The methodology for calculating each in- are available on the website. The website aimp.apec.org/ dicator is transparent, objective and easily also makes available all original datasets replicable. Leading academics collaborate used for background papers. in the development of the indicators, ensur- METHODOLOGY AND DATA ing academic rigor. Eight of the background Information on data corrections is pro- Doing Business in Russia 2012 covers 30 cities. papers underlying the indicators have been vided in the data notes and on the website. The data are based on national and local laws published in leading economic journals. A transparent complaint procedure allows 12 DOING BUSINESS IN RUSSIA 2012

anyone to challenge the data. If errors are European Economic Review 51 (1): 203–24; “The Economic Effects of Employment confirmed after a data verification process, Barseghyan, Levon. 2008. “Entry Costs and Protection: Evidence from International Cross-Country Differences in Productivity Industry-Level Data.” IZA Discussion Paper they are quickly corrected. and Output.” Journal of Economic Growth 13 2433. Institute for the Study of Labor. Bonn, (2): 145–67; Eifert, Benjamin. 2009. “Do Germany. Regulatory Reforms Stimulate Investment 16. Masatlioglu, Yusufcan, and Jamele Rigolini. NOTES and Growth? Evidence from the Doing 2008. “Informality Traps.” B.E. Journal of 1. This has included a review by the World Business Data, 2003–07.” Working Paper Economic Analysis & Policy 8 (1); Djankov, Bank Independent Evaluation Group 159, Center for Global Development, Simeon. 2009. “The Regulation of Entry: A (2008) as well as ongoing input from the Washington, DC; Klapper, Leora, Anat Lewin Survey.” The World Bank Research Observer International Tax Dialogue. and Juan Manuel Quesada Delgado. 2009. 24 (2): 183–203. 2. De Soto, Hernando. 2000. The Mystery of “The Impact of the Business Environment 17. Bruhn, Miriam. 2011. “License to Sell: The Capital: Why Capitalism Triumphs in the West on the Business Creation Process.” Policy Effect of Business Registration Reform on and Fails Everywhere Else. New York: Basic Research Working Paper 4937. World Bank, Entrepreneurial Activity in Mexico.” Review Books. Washington, DC; Djankov, Simeon, Caroline of Economics and Statistics 93 (1): 382–86. Freund and Cong S. Pham. 2010. “Trading on 3. Schneider, Friedrich. 2005. “The Informal 18. Kaplan, David, Eduardo Piedra and Enrique Time.” Review of Economics and Statistics 92 Sector in 145 Countries.” University Linz, Seira. 2007. “Entry Regulation and Business (1): 166–73; Klapper, Leora, and Inessa Love. Department of Economics. Start-Ups: Evidence from Mexico.” Policy 2011. “The Impact of Business Environment Research Working Paper 4322. World Bank, 4. Amin, Mohammad. 2011. “Labor Reforms on New Firm Registration.” Policy Washington, DC. Productivity, Firm-Size and Gender: The Research Working Paper 5493. World Bank, Case of Informal Firms in Argentina Washington, DC; Chari, Anusha. 2011. 19. Aghion, Philippe, Robin Burgess, Stephen and Peru.” Enterprise Note 22. World “Identifying the Aggregate Productivity Redding and Fabrizio Zilibotti. 2008. “The Unequal Effects of Liberalization: Evidence Bank Group, Enterprise Analysis Unit, Effects of Entry and Size Restrictions: An from Dismantling the License Raj in India.” Washington, DC. Empirical Analysis of License Reform in American Economic Review 98 (4): 1397–412. 5. http://www.enterprisesurveys.org India.” American Economic Journal: Economic 6. The World Economic Forum’s Global Policy 3: 66–96; Bruhn, Miriam. 2011. 20. Sharma, Siddharth. 2009. “Entry Regulation, Competitiveness Report uses part of “License to Sell: The Effect of Business Labor Laws and Informality: Evidence from the Doing Business datasets on starting a Registration Reform on Entrepreneurial India.” Enterprise Survey Working Paper business, employing workers, protecting Activity in Mexico.” Review of Economics and .World Bank Group, Enterprise Analysis Unit, investors and getting credit (legal rights). Statistics 93 (1): 382–86. Washington, DC. 21. Chari, Anusha. 2011. “Identifying the 7. Narayan, Deepa, Robert Chambers, Meer 11. Klapper, Lewin, and Quesada Delgado. Aggregate Productivity Effects of Entry and Kaul Shah and Patti Petesh. 2000. Voices of 2009. Entry rate refers to newly registered Size Restrictions: An Empirical Analysis of the Poor: Crying Out for Change. Washington, firms as a percentage of total registered License Reform in India.” American Economic DC: World Bank. firms. Business density is defined as the total Journal: Economic Policy 3: 66–96. 8. World Bank. 2003. Doing Business in 2004: number of businesses as a percentage of the 22. Cardenas, Mauricio, and Sandra Rozo. 2009. Understanding Regulation. Washington, DC: working-age population (ages 18-65). “Firm Informality in Colombia: Problems World Bank Group. 12. Ciccone, Antonio, and Elias Papaioannou. 2007. “Red Tape and Delayed Entry.” Journal and Solutions.” Desarrollo y Sociedad, no. 63: 9. According to searches on Google Scholar 211–43. (http://scholar.google.com) and the Social of the European Economic Association 5 23. Branstetter, Lee G., Francisco Lima, Lowell J. Science Citation Index. (2-3):444-58. Taylor and Ana Venâncio. 2010. “Do Entry 13. Alesina, Alberto, Silvia Ardagna, Giuseppe 10. Djankov, Simeon, Rafael La Porta, Florencio Regulations Deter Entrepreneurship and Job Nicoletti and Fabio Schiantarelli. 2005. López-de-Silanes and Andrei Shleifer. Creation? Evidence from Recent Reforms “Regulation and Investment.” Journal of 2002. “The Regulation of Entry.” Quarterly in Portugal.” NBER Working Paper 16473, the European Economic Association 3 (4): Journal of Economics 117 (1): 1–37; Alesina, National Bureau of Economic Research, 791-825. Alberto, Silvia Ardagna, Giuseppe Nicoletti Cambridge, MA. and Fabio Schiantarelli. 2005. “Regulation 14. Loayza, Norman, Ana Maria Oviedo 24. Djankov, Simeon, Caroline Freund and Cong and Luis Serven. 2005. “Regulation and and Investment.” Journal of the European S. Pham. 2010. “Trading on Time.” Review of Macroeconomic Performance.” Policy Economic Association 3 (4): 791–825; Perotti, Economics and Statistics 92 (1): 166–73. Enrico, and Paolo Volpin. 2005. “The Research Working Paper 346. World Bank, 25. Iwanow, Thomasz, and Colin Kirkpatrick. Political Economy of Entry: Lobbying and Washington, DC; Barseghyan, Levon. 2008. 2009. “Trade Facilitation and Manufacturing Financial Development.” Paper presented “Entry Costs and Cross-Country Differences Exports: Is Africa Different?” World at the American Finance Association 2005 in Productivity and Output.” Journal of Development 37 (6): 1039–50. Philadelphia Meetings; Klapper, Leora, Luc Economic Growth 13 (2): 145-67. Laeven and Raghuram Rajan. 2006. “Entry 15. Dulleck, Uwe, Paul Frijters and R. Winter- 26. Seker, Murat. 2011. “Trade Policies, Regulation as a Barrier to Entrepreneurship.” Ebmer. 2006. “Reducing Start-up Costs Investment Climate, and Exports.” MPRA Journal of Financial Economics 82 (3): for New Firms: The Double Dividend on Paper 29905. University Library of Munich, 591–629; Fisman, Raymond, and Virginia the Labor Market.” Scandinavian Journal of Germany. Sarria-Allende. 2010. “Regulation of Economics 108: 317–37; Calderon, César, 27. Nunn, Nathan. 2007. “Relationship- Entry and the Distortion of Industrial Alberto Chong and Gianmarco Leon. 2007. Specificity, Incomplete Contracts, and Organization.” Journal of Applied Economics “Institutional Enforcement, Labor-Market the Pattern of Trade.” Quarterly Journal of 13 (1): 91–120; Antunes, Antonio, and Tiago Rigidities, and Economic Performance.” Economics 122 (2): 569–600. Cavalcanti. 2007. “Start Up Costs, Limited Emerging Markets Review 8 (1): 38–49; 28. Rauch, James. 2010. “Development through Enforcement, and the Hidden Economy.” Micco, Alejandro, and Carmen Pagés. 2006. Synergistic Reforms.” Journal of Development ABOUT DOING BUSINESS AND DOING BUSINESS IN RUSSIA 2012 13

Economics 93 (2): 153–61. 32. Djankov, Simeon, Caralee McLiesh and Evidence from the 1997 Belgian Bankruptcy 29. Chang, Roberto, Linda Kaltani and Andrei Shleifer. 2007. “Private Credit in 129 Code.” Small Business Economics 31 (4): Norman Loayza. 2009. “Openness Can Countries.” Journal of Financial Economics 409–24; Giné, Xavier, and Inessa Love. Be Good for Growth: The Role of Policy 84 (2): 299–329; Houston, Joel, Chen 2010. “Do Reorganization Costs Matter Complementarities.” Journal of Development Lin, Ping Lin and Yue Ma. 2010. “Creditor for Efficiency? Evidence from a Bankruptcy Economics 90: 33–49; Cunat, Alejandro, Rights, Information Sharing, and Bank Risk Reform in Colombia.” Journal of Law and and Marc J. Melitz. 2007. “Volatility, Taking.” Journal of Financial Economics 96 (3): Economics 53 (4): 833–64. Labor Market Flexibility, and the Pattern of 485–512. 37. Data from previous years on dealing with Comparative Advantage.” NBER Working 33. Ibid. construction permits have been adjusted Paper 13062, National Bureau of Economic 34. Visaria, Sujata. 2009. “Legal Reform and to reflect this change. They are available on Research, Cambridge, MA. Loan Repayment: The Microeconomic the Doing Business website under “historical 30. http://enterprisesurveys.org Impact of Debt Recovery Tribunals in India.” data” (http://www.doingbusiness.org). 31. Haselmann, Rainer, Katharina Pistor and American Economic Journal: Applied Economics Vikrant Vig. 2010. “How Law Affects 1 (3): 59–81. Lending.” Review of Financial Studies 23 35. Funchal, Bruno. 2008. “The Effects of (2): 549–80. The countries studied were the 2005 Bankruptcy Reform in Brazil.” Bulgaria, Croatia, the Czech Republic, Economics Letters 101: 84–86. Estonia, Hungary, Latvia, Lithuania, Poland, 36. Dewaelheyns, Nico, and Cynthia Van Hulle. Romania, the Slovak Republic, Slovenia and 2008. “Legal Reform and Aggregate Small Ukraine. and Micro Business Bankruptcy Rates: Starting a business

Boosting the growth of small and medium- with an increase in productivity of about 8% FIGURE 3.1 Lower-start up costs are correlated size enterprises has become a policy priority for small and medium-size firms. This change with an 8% increase in productivity for Russia. The government has proposed in cost is not correlated with any changes in for small and medium-size measures to encourage 60-70% of the popu- productivity among large firms (figure 3.1).5 businesses across Russian cities lation to become involved in entrepreneurial Lower costs to start a business can facilitate activity by 2020.1 The Ministry of Economic firm entry and raise competition which is 20 Development recently projected that the conducive to greater productivity. Stronger 17 share of small and medium-size enterprises competition might have a stronger impact 2 in GDP would reach 50% in 5–7 years. on small and medium size firms, since most 14 14 Support programs for small and medium- firms start small, especially in the short run. 13 size firms have become a pillar in promoting 12 industry diversification and innovation. WHAT DOES STARTING A BUSINESS MEASURE?

WHY DOES STARTING A BUSINESS Doing Business measures the procedures, Productivity Growth MATTER? time and cost for small and medium-size Formal incorporation has many ben- limited liability companies to start and efits. Legal entities outlive their founders. operate formally (figure 3.2). These require- Total SME Large Resources can be pooled as several share- ments include obtaining needed licenses and holders join together. Limited liability com- permits and completing required notifica- Lower cost to start a business Higher cost to start a business panies cap the financial liability of company tions, verifications and inscriptions for the owners to their investments, so personal as- company and employees. The report also Note: Productivity data obtained from the partial sample of firms of the World Bank Enterprise Surveys from 2011-12 sets are not put at risk. And companies have records the paid-in minimum capital that (75% of the overall sample). The cost to start a business access to services and institutions—from companies must deposit before registration. is obtained from Doing Business in Russia 2012; the analysis covers 27 of the 30 cities measured (all but Surgut, courts to banks—as well as to new custom- To make the data comparable across 183 Petrozavodsk and Vladikavkaz). The significant correlation ers and markets. A recent study using data economies, Doing Business uses a standard- is found after controlling for other potential explanations of the correlation such as firms’ sector of activity, age, initial collected from company registries in 100 ized business that is 100% domestically conditions, and the rate of growth of each city. See Data countries over 8 years found that simple owned, has a start-up capital equivalent to notes for details. Source: Doing Business database. business start-up is critical for fostering for- 10 times income per capita, engages in mal entrepreneurship. Countries with smart business registration have a higher entry rate 3 FIGURE 3.2 The starting a business indicator measures the time, cost, paid-in minimum capital and number as well as greater business density. of procedures to get a local limited liability company up and running

Evidence from time series and country stud- Cost ies shows that reforms to ease business (% of income per capita) Formal entry increase the number of new firms and operation sustain gains in economic performance, in- 4 cluding in employment and productivity. In Paid-in $ Number of minimum procedures Russia, World Bank Enterprise Surveys from capital 27 of the cities studied by this report show a correlation between the cost of starting a business and sales and productivity growth. Entrepreneur The difference between a city with an aver- Time (days) PreregistrationRegistration, Postregistration age cost of 2.4% of income per capita to start incorporation a business and one with 2.0% is associated STARTING A BUSINESS 15

FIGURE 3.3 Starting a business is inexpensive in Russia, but involves many procedures

46.8 15 20

17.9 14 13

12 12 15

9 11.2 9 9 10.6 8 10

6 Procedures (number) 6 5 5

5.4 Cost (% of income per capita) 4.7 5 3 3.5 2.0 1.3 1 0.4 0 0 Canada Belarus EU 10 Turkey Indonesia Russia Vietnam India Brazil China emerging (represented by Moscow)

Procedures Cost (% of income per capita)

Note: The EU 10 countries include the eight Central European countries that joined the EU in 2004: the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, the Slovak Republic and Slovenia; and Bulgaria and Romania that joined the EU in 2007. Source: Doing Business database. general industrial or commercial activities in Belarus, putting them among the top 10 HOW DOES STARTING A and has between 10 and 50 employees. economies on the ease of starting a busi- BUSINESS WORK IN RUSSIA? ness. At the other end of the spectrum, in The 2001 law “On Registration of Legal HOW DOES RUSSIA COMPARE India—ranked 166—it takes 12 procedures, Entities and Sole Proprietors” governs busi- GLOBALLY? 29 days, and 47% of income per capita to ness start-up. Together with Canada, Russia Governments are aware of the importance of register a company. The gap between the top is one of few countries around the globe with reforms to business entry: the Doing Business performers and economies still working on a single national database of registered com- database shows that simplifying business refining their business start-up procedures is panies valid throughout the whole country. registration has been among the most com- shrinking thanks to 48 economies reforming In addition, Russian companies do not need mon reforms introduced by governments on average each year, as recorded by Doing to reserve a commercial name because their since the report was introduced in 2004. But Business since 2006. unique registration number is sufficient. practices vary greatly. In New Zealand, the Under this unified framework, company top global performer, an entrepreneur can Moscow represents Russia in the annual and tax registration were combined and the register a business online in 15 minutes for Doing Business publication. The start-up $118. process takes 9 procedures over 30 days Federal Tax Service became the main coun- and costs 2% of income per capita— terpart in charge of business start-up. The Countries elsewhere have been learning among the cheapest in the world (figure law stipulates the establishment of one-stop from the best performers. In Eastern Europe, 3.3). It ranks ahead of India, Indonesia, shops to centralize the following procedures: China, Brazil and Nigeria, but behind entering the new business into the Unified Belarus and the former Yugoslav Republic Vietnam, Turkey, and many high income of Macedonia have been top reformers for OECD economies. State Register of Legal Entities (EGRYUL), several years, with company registration registering it with the tax authorities to taking 3 days in FYR Macedonia and 5 days obtain a taxpayer identification number and 16 DOING BUSINESS IN RUSSIA 2012

tax registration code, registering employees registration confirmation to the new com- separately. Rather than dealing with one of- with the pension fund, the social security pany’s legal address. ficial at one window, entrepreneurs interact fund and the medical insurance fund, and with 4 institutions, but may gain time. In getting a statistics code from the Federal Because the postal service can be slow, Kaluga, Saransk and Vladikavkaz, where a State Statistics Service. The law sets time entrepreneurs in some cities prefer to 2011 federal law merging registration for limits for completing each set of registra- move post-registration papers themselves, pension fund and medical insurance is not tions: 5 working days for the one-stop shop bypassing the mailing of the documents enforced, entrepreneurs also visit the medi- to enter the company in EGRYUL and assign via postal system. In 11 cities entrepreneurs cal insurance fund (figure 3.4). the tax codes and 5 more to forward the personally pick up the statistics code needed information to the social funds and statistics to open a bank account from the statistics The average cost of starting a business in service, which then have 5 working days to office. In Irkutsk entrepreneurs pick up tax Russia of 2.3% of income per capita is half enter the new company into their registries and company registrations from the one- the average cost of 4.7% in OECD high- and 5 more to confirm the registration back stop shop, then visit the statistics office, the income economies. The cost in the cities to the one-stop shop.6 pension fund and the social security fund studied in Russia varies from 1.7% of income per capita in Kazan to 3% in Surgut. In the HOW DOES STARTING A TABLE 3.1 Ease of starting a business pre- and post-registration phases, entrepre- ranking for the 30 cities neurs interact with private agents including BUSINESS VARY ACROSS RUSSIAN measured in Russia CITIES? banks, seal-makers and notaries. These Cost (% interactions explain the cost differences. Across Russia, registering a company takes of income Procedures Time per on average 9 procedures, 23 days and City Rank (number) (days) capita) Entrepreneurs visit banks at least twice, first costs 2.3% of income per capita. There St. Petersburg* 1 7 17 2.1 to open a temporary account to deposit the are some differences in how federal law is Volgograd 2 8 22 2.0 paid-in minimum capital, then to make the implemented in the 30 cities studied. The Ulyanovsk 3 8 21 2.1 account permanent. The cost of opening a number of procedures ranges from 7 in Kazan* 4 9 21 1.7 permanent company bank account varies Murmansk, Kirov, Perm, Petrozavodsk, Saint Stavropol 4 7 23 2.2 from a low nominal charge in Moscow to Petersburg, Stavropol, Yakutsk and Yaroslavl Petrozavodsk* 6 7 23 2.2 4,000 rubles ($130) in Khabarovsk. The to 12 in Vladikavkaz. The time needed var- Yaroslavl 7 7 27 2.0 difference stems from how much a bank ies from 16 days in Kaliningrad to 33 days Irkutsk* 8 10 19 2.1 charges for copying and verifying registration in Yekaterinburg. And the cost ranges from Yakutsk 8 7 25 2.2 confirmations and certifying the signature on 6,000 to 9,000 rubles ($200-300). It is Vyborg 10 8 25 2.0 the bank card. easiest to start a business in Saint Petersburg Kaliningrad 11 8 16 2.4 and more cumbersome in Surgut (table 3.1). Murmansk 12 7 25 2.2 WHAT REFORMS WERE Kirov 13 7 29 2.1 IMPLEMENTED? Variations in the number of procedures and Perm* 13 7 25 2.2 In 2011 Russia made it possible to register time derive from the degree of involvement Tomsk* 15 8 23 2.2 a business online in 4 pilot locations— of one-stop shops in post-registration pro- Voronezh* 15 8 18 2.5 Moscow, the Orenburg district, Saint cedures to register employees with medical Kaluga 17 11 22 2.1 Petersburg and the Tula district (www.nalog. insurance, social security and pension funds Vladivostok 18 8 23 2.3 ru). But physical one-stop shops are much and getting statistics codes from the Federal Omsk 19 8 25 2.2 more widely used throughout the country. State Statistics Service. Saint Petersburg’s Saransk 20 11 20 2.3 Since Doing Business in Russia 2009 was one-stop shop centralizes these steps—after Tver* 21 8 25 2.4 published, the one-stop shops in Irkutsk, registering the company with EGRYUL and Samara 22 10 19 2.5 Perm, Petrozavodsk, Rostov-on-Don, Saint the tax administration, it sends the relevant Novosibirsk 23 11 22 2.3 Petersburg, Tomsk and Voronezh central- information to the social funds and statis- Khabarovsk 24 8 23 3.0 ized more functions, resulting in fewer tics service and receives the registration Moscow* 25 9 30 2.1 interactions for entrepreneurs. Because of confirmations from them. After just 9 days Rostov-on-Don* 26 11 21 2.5 better coordination between the tax service, entrepreneurs can pick up the full package Vladikavkaz 27 12 22 2.3 statistics office and social funds, up to 4 at the same window where they submitted Kemerovo 28 11 22 2.5 procedures were eliminated in Voronezh and their applications. In Yekaterinburg the same Yekaterinburg 29 8 33 2.4 process takes 30 days. There the one-stop 3 in Tomsk. Surgut 30 11 22 3.0 shop enters the company in the business and * City measured in Doing Business in Russia 2009 But fewer interactions do not automati- tax registers and forwards the information to Note: Rankings are based on the average city percentile cally lead to less waiting time if notifications the 3 social funds and statistics office. Then rankings on the procedures, time and cost to start a business. Cities with the same average percentile rankings have the are sent by mail. An exception is Saint the one-stop shop disengages. After each same rank. See Data notes for details. Petersburg, where the one-stop shop agency registers the company, it mails the Source: Doing Business database. STARTING A BUSINESS 17

FIGURE 3.4 Comparing the one-stop shops of Saint Petersburg and Saransk

How the one-stop-shop functions in Saint Petersburg

Medical Insurance Fund

State Statistical Office One-stop shop at Federal Tax Service Social Security Fund

Pension Fund

How the one-stop-shop functions in Saransk

Collect registration Medical confirmations from each agency Insurance Fund

State Statistical One-stop shop Office at Federal Tax Service Social Security Fund

Pension Fund Pick up tax and company registration confirmation from OSS

Source: Doing Business database. consolidates all notifications, saving entre- them by mail. Company and tax registration the concept of both online registration and preneurs 6 days. And in 2 of the 10 cities certificates could become available electroni- electronic signatures. measured twice over time, Petrozavodsk and cally from the Federal Tax Services website. Rostov-on-Don, a 2006 decree stating that Other registration numbers could be available Making registration electronic is the ultimate banks should not request notarized copies from the company registry extract or online. way to streamline business start-up. Seven for opening company bank accounts led to Regulation should be issued to legitimize on- of the economies with the fastest business the elimination of the need to notarize regis- line information to ensure that paper copies start-up offer online electronic registration— tration notifications. are no longer needed. Australia, Canada, Denmark, Estonia, New Zealand, Portugal and Singapore. More than Though still low from an international per- Extend online company registration to 20 economies have introduced electronic spective, the cost of starting a business across more cities and promote its use registration in the past 6 years. Allowing entrepreneurs to complete registration Russian cities has increased since 2008. This In 2011 Russia introduced online company online without visiting a government office is mainly due to a doubling of the state regis- registration in Moscow, the Orenburg dis- or notary should be the goal. The Russian tration fee, from 2,000 rubles ($66) in 2008 trict, Saint Petersburg and the Tula district. government should implement an online to 4,000 rubles ($133) in 2011. But the processing system could be simpli- one-stop shop as a single virtual interface for fied. The customer interface could be more entrepreneurs. WHAT TO REFORM? user friendly by eliminating, for example, Replace paper registration certificates the need to first download the software or No longer require notarized signatures with electronic notifications by making available sample charters that on registration applications Entrepreneurs in many cities visit up to 5 insti- could be selected by a click of the mouse. In The Company Registration Law requires that tutions—the one-stop shop at the tax admin- addition, entrepreneurs still have to notarize founders’ signatures on registration applica- istration, statistics office, social security fund, their signatures on the application forms, tion forms be notarized. The purpose is to pension fund and medical insurance fund—to even if they can use electronic signatures on confirm the identity of applicants and verify get their registration notifications; or receive other documents. This practice undermines their signatures. When founders submit 18 DOING BUSINESS IN RUSSIA 2012

registration packages, their identities can and other legislation, in particular on banking It can also be withdrawn after registra- easily be checked by one-stop shops. If sub- and taxation, require company seals. tion—hardly of any value in insolvency. And mitted by third parties, a power of attorney it is not clear that minimum capital require- could serve as confirmation, so notarization Russia has a law on electronic signatures ments have much value in other ways. Fixed would not be required. (Federal Law on Electronic Digital Signature, amounts of capital do not take into account 2002), but its implementation is lagging. differences in commercial risks. Recovery The verification performed by notaries is Promoting the use of electronic signatures rates in bankruptcy are no higher in econo- also performed by the tax administration, and eliminating the need for seals would mies with minimum capital requirements duplicating efforts and processes. Half of the save entrepreneurs time, costs, allow for than in those without.7 Thus the minimum economies measured by Doing Business do online company start-up, tax filing, and other capital requirement is not an appropriate way not require the involvement of notaries to in- services based on information technology, of safeguarding the interests of creditors. corporate a limited liability company. Other and protect business information better by countries, such as Belarus, Hungary, Portugal making it harder to falsify documents. and Romania have made notary involvement NOTES optional. Do not require entrepreneurs to notify 1. Bolotinsky, Max, and Hongda Jiang. 2008. government agencies about opening “SMEs in Russia and China: A Comparison.” With online registration and digital signature, bank accounts Market Ananysis, Alinga Consulting Group. 2. Russian Federation, Ministry of Economic the need to verify personal identification Article 23 of the Tax Code requires that Development. 2011. “Socio-economic would become obsolete. Singapore’s regis- the entrepreneur or company notify the tax trar rightfully assumes that most businesses Prognosis for the Russian Federation in authorities within 7 days of opening or clos- 2012 and Plan for the Period 2013-2014,” would not aim to go through fraudulent reg- ing a bank account. Article 86 also obliges Moscow. istration and put their control into the hands banks to inform the tax authorities about 3. Klapper, Leora, Anat Lewin and Juan Manuel of strangers. In the few cases where people the opening or closing of bank accounts in Quesada Delgado. 2009. “The Impact of are listed as company founders without 5 days. This duplication is cumbersome Business Environment on the Business Creation Process.” Policy Research Working their consent, the registry office uses post- for entrepreneurs, especially if the postal registration verification and informs them Paper 4937, World Bank, Washington, DC. system is unreliable and they have to deliver Entry rate refers to newly registered firms that a company has been created with them the notification in person. Banks can easily as a percentage of total registered firms. listed as a founder. Registry officials focus inform the tax authorities electronically, so Business density is defined as the number of their time and attention on the minority of entrepreneurs should be exempt from this businesses as a percentage of the working- age population (pages 18–65). fraudulent cases instead of verifying every responsibility. single application. 4. Motta, Marialisa, Ana Maria Oviedo and Massimiliano Santini. 2010. “An Open Door for Eliminate the minimum capital Make the company seal optional Firms: The Impact of Business Entry Reforms.” requirement World Bank Group, Washington, DC. An official seal is intended to confirm the Entrepreneurs starting a business must 5. See www.enterprisesurveys.org legality of a company’s contracts. But seals have 10,000 rubles ($333), or almost 2% 6. Federal Law on the Registration of Legal can be forged easily, and most economies of income per capita, to be deposited into a Entities, August 8, 2001, N 129-03 have done away with them. Seals are being bank account in the first year of a company’s 7. Djankov, Simeon, Oliver Hart, Caralee MacLiesh and Andrei Schleifer. 2008. “Debt replaced by electronic signatures. About operation. Half of that has to be deposited 60% of economies do not use them. Since Enforcement around the World. “Journal of before the application for business registra- Political Economy 116 (6): 1105-49. 2007, 14 economies, including Bulgaria and tion. The rationale is that this requirement Pakistan, have eliminated or made optional protects creditors. But the deposited capital the requirement for companies to have seals. is rather nominal and does not provide pro- Russia’s Law on Limited Liability Companies tection for creditors. 19

Dealing with construction permits

Since 2002 Russia’s construction industry has been the most profitable after oil and FIGURE 4.1 What are the time, cost and number of procedures to comply with formalities 1 gas. At the height of its activity in 2008, the to build a warehouse? construction sector employed 8% of Russia’s 2 workers and generated 6.3% of GDP. The Cost construction industry was hit hard by the (% of income per capita) global economic downturn of 2008/09. Completed warehouse According to some estimates, 80% of construction projects were suspended and Number of almost no new residential or commercial procedures property projects started. As the effects of 3 the crisis dissipated, this share fell to 50%. A business in the construction industry External factors can have a large impact, but Time (days) so can regulation. Though external shocks PreconstructionConstruction Postconstruction and utilities are difficult for policymakers to respond to, providing the right regulatory environment WHAT DOES DEALING WITH construction permits, according to Doing is in their hands. In regulating the construc- CONSTRUCTION PERMITS Business 2012. After the recent removal of tion industry, it is important to strike the MEASURE? 4 approvals previously required from the right balance between safety and efficiency. Moscow city administration, the process Smart regulations can ensure public safety Doing Business measures the time, cost and now takes 47 procedures, 392 days and and revenue for government while making procedures required for a small and medium- costs 171.5% of income per capita. For an life easier for entrepreneurs. size enterprise to obtain all approvals needed to build a simple commercial warehouse entrepreneur in the average Russian city the and connect it to water, sewage and a fixed process would be easier, faster and cheaper WHY DOES DEALING WITH telephone line (figure 4.1). Doing Business with 25 procedures in 269 days at a cost CONSTRUCTION PERMITS includes all inspections needed before, dur- of 121.4% of income per capita. Hong Kong MATTER? ing and after construction of the warehouse. SAR, China, has been the top performer in Complex, confusing regulation hurts busi- It is assumed that the warehouse is located dealing with construction permits among the ness and can encourage corruption. Instead in the periurban area of the city, is not in a 183 economies ranked by Doing Business over of promoting public safety, overly rigid special economic or industrial zone and will the last 3 years. It takes only 6 procedures, regulation can push construction into the be used for general storage. 67 days and a cost of 17.8% of income per informal economy. By some estimates, capita. 60–80% of building projects in developing Such indicators can be telling. A recent economies are undertaken without proper report by KPMG indicated that construction HOW DOES DEALING WITH permits and approvals. In the Philippines costs and permitting processes were among CONSTRUCTION PERMITS WORK 57% of new construction is considered il- the top 20 factors determining the location IN RUSSIA? legal.4 Fewer procedures do not mean less 5 of start-ups in the United States. Dealing with construction permits follows safety—Denmark, New Zealand and Sweden the same stages across Russian cities (figure each have 6–8 procedures, and buildings in HOW DOES DEALING WITH 4.2). Construction permits are regulated all three countries are considered safe. CONSTRUCTION PERMITS IN by the Urban Development Code, which RUSSIA COMPARE GLOBALLY? prescribes most procedures, sets time limits Russia, as represented by Moscow, for their completion and regulates costs.6 ranked 178th on the ease of dealing with For instance, the code regulates the time and 20 DOING BUSINESS IN RUSSIA 2012

what can or cannot be built on the land plot, FIGURE 4.2 Construction permitting follows roughly the same stages across Russia obtain a land development plan (GPZU)8 and technical conditions for utility con- nections.9 During preconstruction all cities

Approval of land development plan follow similar steps, yet in some the process is simpler. Murmansk, Perm, Petrozavodsk, Obtaining technical conditions/preparing project Rostov-on-Don, Surgut and Yekaterinburg design/conducting engineering surveys Preconstruction require only 6 procedures. Moscow is the procedures Approval/clearances of technical conditions with utilities city with most preconstruction approvals —23—including from the Ministry of Civil Obtaining construction permit and other approvals and clearances Defense, Ministry of Emergencies and Natural Disaster Management, State Inspection of

Notification of authorities of commencement Road Safety, Fire Department, Department During construction procedures of construction works/inspections

TABLE 4.1 Ease of dealing with construction Obtaining documents confirming compliance with technical permits ranking for the 30 cities conditions, signing utility agreements measured in Russia Cost (% Obtaining occupancy permit Postconstruction of income procedures Procedures per Technical inventorization and entry into the cadastre City Rank (number) Time (days) capita) Surgut 1 17 150 106.2 State registration Stavropol 2 23 216 47.1 Kaliningrad 3 17 239 86.3 Ulyanovsk 4 30 191 45.6 Source: Doing Business database. Kirov 5 29 206 47.3 Irkutsk* 6 17 215 141.0 Tomsk* 6 18 279 66.5 cost of obtaining the 2 most critical docu- First, in some cases city regulations are not Saransk 8 30 191 67.3 ments: building and occupancy permits. In up-to-date with federal laws. This explains Kaluga 9 24 264 48.0 addition, federal law caps the time required antiquated requirements in some cities that St. Petersburg* 9 18 361 51.3 to register a newly constructed building.7 But predated the introduction of the federal Vladikavkaz 11 29 201 91.1 these laws are not implemented universally Urban Development Code in 2004. Another Perm* 12 21 229 107.7 across cities and significant differences ex- reason is the lack of modern zoning rules in Yekaterinburg 13 21 217 136.1 ist. In some cases, practice at the local level some cities. In such cases developers have Kazan* 14 32 223 40.0 might show additional requirements. to do additional analysis to determine what Rostov-on-Don* 15 18 294 95.0 can be built where. Finally, there are different Petrozavodsk* 16 18 285 117.2 HOW DOES DEALING WITH local practices—even though not required Yaroslavl 17 22 247 130.6 CONSTRUCTION PERMITS VARY by federal legislation, builders choose to go Novosibirsk 18 20 248 146.7 ACROSS RUSSIAN CITIES? through certain procedures to “guarantee” Murmansk 19 16 357 137.4 trouble-free construction and postconstruc- In Surgut it is easy to obtain a construction Omsk 20 29 312 62.4 tion. Builders report that despite knowing permit, while in Moscow it is most cumber- Kemerovo 21 24 322 74.8 that their projects are not subject to certain some. Globally, Surgut would rank 96 out Vladivostok 22 26 218 169.4 procedures, city authorities continue issuing of 183 economies as measured by Doing Vyborg 23 20 279 297.9 Business. In Surgut the construction process them, and builders choose to obtain them as a precaution, preferring “being safe than Samara 24 30 200 417.9 takes 150 days—very close to the OECD Tver* 25 30 448 75.2 average of 152 (table 4.1). sorry.” Until October 2011, such was the case in Moscow, when the authorities issued a Yakutsk 26 26 280 178.0 Volgograd 27 23 371 186.0 The number of procedures varies widely, document verifying that communication Voronezh* 28 31 364 111.4 from 16 in Murmansk to 47 in Moscow. lines and power grids are in accordance Of these, 11 of the average 25 procedures with the technical conditions from the utility Khabarovsk 29 32 269 188.9 are required before construction, 4 during company. Moscow* 30 47 392 171.5 construction and 10 postconstruction. In * City measured in Doing Business in Russia 2009 Article 51 of the Urban Development Code Note: Rankings are based on the average percentile rankings comparison, OECD high-income coun- on the procedures, time, and cost to deal with construction tries manage the entire process with 14 outlines the requirements to obtain a con- permits. Cities with the same average percentile rankings have struction permit: conduct geodesic and topo- the same rank. See Data notes for details. procedures. There are 3 explanations for Source: Doing Business database. additional requirements in some cities. graphic surveys of the land plot to document DEALING WITH CONSTRUCTION PERMITS 21

of Nature Management and Environment Protection, and Prefect’s Office. The city FIGURE 4.3 Construction requirements vary across cities administrations of Khabarovsk and Moscow Number of procedures require clearances from the fire department and traffic police, while Tver and Voronezh 16 require clearances from the Department of Murmansk Surgut 17 Culture confirming the absence of historic Kaliningrad 17 monuments on the land plot. Surgut requires Irkutsk 17 Before construction a confirmation that the construction project Petrozavodsk 18 18 has been added to the city archive. Kazan, Rostov-on-Don During construction Tomsk 18 Moscow and Tver have mandatory clearances St. Petersburg 18 20 After construction and from the Department of Comprehensive City Novosibirsk connection to utilities 20 Improvement to ensure that projects are in Vyborg Perm 21 line with pollution and environmental safety Yekaterinburg 21 norms and standards. Yaroslavl 22 Stavropol 23 The Urban Development Code takes a risk- Volgograd 23 24 based approach during construction. Permit Kaluga Kemerovo 24 applications for smaller, less risky projects Vladivostok 26 are treated differently than larger, more Yakutsk 26 29 complex buildings. Project documentation Vladikavkaz Kirov 29 for buildings below 2 stories and a surface Omsk 29 of 1,500 square meters or less do not require Ulyanovsk 30 government review.10 The hypothetical ware- Samara 30 30 house studied by Doing Business falls under Saransk Tver 30 this category, yet the rule is not applied Voronezh 31 evenly across the 30 cities measured—only Kazan 32 32 9 follow this rule (figure 4.3). In the others, Khabarovsk Moscow 47 builders still undergo several steps dur- 0 1020304050 ing construction, including notifying the city’s building authority of the beginning of construction, various inspections, and noti- Source: Doing Business database. fication after completion of construction. In Perm and Yekaterinburg this stage involves the occupancy permit. In some cities such usually stay close to these deadlines. But in 8 procedures. In Samara, Saransk, Ulyanovsk as Moscow, Kazan, Khabarovsk or Tver, the Moscow authorities take 120 days to issue and Vladikavkaz, 9. In Moscow, 18. state acceptance commission convenes to land development plans. This delay is partly check compliance with various municipal due to the absence of a master city plan, Once construction is complete, building requirements, including from the prefecture, up-to-date zoning rules and very high urban companies typically obtain clearances from sanitary services and environmental agency. density. Thus city officials do not have clear utilities certifying a project’s compliance rules on where commercial or residential with technical conditions, sign connection It takes on average 269 days to obtain a buildings can be erected, and need extra agreements with utilities, obtain an oc- construction permit, ranging from 150 days time to review each application and take cupancy permit and register the building.11 in Surgut to 448 in Tver. Russia’s average decisions case by case. Procedures at this stage vary from 4 in is slightly above that of Eastern Europe and Yekaterinburg to 15 in Tver. In Yekaterinburg Central Asia (238 days). Among the 30 cit- The federal law sets a cap of 30 days to reg- the technical inventorization of the newly- ies measured, the time varies from about 5 ister the ownership rights of the new build- built warehouse, the occupancy permit, the months in Stavropol and Yekaterinburg—as ings. Cities rarely violate these limits. Irkutsk, technical passport and the building registra- fast as in Luxembourg or Switzerland—to more Petrozavodsk, Surgut and Tomsk register tion are all that is needed for the builder than one year in Moscow, Tver and Voronezh. the ownership rights of new buildings even to use the warehouse. The construction faster—within 17 days. Because most of the Times for the 3 most critical documents for authorities in Kaluga, Samara, Vyborg and federally imposed time limits are complied construction—the land development plan, 11 others require approvals from utilities with, time variations between cities can building permit and occupancy permit—are (typically 2 or 3), certifying that the project mostly be attributed to the time required to regulated by the Urban Development Code complies with the technical conditions is- obtain other approvals required by local au- at 30, 10 and 10 days, respectively. Though sued before construction, in order to issue thorities. In Moscow, Tver and Voronezh the cities can issue these documents faster, they 22 DOING BUSINESS IN RUSSIA 2012

time required can be close to 400 days. In in 2008. Today it takes 392 days. These bimonthly inspections during and after Surgut, where only standard technical utility improvements are the result of several construction. conditions, the land development plan, and legislative and administrative reforms at the topographic and geodesic surveys need ap- regional and federal level. Another driver of reform was the enforce- proval, obtaining a construction permit takes ment of the time limits and cost ceilings just 150 days. The gradual implementation of the Urban set by the Urban Development Code. This Development Code across the country is the success was possible due to the increased The cost of construction approvals and most important single cause of the improve- involvement of the public prosecutor’s office certificates is prescribed by the Urban ments. The 10 cities adopted regulations to at the federal level, which closely monitors Development Code. For instance, obtaining harmonize regional rules with the provisions agencies and penalizes those that do not a development plan of a land plot, building of the federal code and/or eliminated old pro- comply with statutory time limits. In 2008 permit and occupancy permits free of charge visions. The biggest change is the removal of it took 300 days to issue a development plan in every city. It costs 15,000 rubles ($500) requirements—11 on average—which is also of a land plot in Voronezh—today it takes 10 to register a new warehouse with the state the main driver of the reduction in time. The days. A construction permit took 120 days to registration authority across the country. largest impact is felt during preconstruction be issued in Petrozavodsk and 60 in Irkutsk. The variations in cost across cities are due with Tomsk and Voronezh removing 13 and Today it takes 14 days in Petrozavodsk and to utility connections, topographic and geo- 14 procedures. 7 in Irkutsk. The same applies to costs. For desic surveys and technical inventorization. instance, obtaining a building permit, oc- Connections to water and sewerage are In 2008, 8 cities required clearances from cupancy permit and land development plan most expensive, showing a wide variation the Fire Department, 5 required clearances have been officially free of charge since across cities. Rostov-on-Don has the low- from the Department of Comprehensive 2004. The 2009 study, however, revealed est fees, charging 32,125 rubles ($1,036) to City Improvement, as well as approvals from that some cities charged for these proce- connect a warehouse to water and sewerage, the City Transport Agencies, and 2 required dures. Today this procedure is free in the 30 while in Irkutsk it costs almost 7 times as approvals from the City Illumination Office. cities studied by this report. much—244,300 rubles ($7,881). Today clearance from Sanitary Service is only required in 2 cities, while clearance Moscow introduced a one-stop shop to deal Topographic and geodesic surveys are con- from the Fire Department is required only with procedures related to land use for con- ducted by private companies. Prices average in one. Irkutsk, Perm, Petrozavodsk, Rostov- struction and reduced the processing time for 30,000 rubles ($1,000) for a topographic on-Don, Tomsk and Tver complied with issuance of land development plans from 180 survey and 100,000 rubles ($3,226) for a Article 49 of the Urban Development Code, to 120 days.12 The city government recently geodesic survey per land plot. Private agen- which exempts warehouses below 1,500 introduced more measures to streamline ap- cies set prices based on the land plot, loca- square meters from third-party review. This provals for construction permits. One of the tion, soil type and number of holes dug dur- measure eliminated inspections—in Irkutsk city’s objectives is to eliminate up to half of the ing the survey, as well as on market demand, 6 procedures were eliminated by stopping 23 procedures required before construction. which varies city by city. Prices for geodesic As of October 2011, it is no longer necessary surveys range from 7,000 rubles ($226) TABLE 4.2 It is easier to deal with to certify compliance with the communica- in Kazan to 313,000 rubles ($10,097) in construction permits now in the tion lines and power grids (Sketch No 2) at 10 cities benchmarked in 2008 Volgograd. Technical inventorization is Mosgorgeotrest and have it approved by the Reduced cheapest in Kemerovo at 15,000 rubles time for Adopted Moscow Architecture Committee, get the ap- ($500), while in Volgograd it is 6 times more processing new Introduced proval on transport routes from the Moscow permit Streamlined building risk-based expensive (91,000 rubles or $2,935). City applications procedures regulations approvals City Transport Agency, nor obtain the con- Irkutsk struction passport from Mosgorgeotrest. As a result, the number of requirements dropped WHAT REFORMS WERE Kazan   IMPLEMENTED? from 51 to 47, the time by 1 month (from Moscow  Doing Business in Russia 2009 identified 423 to 392 days) and the cost by 12.28% of Perm   good practices, pointed out bottlenecks income per capita.  and provided recommendations. Significant Petrozavodsk changes have since occurred in the country’s Rostov-on-Don  WHAT TO REFORM? construction regulation (table 4.2). In the 10 St. Petersburg    Consolidate approvals for technical and cities measured then, the average number Tomsk    design conditions of procedures was 35. Today this average Tver Many agencies review construction de- is 25. The average time also dropped, from  signs—15 in Moscow, 13 in Voronezh, 10 in 520 days in 2008 to 309 in 2011. In Moscow Voronezh  Kazan. Several options could consolidate the it took almost 2 years to complete the Doing Business reform making it easier to deal with construction permits process. One would be to identify the rel- paperwork to obtain a construction permit Source: Doing Business database. evance of each approval. Another would be to DEALING WITH CONSTRUCTION PERMITS 23

create approval panels with participation of all BOX 4.1 HONG KONG’S “BE THE SMART REGULATOR PROGRAM”* involved agencies. Such panels would examine In Hong Kong SAR (China) a working group (WG) was established by the local government technical conditions and project designs. in 2007, comprising the Economic Analysis and Business Facilitation Unit, the Development Bureau and the Buildings Department, Lands Department, Fire Services Department, Drainage Agencies can also be put in one location to Services Department, Highways Department and Water Supplies Department to re-engineer improve coordination amongst themselves. and streamline the relevant licensing procedures in response to the survey findings of the World Twenty-six economies, including Canada, Bank. The WG’s recommendations which did not require drastic procedural changes were imple- Hong Kong SAR (China), Mexico, Morocco mented that same year. Other reforms identified by the WG were long term in nature, requiring cross-departmental process re-engineering and organizational change. and Singapore have one-stop shops for building clearances; 15 were created in the The following reforms were implemented in 2008, consolidating 8 procedures in 2 steps: past 7 years. Hong Kong SAR (China) is a 1. SETTING-UP OF ONE-STOP CENTRE successful example—in 2009 the govern- The WG set up a One-Stop Centre for Warehouse Construction Permits (OSC) where build- ment merged 8 procedures involving 6 ing license applications to 6 government departments and 2 private utilities (i.e. telephone line and electricity supply) are collected and joint inspections for two-storey warehouse projects as agencies and 2 private utilities in a one-stop a pilot program are coordinated. All these departments and private utilities work together on the shop. Today only 6 procedures are needed to OSC under the supervision of the Efficiency Unit (EU). obtain a construction permit (Box 4.1). 2. BEFORE CONSTRUCTION Property developers can now use Form OSC-1 to submit to the One-Stop Centre in one-go Update or complete city master plans all applications relating to building plans approval and consent for commencement of building and zoning rules works from the Buildings Department, technical audit of water supply connection works by the Many cities lack good master zoning plans. Water Supplies Department, and road excavation permit from both the Police and Highways Department. This new arrangement simplifies the submission process by combining the follow- This is the case in Kazan and Moscow, which ing 5 procedures– have the longest construction processing - Obtain building plans approval times and procedure lists. Without zoning requirements, new property has to be re- - Apply and pay for technical audit of water supply connection works viewed by all clearance agencies. - Apply, pay and receive road excavation work permission from Highways Department - Notify and obtain approval from traffic police In cities with updated master plans, such as - Obtain building consent from Buildings Department Petrozavodsk and Surgut, fewer clearances 3. AFTER CONSTRUCTION are needed for construction permits. Building When the necessary construction works are completed, the developer can now submit the authorities in most EU countries verify that postconstruction applications under a covering checklist (Form OSC-2) to the One-Stop Centre projects comply with zoning requirements. for the technical audit from the Drainage Services Department, water supply certificates from France, for instance, does not require prelim- the Water Supplies Department, occupation permit from the Buildings Department, certificate inary zoning permits because there is a right of compliance from the Lands Department, certificate for fire service installations from the Fire Services Department, and connection of electricity and telephone line from the respective utility to build in areas allowed by zoning plans and companies. This one-stop service eliminates the need for the developer to contact individual construction applicants can access relevant government departments and private utility companies for reporting completion of works, issu- zoning information to determine if projects ance of certificates and inspections. meet zoning conditions. Upon receipt of the applications, the One-Stop Centre will coordinate, according to the infor- mation provided in the application form, with the relevant authorities to conduct a single joint Enhance alignment with the Urban inspection in one day. This greatly alleviates the effort of developers in receiving inspections and Development Code shortens the total processing time. Despite being in place since 2004, the fed- 4. TRACKING OF APPLICATIONS eral Urban Development Code is not evenly To facilitate answering enquiries from applicants, the One-Stop Centre has established a mechanism to monitor the progress of each application, making the whole application process implemented across the country, especially more transparent and convenient to the property developers. in big cities such as Moscow. Russian au- thorities could make efforts to ensure a * http://www.gov.hk/en/theme/bf/pdf/pamphlet.pdf stronger alignment of regional codes with the provisions of the national code. These reform, the federal government has started genuine effort to move closer to international efforts can be hampered by local regulations empowering private professionals who can good practice. that, at times, are not consistent with the be held accountable for acceptable stan- federal legislation. dards of care. Amendments to the Urban Extending third-party reviews to building Development Code (articles 49 and 50) inspections, not just plan reviews, would Increase the use of certified private expedite several procedures conducted professionals introduced private third-party reviews for plan checks. These amendments represent a before and during construction, including Russian building controls used to rely issuance of building permits and inspections. exclusively on the public sector. As part of To proceed to this step, Russian authorities 24 DOING BUSINESS IN RUSSIA 2012

need to ensure that a successful and robust with final drawings. Once this infrastructure NOTES private certification system is in place. This is created, it could be used to issue other 1. Russian Federation Federal State Statistics body should be independent of municipal, documents such as building and occupancy Service database. regional and federal governments. permits. In September 2010 a federal or- 2. Russian Federation Federal State Statistics dinance set a timetable for the provision of Service. “Construction in Russia 2010.” Most economies with well-developed con- electronic services for 74 public services. In 3. Vladimir Yakovlev and Nikolaj Koshman, “Russia’s Construction Industry: Current struction industries have some collaboration conjunction with the law on electronic sig- with licensed private building professionals to Status and Perspectives for Improvement,” nature signed by the State Duma in March July 23, 2009. reduce public controls. Austria and Germany 2011, this ordinance also creates a legal 4. World Bank. 2011. Doing Business 2012: Doing use qualified private individuals or engineer- framework to automate government services Business in a More Transparent World. World ing firms for plan reviews and inspections to with a focus on permits and licenses. Bank Group: Washington, DC. increase efficiency. Austria, Australia, Canada, 5. KPMG. 2009. “Competitive Alternatives: Germany, Japan, New Zealand, Singapore and Establish a risk-based system for KPMG’s Guide to International Business the United Kingdom do not restrict the use technical reviews, inspections and Location.” http://www.competitivealterna- tives.com. of private services to check on building plans conformity assessment and technical reviews of construction permit 6. “Urban Development Code of the Russian The risk-based approach of defining simple Federation”, Federal Law No. 190, December applications; they allow private professionals projects at an early stage could save time and 29, 2004. to conduct inspections. concentrate resources on complex projects 7. Federal Law on State Registration of Real that pose a higher threat to public safety. It Estate Rights and Transactions, Federal Law By delegating such tasks to private profes- would also eliminate the need for preapproval No. 122, July 21, 1997, as amended. sionals, city administrations save resources of projects by environmental, transport, fire 8. Gradostroitelnij plan zemel’nogo uchastka and time for entrepreneurs. Using a risk- (GPZU; development plan of a land plot) is a and sanitary services. While Russian legisla- based approach, approvals of simple, low- document providing information on the type tion takes a risk-based approach during con- risk buildings are outsourced to private and characteristics of construction projects struction—eliminating the need for low-risk professionals who carry responsibility for that can be built on the land plot according projects to undergo state supervision and to the city’s zoning requirements. The docu- projects. In Germany the state of Bavaria inspections—this practice could be further ment has detailed information of the land introduced a risk-based approach in 1994, plot including the land plot’s boundaries; its expanded to preconstruction. agreeing that the building authorities were interaction with the city’s cultural heritage structures; the requirements for connection only to review high-risk projects. Architects Builders in Russia submit an average of of low-risk projects assumed liability for con- to various utilities; etc. A more detailed 11 documents and approvals to obtain a description can be found in Article 44 of the struction. Builders saved 154 million euros construction permit. Not all projects have Urban Development Code. and building authorities reduced 270 staff, the same social, cultural, economic and envi- 9. Technical parameters of the project such and in a few years the approach spread to ronmental risks. Simple buildings involve low as volume of water required, the point of 13 connection for telephone line, etc. the rest of Germany. risk and should require less documentation. Russian authorities could consider adopting 10. According to the Federal Law of 28.11.2011 Create an electronic platform for No: 337-FZ, state expertise, or “review”, is a risk-based classification of buildings, pos- approving technical conditions from not a requirement for self-standing construc- sibly building on European Standard EN 1990 utilities tion objects no taller than 2 stories and of a (Annex B. 3.1). This approach would allow a total surface of 1,500 square meters. Builders in Russia have to obtain techni- meaningful risk categorization for buildings 11. Article 55 of the Urban Development Code cal conditions from electricity providers, while providing a structured, operational ap- outlines procedural and documentation re- street lighting providers, water services proach to implement it. quirements for obtainment of the occupancy providers, sewerage providers, telecom- permit. munications providers, and heat providers. Efficient governments have legislation that 12. Doing Business database. Multifunctional centers that are in place in differentiates construction permitting based 13. World Bank. 2011. Doing Business 2012: Doing business in a more transparent world. some cities are meant to facilitate the issu- on risk and location. Eighty-six economies Washington, DC: World Bank Group. ance of technical conditions for various utili- have adopted this practice, 13 in the past 7 14. Ibid. ties. But they hardly improve the efficiency of years. Colombia, Singapore and the United the process. Builders prefer to go directly to Kingdom are among the countries that have utilities, which are considered likely to offer improved risk-based approvals, eliminat- better conditions. ing the need for preapprovals by multiple agencies. In 2006 the Republic of Korea One solution is to create an electronic plat- introduced a fast track for small construction form where applicants for building permits projects. Between 2004 and 2009 applica- can apply for all technical conditions simulta- tions for building permits in Seoul jumped neously by submitting one online form along from 1,521 to 3,895.14 25

Getting electricity

In 2011 Russian utilities connected to the FIGURE 5.1 Firms consider electricity one of their biggest constraints electricity grid twice as many applicants as they did in 2008.1 But electricity connections Share of managers identifying issue as the most serious obstacle to their business operation (%) remain a concern. A 2010 survey of more than 5,000 managers in 40 regions found Access to that 14% reported that it is almost impos- finance Access to finance Crime, theft & disorder 15.9% sible to obtain a new electricity connection, Electricity Access to land and 30% reported that it is associated with Informal sector pratices Tax administration Electricity difficulties.2 14.5% Tax rates Licenses & permits Political instability Transport Informal Corruption Customs & trade regulations WHY DOES GETTING ELECTRICITY sector practices Inadequately Labor regulations MATTER? Tax rates 11% educated worfkorce Courts Infrastructure services—particularly elec- 10.7% tricity—are a concern for businesses around the world. World Bank Enterprise Surveys in Note: The data sample comprises 109 economies. 109 economies show that managers con- Source: World Bank Enterprise Surveys (2006–10 data). sider lack of electricity among the biggest constraints to their businesses (figure 5.1). FIGURE 5.2 Doing Business measures the connection process at the level of distribution utilities Poor electricity supply undermines firms’ productivity and investments.3 Eliminating electricity outages in Eastern Europe and Central Asia would increase GDP by 0.5%.4

Obtaining a new connection—the process measured by the getting electricity indica- tor—represents only a small part of electricity Generation Transmission services (figure 5.2). Yet the indicator offers information on a number of issues for which Distribution data were previously unavailable, comple- New connections menting other indicators such as electricity Network operation and maintenance outages. Analysis of 140 economies suggests Metering and billing that the getting electricity indicator is a use- Customer ful proxy for the broader performance of the electricity sector.5 Longer delays and higher standards and procurement practices. In costs of getting an electricity connection are WHAT DOES GETTING many economies electricity connections are associated with lower electrification rates. ELECTRICITY MEASURE? under the control of distribution utilities that Additional connection procedures are more Doing Business measures the procedures, often retain monopolistic positions—even in likely in economies with weak electricity sup- time and cost for a small or medium-size plies because of high losses in transmission otherwise liberalized electricity markets—so 6 enterprise to get a new electricity con- and distribution systems. businesses have little choice. The getting electricity indicator provides insights into nection for a standardized warehouse Electricity services are highly regulated. The regulatory aspects of electricity connections with specific electricity needs (figure 5.3). connection process is governed by laws and and assesses how such regulations and insti- These procedures include applications regulations covering quality, safety, technical tutions affect businesses. and contracts with electricity utilities, 26 DOING BUSINESS IN RUSSIA 2012

necessary inspections, clearances from FIGURE 5.3 The getting electricity indicator measures the time, cost and number of procedures required the distribution utility and other agencies to obtain a new electricity connection and external and final connection works. To make the data comparable across cities, Cost several assumptions about the warehouse (% of income per capital) and the electricity connections are used. Electricity is The location of the warehouse is assumed flowing to be within city limits, the subscribed Number of capacity of the connection 140 kilovolt Procedures amperes (kVA) and the length of the con- nection 150 meters.

HOW DOES GETTING Entrepreneur Time ELECTRICITY IN RUSSIA COMPARE Pre connection Connection Post connection (days) GLOBALLY? works works In the 30 Russian cities studied, obtaining an the connection. The design of the connection TABLE 5.1 Ease of getting electricity ranking electricity connection for a small and medium- can then be prepared in accordance with the for the 30 cities measured in Russia size business takes, on average, 9 procedures, technical specifications. After the connection Cost 230 days and costs 662% of income per (% of design has been approved by several agen- capita. Compared with Brazil, China, and income cies—including the distribution utility and Procedures Time per India, Russian cities have, on average, more City Rank (number) (days) capita) the energy inspectorate—connection works procedures, higher costs and slower process- Saransk 1 9 123 269.2 begin. Connection design and approval, as ing. The connection takes 34 days in Brazil, 67 Vladikavkaz 2 9 120 441.2 well as connection works, are often conducted in India, 70 in Turkey, 108 in Indonesia, 142 in Rostov-on-Don 3 6 223 115.1 by private firms and contractors, although Vietnam, 145 in China and 260 in Nigeria. In Kirov 4 9 220 390.6 in some cities distribution utilities complete OECD economies procedures between a util- Ulyanovsk 5 9 164 654.9 these tasks. Inspections and documentation ity and other public agencies are streamlined Yaroslavl 6 9 146 696.8 on technical requirements follow the works. and utilities usually have enough capacity Kemerovo 7 6 259 392.5 Electricity starts flowing once the customer to accommodate additional demand with a Khabarovsk 8 9 248 391.1 signs the supply contract. simple network extension. Russian small busi- Stavropol 9 7 238 443.5 nesses wait almost 7 months longer than their When the Unified Energy System, a state- Irkutsk 10 9 228 573.6 competitors in Germany, where it takes 17 owned vertically integrated monopoly servic- Tomsk 10 9 264 391.4 days to obtain an electricity connection—and ing all Russia, was restructured in 2006-08, Vyborg 12 9 202 772.7 spend 72 times more than Australians, where the electricity sector was unbundled into gen- Omsk 13 10 222 112.2 it costs 9% of income per capita. eration, transmission and distribution. IDGC Tver 14 9 183 869.2 Holding is the largest distribution entity, with Kaluga 15 10 144 589.8 Getting an electricity connection is easiest subsidiaries in 69 of 83 regions in Russia.7 Voronezh 16 9 215 838.4 in Saransk, where it takes 9 procedures and Other distribution utilities serve the other Kazan 17 9 186 929.1 123 days at a cost of 269% of income per regions. The boundaries where a distribution Perm 18 6 305 618.2 capita (table 5.1). The factors driving Saransk’s utility operates do not necessarily correspond Surgut 19 10 171 746.1 performance are shorter delays and lower to the borders of a city or region. Independent Yekaterinburg 19 9 360 458.0 connection tariffs. Globally, it would rank 154th retail electric suppliers participate in the con- Petrozavodsk 21 10 226 564.9 among 183 economies, similar to the Czech nection process at the stage of preparation Kaliningrad 22 9 308 641.6 Republic. and signing of contracts for electricity supply. Vladivostok 23 9 260 852.4 St. Petersburg 24 9 238 1080.0 HOW DOES GETTING Distribution utilities are governed by federal Yakutsk 25 6 279 1012.2 ELECTRICITY WORK IN RUSSIA? regulations on electricity connections.8 These Volgograd 26 10 205 804.3 Across Russian cities, the electricity con- regulations provide step-by-step descriptions Murmansk 27 10 328 375.6 nection process follows the same overall of how to obtain a connection, specifying the Samara 28 6 290 1153.0 stages (figure 5.4). The customer submits responsibilities of distribution utilities and Novosibirsk 29 10 265 815.9 documents to the distribution utility that customers. They list documents required for Moscow 30 10 281 1852.4 operates in the city where the warehouse a connection application and prohibit distribu- Note: Rankings are the simple average of the city’s percentile tion utilities from requesting additional rankings on the procedures, time and cost to get an electricity is located. The utility issues a contract and connection. Cities with the same average percentile rankings conditions with the technical specifications of have the same rank. See Data notes for details. Source: Doing Business database. GETTING ELECTRICITY 27

FIGURE 5.4 The connection process follows the same overall stages across cities

2 Prepare design of 1. Obtain technical the connection and 3.Complete external 4. Inspections of 5. Conclude a conditions and sign a obtain approvals of connection works works and meter supply contract connection contract the design information. In addition, many distribution utilities provide guidance on their websites or FIGURE 5.5 Fewer procedures, but longer delays in some cities in their offices. 2000 Time limits for issuing technical specifica- Moscow tions and completing connections are also regulated at the federal level. If distribution utilities do not comply with the time limits, ap- 1600 EXPENSIVE EXPENSIVE plicants can file a complaint with the Federal AND FAST AND SLOW Antimonopoly Service, which can issue warn- ings, monetary penalties or legal action. For 1200 Samara example, in 2012 the Moscow United Electric St. Petersburg Grid Company was issued a warning regard- Yakutsk Kazan ing 20 cases where the Federal Antimonopoly Tver Voroneg Vladivostok Service found that the utility was not meeting Volgograd Novosibirsk 800 Surgut Vyborg Cost as % of GNI per capita Yaroslavl its obligations in a timely fashion and impos- Ulyanovsk Kaliningrad 9 Kaluga Irkutsk Perm ing excessive requirements on customers. Petrozavodsk Despite these efforts, much remains to be Stavropol Ekaterinburg Vladikavkaz Tomsk done to improve regulations on electricity 400 Kirov KhabarovskKemerovo Murmansk Saransk connections. In addition, federal regulations CHEAP CHEAP are implemented and interpreted unevenly AND FAST Rostov on Don AND SLOW Omsk across regions and cities. 0 100 150 200 250 300 350 400

HOW DOES GETTING Time ELECTRICITY VARY ACROSS Cities with 6-7 procedures Cities with 9-10 procedures RUSSIAN CITIES?

Differences in procedures among cities depend Source: World Bank Enterprise Surveys (2006–10 data). on whether most of the connection process is conducted by the distribution utility or if private average it takes about 2 months longer (figure works by the distribution utility, the energy third parties hired by customers are involved. 5.5). inspectorate and the check of the meter by the The process involves less steps in Kemerovo, distribution utility or power retail company). Perm, Rostov-on-Don, Samara, Stavropol and Less common procedures add to the complex- In Moscow and Novosibirsk a customer pro- Yakutsk with 6-7 procedures. The predominant ity of the connection process in a few of the file must be submitted by the applicant to a practice in these cities is for the distribution cities studied. In Kaluga, Murmansk, Stavropol, special department of the distribution utility.10 utility to prepare the connection design, ob- Surgut and Volgograd the distribution utility The profile is required to obtain a document tain approvals of the design from the energy also visits the construction site when prepar- describing the division of ownership and inspectorate, the department of architecture ing technical conditions. It is common for ap- responsibilities for the maintenance of the and construction and others, undertake the plicants or their representatives to be present electricity connection by the distribution utility external connection works and prepare part during this visit. In other cities the distribution and customers. of the inspection documentation (stages 2, utility prepares the connection specifications 3 and partially 4 in figure 5.4). In other cities by using maps of the electricity network. Only The design including approvals is the longest the number of procedures increases to 9-10 in complicated cases is a site visit organized. stage in the connection process (figure 5.6). because customers hire private design firms Across the cities studied, this procedure lasts and electrical contractors directly. Cities where In Omsk and Petrozavodsk the power retail an average of 74 days. It is fastest in Surgut at 1 utilities are in charge of the design, approvals company inspects the connection when month—while in Murmansk and Petrozavodsk and connection works have fewer procedures, preparing the supply contract (in addition to it takes 4 months. External connection works but they sometimes have longer delays—on the 3 common inspections of the connection take an average of 34 days, and together all 28 DOING BUSINESS IN RUSSIA 2012

reduces the possibility of overcharging cus- In response to this problem, the Russian gov- FIGURE 5.6 Connection design and approvals tomers but delays connections. ernment introduced amendments to federal take the most time legislation on electricity connections.15 Several Average time for each type of In addition, connection costs vary depending activity (as % of total time) of these amendments targeted companies on the type of connection works required in a requesting loads below 100 kilowatts and particular city and location.11 If the network is Application and residential customers with loads below 15 Other technical conditions saturated, more extensive external connection kilowatts.16 After the enactment of the new procedures 12% 16% works—including an expansion of the distribu- legislation, such requests could no longer be tion network—may be required. The resulting denied because of insufficient capacity of Supply capital investments (such as the installation of contract the electricity grid. In an effort to reduce the 7% a distribution transformer) can substantially burden of inspections, the energy inspector- Design and increase costs for new customers. Among its approvals ate stopped checking completed connection 33% the 30 cities studied, an expansion of the works in such cases. Inspections distribution network with installation of a new 17% transformer is the most likely scenario in 19.12 Other federal reforms affected a broader set of customers. For example, to ease the burden of Connection works As a result of these variations, connection 15% high connection fees, it is now possible to pay costs equal 112% of income per capita in in installments. In March 2011 new amend- Note: The graph includes 24 cities where customers hire Omsk, compared with 1,852% in Moscow and ments introduced mandatory templates for private firms to complete the design. In the other 6 cities, 1,153% in Samara (figure 5.7).13 utilities conduct design, approvals and connection works. connection contracts between utilities and Therefore, connection durations cannot be estimated customers.17 These templates reduce opportu- separately. WHAT REFORMS WERE nities for excessive or even illegal connection Source: Doing Business database. IMPLEMENTED? conditions. In addition, utilities are required the inspections of completed works including In 2008 distribution utilities connected only to disclose certain statistical information on inspections by the distribution utility, energy 15% of the load requested during the year.14 inspectorate, and a separate check and sealing of the meter, take 40 days. Project approvals FIGURE 5.7 Getting an electricity connection is cheapest in Omsk and most expensive in Moscow from several public agencies are common and Samara in most economies in Eastern Europe and Cost as % of income per capita Central Asia, but not elsewhere in the world. Omsk 105.6 The cost of connecting to electricity consists Rostov on Don 114.3 of fees paid to distribution utilities and, where Saransk 273 Murmansk 375.2 applicable, private design firms and electrical Kirov 391 Connection fee contractors. Fees paid to distribution utilities Khabarovsk 391 charged by a utility Tomsk 391 are set by regional energy commissions and Costs charged by Kemerovo 405.5 private contractors based on a federal methodology. The fees vary Vladikavkaz 425.4 Stavropol 443.2 Other costs (various inspections based on the amount of the requested load, and sealing of a meter) Ekaterinburg 461.2 voltage at the point of connection, location Irkutsk 571 and other factors. Petrozavodsk 581.1 Kaluga 589.6 If a local distribution utility determines that Perm 618.3 Kaliningrad 628.6 the network is too saturated to connect a new Ulyanovsk 35654.9 customer, regulated fee schedules do not ap- Russia Average 661 38 ply. In such situations utilities calculate costs Yaroslavl 693.2 Surgut 746.147 on a case by case basis. In Murmansk, Surgut, Vyborg 769.6 Yekaterinburg and Vladivostok it is difficult to Volgograd 805.9 Novosibirsk 809.4 obtain the regulated fee schedules because Voroneg 838.6 they are often not used. Instead, utilities Vladivostok 852.9 70 Tver 869.1 extensively use the case by case approach to 88 Kazan 929 determine connection costs even for relatively Yakutsk 1014 90 average loads like the 140 kVA load assumed St. Petersburg 1078.7 in the Doing Business case study. Case by case Samara 1152.9 Moscow 1850 costs are reviewed by regional energy com- 0 500 1000 1500 2000 missions for each connection. This approach Costs Source: Doing Business database. GETTING ELECTRICITY 29

electricity connections, including the number steps before supply contracts can be signed calculate and understand the costs charged of submitted and completed applications. and electricity can start flowing. The inspec- by distribution utilities. But for loads above tion by the distribution utility is followed by 100 kilowatts, distribution utilities can decide Federal reforms are not evenly implemented an inspection from the energy inspectorate that networks are too saturated to connect across cities. For example, in 2008 the for customers requesting loads above 100 new customers. In such situations utilities connection design and approval stage was kilowatts.22 After that, the applicant visits the calculate costs based on each case. simplified by eliminating the requirement to utility to collect several documents, including have the design approved by the energy in- one describing the division of ownership and Though it is difficult to ensure that customers 18 spectorate. Yet in Irkutsk, Novosibirsk, Omsk responsibilities for the maintenance of the are charged fairly when costs are estimated and Yekaterinburg this approval is still required electricity connection between the distribu- on a case by case basis, some countries find today. Another reform not enforced in all cities tion utility and the customer. Finally, a separate inventive ways to facilitate adequate charging. is a 2009 amendment that defines the divi- procedure is required to check and seal the For example, in the United Kingdom, where sion of responsibilities for connection works meter. Moreover, some cities have additional connection costs are also estimated on a case 19 between distribution utilities and customers. requirements. In Omsk and Petrozavodsk an by case basis, utilities publish booklets with Under this amendment, customers complete additional inspection by a power company the most common connection schemes and 23 works within the borders of their property is required before electricity is turned on. By associated costs of materials and works. This and utilities are responsible for works beyond contrast, in Australia, once the electrical approach gives customers an idea of the cost the property lines. But in most of the cities contractor finishes works, there is only one range that will apply to their connections. studied, utilities do not strictly follow this more step before electricity starts flowing—an regulation. Customers often have to hire firms inspection by the utility. to complete the design and works required to NOTES lay cable outside their property lines. Inspection and documentation have already 1. Ministry of Economic Development, note on been simplified for customers requesting the completed work and planned activities in the area of electricity connections, 2011. For connection fees, reforms present a serious loads below 100 kilowatts by eliminating the challenge. Because the condition of the elec- 2. Opora Russia. 2011. “Business Environment inspection by the energy inspectorate. Further in Russia: Opora Index 2010-2011.” trical network across Russia has required large review and streamlining of this process would 3. Calderon, César, and Luis Servén. 2003. investments, connection costs have been high reduce its complexity for customers request- “The Output Cost of Latin America’s partly to help fund these investments. To rem- ing higher loads. Infrastructure Gap.” In The Limits of edy this situation, the government amended Stabilization: Infrastructure, Public Deficits, the methodology for calculating connection Make case by case connection fees more and Growth in Latin America, ed., William R. costs in 2011. It is now prohibited to include transparent Easterly and Luis Servén. Washington, DC: World Bank. Dollar, David, Mary Hallward- investment expenses for the development of Connection costs should be transparent to Driemeier and Taye Mengistae. 2005. an existing network in connection fees.20 As allow customers to understand what they are “Investment Climate and International a result, the connection fee, for example in paying for. When utilities allocate the costs for Integration.” Policy Research Working Paper 3323, World Bank, Washington, DC. Moscow, dropped from 4,125% of income per new connections between prospective and capita to 1,852%. Reinikka, Ritva, and Jakob Svensson. 1999. existing customers by charging connection “Confronting Competition: Investment fees and distribution charges, respectively, Response and Constraints in Uganda.” WHAT TO REFORM? they also balance considerations of economic Policy Research Working Paper 2242, World Make design approval less complex efficiency and fairness. But it is often difficult Bank, Washington, DC. Eifert, Benjamin. 2007. “Infrastructure and Market Structure to distinguish between capital works needed The most complex, time-consuming proce- in Least-Developed Countries.” University dure in getting an electricity connection is to connect customers and those needed for of California at Berkeley, Department of obtaining approvals of the connection design projected growth or to improve the safety and Economics. Iimi, Atsushi. 2008. “Effects of Improving Infrastructure Quality on Business from all relevant agencies, including the distri- reliability of distribution networks. New cus- tomers might end up paying for investments Costs: Evidence from Firm-Level Data.” bution utility, the department of architecture Policy Research Working Paper 4581, World in networks rather than just connection costs. and construction, the energy inspectorate in Bank, Washington, DC. some cases, the retail electric supplier and in In some of the Russian cities studied, con- 4. Iimi, Atsushi. 2008. “Effects of Improving many cases other organizations, like the water Infrastructure Quality on Business Costs: nection fees are available on websites or in and gas utilities and the telephone company.21 Evidence from Firm-Level Data.” Policy offices of distribution utilities and regulators. Research Working Paper 4581, World Bank, Customers may have to visit more than 10 For customers requesting less than 15 kilo- Washington, DC. agencies to complete this process. There is watts, a federally regulated tariff of up to 550 5. Geginat, Carolin, and Rita Ramalho. 2010. ample room for streamlining this process. rubles ($19) applies across Russian cities. For “Connecting Businesses to the Electrical customers requesting larger loads, connec- Grid in 140 Economies.” Paper pre- Simplify inspection and documentation sented at the International Conference on tion fee schedules are set by regional energy after connection works are completed Infrastructure Economics and Development, commissions in charge of tariff regulation. Toulouse, January 14–15. After connection works are completed, Based on these fee schedules, customers can customers must comply with 3–5 additional 30 DOING BUSINESS IN RUSSIA 2012

6. In many economies connection works and closest connection point on the network. 16. These reforms do not apply to the case designs are conducted by private design The second case usually occurs when the study. firms and electrical contractors rather than capacity of the utility’s low-voltage network 17. Decree N861 from December 2004 with distribution utilities. But even in these cases cannot accommodate the power demands amendments through March 2011. issuing connection specifications, turning on of customers. This case involves installing 18. Decree N 182 of the Ministry of Natural electricity and other tasks can be completed a distribution transformer and connecting it Resources and Ecology of the Russian only by utilities. between a customer’s installation and the Federation from August 2008. 7. http://www.holding-mrsk.ru/eng/about/ utility’s medium-voltage network. 19. Decree N861 with amendments through Key-facts 12. Ekaterinburg, Irkutsk, Kazan, Kemerovo, April 2009. 8. Federal Decree N861 from December 2004 Khabarovsk, Kirov, Novosibirsk, Samara, 20. Methodology for calculation of electricity with amendments through March 2011 Saransk, Stavropol, Surgut, Tomsk, Tver, Ulyanovsk, Vladikavkaz, Vladivostok, connection tariffs with amendments through 9. Federal Antimonopoly Service. 2012 News. Volgograd, Voroneg and Yakutsk. November 2010. http://www.fas.gov.ru/fas-news/fas- 21. In cities where utilities are in charge of news_32197.html 13. In Samara costs are paid only to distribu- tion utilities, while in Moscow and Omsk approving designs, customers do not have to 10. As this report went to print, the Moscow total costs consist of connection fees paid visit public agencies to obtain the approvals. United Electric Grid Company issued an to distribution utilities and charges paid to Still, the time required to complete this step internal order that eliminates the require- electrical contractors and design firms. delays the connection process. ment for customers to submit the profiles. 22. For loads below 100 kilowatts the energy Instead, departments in the utility share the 14. Ministry of Economic Development of inspectorate does not check connection information internally. Russian Federation. 2009. “New Process of Connection to Electrical Network.” works. 11. Doing Business distinguishes between 2 http://www.mrsk-volgi.ru/ru/klientam/ 23. http://www.ukpowernetworks.co.uk/ cases: connecting to low-voltage or to tehnologicheskoe_prisoedinenie/ products-services/networks/pdf/UKPN_ medium-voltage networks. The first case noviy_poryadok_tehnologicheskogo_ CCCM_and_CS_MB-PXM_v3_1_280311.pdf involves laying low-voltage underground prisoedineniya_k_elektricheskim_setyam cables or installing low-voltage overhead wires from the metering point to the 15. Decree N861 from December 2004 with amendments through April 2009. 31

Registering property

Russia’s transition to a market-oriented economy had wide-reaching effects, includ- FIGURE 6.1 The registering property indicator measures the time, cost and number of procedures required to transfer property between 2 local companies ing repercussions on land rights and prop- erty ownership. Since the Soviet Union was dissolved, Russia created the institutions Cost needed to transition from a state-owned to a (% of property value) private property system. New laws rejected Buyer can use the property, the state monopoly over land in 1990, and resell it or use it as collateral in 1993 the constitution granted the right to private property ownership. The 2001 Land Procedures Code provided a legal framework for prop- Land & 2-story warehouse erty ownership and unified titles to land and Seller with property buildings, setting the ground for an efficient registered and no land market and a system of property rights. title disputes Time Preregistration Registration Postregistration (days) WHY DOES REGISTERING PROPERTY MATTER?

Registered property rights are needed to an encumbrance’s certificate or copy of the and computerized information on rights to land 1 support investment, productivity and growth. seller’s title—and conducting due diligence and buildings under one agency that became Land and buildings account for between half if required. The transaction is considered responsible for registering real estate transac- and three-quarters of wealth in most econo- complete when it is opposable to third par- tions. Entrepreneurs can now register property mies, so having an accurate land information ties and when the buyer can use the property with only 2 procedures and in 10 days.4 2 system matters. Smoothly run, up-to-date as collateral for a bank loan or resell it (figure land information systems have many benefits. 6.1). Every procedure required by law or Moscow represents Russia in the annual Entrepreneurs with formal land titles have a necessary in practice is included, whether it Doing Business publication. It ranks 45 among better chance of getting credit when using is the responsibility of the seller or the buyer 183 economies, ahead of Brazil (114), India their property as collateral. Efficient property and even if it must be completed by a third (97) and Japan (58) and not far behind China registration systems also can raise tax rev- party on their behalf. (40). It takes an entrepreneur 5 procedures, enues. Timely land information also allows 43 days and costs 0.2% of property value— governments to map out needs in cities and HOW DOES REGISTERING one of the lowest amounts in the world—to plan the provision of services and infrastruc- PROPERTY IN RUSSIA COMPARE transfer a property title in Moscow. Compared ture.3 Tools such as cadastres and survey GLOBALLY? with EU countries, Russia ranks ahead of maps can be used in city planning to avoid or Germany (77) and the United Kingdom (68). The ease of registering property varies greatly mitigate environmental or climate risks. Russia could look to its neighbors for good among economies. Globally, it is easiest to practices in property registration. Azerbaijan register property in Norway or the United Arab WHAT DOES REGISTERING ranks 9, Kazakhstan 29 and Lithuania 7. Emirates, where only 1 procedure is required, PROPERTY MEASURE? it takes 3 days or fewer and the cost does not HOW DOES REGISTERING Doing Business records the procedures, exceed 3% of income per capita. Regionally, PROPERTY WORK IN RUSSIA? time and costs needed for a business to in Eastern Europe and Central Asia, Belarus purchase a property from another busi- faced similar challenges as Russia in its Three organizations used to manage property ness and to transfer the property title to transition to a market-oriented economy. It information in Russia. Cadastral information the buyer’s name. The process starts by overhauled its Soviet-style system and unified on land was held by different regional land obtaining the needed documents—such as committees based on whether it was urban 32 DOING BUSINESS IN RUSSIA 2012

or rural. Cadastral information on buildings cities. And because many cities have the ownership and encumbrances at the Federal was managed by the Bureaus of Technical same number of procedures and identical Service of State Registration, Cadastre and Inventory. Information on property owner- costs, they share the same rankings. Cartography, obtaining excerpts from the ship was managed by the Federal Registry commercial registry about the companies Service and its predecessors. A 2008 law Across the cities measured, it would take an of the buyer and seller, and registering the created the Federal Service of Registration, entrepreneur an average of 4 procedures, 35 transfer of rights for the building and the Cadastre and Cartography Rosreestr, unifying days and 0.23% of property value to register land plot. management of ownership registration and property. Russia has one of the world’s lowest land cadastre. Since 2009 cadastral infor- fees as a percentage of property value—much Twelve cities have 1 or 2 other requirements. mation on buildings is being gradually trans- less than in EU or Eastern European and For example, in some cities it is common for ferred to the property registry Rosreestr.5 The Central Asian economies, where it is 4.8% entrepreneurs to have to submit cadastral database combining the cadastre and regis- and 2.8%, respectively. In neighboring econo- passports for land, buildings or both. Though try of property rights can facilitate planning mies such as China, Finland and Japan trans- notarization of official documents is not a and local development. It makes procedures fer costs range between 3.6% and 5.7% of legal obligation, in Kirov, Murmansk, Saint simpler for entrepreneurs wanting to register property value. In the region, only Kazakhstan property because all information can be has a cheaper property transfer fee, at just TABLE 6.1 Ease of registering property found in one place. 0.1% of property value (figure 6.2). ranking for the 30 cities measured in Russia The low cost in Russia is partly due to the Cost HOW DOES REGISTERING fact that entrepreneurs pay a fixed fee to (% of PROPERTY VARY ACROSS property register property, a good practice captured City Rank Procedures Time value) RUSSIAN CITIES? by Doing Business in 15 economies like New Kaluga 1 3 19 0.2 Entrepreneurs seeking to register property Zealand and the Slovak Republic, as op- Vladikavkaz 2 3 26 0.2 in Russian cities face similar requirements posed to a percentage of the property value. Vladivostok 3 3 32 0.2 established by federal regulation. The Because this cost structure does not penal- Kazan* 4 3 33 0.2 streamlined process in most of the 30 cit- ize higher property values, it can encourage Omsk 4 3 33 0.2 ies studied is efficient and affordable by sellers to declare the real market value of Rostov-on-Don* 4 3 33 0.2 international standards. But there are local their properties. Volgograd 4 3 33 0.2 variations due to how national legislation is Petrozavodsk* 8 3 35 0.2 interpreted and enforced. Among the cities In 27 of the 30 cities studied, almost all the Samara 8 3 35 0.2 measured, it is easiest to register property in cost corresponds to the official registration Saransk 8 3 35 0.2 Kaluga—where it takes 3 procedures, 19 days fee of 30,000 rubles ($1,000) for land and Surgut 8 3 35 0.2 and 0.2% of property value—and longest in building, prescribed by federal law. In Irkutsk Tver* 8 3 35 0.2 Yakutsk—where it takes 4 procedures, 60 and Khabarovsk, entrepreneurs pay an ad- Ulyanovsk 8 3 35 0.2 days and 0.4% of property value (table 6.1). ditional 15,000 rubles ($500) because they Voronezh* 8 3 35 0.2 also register the sale-purchase agreement. Vyborg 8 3 35 0.2 Several observations emerge when comparing The registration of the agreement contract is Yaroslavl 16 3 38 0.2 these results with those from 2008. Some not required by law because registration of Khabarovsk 17 3 13 0.3 cities, like Perm and Tomsk, dropped relative to the transfer rights is sufficient to ensure an Irkutsk* 18 3 34 0.3 their peers. Others moved up. Some of these owner’s rights to property. Other fees stem Stavropol 19 4 29 0.2 changes are due to the study’s addition of 20 from notarization practices in cities like Kirov, Kirov 20 4 35 0.2 cities, some of which have competitive prop- where it costs 500 rubles ($17) to notarize Yekaterinburg 20 4 35 0.2 erty registration systems. In addition, all 10 cit- each charter, one for the buyer and one for Kaliningrad 22 5 27 0.5 ies previously measured reduced the number the seller. In 5 cities entrepreneurs typically Murmansk 23 5 35 0.2 of procedures and the time required to register obtain a cadastral passport on the building, Novosibirsk 24 5 37 0.2 property, while costs increased slightly. For ex- and its cost varies from 600 rubles ($20) Tomsk* 25 5 37 0.2 ample, Moscow and Saint Petersburg each cut in Novosibirsk to 49,500 rubles ($1,650) Moscow* 26 5 43 0.2 1 procedure, Rostov-on-Don cut 2 procedures in Kaliningrad. The variance arises from Perm* 27 4 47 0.2 and reduced delay by almost half, and Tver cut entrepreneurs in cities like Kaliningrad and St. Petersburg* 27 5 44 0.2 3 procedures and 13 days. Yakutsk carrying out a technical inventory of Kemerovo 29 5 45 0.2 their buildings to mitigate risk. Yakutsk 30 4 60 0.4 Despite business reforms across the board, * City measured in Doing Business in Russia 2009 there were differences in the gains of one Despite a common regulatory framework Note: Rankings are based on the average percentile rankings location relative to its peers. For example, Tver for property registration, the number of pro- on the procedures, time, and cost to register property. Cities dropped from 1 in 2008 to 8 now. Rostov- with the same average percentile rankings have the same rank. cedures varies due to local practices. All 30 See data notes for details. on-Don jumped from the bottom to 4 of 30 cities studied share 3 requirements: verifying Source: Doing Business database. REGISTERING PROPERTY 33

Petersburg, Tomsk and Yekaterinburg entre- FIGURE 6.2 Fees for registering property are low across Russia preneurs submit notarized copies. In Irkutsk, Cost (% of property value) Perm and Petrozavodsk they submit the 7.3 originals. The registration officers certify the 6.0 copies by checking them against the originals 5.7 and returning the originals to the applicants. 5.2 The Rosreestr’s internet portal in these cities 4.4 4.0 points out this option for applicants. As a 3.6 3.3 result applicants are aware that they can 2.8 bring original deeds for onsite verification 2.3 rather than notarized copies, saving time and money for entrepreneurs. Petrozavodsk was previously the only city to require submis- 0.1 0.23 sion of a “Plan Spravka” but has eliminated Brazil Turkey China Japan India Finland this requirement since it was last measured. Germany Kazakhstan

The duration of the registration process OECD high income is set by federal legislation, and all cit- Russia (30 city average) Global (183 economies) Eastern Europe & Central Asia ies comply with the 30-day limit.6 In Kaliningrad, Kaluga, Khabarovsk, Stavropol Source: Doing Business database. and Vladikavkaz it takes even less time—10 to 22 days. In Kazan state registration used WHAT REFORMS WERE the Federal Service of State Registration, to take 20 days, but now takes 30. Alleged IMPLEMENTED? Cadastre and Cartography. In 2010 changes causes are an increase in the number of ap- Since Doing Business in Russia 2009 was to the Federal Law on State Registration of plications and fewer employees.7 Time limits published, several federal reforms have been Real Estate Rights came into force. The new also exist for the issuance of the cadastral introduced to facilitate property registration provisions prevent the government from passport, but they are not always adhered (table 6.2). requesting new cadastral passports for to in practice. A federal law passed in 2010 buildings and land plots when the registry caps the time to obtain a cadastral passport In 2008 officials embarked on an effort to has records in its archives. One exception is for a land plot at 5 working days.8 But a ca- reorganize property registration by combin- if physical modifications were made to the dastral passport for a land plot takes 14 days ing the cadastre for land and property under property. The majority of cities across the to be issued in Saint Petersburg due to high TABLE 6.2 It is easier to register property now in the 10 cities benchmarked in 2008 number of applications. Eliminated Eliminated Introduced requirement requirement Eliminated Efficient service saves time. The Federal Tax legislation to for cadastral for cadastral requirement consolidate passport for passport for Increased fees for notarization Reduced time Service, which manages the commercial functions in land from building from for registration of copy of sale for registration registry, introduced an electronic queue in City “Rosreestr” “Rosreestr” “BTI” at “Rosreestr” deed at “Rosreestr” Rostov-on-Don. This simple tool designed to Irkutsk X  keep people in line organized the activities in Kazan XX the agency, increased transparency and im- Moscow X proved customer service. In the commercial Perm  X  registry, expedited procedures are offered to Petrozavodsk X  obtain company excerpts that indicate the Rostov-on-Don X legal representatives of the firm, in 1–2 days, for 400 rubles ($13), twice the regular fee. St. Petersburg X  Entrepreneurs in Yaroslavl tend to choose Tomsk X the regular service to obtain their documents Tver X  in 7 days. This approach is possible because Voronzeh X excerpts can be presented after submitting  Doing Business reform making it easier to register property. applications for registration of property X Doing Business reform making it more difficult to register property. rights, so there is no rush for entrepreneurs  National level reform making it easier to register property. to obtain them quickly. Source: Doing Business database. 34 DOING BUSINESS IN RUSSIA 2012

Russian Federation have complied with this new Federal Law. However, in Kaliningrad, FIGURE 6.3 Property registration is faster in the 10 cities studied in 2008 Kemerovo, Moscow, Novosibirsk, Perm Time to register property (days) and Yakutsk entrepreneurs still submit St. Petersburg 117 the cadastral passport for buildings. And 44 in Kaliningrad, Kemerovo, Murmansk, Kazan 80 Novosibirsk, Saint Petersburg, Stavropol 33 and Tomsk, it is still common practice for Rostov-on-Don 61 33 entrepreneurs to choose to submit cadas- Voronezh 56 tral passports on land. Parties do not want 35 to jeopardize approval due to potential Petrozavodsk 52 35 inconsistencies between the information Moscow 52 contained in the documents about the 43 property and the actual property itself, and Irkutsk 51 therefore choose to submit these cadastral 34 passports to minimize risk. It is faster to Perm 51 47 DB2009 register property in Russia than in 2008. Tver 48 DB2012 For the 10 cities measured in Doing Business 35 in Russia 2009, the average time to register Tomsk 47 37 property dropped from 61 days in 2008 to 38 0 20 40 60 80 100 120 today (figure 6.3). Saint Petersburg had the largest reduction, of 73 days from 117 to 44 Note: Only the 10 cities measured in Doing Business in Russia 2009 are included in this figure. days, after speeding registration at Rosreestr, Source: Doing Business database. followed by Kazan which cut time by more than half to 33 days by unifying cadastral and people who need speedier registration and Though Russia has combined the functions registration functions at Rosreestr. are willing to pay for it – and allows a registry of multiple agencies responsible for land to prioritize its work and pay for additional cadastral and real estate rights into one Across the country, the fixed registration resources to enable expedited registration. agency, the Rosreestr continues to centralize fee at Rosreestr doubled from 7,500 rubles Azerbaijan, Bulgaria and Serbia introduced all information in all regions. To strengthen ($250) to 15,000 ($500) in 2010, which is fast-track options for property registrations connectivity between agencies, the country paid on both the land plot and the building, over the past 6 years.9 In Lithuania property should continue to work on a unified data- totaling 30,000 rubles ($1,000). can be registered in 10 business days, or in 3 base for records to allow for easier, quicker by paying 30% more, 2 by paying 50% more, access to vital information to ensure title se- WHAT TO REFORM? or 1 for 100% more. In Moldova property can curity. Connecting with the bureaus of tech- Expedite registration at the Rosreestr be registered in 10 days (for $38), 3 ($111) nical inventory for information on buildings and offer fast-track procedures for or 1 ($185). Hungary introduced a fast-track can facilitate the property transfer process property registration procedure that reduced registration time at until the full unification is complete. Linking Russian law sets 30 days as the time limit the land registry to 9–19 days for a higher fee the Rosreesrt and Commercial Registry could for property registration. In some cities, like ($72 compared with $30 for regular service, also eliminate the need for entrepreneurs to 10 Kaluga, it takes 14 or fewer days. But in which takes 30-60 days). undertake a separate procedure to obtain most cities it takes 30 days to register the company excerpts. transfer. Agencies should better plan staff- Continue integrating land and building ing resources based on assessments of cadastres and registries in Rosreestr Introduce and promote electronic transaction volumes and staff productivity across regions submission of registration for transfer of to complete registration of property rights in Efficient property registration systems real estate rights less time. centralize activities in one-stop shops or link Russia has an electronic system to man- relevant agencies electronically, minimizing age property ownership information, a tool Another option is to offer expedited pro- interactions between agencies and entre- used to ease and expedite registration in cedures for higher fees. The Commercial preneurs. Azerbaijan, Belarus, Kazakhstan 108 economies. Computerized systems at Registry already offers expedited procedures and the Kyrgyz Republic created one-stop cadastres or registries improve access to to issue company excerpts in 1 day for 400 shops for property transfers by unifying their information and allow making information rubles ($14) instead of 7 days—half the land and building registries. As a result, the available online. usual fee. Among the 183 economies studied average time to transfer property in these 5 by the global Doing Business, 15 offered economies fell from 78 days to 14 days. The Rosreestr could promote electronic expedited procedures in 2010/11. This helps submission of state registration for transfer REGISTERING PROPERTY 35

of property rights. Eleven economies—in- submit notarized copies, though not required NOTES cluding France, the Netherlands and New by law, adding an additional procedure at a 1. Deininger, Klaus. 2003. Land Policies for Zealand—offer this option. New Zealand cost of 1,000 rubles ($32). Growth and Poverty Reduction. World Bank digitized property records between 1997 and Policy Research Report. New York: Oxford University Press. 2002, then introduced electronic registra- Eliminate the practice of registering 2. World Bank. 1989. World Development Report tion. By 2005 only about half of property agreement contract across Russia 1989. New York: Oxford University Press. transactions were submitted electronically. In Russia registration of transfer of property 3. Property information held in cadastres and In 2008 the government passed a law mak- rights is mandatory, while registration of the land registries is part of the land information ing electronic registration mandatory. Today agreement contract is not. Entrepreneurs available to governments. Land information registration can be completed in just 2 steps typically pay 30,000 rubles ($1,000) to also includes other geographic, environ- mental and socioeconomic data related to at a cost of 0.1% of property value. register a transfer as mandated by law. But in land that are useful for urban planning and cities such as Irkutsk and Khabarovsk entre- development. Accepting original deeds instead of preneurs register agreements in addition to 4. Hacibeyoglu, Cemile. A world-class one notarized copies the property rights, at a cost of 15,000 rubles stop shop: The story of property reform in Notarizing corporate documents adds to ($500) per transaction. Several reasons ex- Belarus. Doing Business reform case study. the time and cost of transferring property. ist for this practice, including ambiguity on Washington, DC: World Bank Group. In most cities in Russia, validating corporate the law and entrepreneurs seeking to mini- 5. According to the order of Rosreestr on May documents is done by the Registry, eliminat- mize the risk of refusal or suspension of state 28, 2009 No. 25 ing the need for entrepreneurs to submit registration of real estate rights, though not 6. Federal Law (N122-FZ of 21/07/1997, art. 13, part 3). notarized copies. This good practice should registering the agreement does not pose any 7. http://www.tatar-inform.ru/ be extended to all cities. such risk. This practice should be eliminated news/2012/01/17/300764/ by instructing relevant authorities not to ac- 8. Federal Law (N334-FZ of 21 December, Though the number of applicants submit- cept any additional documents above those 2009, enacted March 1, 2010,). ting notarized copies of official documents prescribed by law. 9. World Bank. 2011. Doing Business in 2012: has decreased since 2008, the practice still Doing business in a more transparent world. exists across many Russian cities. In Kirov, Washington, DC: World Bank Group. Moscow, Murmansk, Saint Petersburg, 10. Doing Business database. Tomsk and Yekaterinburg entrepreneurs still Data notes

The indicators presented and analyzed in or advising on legal and regulatory require- Doing Business in Russia 2012 measure busi- ments. These experts have several rounds of ECONOMY CHARACTERISTICS ness regulation and the protection of prop- interaction with the Doing Business in Russia Gross national income (GNI) per capita Doing Business in Russia 2012 reports erty rights—and their effect on businesses, 2012 team, through face-to-face interviews, 2010 income per capita as published in especially small and medium-size domestic conference calls and written correspon- the World Bank’s World Development firms. The indicators document the degree of dence. The data from questionnaires are Indicators 2011. Income is calculated regulation, such as the number of procedures subjected to numerous tests for robustness, using the Atlas method (current US$). to start a business or to register and transfer which lead to revisions or expansions of For cost indicators expressed as a per- centage of income per capita, 2010 GNI commercial property. They also gauge the the information collected. For example, the in U.S. dollars is used as the denomina- time and cost of achieving a regulatory goal or preliminary findings are presented to the tor. Russia’s GNI per capita in 2010 = complying with regulation, such as the time local governments through right of reply US$9,910. and cost to enforce a contract. consultations with administrators and other Exchange rate local government officials. The exchange rate used in this report In this report, Doing Business indicators have is: 1 US$ = 30.945 RUB. been measured for 30 cities in Russia. Ten The Doing Business methodology offers Region and income group of these cities were benchmarked in Doing several advantages. It is transparent, us- Doing Business uses the World Bank Business in Russia 2009. The data presented in ing factual information about what laws regional and income group classifica- this report for Moscow and other economies and regulations say and allowing multiple tions available at http://www.worldbank. org/data/countryclass are based on the global report Doing Business interactions with local respondents to clarify 2012—Doing Business in a more transparent potential misinterpretations of questions. world. The data for all sets of indicators in Having representative samples of respon- Doing Business in Russia 2012 are current as dents is not an issue: Doing Business is not a standardized case study refer to a specific of November 2011. The data for all sets of a statistical survey, and the texts of relevant set of issues and may not represent the full indicators taken from Doing Business 2012 are laws and regulations are collected and an- set of issues a business encounters. Third, current as of June 2011. swers checked for accuracy. The methodol- the measures of time involve an element of ogy is inexpensive and easily replicable, so judgment by the expert respondents. When METHODOLOGY data can be collected in a large sample of sources indicate different estimates, the time economies. Because standard assumptions The Doing Business in Russia 2012 data is indicators reported in Doing Business represent are used in the data collection, comparisons collected in a standardized way. To start, the the median values of several responses given and benchmarks are valid across economies. Doing Business team, with academic advis- under the assumptions of the standardized Finally, the data not only highlight the extent ers, designs a questionnaire. The question- case. of specific regulatory obstacles to Doing naire uses a simple business case to ensure Business but also identify their source and Finally, the methodology assumes that a busi- comparability across countries and over point to what might be reformed. ness has full information on what is required time—with assumptions about the legal and does not waste time when completing form of the business, its size, its location LIMITS TO WHAT IS MEASURED procedures. In practice, completing a proce- and the nature of its operations. Then the dure may take longer if the business lacks in- questionnaire is customized to the particular The Doing Business methodology has four case of Russia. limitations that should be considered when formation or is unable to follow up promptly. interpreting the data. First, the data often Alternatively, the business may choose to Questionnaires are administered through lo- focus on a specific business form—a limited disregard some burdensome procedures. cal experts, including lawyers, business con- liability company of a specified size—and may For both reasons the time delays reported in sultants, construction firms, engineers, local not be representative of the regulation on Doing Business in Russia 2012 would differ from and national-level government officials and other businesses, for example, sole propri- the perceptions of entrepreneurs reported in other professionals routinely administering etorships. Second, transactions described in DATA NOTES 37

the World Bank Enterprise Surveys or other To make the data comparable across coun- FIGURE 7.1 Starting a business: getting a local perception surveys. tries, several assumptions about the business limited liability company up and and the procedures are used. running CHANGES IN WHAT IS MEASURED Rankings are based on 4 indicators Assumptions about the business The methodology for the dealing with con- struction permits indicator was updated this The business: Preregistration, As % of income registration and per capita, no year. The global Doing Business report now Ė Is a limited liability company. If there is postregistration bribes included includes getting electricity indicators in its more than one type of limited liability (in calendar days) overall analysis of the ease of doing business. company in the country, the limited liabil- ity form most popular among domestic For this reason, the procedures, time and 25% 25% cost related to obtaining an electricity con- firms is chosen. Information on the most Time Cost nection were removed from the dealing with popular form is obtained from incorpora- 25% 25% construction permits indicator. In line with tion lawyers or the statistical office. Procedures Paid-in minimum Doing Business methodology and to allow for Ė Operates in the commercial district of the capital international and subnational comparabil- selected city. ity, Doing Business in Russia 2012 has also Procedure is Funds deposited in a Ė Is 100% domestically owned and has 5 completed when bank or with a notary removed procedures, time, and cost related owners, none of whom is a legal entity. final document before registration (or to getting an electricity connection from the is received within 3 months), as % Ė Has start-up capital of 10 times income of income per capita dealing with construction permits indicator. per capita at the end of 2010, paid in cash. Ė Performs general commercial activities, accountants or lawyers, unless the use of such a third party is mandated by law. If STARTING A BUSINESS such as the production or sale of products or services to the public. The business the services of professionals are required, Doing Business in Russia 2012 records all does not perform foreign trade activities procedures conducted by such profession- procedures that are officially required for an and does not handle products subject to als on behalf of the company are counted entrepreneur to start up and formally oper- a special tax regime, for example, liquor separately. Each electronic procedure is ate a commercial business. These include or tobacco. It is not using heavily polluting counted separately. If 2 procedures can be obtaining all necessary licenses and permits production processes. completed through the same website but re- and completing any required notifications, quire separate filings, they are counted as 2 Ė Leases the commercial plant and offices verifications or inscriptions for the company procedures. Both pre- and post incorporation and is not a proprietor of real estate. and employees with relevant authorities. The procedures that are officially required for an ranking on the ease of starting a business is Ė Does not qualify for investment incentives entrepreneur to formally operate a business the simple average of the percentile rankings or any special benefits. are recorded (table 7.1). on its component indicators (figure 7.1). Ė Has at least 10 and up to 50 employees 1 month after the commencement of opera- After a study of laws, regulations and publicly tions, all of them nationals. TABLE 7.1 What do the starting a business available information on business entry, a Ė Has a turnover of at least 100 times in- indicators measure? detailed list of procedures is developed, along come per capita. Procedures to legally start and operate a company with the time and cost of complying with each (number) Ė Has a company deed 10 pages long. procedure under normal circumstances and Preregistration (for example, name verification or reservation, notarization) the paid-in minimum capital requirements if Procedures Registration in the economy’s selected city applicable. Subsequently, local incorporation A procedure is defined as any interaction of lawyers, notaries and government officials Postregistration (for example, social security the company founder with external parties registration, company seal) complete and verify the data. (for example, government agencies, lawyers, Time required to complete each procedure (calendar days) auditors or notaries). Interactions between Information is also collected on the sequence Does not include time spent gathering information company founders or company officers and in which procedures are to be completed Each procedure starts on a separate day employees are not counted as procedures. and whether procedures may be carried Procedure completed once final document is received out simultaneously. It is assumed that any Procedures that must be completed in the No prior contact with officials required information is readily available and same building but in different offices are Cost required to complete each procedure that all agencies involved in the start-up pro- counted as separate procedures. If found- (% of income per capita) cess function without corruption. If answers ers have to visit the same office several Official costs only, no bribes by local experts differ, inquiries continue until times for different sequential procedures, No professional fees unless services required by law each is counted separately. The founders the data are reconciled. Paid-in minimum capital (% of income per capita) are assumed to complete all procedures Funds deposited in a bank or with a notary before themselves, without middlemen, facilitators, registration (or within 3 months) 38 DOING BUSINESS IN RUSSIA 2012

Procedures required for official correspon- services if such services are required by law. FIGURE 7.2 Dealing with construction permits: dence or transactions with public agencies are Fees for purchasing and legalizing company building a warehouse also included. For example, if a company seal books are included if these transactions are Rankings are based on 3 indicators or stamp is required on official documents, required by law. The company law, the com- such as tax declarations, obtaining the seal mercial code and specific regulations and fee Days to build a As % of income or stamp is counted. Similarly, if a company schedules are used as sources for calculat- warehouse in the per capita, no must open a bank account before registering ing costs. In the absence of fee schedules, selected city bribes included for sales tax or value added tax, this transac- a government officer’s estimate is taken 33.3% 33.3% tion is included as a procedure. Shortcuts are as an official source. In the absence of a Time Cost counted only if they fulfill 4 criteria: they are government officer’s estimate, estimates of legal, they are available to the general public, incorporation lawyers are used. If several they are used by the majority of companies, incorporation lawyers provide different esti- 33.3% Procedures and avoiding them causes substantial delays. mates, the median reported value is applied. In all cases the cost excludes bribes. Only procedures required of all businesses Procedure is completed when final document is received; construction permits, inspections and are covered. Industry-specific procedures Paid-in minimum capital utility connections included are excluded. For example, procedures to The paid-in minimum capital requirement comply with environmental regulations are reflects the amount that the entrepreneur a fixed telephone landline. Procedures neces- included only when they apply to all busi- needs to deposit in a bank or with a notary sary to register the property so that it can be nesses conducting general commercial or before registration and up to 3 months fol- used as collateral or transferred to another industrial activities. Procedures that the lowing incorporation and is recorded as a entity are also counted. The survey divides the company undergoes to connect to electric- percentage of the economy’s income per process of building a warehouse into distinct ity, water, gas and waste disposal services capita. The amount is typically specified in procedures and calculates the time and cost are not included. the commercial code or the company law. of completing each procedure. The ranking on Many countries have a minimum capital re- Time the ease of dealing with construction permits quirement but allow businesses to pay only a is the simple average of the percentile rank- Time is recorded in calendar days. The part of it before registration, with the rest to ings on its component indicators (figure 7.2). measure captures the median duration that be paid after the first year of operation. incorporation lawyers indicate is necessary Information is collected from experts in to complete a procedure with minimum The data details on starting a business can construction licensing, including architects, follow-up with government agencies and be found for each economy at http://www. construction lawyers, construction firms, no extra payments. It is assumed that the doingbusiness.org by selecting the economy utility service providers and public officials minimum time required for each procedure in the drop-down list. This methodology was who deal with building regulations, including is 1 day. Although procedures may take place developed in Djankov, Simeon, Rafael la Porta, approvals and inspections. To make the data simultaneously, they cannot start on the Florencio López-de-Silanes and Andrei Schleifer. comparable across economies, several as- same day (that is, simultaneous procedures 2002. ¨The Regulation of Entry.¨ Quarterly sumptions about the business, the warehouse start on consecutive days). A procedure is Journal of Economics 117(1):1-37, and is ad- project and the utility connections are used. considered completed once the company has opted here with minor change. received the final document, such as the com- Assumptions about the pany registration certificate or tax number. If construction company a procedure can be accelerated for an ad- DEALING WITH CONSTRUCTION The business (BuildCo): ditional cost, the fastest procedure is chosen. PERMITS Ė Is a limited liability company. It is assumed that the entrepreneur does not Doing Business in Russia 2012 records all proce- Ė Operates in the selected city. waste time and commits to completing each dures required for a business in the construc- remaining procedure without delay. The time tion industry to build a standardized ware- Ė Is 100% domestically and privately that the entrepreneur spends on gathering house. These procedures include submitting owned. information is ignored. It is assumed that the all relevant project-specific documents (for Ė Has 5 owners, none of whom is a legal entrepreneur is aware of all entry regulations example, building plans and site maps) to entity. and their sequence from the beginning but has the authorities; obtaining all necessary clear- Ė Is fully licensed and insured to carry out had no prior contact with any of the officials. ances, licenses, permits and certificates; com- construction projects, such as building pleting all required notifications; and receiving warehouses. Cost all necessary inspections. Doing Business in Ė Has 60 builders and other employees, Cost is recorded as a percentage of the Russia 2012 also records procedures for ob- all of them nationals with the technical economy’s income per capita. It includes all taining connections for water, sewerage, and expertise and professional experience official fees and fees for legal or professional DATA NOTES 39

necessary to obtain construction permits Ė Does not require water for fire protection inspections conducted by employees, are and approvals. reasons; a fire extinguishing system (dry not counted as procedures. Procedures Ė Has at least 1 employee who is a licensed system) will be used instead. If a wet fire that the company undergoes to connect to architect and registered with the local as- protection system is required by law, it is water, sewerage and telephone services are sociation of architects. assumed that the water demand specified included. All procedures that are legally or below also covers the water needed for in practice required for building a warehouse Ė Has paid all taxes and taken out all nec- essary insurance applicable to its general fire protection. are counted, even if they may be avoided in business activity (for example, accidental Ė Has an average water use of 662 liters (175 exceptional cases (table 7.2). insurance for construction workers and gallons) a day and an average wastewater Time third-person liability insurance). flow of 568 liters (150 gallons) a day. Time is recorded in calendar days. The mea- Ė Owns the land on which the warehouse is Ė Has a peak water use of 1,325 liters (350 sure captures the median duration that local built. gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day. experts indicate is necessary to complete the procedure in practice. It is assumed that the Assumptions about the warehouse Ė Will have a constant level of water de- minimum time required for each procedure The warehouse: mand and wastewater flow throughout is 1 day. Although procedures may take place the year. Ė Will be used for general storage activities, simultaneously, they cannot start on the such as storage of books or stationery. The The telephone connection: same day (that is, simultaneous procedures warehouse will not be used for any goods start on consecutive days). If a procedure Ė Is 10 meters (32 feet, 10 inches) from the requiring special conditions, such as food, can be accelerated legally for an additional main telephone network. chemicals or pharmaceuticals. cost, the fastest procedure is chosen. It is as- Is a fixed telephone landline. Ė Has 2 stories, both above ground, with Ė sumed that BuildCo does not waste time and a total surface of approximately 1,300.6 commits to completing each remaining pro- Procedures square meters (14,000 square feet). Each cedure without delay. The time that BuildCo floor is 3 meters (9 feet, 10 inches) high. A procedure is any interaction of the com- spends on gathering information is ignored. pany’s employees or managers with external Ė Has road access and is located in the It is assumed that BuildCo is aware of all parties, including government agencies, periurban area of the selected city (that is, building requirements and their sequence notaries, the land registry, the cadastre, util- on the fringes of the city but still within its from the beginning. ity companies, public and private inspectors official limits). and technical experts apart from in-house Cost Is not located in a special economic or in- Ė architects and engineers. Interactions dustrial zone. The zoning requirements for Cost is recorded as a percentage of the between company employees, such as warehouses are met by building in an area economy’s income per capita. Only official development of the warehouse plans and where similar warehouses can be found. costs are recorded. All the fees associated with completing the procedures to legally Ė Is located on a land plot of 10,000 square build a warehouse are recorded, includ- feet (929 square meters) that is 100% TABLE 7.2 What do the dealing with construction permits indicators ing those associated with obtaining land owned by BuildCo and is registered in the measure? use approvals and preconstruction design cadastre and land registry. Procedures to legally build a warehouse (number) clearances; receiving inspection before, Is a new construction (there was no previ- Ė Submitting all relevant documents and obtain- during and after construction; getting utility ous construction on the land). ing all necessary clearances, licenses, permits and certificates connections; and registering the warehouse Ė Has complete architectural and technical Completing all required notifications and receiving property. Nonrecurring taxes required for the plans prepared by a licensed architect. all necessary inspections completion of the warehouse project are also Ė Will include all technical equipment Obtaining utility connections for water, sewerage recorded. The building code, information from and a fixed telephone landline required to make the warehouse fully local experts and specific regulations and fee Registering the warehouse after its completion (if operational. required for use as collateral or for transfer of the schedules are used as sources for costs. If Ė Will take 30 weeks to construct (exclud- warehouse) several local partners provide different esti- ing all delays due to administrative and Time required to complete each procedure mates, the median reported value is used. (calendar days) regulatory requirements). Does not include time spent gathering information The data details on dealing with construction Assumptions about the utility Each procedure starts on a separate day permits can be found for each economy at connections Procedure completed once final document is received http://www.doingbusiness.org by selecting the economy in the drop-down list. The water and sewerage connection: No prior contact with officials Cost required to complete each procedure Ė Is 10 meters (32 feet, 10 inches) from the (% of income per capita) existing water source and sewer tap. Official costs only, no bribes 40 DOING BUSINESS IN RUSSIA 2012

GETTING ELECTRICITY Ė Is located in an area with no physical con- straints. For example, the property is not FIGURE 7.3 Getting electricity: obtaining an Doing Business in Russia 2012 records all electricity connection near a railway. procedures required for a business to obtain Rankings are based on 3 indicators a permanent electricity connection and Ė Is used for storage of refrigerated goods. Days to obtain supply for a standardized warehouse. These Ė Is a new construction (that is, there was As % of income an electricity per capita, no procedures include applications and con- no previous construction on the land connection in the bribes included selected city tracts with electricity utilities, all necessary where it is located). It is being connected inspections and clearances from the utility to electricity for the first time. 33.3% 33.3% Time Cost and other agencies and the external and final Ė Has 2 stories, both above ground, with connection works. The survey divides the a total surface area of approximately process of getting an electricity connection 1,300.6 square meters (14,000 square 33.3% Procedures into distinct procedures and calculates the feet). The plot of land on which it is built is time and cost of completing each procedure. 929 square meters (10,000 square feet). The ranking on the ease of getting electricity Steps to file an application, prepare a design, is the simple average of the percentile rank- Assumptions about the electricity complete works, obtain approvals, go through inspections, install a meter and ings on its component indicators (figure 7.3). connection sign a supply contract The electricity connection: Data are collected from the electricity dis- The company’s employees are assumed to Ė Is a permanent one. tribution utility, then completed and verified complete all procedures themselves unless by electricity regulatory agencies and inde- Ė Is a 3-phase, 4-wire Y, 140-kilovolt- the use of a third party is mandated (for pendent professionals such as electrical en- ampere (kVA) (subscribed capacity) example, if only an electrician registered with gineers, electrical contractors and construc- connection. the utility is allowed to submit an applica- tion companies. The electricity distribution Ė Is 150 meters long. The connection is to tion). If the company can, but is not required utility surveyed is the one serving the area either the low-voltage or the medium- to, request the services of professionals (or areas) where warehouses are located. If voltage distribution network and either (such as a private firm rather than the utility there is a choice of distribution utilities, the overhead or underground, whichever is for the external works), these procedures are one serving the largest number of customers more common in the economy and in the recorded if they are commonly done. For all is selected. To make the data comparable area where the warehouse is located. The procedures, only the most likely cases (for across economies, several assumptions about length of any connection in the customer’s example, more than 50% of the time the the warehouse and the electricity connection private domain is negligible. utility has the material) and those followed are used. Ė Involves the installation of only one in practice for connecting a warehouse to electricity meter. The monthly electricity electricity are counted. Assumptions about the warehouse consumption will be 0.07 gigawatt-hour The warehouse: (GWh). The internal electrical wiring has Ė Is owned by a local entrepreneur. already been completed. TABLE 7.3 What do the getting electricity Ė Is located in the selected city. Procedures indicators measure? Ė Is located within the city’s official limits A procedure is defined as any interaction Procedures to obtain an electricity connection (number) and in an area where other warehouses of the company’s employees or its main Submitting all relevant documents and obtaining all are located (a nonresidential area). necessary clearances and permits electrician or electrical engineer (that is, Ė Is not located in a special economic or Completing all required notifications and receiving the one who may have done the internal all necessary inspections investment zone; that is, the electricity wiring) with external parties such as the Obtaining external installation works and possibly connection is not eligible for subsidization electricity distribution utility, electric- purchasing material for these works or faster service under a special invest- ity supply utilities, government agencies, Concluding any necessary supply contract and ment promotion regime. If several options obtaining final supply electrical contractors and electrical firms. for location are available, the warehouse Time required to complete each procedure Interactions between company employees (calendar days) is located where electricity is most easily and steps related to the internal electrical Is at least 1 calendar day available. wiring, such as the design and execution of Each procedure starts on a separate day Has road access. The connection works Ė the internal electrical installation plans, are Does not include time spent gathering information involve the crossing of a road (for excava- not counted as procedures. Procedures that Reflects the time spent in practice, with little follow- tion, overhead lines and the like), but they must be completed with the same utility up and no prior contact with officials are all carried out on public land; that is, but with different departments are counted Cost required to complete each procedure (% of income per capita) there is no crossing onto another owner’s as separate procedures (table 7.3). private property. Official costs only, no bribes Value added tax excluded DATA NOTES 41

Time to third parties and when the buyer can use FIGURE 7.4 Registering property: transfer of the property, use it as collateral for a bank Time is recorded in calendar days. The property between 2 local companies measure captures the median duration that loan or resell it. The ranking on the ease of Rankings are based on 3 indicators the electricity utility and experts indicate is registering property is the simple average of the percentile rankings on its component necessary in practice, rather than required by Days to transfer As % of property law, to complete a procedure with minimum indicators (figure 7.4). property in the value, no bribes selected city included follow-up and no extra payments. It is also Every procedure required by law or neces- assumed that the minimum time required for sary in practice is included, whether it is the 33.3% 33.3% each procedure is 1 day. Although procedures Time Cost responsibility of the seller or the buyer or may take place simultaneously, they cannot must be completed by a third party on their start on the same day (that is, simultaneous behalf. Local property lawyers, notaries and 33.3% procedures start on consecutive days). It is as- property registries provide information on Procedures sumed that the company does not waste time procedures as well as the time and cost to and commits to completing each remaining complete each of them. Steps to check encumbrances, obtain clearance procedure without delay. The time that the certificates, prepare deed and transfer title so company spends on gathering information that the property can be occupied, To make the data comparable across econo- sold or used as collateral is ignored. It is assumed that the company mies, several assumptions about the parties is aware of all electricity connection require- to the transaction, the property and the Will not be subject to renovations or ad- ments and their sequence from the beginning. procedures are used. Ė ditional building following the purchase. Cost Assumptions about the parties Ė Has no trees, natural water sources, natu- Cost is recorded as a percentage of the The parties (buyer and seller): ral reserves or historical monuments of economy’s income per capita. Costs are any kind. Ė Are limited liability companies. recorded exclusive of value added tax. All Ė Will not be used for special purposes, and Ė Are located in the periurban area of the the fees and costs associated with complet- no special permits, such as for residential selected city. ing the procedures to connect a warehouse use, industrial plants, waste storage or Are 100% domestically and privately to electricity are recorded, including those Ė certain types of agricultural activities, are owned. related to obtaining clearances from govern- required. ment agencies, applying for the connection, Have 50 employees each, all of whom are Ė Ė Has no occupants (legal or illegal), and no receiving inspections of both the site and the nationals. other party holds a legal interest in it. internal wiring, purchasing material, getting Ė Perform general commercial activities. the actual connection works and paying Procedures a security deposit. Information from local Assumptions about the property A procedure is defined as any interaction experts and specific regulations and fee The property: of the buyer or the seller, their agents (if an schedules are used as sources for costs. If Ė Has a value of 50 times income per capita. agent is legally or in practice required) or the several local partners provide different esti- The sale price equals the value. property with external parties, including gov- mates, the median reported value is used. In Ė Is fully owned by the seller. ernment agencies, inspectors, notaries and all cases the cost excludes bribes. lawyers. Interactions between company of- Ė Has no mortgages attached and has been ficers and employees are not considered. All under the same ownership for the past 10 procedures that are legally or in practice re- REGISTERING PROPERTY years. quired for registering property are recorded, Is registered in the land registry or cadas- Doing Business in Russia 2012 records the Ė even if they may be avoided in exceptional tre, or both, and is free of title disputes. full sequence of procedures necessary for cases. It is assumed that the buyer follows a business (buyer) to purchase a property Ė Is located in a periurban commercial zone, the fastest legal option available and used by from another business (seller) and to trans- and no rezoning is required. the majority of property owners. Although fer the property title to the buyer’s name Ė Consists of land and a building. The land the buyer may use lawyers or other profes- so that the buyer can use the property for area is 557.4 square meters (6,000 square sionals where necessary in the registration expanding its business, as collateral in taking feet). A 2-story warehouse of 929 square process, it is assumed that it does not em- new loans or, if necessary, sell to another meters (10,000 square feet) is located on ploy an outside facilitator in the registration business. The process starts with obtaining the land. The warehouse is 10 years old, is in process unless legally or in practice required the necessary documents, such as a copy of good condition and complies with all safety to do so (table 7.4). the seller’s title if necessary, and conducting standards, building codes and other legal due diligence if required. The transaction is requirements. The property of land and considered complete when it is opposable building will be transferred in its entirety. 42 DOING BUSINESS IN RUSSIA 2012

Time cost estimates differ among sources, the me- an economy to the “frontier” and shows the Time is recorded in calendar days. The dian reported value is used. extent to which the economy has closed this measure captures the median duration gap over time. The frontier is a score derived The data details on registering property can that property lawyers, notaries or registry from the most efficient practice or highest be found for each economy at http://www. officials indicate is necessary to complete a score achieved on each of the component doingbusiness.org by selecting the economy in procedure. It is assumed that the minimum indicators in 9 Doing Business indicator sets the drop-down list. time required for each procedure is 1 day. (excluding the employing workers and get- Although procedures may take place simul- ting electricity indicators) by any economy RANKINGS taneously, they cannot start on the same since 2005. In starting a business, for ex- day (that is, simultaneous procedures start The ranking on each topic is the simple ample, New Zealand has achieved the high- on consecutive days). It is assumed that the average of the percentile rankings on its est performance on the time (1 day), Canada buyer does not waste time and commits to component indicators. The ease of starting and New Zealand on the number of proce- completing each remaining procedure with- a business is a simple average of the city dures required (1), Denmark and Slovenia out delay. If a procedure can be accelerated rankings on the number of procedures, and on the cost (0% of income per capita) and for an additional cost, the fastest legal pro- the associated time and cost (% of income Australia on the paid-in minimum capital cedure available and used by the majority of per capita) required to start a business. The requirement (0% of income per capita). property owners is chosen. If procedures can ease of dealing with construction permits Calculating the distance to frontier for each be undertaken simultaneously, it is assumed is a simple average of the city rankings on economy involves 2 main steps. First, indi- that they are. It is assumed that the parties the number of procedures, and the associ- vidual indicator scores are normalized to a involved are aware of all regulations and their ated time and cost (% of income per capita) common unit. To do so, each of the 32 com- sequence from the beginning. Time spent on required to build a warehouse. The ease of ponent indicators y is rescaled to (y − min)/ gathering information is not considered. getting electricity is a simple average of the city rankings on the number of procedures, (max − min), with the minimum value (min) Cost associated time and cost (% of (% of income representing the frontier—the highest perfor- mance on that indicator across all economies Cost is recorded as a percentage of the proper- per capita) required to obtain a permanent since 2005. Second, for each economy the ty value, assumed to be equivalent to 50 times electricity connection and supply for a scores obtained for individual indicators are income per capita. Only official costs required standardized warehouse. The ease of reg- aggregated through simple averaging into by law are recorded, including fees, transfer istering property is a simple average of the one distance to frontier score. An economy’s taxes, stamp duties and any other payment to city rankings on the number of procedures, distance to the frontier is indicated on a scale the property registry, notaries, public agencies associated time and cost (% of the property from 0 to 100, where 0 represents the frontier or lawyers. Other taxes, such as capital gains value) required to register property. and 100 the lowest performance. tax or value added tax, are excluded from the The rankings are limited in scope. They do cost measure. Both costs borne by the buyer not account for an economy’s proximity to The difference between an economy’s and those borne by the seller are included. If large markets, the quality of its infrastructure distance to frontier score in 2005 and its services (other than services related to score in 2011 illustrates the extent to which TABLE 7.4 What do the registering property construction permits), the security of prop- the economy has closed the gap to the indicators measure? erty from theft and looting, macroeconomic frontier over time. The maximum (max) Procedures to legally transfer title on immovable conditions or the strength of underlying and minimum (min) observed values are property (number) institutions. There remains a large unfinished computed for the 174 economies included Preregistration procedures (for example, checking for in the Doing Business sample since 2005 liens, notarizing sales agreement, paying property agenda for research into what regulation transfer taxes) constitutes binding constraints, what pack- and for all years (from 2005 to 2011). The Registration procedures in the economy’s selected age of reforms is most effective and how year 2005 was chosen as the baseline for city these issues are shaped by the context of the economy sample because it was the Postregistration procedures (for example, filing title first year in which data were available for the with municipality) an economy. The Doing Business indicators majority of economies (a total of 174) and for Time required to complete each procedure provide a new empirical data set that may (calendar days) improve understanding of these issues. all 9 indicator sets included in the measure. Does not include time spent gathering information To mitigate the effects of extreme outliers in Each procedure starts on a separate day DISTANCE TO FRONTIER the distributions of the rescaled data (very Procedure completed once final document is received MEASURE few economies need 694 days to complete the procedures to start a business, but many No prior contact with officials This year’s report introduces a new measure need 9 days), the maximum (max) is defined Cost required to complete each procedure to illustrate how the regulatory environ- (% of property value) as the 95th percentile of the pooled data for ment for local businesses in each economy Official costs only, no bribes all economies and all years for each indicator. has changed over time. The distance to No value added or capital gains taxes included frontier measure illustrates the distance of 43

City tables

Irkutsk, Irkutsk Oblast Aggregate rank 10 Starting a business (rank) 8 Getting electricity (rank) 10 Procedures (number) 10 Procedures (number) 9 Time (days) 19 Time (days) 228 Cost (% of income per capita) 2.1 Cost (% of income per capita) 573.6 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 6 Registering property (rank) 18 Procedures (number) 17 Procedures (number) 3 Time (days) 215 Time (days) 34 Cost (% of income per capita) 141.0 Cost (% of property value) 0.3

Kaliningrad, Kaliningrad Oblast Aggregate rank 19 Starting a business (rank) 11 Getting electricity (rank) 22 Procedures (number) 8 Procedures (number) 9 Time (days) 16 Time (days) 308 Cost (% of income per capita) 2.4 Cost (% of income per capita) 641.6 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 3 Registering property (rank) 22 Procedures (number) 17 Procedures (number) 5 Time (days) 239 Time (days) 27 Cost (% of income per capita) 86.3 Cost (% of property value) 0.5

Kaluga, Kaluga Oblast Aggregate rank 6 Starting a business (rank) 17 Getting electricity (rank) 15 Procedures (number) 11 Procedures (number) 10 Time (days) 22 Time (days) 144 Cost (% of income per capita) 2.1 Cost (% of income per capita) 589.8 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 9 Registering property (rank) 1 Procedures (number) 24 Procedures (number) 3 Time (days) 264 Time (days) 19 Cost (% of income per capita) 48.0 Cost (% of property value) 0.2

Kazan, Republic of Tatarstan Aggregate rank 5 Starting a business (rank) 4 Getting electricity (rank) 17 Procedures (number) 9 Procedures (number) 9 Time (days) 21 Time (days) 186 Cost (% of income per capita) 1.7 Cost (% of income per capita) 929.1 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 14 Registering property (rank) 4 Procedures (number) 32 Procedures (number) 3 Time (days) 223 Time (days) 33 Cost (% of income per capita) 40.0 Cost (% of property value) 0.2 44 DOING BUSINESS IN RUSSIA 2012

Kemerovo, Kemerovo Oblast Aggregate rank 27 Starting a business (rank) 28 Getting electricity (rank) 7 Procedures (number) 11 Procedures (number) 6 Time (days) 22 Time (days) 259 Cost (% of income per capita) 2.5 Cost (% of income per capita) 392.5 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 21 Registering property (rank) 29 Procedures (number) 24 Procedures (number) 5 Time (days) 322 Time (days) 45 Cost (% of income per capita) 74.8 Cost (% of property value) 0.2

Khabarovsk, Khabarovsk Kray Aggregate rank 23 Starting a business (rank) 24 Getting electricity (rank) 8 Procedures (number) 8 Procedures (number) 9 Time (days) 23 Time (days) 248 Cost (% of income per capita) 3.0 Cost (% of income per capita) 391.1 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 29 Registering property (rank) 17 Procedures (number) 32 Procedures (number) 3 Time (days) 269 Time (days) 13 Cost (% of income per capita) 188.9 Cost (% of property value) 0.3

Kirov, Kirov Oblast Aggregate rank 12 Starting a business (rank) 13 Getting electricity (rank) 4 Procedures (number) 7 Procedures (number) 9 Time (days) 29 Time (days) 220 Cost (% of income per capita) 2.1 Cost (% of income per capita) 390.6 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 5 Registering property (rank) 20 Procedures (number) 29 Procedures (number) 4 Time (days) 206 Time (days) 35 Cost (% of income per capita) 47.3 Cost (% of property value) 0.2

Moscow Aggregate rank 30 Starting a business (rank) 25 Getting electricity (rank) 30 Procedures (number) 9 Procedures (number) 10 Time (days) 30 Time (days) 281 Cost (% of income per capita) 2.1 Cost (% of income per capita) 1852.4 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 30 Registering property (rank) 26 Procedures (number) 47 Procedures (number) 5 Time (days) 392 Time (days) 43 Cost (% of income per capita) 171.5 Cost (% of property value) 0.2

Murmansk, Murmansk Oblast Aggregate rank 26 Starting a business (rank) 12 Getting electricity (rank) 27 Procedures (number) 7 Procedures (number) 10 Time (days) 25 Time (days) 328 Cost (% of income per capita) 2.2 Cost (% of income per capita) 375.6 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 19 Registering property (rank) 23 Procedures (number) 16 Procedures (number) 5 Time (days) 357 Time (days) 35 Cost (% of income per capita) 137.4 Cost (% of property value) 0.2 CITY TABLES 45

Novosibirsk, Novosibirsk Oblast Aggregate rank 29 Starting a business (rank) 23 Getting electricity (rank) 29 Procedures (number) 11 Procedures (number) 10 Time (days) 22 Time (days) 265 Cost (% of income per capita) 2.3 Cost (% of income per capita) 815.9 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 18 Registering property (rank) 24 Procedures (number) 20 Procedures (number) 5 Time (days) 248 Time (days) 37 Cost (% of income per capita) 146.7 Cost (% of property value) 0.2

Omsk, Omsk Oblast Aggregate rank 13 Starting a business (rank) 19 Getting electricity (rank) 13 Procedures (number) 8 Procedures (number) 10 Time (days) 25 Time (days) 222 Cost (% of income per capita) 2.2 Cost (% of income per capita) 112.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 20 Registering property (rank) 4 Procedures (number) 29 Procedures (number) 3 Time (days) 312 Time (days) 33 Cost (% of income per capita) 62.4 Cost (% of property value) 0.2

Perm, Perm Kray Aggregate rank 25 Starting a business (rank) 13 Getting electricity (rank) 18 Procedures (number) 7 Procedures (number) 6 Time (days) 25 Time (days) 305 Cost (% of income per capita) 2.2 Cost (% of income per capita) 618.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 12 Registering property (rank) 27 Procedures (number) 21 Procedures (number) 4 Time (days) 229 Time (days) 47 Cost (% of income per capita) 107.7 Cost (% of property value) 0.2

Petrozavodsk, Republic of Karelia Aggregate rank 11 Starting a business (rank) 6 Getting electricity (rank) 21 Procedures (number) 7 Procedures (number) 10 Time (days) 23 Time (days) 226 Cost (% of income per capita) 2.2 Cost (% of income per capita) 564.9 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 16 Registering property (rank) 8 Procedures (number) 18 Procedures (number) 3 Time (days) 285 Time (days) 35 Cost (% of income per capita) 117.2 Cost (% of property value) 0.2

Rostov-on-Don, Rostov Oblast Aggregate rank 4 Starting a business (rank) 26 Getting electricity (rank) 3 Procedures (number) 11 Procedures (number) 6 Time (days) 21 Time (days) 223 Cost (% of income per capita) 2.5 Cost (% of income per capita) 115.1 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 15 Registering property (rank) 4 Procedures (number) 18 Procedures (number) 3 Time (days) 294 Time (days) 33 Cost (% of income per capita) 95.0 Cost (% of property value) 0.2 46 DOING BUSINESS IN RUSSIA 2012

Saint Petersburg Aggregate rank 22 Starting a business (rank) 1 Getting electricity (rank) 24 Procedures (number) 7 Procedures (number) 9 Time (days) 17 Time (days) 238 Cost (% of income per capita) 2.1 Cost (% of income per capita) 1080.0 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 9 Registering property (rank) 27 Procedures (number) 18 Procedures (number) 5 Time (days) 361 Time (days) 44 Cost (% of income per capita) 51.3 Cost (% of property value) 0.2

Samara, Samara Oblast Aggregate rank 21 Starting a business (rank) 22 Getting electricity (rank) 28 Procedures (number) 10 Procedures (number) 6 Time (days) 19 Time (days) 290 Cost (% of income per capita) 2.5 Cost (% of income per capita) 1153.0 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 24 Registering property (rank) 8 Procedures (number) 30 Procedures (number) 3 Time (days) 200 Time (days) 35 Cost (% of income per capita) 417.9 Cost (% of property value) 0.2

Saransk, Republic of Mordovia Aggregate rank 2 Starting a business (rank) 20 Getting electricity (rank) 1 Procedures (number) 11 Procedures (number) 9 Time (days) 20 Time (days) 123 Cost (% of income per capita) 2.3 Cost (% of income per capita) 269.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 8 Registering property (rank) 8 Procedures (number) 30 Procedures (number) 3 Time (days) 191 Time (days) 35 Cost (% of income per capita) 67.3 Cost (% of property value) 0.2

Stavropol, Stavropol Kray Aggregate rank 7 Starting a business (rank) 4 Getting electricity (rank) 9 Procedures (number) 7 Procedures (number) 7 Time (days) 23 Time (days) 238 Cost (% of income per capita) 2.2 Cost (% of income per capita) 443.5 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 2 Registering property (rank) 19 Procedures (number) 23 Procedures (number) 4 Time (days) 216 Time (days) 29 Cost (% of income per capita) 47.1 Cost (% of property value) 0.2

Surgut, Khanty-Mansiisk Autonomous Okrug – Yugra Aggregate rank 9 Starting a business (rank) 30 Getting electricity (rank) 19 Procedures (number) 11 Procedures (number) 10 Time (days) 22 Time (days) 171 Cost (% of income per capita) 3.0 Cost (% of income per capita) 746.1 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 1 Registering property (rank) 8 Procedures (number) 17 Procedures (number) 3 Time (days) 150 Time (days) 35 Cost (% of income per capita) 106.2 Cost (% of property value) 0.2 CITY TABLES 47

Tomsk, Tomsk Oblast Aggregate rank 20 Starting a business (rank) 15 Getting electricity (rank) 10 Procedures (number) 8 Procedures (number) 9 Time (days) 23 Time (days) 264 Cost (% of income per capita) 2.2 Cost (% of income per capita) 391.4 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 6 Registering property (rank) 25 Procedures (number) 18 Procedures (number) 5 Time (days) 279 Time (days) 37 Cost (% of income per capita) 66.5 Cost (% of property value) 0.2

Tver, Tver Oblast Aggregate rank 18 Starting a business (rank) 21 Getting electricity (rank) 14 Procedures (number) 8 Procedures (number) 9 Time (days) 25 Time (days) 183 Cost (% of income per capita) 2.4 Cost (% of income per capita) 869.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 25 Registering property (rank) 8 Procedures (number) 30 Procedures (number) 3 Time (days) 448 Time (days) 35 Cost (% of income per capita) 75.2 Cost (% of property value) 0.2

Ulyanovsk, Ulyanovsk Oblast Aggregate rank 1 Starting a business (rank) 3 Getting electricity (rank) 5 Procedures (number) 8 Procedures (number) 9 Time (days) 21 Time (days) 164 Cost (% of income per capita) 2.1 Cost (% of income per capita) 654.9 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 4 Registering property (rank) 8 Procedures (number) 30 Procedures (number) 3 Time (days) 191 Time (days) 35 Cost (% of income per capita) 45.6 Cost (% of property value) 0.2

Vladikavkaz, Republic of North Ossetia – Alania Aggregate rank 3 Starting a business (rank) 27 Getting electricity (rank) 2 Procedures (number) 12 Procedures (number) 9 Time (days) 22 Time (days) 120 Cost (% of income per capita) 2.3 Cost (% of income per capita) 441.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 11 Registering property (rank) 2 Procedures (number) 29 Procedures (number) 3 Time (days) 201 Time (days) 26 Cost (% of income per capita) 91.1 Cost (% of property value) 0.2

Vladivostok, Primorsky Kray Aggregate rank 15 Starting a business (rank) 18 Getting electricity (rank) 23 Procedures (number) 8 Procedures (number) 9 Time (days) 23 Time (days) 260 Cost (% of income per capita) 2.3 Cost (% of income per capita) 852.4 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 22 Registering property (rank) 3 Procedures (number) 26 Procedures (number) 3 Time (days) 218 Time (days) 32 Cost (% of income per capita) 169.4 Cost (% of property value) 0.2 48 DOING BUSINESS IN RUSSIA 2012

Volgograd, Volgograd Oblast Aggregate rank 16 Starting a business (rank) 2 Getting electricity (rank) 26 Procedures (number) 8 Procedures (number) 10 Time (days) 22 Time (days) 205 Cost (% of income per capita) 2.0 Cost (% of income per capita) 804.3 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 27 Registering property (rank) 4 Procedures (number) 23 Procedures (number) 3 Time (days) 371 Time (days) 33 Cost (% of income per capita) 186.0 Cost (% of property value) 0.2

Voronezh, Voronezh Oblast Aggregate rank 17 Starting a business (rank) 15 Getting electricity (rank) 16 Procedures (number) 8 Procedures (number) 9 Time (days) 18 Time (days) 215 Cost (% of income per capita) 2.5 Cost (% of income per capita) 838.4 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 28 Registering property (rank) 8 Procedures (number) 31 Procedures (number) 3 Time (days) 364 Time (days) 35 Cost (% of income per capita) 111.4 Cost (% of property value) 0.2 Vyborg, Leningrad Oblast Aggregate rank 14 Starting a business (rank) 10 Getting electricity (rank) 12 Procedures (number) 8 Procedures (number) 9 Time (days) 25 Time (days) 202 Cost (% of income per capita) 2.0 Cost (% of income per capita) 772.7 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 23 Registering property (rank) 8 Procedures (number) 20 Procedures (number) 3 Time (days) 279 Time (days) 35 Cost (% of income per capita) 297.9 Cost (% of property value) 0.2

Yakutsk, Republic of Sakha – Yakutia Aggregate rank 28 Starting a business (rank) 8 Getting electricity (rank) 25 Procedures (number) 7 Procedures (number) 6 Time (days) 25 Time (days) 279 Cost (% of income per capita) 2.2 Cost (% of income per capita) 1,012.2 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 26 Registering property (rank) 30 Procedures (number) 26 Procedures (number) 4 Time (days) 280 Time (days) 60 Cost (% of income per capita) 178.0 Cost (% of property value) 0.4

Yaroslavl, Yaroslavl Oblast Aggregate rank 8 Starting a business (rank) 7 Getting electricity (rank) 6 Procedures (number) 7 Procedures (number) 9 Time (days) 27 Time (days) 146 Cost (% of income per capita) 2.0 Cost (% of income per capita) 696.8 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 17 Registering property (rank) 16 Procedures (number) 22 Procedures (number) 3 Time (days) 247 Time (days) 38 Cost (% of income per capita) 130.6 Cost (% of property value) 0.2 CITY TABLES 49

Yekaterinburg, Sverdlovsk Oblast Aggregate rank 24 Starting a business (rank) 29 Getting electricity (rank) 19 Procedures (number) 8 Procedures (number) 9 Time (days) 33 Time (days) 360 Cost (% of income per capita) 2.4 Cost (% of income per capita) 458.0 Minimum capital (% of income per capita) 1.6

Dealing with construction permits (rank) 13 Registering property (rank) 20 Procedures (number) 21 Procedures (number) 4 Time (days) 217 Time (days) 35 Cost (% of income per capita) 136.1 Cost (% of property value) 0.2 Indicator tables

Starting a Business Dealing with construction permits Ease of dealing Paid-in Min. Ease of with con- Cost Capital starting a Cost struction Procedures Time (% of income (% of income business Procedures Time (% of income permits City (number) (days) per capita) per capita) (rank) (number) (days) per capita) (rank)

Irkutsk, Irkutsk Oblast 10 19 2.1 1.6 8 17 215 141.0 6

Kaliningrad, Kaliningrad Oblast 8 16 2.4 1.6 11 17 239 86.3 3

Kaluga, Kaluga Oblast 11 22 2.1 1.6 17 24 264 48.0 9

Kazan, Republic of Tatarstan 9 21 1.7 1.6 4 32 223 40.0 14

Kemerovo, Kemerovo Oblast 11 22 2.5 1.6 28 24 322 74.8 21

Khabarovsk, Khabarovsk Krai 8 23 3.0 1.6 24 32 269 188.9 29

Kirov, Kirov Oblast 7 29 2.1 1.6 13 29 206 47.3 5

Moscow 9 30 2.1 1.6 25 47 392 171.5 30

Murmansk, Murmansk Oblast 7 25 2.2 1.6 12 16 357 137.4 19

Novosibirsk, Novosibirsk Oblast 11 22 2.3 1.6 23 20 248 146.7 18

Omsk, Omsk Oblast 8 25 2.2 1.6 19 29 312 62.4 20

Perm, Perm Krai 7 25 2.2 1.6 13 21 229 107.7 12

Petrozavodsk, Republic of Karelia 7 23 2.2 1.6 6 18 285 117.2 16

Rostov-on-Don, Rostov Oblast 11 21 2.5 1.6 26 18 294 95.0 15

Saint Petersburg 7 17 2.1 1.6 1 18 361 51.3 9

Samara, Samara Oblast 10 19 2.5 1.6 22 30 200 417.9 24

Saransk, Republic of Mordovia 11 20 2.3 1.6 20 30 191 67.3 8

Stavropol, Stavropol Krai 7 23 2.2 1.6 4 23 216 47.1 2

Surgut, Khanty-Mansiisk Autono- 11 22 3.0 1.6 30 17 150 106.2 1 mous Okrug – Yugra

Tomsk, Tomsk Oblast 8 23 2.2 1.6 15 18 279 66.5 6

Tver, Tver Oblast 8 25 2.4 1.6 21 30 448 75.2 25

Ulyanovsk, Ulyanovsk Oblast 8 21 2.1 1.6 3 30 191 45.6 4

Vladikavkaz, Republic of North 12 22 2.3 1.6 27 29 201 91.1 11 Ossetia – Alania

Vladivostok, Primorsky Krai 8 23 2.3 1.6 18 26 218 169.4 22

Volgograd, Volgograd Oblast 8 22 2.0 1.6 2 23 371 186.0 27

Voronezh, Voronezh Oblast 8 18 2.5 1.6 15 31 364 111.4 28

Vyborg, Leningrad Oblast 8 25 2.0 1.6 10 20 279 297.9 23

Yakutsk, Republic of Sakha – 7 25 2.2 1.6 8 26 280 178.0 26 Yakutia

Yaroslavl, Yaroslavl Oblast 7 27 2.0 1.6 7 22 247 130.6 17

Yekaterinburg, Sverdlovsk Oblast 8 33 2.4 1.6 29 21 217 136.1 13 CITY TABLES 51

Getting Electricity Registering Property

Ease of Ease of getting Cost registering Procedures Time Cost electricity Procedures Time (% of property property City (number) (days) (% of GNI) (rank) (number) (days) value) (rank)

Irkutsk, Irkutsk Oblast 9 228 573.6 10 3 34 0.3 18

Kaliningrad, Kaliningrad Oblast 9 308 641.6 22 5 27 0.5 22

Kaluga, Kaluga Oblast 10 144 589.8 15 3 19 0.2 1

Kazan, Republic of Tatarstan 9 186 929.1 17 3 33 0.2 4

Kemerovo, Kemerovo Oblast 6 259 392.5 7 5 45 0.2 29

Khabarovsk, Khabarovsk Krai 9 248 391.1 8 3 13 0.3 17

Kirov, Kirov Oblast 9 220 390.6 4 4 35 0.2 20

Moscow 10 281 1852.4 30 5 43 0.2 26

Murmansk, Murmansk Oblast 10 328 375.6 27 5 35 0.2 23

Novosibirsk, Novosibirsk Oblast 10 265 815.9 29 5 37 0.2 24

Omsk, Omsk Oblast 10 222 112.2 13 3 33 0.2 4

Perm, Perm Krai 6 305 618.2 18 4 47 0.2 27

Petrozavodsk, Republic of Karelia 10 226 564.9 21 3 35 0.2 8

Rostov-on-Don, Rostov Oblast 6 223 115.1 3 3 33 0.2 4

Saint Petersburg 9 238 1080.0 24 5 44 0.2 27

Samara, Samara Oblast 6 290 1153.0 28 3 35 0.2 8

Saransk, Republic of Mordovia 9 123 269.2 1 3 35 0.2 8

Stavropol, Stavropol Krai 7 238 443.5 9 4 29 0.2 19

Surgut, Khanty-Mansiisk Autono- 10 171 746.1 19 3 35 0.2 8 mous Okrug – Yugra

Tomsk, Tomsk Oblast 9 264 391.4 10 5 37 0.2 25

Tver, Tver Oblast 9 183 869.2 14 3 35 0.2 8

Ulyanovsk, Ulyanovsk Oblast 9 164 654.9 5 3 35 0.2 8

Vladikavkaz, Republic of North 9 120 441.2 2 3 26 0.2 2 Ossetia – Alania

Vladivostok, Primorsky Krai 9 260 852.4 23 3 32 0.2 3

Volgograd, Volgograd Oblast 10 205 804.3 26 3 33 0.2 4

Voronezh, Voronezh Oblast 9 215 838.4 16 3 35 0.2 8

Vyborg, Leningrad Oblast 9 202 772.7 12 3 35 0.2 8

Yakutsk, Republic of Sakha – 6 279 1012.2 25 4 60 0.4 30 Yakutia

Yaroslavl, Yaroslavl Oblast 9 146 696.8 6 3 38 0.2 16

Yekaterinburg, Sverdlovsk Oblast 9 360 458.0 19 4 35 0.2 20 52 DOING BUSINESS IN RUSSIA 2012

(1) Application for state registration of a legal entity Comments: After obtaining registration documents LIST OF PROCEDURES (form R11001), at the Federal Tax Service a company can order a STARTING A BUSINESS (2) Minutes of a meeting establishing a legal entity, seal at any seal producer. To do so, it is necessary to (3) Charter of a limited liability company (2 copies), show the following documents: certificate of state registration, certificate of taxpayer registration, an Irkutsk, Irkutsk Oblast (4) Receipt confirming payment of a state duty. excerpt from the Unified State Register of Legal Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Entities. The price of a seal depends on its model and (LLC) documents and date of submission. State registration complexity of production. In Irkutsk a seal costs 400 is conducted no more than 5 working days after Minimum capital requirement: 5,000 (US$ 162) rubles on average. documents are submitted. Data as of: November 2011 On the 6th working day the applicant receives the Procedure 9*. Open the company bank account Procedure 1. Notarize signature on following documents confirming state registration of application for state registration of a legal a legal entity: Time: 3 days entity (1) Certificate of state registration of a legal entity in Cost: RUB 1,500 Time: 1 day the Unified State Register of Legal Entities with Comments: On state registration of a legal entity assigned main state registration number, (LLC) a temporary bank account is transformed into Cost: RUB 500 (200 rubles state duty + 300 rubles a permanent bank account. To do so, it is necessary notary fees) (2) Certificate as a taxpayer with assigned individual number of a taxpayer, to submit to a bank the documents received in Comments: In accordance with the Federal Law of procedure No.4 as well as a copy of an information August 8, 2001 No. 129-FZ “On State Registration (3) Excerpt from the Unified State Register of Legal Entities, letter from the statistics service, an order appointing of Legal Entities and Individual Entrepreneurs,” a a chief accountant or an order authorizing the head (4) Copy of the charter certified by the Federal Tax signature on application for state registration of a of the company to act as chief accountant, an order Service. company must be notarized. Application should be appointing a director. An additional agreement signed by a director of a company or other authorized The Federal Tax Service sends information to the about opening a bank account is signed and a bank person. The following documents should be submit- Pension Fund, Social Insurance Fund and Federal card with samples of signatures of the head of the ted to the notary: minutes of meeting of founders Service of State Statistics, which register the company and the chief accountant and the seal print on establishment of a limited liability company, company within 5 working days from when they is prepared. Cost of opening of a bank account varies charter (draft), passport of applicant who signs the receive information from the Federal Tax Service. and depends upon each bank. Sometimes banks have application, application (form R11001). The cost of The state duty for state registration of a legal entity special offers for small and medium-size enterprises notarization varies. In Irkutsk the cost is 500 rubles. increased in January 2011 to 4,000 rubles (The Tax and do not charge for opening accounts. The average Procedure 2*. Open a temporary bank Code, Article 333.33). cost of opening a bank account in Irkutsk is1,500 account and deposit part of charter capital rubles. Procedure 5. Obtain confirmation with Time: 2 days statistics codes at the Federal Service of Procedure 10. Inform the Federal Tax Cost: No cost State Statistics Service, the Pension Fund and the Social Insurance Fund of the company bank Comments: At least 50% of the charter capital must Time: 1 day be paid before company incorporation. The balance account number Cost: No cost must be paid during the first year of operation. To Time: 1 day Comments: On the day after state registration the deposit charter capital a temporary bank account Cost: No cost Federal Tax Service sends information about the should be opened. Time, cost and number of required Comments: A taxpayer within 7 days of opening documents might vary depending on the bank. company to the Federal Service of State Statistics for registration. The Federal Service of State Statistics a bank account notify the Federal Tax Service, The following documents are required to open a the Pension Fund and the Social Insurance Fund. temporary bank account: charter (draft), agreement sends their registration certificate by registered mail to the legal address of the company or a company Notifications of required format with the bank and minutes of meeting. The minutes of meeting account number an applicant either mails or brings should indicate that the founders entrust their representative picks it up personally. In the latter case the procedure takes 1-2 days. personally. In the latter case a secretariat puts a representative (indicate name) to open a temporary mark on the second copy that information has been bank account, deposit charter capital and receive the Procedure 6. Obtain confirmation of received. Banks also inform the Federal Tax Service money back in case the registration does not happen. registration at the Pension Fund about opening bank accounts. The charter capital can be in a noncash form — a Time: 1 day common practice. (Law on LLC, Article 15). STARTING A BUSINESS Cost: No cost Kaliningrad, Kaliningrad Oblast Procedure 3*. Pay registration fee for state Comments: The Pension Fund registers the company registration in a bank and get proof thereof within 5 days from the date of receipt of information Standard company legal form: Limited Liability Company Time: 1 day from the Unified State Register of Legal Entities from (LLC) Cost: No cost (included in procedure of state the Federal Tax Service. The company can personally Minimum capital requirement: RUB 5,000 (US$ 162) registration at the Federal Tax Service) pick up the registration certificate at the Pension Fund Data as of: November 2011 Comments: The registration fee of 4,000 rubles or wait for mail delivery to its legal address. must be paid before documents are submitted for Procedure 1. Notarize signature on Procedure 7*. Obtain confirmation of application for state registration of a legal registration. The registration fee doubled from 2,000 registration at the Social Insurance Fund rubles to 4,000 rubles in January 2011. entity Time: 1 day Time: 1 day Procedure 4. Submit documents for Cost: No cost Cost: RUB 250 (200 rubles state duty + 50 rubles registration of a legal entity to one-stop Comments: Within 4 work days upon the date of notary fees) shop at the Federal Tax Service and obtain receipt of information from the Federal Tax Service, registration documents Comments: In accordance with the Federal Law of the Social Insurance Fund registers the company as August 8, 2001 No. 129-FZ “On State Registration Time: 8 days an insurer and issues the registration documents to of Legal Entities and Individual Entrepreneurs”, a Cost: RUB 4,000 the company representative in person or mails them. signature on application for state registration of a Comments: State registration of a legal entity at Procedure 8*. Order and obtain a company must be notarized. Application should the Federal Tax Service includes a data entry in the company seal be signed by a director of a company or other Unified State Register of Legal Entities and a taxpayer authorized person. The following documents should Time: 1 day registration. be submitted to the notary: minutes of meeting Cost: RUB 400 The following documents are required: of founders on establishment of a limited liability

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 53

company, charter (draft), passport of applicant who (1) Certificate of state registration of a legal entity in Procedure 8. Inform the Federal Tax signs the application, application (form R11001). The the Unified State Register of Legal Entities with Service, the Pension Fund and the Social cost of notarization varies. In Kaliningrad the cost is assigned main state registration number, Insurance Fund of the company bank 250 rubles. (2) Certificate as a taxpayer with assigned individual account number Procedure 2*. Open a temporary bank number of a taxpayer, Time: 1 day account and deposit part of charter capital (3) Excerpt from the Unified State Register of Legal Cost: No cost Entities, Time: 1 day Comments: A taxpayer within 7 days of opening (4) Copy of the charter certified by the Federal Tax Cost: No cost a bank account notify the Federal Tax Service, Service, the Pension Fund and the Social Insurance Fund. Comments: At least 50% of the charter capital must as well as Notifications of required format with the bank be paid before company incorporation. The balance account number an applicant either mails or brings must be paid during the first year of operation. To (5) Certificate of registration in the Pension Fund personally. In the latter case a secretariat puts a deposit charter capital a temporary bank account (6) Certificate of registration in the Mandatory mark on the second copy that information has been should be opened. Time, cost and number of required Medical Insurance Fund received. Banks also inform the Federal Tax Service documents might vary depending on the bank. (7) Certificate of registration in Social Insurance about opening bank accounts. The following documents are required to open a Fund. temporary bank account: charter (draft), agreement The state duty for state registration of a legal entity STARTING A BUSINESS and minutes of meeting. The minutes of meeting increased in January 2011 to 4,000 rubles (The Tax Kaluga, Kaluga Oblast should indicate that the founders entrust their Code, Article 333.33). representative (indicate name) to open a temporary Standard company legal form: Limited Liability Company bank account, deposit charter capital and receive the Procedure 5. Obtain confirmation with (LLC) money back in case the registration does not happen. statistics codes at the Federal Service of Minimum capital requirement: RUB 5,000 (US$ 162) The charter capital can be in a noncash form—a State Statistics Data as of: November 2011 common practice. (Law on LLC, Article 15). Time: 1 day Procedure 1. Notarize signature on Procedure 3*. Pay registration fee for state Cost: No cost application for state registration of a legal registration in a bank and get proof thereof Comments: After receipt of registration documents entity Time: 1 day at the Federal Tax Service a director of the company Time: 1 day or an authorized representative personally goes to Cost: No cost (included in procedure of state Cost: RUB 550 (200 rubles state duty + 350 rubles Rosstat with a certificate of state registration. On the registration at the Federal Tax Service) notary fees) Comments: The registration fee of 4,000 rubles same day Rosstat registers the company and issues their registration certificate. Comments: In accordance with the Federal Law of must be paid before documents are submitted for August 8, 2001 No. 129-FZ “On State Registration registration. The registration fee doubled from 2,000 Procedure 6. Order and obtain a company of Legal Entities and Individual Entrepreneurs,” a rubles to 4,000 rubles in January 2011. seal signature on application for state registration of a Procedure 4. Submit documents for Time: 1 day company must be notarized. Application should be signed by a director of a company or other authorized registration of a legal entity to one-stop Cost: RUB 700 person. The following documents should be submit- shop at the Federal Tax Service and obtain Comments: After obtaining registration documents registration documents ted to the notary: minutes of meeting of founders at the Federal Tax Service a company can order a on establishment of a limited liability company, Time: 8 days seal at any seal producer. To do so, it is necessary to charter (draft), passport of applicant who signs the Cost: RUB 4,000 show the following documents: certificate of state application, application (form R11001). The cost of Comments: State registration of a legal entity at registration, certificate of taxpayer registration, an notarization varies. In Kaluga the cost is 550 rubles. the Federal Tax Service includes a data entry in the excerpt from the Unified State Register of Legal Unified State Register of Legal Entities and a taxpayer Entities. The price of a seal depends on its model and Procedure 2*. Open a temporary bank registration. complexity of production. In Kaliningrad a seal costs account and deposit part of charter capital 700 rubles on average. The following documents are required: Time: 1 day (1) Application for state registration of a legal entity Procedure 7. Open the company bank Cost: No cost (form R11001), account Comments: At least 50% of the charter capital must (2) Minutes of a meeting establishing a legal entity, Time: 2 days be paid before company incorporation. The balance must be paid during the first year of operation. To (3) Charter of a limited liability company (2 copies), Cost: RUB 2,400 deposit charter capital a temporary bank account (4) Receipt confirming payment of a state duty. Comments: On state registration of a legal entity should be opened. Time, cost and number of required An applicant receives a receipt confirming a list of (LLC) a temporary bank account is transformed into documents might vary depending on the bank. documents and date of submission. State registration a permanent bank account. To do so, it is necessary The following documents are required to open a is conducted no more than 5 working days after to submit to a bank the documents received in temporary bank account: charter (draft), agreement documents are submitted. procedure No.4 as well as a copy of an information and minutes of meeting. The minutes of meeting letter from the statistics service, an order appointing Once state registration is completed, the Federal should indicate that the founders entrust their a chief accountant or an order authorizing the head Tax Service sends information about the legal entity representative (indicate name) to open a temporary of the company to act as chief accountant, an order from the Unified State Register of Legal Entities to bank account, deposit charter capital and receive the appointing a director. An additional agreement the Pension Fund, Mandatory Medical Insurance money back in case the registration does not happen. about opening a bank account is signed and a bank Fund and Social Insurance Fund. They register the The charter capital can be in a noncash form—a card with samples of signatures of the head of the company and send their registration certificates back common practice. (Law on LLC, Article 15). company and the chief accountant and the seal print to the Federal Tax Service which passes them to the is prepared. Cost of opening of a bank account varies applicant together with other registration documents. Procedure 3*. Pay registration fee for state and depends upon each bank. Sometimes banks have registration in a bank and get proof thereof On the 6th working day the applicant receives the special offers for small and medium-size enterprises Time: 1 day following documents confirming state registration of and do not charge for opening accounts. The average Cost: No cost (included in procedure of state a legal entity: cost of opening a bank account in Kaliningrad is registration at the Federal Tax Service) 2,400 rubles. Comments: The registration fee of 4,000 rubles must be paid before documents are submitted for

* This procedure can be completed simultaneously with previous procedures. 54 DOING BUSINESS IN RUSSIA 2012

registration. The registration fee doubled from 2,000 Then within no more than 3 days after receipt of the and do not charge for opening accounts. The average rubles to 4,000 rubles in January 2011. information the Social Insurance Fund registers the cost of opening a bank account in Kaluga is 1,000 company as an insurer. The actual time is 1 day. The rubles. Procedure 4. Submit documents for company may wait for mail delivery of the registration registration of a legal entity to one-stop certificate (about 2 weeks) though in practice Procedure 11*. Inform the Federal Tax shop at the Federal Tax Service and obtain entrepreneurs prefers to personally pick it up at the Service, the Pension Fund and the Social registration documents Social Insurance Fund. Insurance Fund of the company bank Time: 9 days account number Procedure 7*. Obtain confirmation of Cost: RUB 4,000 Time: 1 day registration at the Pension Fund Comments: State registration of a legal entity at Cost: No cost Time: 5 days the Federal Tax Service includes a data entry in the Comments: A taxpayer within 7 days of opening Unified State Register of Legal Entities and a taxpayer Cost: No cost a bank account notify the Federal Tax Service, registration. Comments: The Federal Tax Service within 3-5 the Pension Fund and the Social Insurance Fund. The following documents are required: working days after of state registration electronically Notifications of required format with the bank sends information from the Unified State Register (1) Application for state registration of a legal entity account number an applicant either mails or brings of Legal Entities to the Pension Fund for registration. (form R11001), personally. In the latter case a secretariat puts a Within no more than 3 days after receipt of this mark on the second copy that information has been (2) Minutes of a meeting establishing a legal entity, information the Pension Fund registers the company. received. Banks also inform the Federal Tax Service (3) Charter of a limited liability company (2 copies), The actual registration time is 1 day. The company about opening bank accounts. (4) Receipt confirming payment of a state duty. can wait for the registration certificate to be mailed STARTING A BUSINESS An applicant receives a receipt confirming a list of (about 2 weeks) but in practice entrepreneurs prefer documents and date of submission. State registration to personally pick it up at the Pension Fund. Kazan, Republic of Tatarstan is conducted no more than 5 working days after Procedure 8*. Obtain confirmation of Standard company legal form: Limited Liability Company documents are submitted. registration at the Mandatory Medical (LLC) On the 6th working day the applicant receives the Insurance Fund Minimum capital requirement: RUB 5,000 (US$ 162) following documents confirming state registration of Time: 7 days Data as of: November 2011 a legal entity: Cost: No cost (1) Certificate of state registration of a legal entity in Procedure 1. Notarize signature on the Unified State Register of Legal Entities with Comments: The Federal Tax Service within 5 working application for state registration of a legal assigned main state registration number, days from the date of state registration electronically entity sends information from the Unified State Register of (2) Certificate as a taxpayer with assigned individual Time: 1 day Legal Entities to the Mandatory Medical Insurance number of a taxpayer, Fund for the further registration. The actual time of Cost: RUB 400 (200 rubles state duty + 200 rubles (3) Excerpt from the Unified State Register of Legal registration is 1 day. The company is assigned a reg- notary fees) Entities, istration number which is included in the registration Comments: In accordance with the Federal Law of (4) Copy of the charter certified by the Federal Tax certificate. A representative of the company picks up August 8, 2001 No. 129-FZ “On State Registration Service. this certificate at the Mandatory Medical Insurance of Legal Entities and Individual Entrepreneurs,” a The Federal Tax Service sends information to the Fund personally. signature on application for state registration of a Pension Fund, Mandatory Medical Insurance Fund, company must be notarized. Application should be Social Insurance Fund and Federal Service of State Procedure 9*. Order and obtain a company signed by a director of a company or other authorized Statistics, which register the company within 3-5 seal person. The following documents should be submit- working days from when they receive information Time: 1 day ted to the notary: minutes of meeting of founders from the Federal Tax Service. Cost: RUB 1,000 on establishment of a limited liability company, The state duty for state registration of a legal entity Comments: After obtaining registration documents charter (draft), passport of applicant who signs the increased in January 2011 to 4,000 rubles (The Tax at the Federal Tax Service a company can order a application, application (form R11001). The cost of Code, Article 333.33). seal at any seal producer. To do so, it is necessary to notarization varies. In Kazan the cost is 400 rubles. show the following documents: certificate of state Procedure 2*. Open a temporary bank Procedure 5. Obtain confirmation with registration, certificate of taxpayer registration, an account and deposit part of charter capital statistics codes at the Federal Service of excerpt from the Unified State Register of Legal Time: 1 day State Statistics Entities. The price of a seal depends on its model and Cost: No cost Time: 1 day complexity of production. In Kaluga a seal costs 1,000 rubles on average. Comments: At least 50% of the charter capital must Cost: No cost be paid before company incorporation. The balance Comments: The Federal Tax Service sends Procedure 10*. Open the company bank must be paid during the first year of operation. To information about the registered legal entity to the account deposit charter capital a temporary bank account Federal Service of State Statistics. Then a director of Time: 1 day should be opened. Time, cost and number of required the company or an authorized representative goes Cost: RUB 1,000 documents might vary depending on the bank. to Rosstat with certificates of state registration, The following documents are required to open a taxpayer registration and an excerpt from the Unified Comments: On state registration of a legal entity (LLC) a temporary bank account is transformed into temporary bank account: charter (draft), agreement State Registry of Legal Entities. On the same day the and minutes of meeting. The minutes of meeting applicant receives the information letter confirmation a permanent bank account. To do so, it is necessary to submit to a bank the documents received in should indicate that the founders entrust their of registration) with assigned statistics codes from representative (indicate name) to open a temporary Rosstat. procedure No.4 as well as a copy of an information letter from the statistics service, an order appointing bank account, deposit charter capital and receive the Procedure 6*. Obtain confirmation of a chief accountant or an order authorizing the head money back in case the registration does not happen. registration at the Social Insurance Fund of the company to act as chief accountant, an order The charter capital can be in a noncash form—a common practice. (Law on LLC, Article 15). Time: 5 days appointing a director. An additional agreement about opening a bank account is signed and a bank Cost: No cost Procedure 3*. Pay registration fee for state card with samples of signatures of the head of the registration in a bank and get proof thereof Comments: The Federal Tax service within 3-5 company and the chief accountant and the seal print Time: 1 day days after state registration electronically sends is prepared. Cost of opening of a bank account varies information from the Unified State Register of Legal and depends upon each bank. Sometimes banks have Cost: No cost (included in procedure of state Entities to the Social Insurance Fund for registration. special offers for small and medium-size enterprises registration at the Federal Tax Service)

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 55

Comments: The registration fee of 4,000 rubles Procedure 7*. Order and obtain a company company must be notarized. Application should must be paid before documents are submitted for seal be signed by a director of a company or other registration. The registration fee doubled from 2,000 Time: 1 day authorized person. The following documents should rubles to 4,000 rubles in January 2011. be submitted to the notary: minutes of meeting Cost: RUB 500 of founders on establishment of a limited liability Procedure 4. Submit documents for Comments: After obtaining registration documents company, charter (draft), passport of applicant who registration of a legal entity to one-stop at the Federal Tax Service a company can order a signs the application, application (form R11001). The shop at the Federal Tax Service and obtain seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Kemerovo the cost is registration documents show the following documents: certificate of state 550 rubles. Time: 18 days registration, certificate of taxpayer registration, an excerpt from the Unified State Register of Legal Procedure 2*. Open a temporary bank Cost: RUB 4,000 Entities. The price of a seal depends on its model and account and deposit part of charter capital Comments: State registration of a legal entity at complexity of production. In Kazan a seal costs 500 Time: 1 day the Federal Tax Service includes a data entry in the rubles on average. Unified State Register of Legal Entities and a taxpayer Cost: No cost registration. Procedure 8*. Open the company bank Comments: At least 50% of the charter capital must The following documents are required: account be paid before company incorporation. The balance must be paid during the first year of operation. To (1) Application for state registration of a legal entity Time: 1 day deposit charter capital a temporary bank account (form R11001), Cost: RUB 400 should be opened. Time, cost and number of required (2) Minutes of a meeting establishing a legal entity, Comments: On state registration of a legal entity documents might vary depending on the bank. The (3) Charter of a limited liability company (2 copies), (LLC) a temporary bank account is transformed into following documents are required to open a tempo- (4) Receipt confirming payment of a state duty. a permanent bank account. To do so, it is necessary rary bank account: charter (draft), agreement and to submit to a bank the documents received in An applicant receives a receipt confirming a list of minutes of meeting. The minutes of meeting should procedure No.4 as well as a copy of an information documents and date of submission. State registration indicate that the founders entrust their representative letter from the statistics service, an order appointing is conducted no more than 5 working days after (indicate name) to open a temporary bank account, a chief accountant or an order authorizing the head documents are submitted. deposit charter capital and receive the money back of the company to act as chief accountant, an order in case the registration does not happen. The charter On the 6th working day the applicant receives the appointing a director. An additional agreement capital can be in a noncash form - a common practice. following documents confirming state registration of about opening a bank account is signed and a bank (Law on LLC, Article 15). a legal entity: card with samples of signatures of the head of the (1) Certificate of state registration of a legal entity in company and the chief accountant and the seal print Procedure 3*. Pay registration fee for state the Unified State Register of Legal Entities with is prepared. Cost of opening of a bank account varies registration in a bank and get proof thereof assigned main state registration number, and depends upon each bank. Sometimes banks have Time: 1 day (2) Certificate as a taxpayer with assigned individual special offers for small and medium-size enterprises Cost: No cost (included in procedure of state registra- number of a taxpayer, and do not charge for opening accounts. The average tion at the Federal Tax Service) cost of opening a bank account in Kazan is 400 (3) Excerpt from the Unified State Register of Legal Comments: The registration fee of 4,000 rubles rubles. Entities, must be paid before documents are submitted for (4) Copy of the charter certified by the Federal Tax Procedure 9*. Inform the Federal Tax registration. The registration fee doubled from 2,000 Service. Service, the Pension Fund and the Social rubles to 4,000 rubles in January 2011. The Federal Tax Service sends electronically Insurance Fund of the company bank Procedure 4. Submit documents for information to the Pension Fund, Mandatory Medical account number registration of a legal entity to one-stop Insurance Fund, Social Insurance Fund and Federal Time: 1 day Service of State Statistics, which register the company shop at the Federal Tax Service and obtain Cost: No cost and mail their registration certificates to the legal registration documents address of the company. Comments: A taxpayer within 7 days of opening Time: 8 days a bank account notify the Federal Tax Service, The state duty for state registration of a legal entity Cost: RUB 4,000 the Pension Fund and the Social Insurance Fund. increased in January 2011 to 4,000 rubles (The Tax Comments: State registration of a legal entity at Notifications of required format with the bank Code, Article 333.33). the Federal Tax Service includes a data entry in the account number an applicant either mails or brings Unified State Register of Legal Entities and a taxpayer personally. In the latter case a secretariat puts a registration. Procedure 5*. Inspection of a legal address mark on the second copy that information has been by the Federal Tax Service received. Banks also inform the Federal Tax Service The following documents are required: Time: 1 day about opening bank accounts. (1) Application for state registration of a legal entity Cost: No cost (form R11001), STARTING A BUSINESS Comments: The Federal Tax Service sometimes (2) Minutes of a meeting establishing a legal entity, sends an inspector to confirm the legal address of the Kemerovo, Kemerovo Oblast (3) Charter of a limited liability company (2 copies), company provided for state registration. Standard company legal form: Limited Liability Company (4) Receipt confirming payment of a state duty. (LLC) Procedure 6*. Obtain confirmation with An applicant receives a receipt confirming a list of statistics codes at the Federal Service of Minimum capital requirement: RUB 5,000 (US$ 162) documents and date of submission. State registration State Statistics Data as of: November 2011 is conducted no more than 5 working days after documents are submitted. Time: 1 day Procedure 1. Notarize signature on On the 6th working day the applicant receives the Cost: No cost application for state registration of a legal following documents confirming state registration of Comments: After receipt of registration documents entity a legal entity: at the Federal Tax Service a director of the company Time: 1 day (1) Certificate of state registration of a legal entity in or an authorized representative personally goes to Cost: RUB 500 (200 rubles state duty + 300 rubles the Unified State Register of Legal Entities with Rosstat with a certificate of state registration. On the notary fees) assigned main state registration number, same day Rosstat registers the company and issues their registration certificate. Comments: In accordance with the Federal Law of (2) Certificate as a taxpayer with assigned individual August 8, 2001 No. 129-FZ “On State Registration number of a taxpayer, of Legal Entities and Individual Entrepreneurs,” a (3) Excerpt from the Unified State Register of Legal signature on application for state registration of a Entities,

* This procedure can be completed simultaneously with previous procedures. 56 DOING BUSINESS IN RUSSIA 2012

(4) Copy of the charter certified by the Federal Tax Entities. The price of a seal depends on its model and of Legal Entities and Individual Entrepreneurs”, a Service. complexity of production. In Kemerovo a seal costs signature on application for state registration of a The Federal Tax Service sends information to the 550 on average. company must be notarized. Application should be signed by a director of a company or other Pension Fund, Mandatory Medical Insurance Fund, Procedure 9. Notarize documents Social Insurance Fund and Federal Service of State authorized person. The following documents should for opening a bank account including be submitted to the notary: minutes of meeting Statistics, which register the company within 3-5 signatures on a bank card working days from when they receive information of founders on establishment of a limited liability from the Federal Tax Service. Time: 1 day company, charter (draft), passport of applicant who The state duty for state registration of a legal entity Cost: RUB 1,200 signs the application, application (form R11001). The increased in January 2011 to 4,000 rubles (The Tax Comments: To open a bank account, notarized copies cost of notarization varies. In Khabarovsk the cost is Code, Article 333.33). of documents confirming the registration of a new 500 rubles. company are required, along with notarization of Procedure 2*. Open a temporary bank Procedure 5. Obtain confirmation with signatures of authorized company representatives account and deposit part of charter capital statistics codes at the Federal Service of on a bank card. As an alternative, some banks certify Time: 1 day State Statistics copies of registration documents and signatures on a Cost: No cost Time: 1 day bank card themselves. Comments: At least 50% of the charter capital must Cost: No cost Procedure 10. Open the company bank be paid before company incorporation. The balance Comments: After receipt of registration documents at account must be paid during the first year of operation. To the Federal Tax Service the applicant can immediately Time: 2 days deposit charter capital a temporary bank account go to Rosstat to pick up the registration certificate Cost: RUB 1,300 should be opened. Time, cost and number of required with assigned statistic codes or wait for mail delivery. Comments: On state registration of a legal entity documents might vary depending on the bank. The More often applicants prefer to personally pick up the (LLC) a temporary bank account is transformed into following documents are required to open a tempo- registration certificate at Rosstat. a permanent bank account. To do so, it is necessary rary bank account: charter (draft), agreement and Procedure 6*. Obtain confirmation of to submit to a bank the documents received in minutes of meeting. The minutes of meeting should registration at the Social Insurance Fund procedure No.4 as well as a copy of an information indicate that the founders entrust their representative (indicate name) to open a temporary bank account, Time: 5 days letter from the statistics service, an order appointing a chief accountant or an order authorizing the head deposit charter capital and receive the money back Cost: No cost of the company to act as chief accountant, an order in case the registration does not happen. The charter Comments: Within 5 days after state registration the appointing a director. An additional agreement capital can be in a noncash form - a common practice. Federal Tax Service sends information about the new about opening a bank account is signed and a bank (Law on LLC, Article 15). company to the Social Insurance Fund for registration. card with samples of signatures of the head of the Procedure 3*. Pay registration fee for state The registration certificate can be mailed by Social company and the chief accountant and the seal print registration in a bank and get proof thereof Insurance Fund to the legal address of the company is prepared. Cost of opening of a bank account varies Time: 1 day but in practice entrepreneurs prefers to personally and depends upon each bank. Sometimes banks have pick up the registration certificate at Social Insurance special offers for small and medium-size enterprises Cost: No cost (included in procedure of state registra- Fund to avoid delays and losing the letter during mail and do not charge for opening accounts. The average tion at the Federal Tax Service) delivery. cost of opening a bank account in Kemerovo is 1,300 Comments: The registration fee of 4,000 rubles Procedure 7*. Obtain confirmation of rubles. must be paid before documents are submitted for registration at the Pension Fund registration. The registration fee doubled from 2,000 Procedure 11. Inform the Federal Tax rubles to 4,000 rubles in January 2011. Time: 5 days Service, the Pension Fund and the Social Cost: No cost Insurance Fund of the company bank Procedure 4. Submit documents for registration of a legal entity to one-stop Comments: Within 5 days after state registration account number shop at the Federal Tax Service and obtain the Federal Tax Service sends information about the Time: 1 day registration documents new company to the Pension Fund for registration. Cost: No cost Time: 20 days Registration certificates can be mailed to the legal Comments: A taxpayer within 7 days of opening address of the company but in practice entrepreneurs a bank account notify the Federal Tax Service, Cost: RUB 4,000 prefer to personally pick them up to avoid delays and the Pension Fund and the Social Insurance Fund. Comments: State registration of a legal entity at losing the letter during mail delivery. Notifications of required format with the bank the Federal Tax Service includes a data entry in the The registration certificate from the Mandatory account number an applicant either mails or brings Unified State Register of Legal Entities and a taxpayer Medical Insurance Fund is usually received in mail personally. In the latter case a secretariat puts a registration. within 2 weeks after completion of registration at the mark on the second copy that information has been The following documents are required: Federal Tax Service. received. Banks also inform the Federal Tax Service (1) Application for state registration of a legal entity Since January 1, 2011 the Pension Fund has about opening bank accounts. (form R11001), performed the function of the Mandatory Medical STARTING A BUSINESS (2) Minutes of a meeting establishing a legal entity, Insurance Fund on registration (in accordance with the federal law “On Mandatory Medical Insurance in Khabarovsk, Khabarovsk Kray (3) Charter of a limited liability company (2 copies), the Russian Federation” of November 29, 2010 No Standard company legal form: Limited Liability Company (4) Receipt confirming payment of a state duty. 326-FZ, Article 17). (LLC) An applicant receives a receipt confirming a list of documents and date of submission. State registration Minimum capital requirement: RUB 5,000 (US$ 162) Procedure 8*. Order and obtain a company is conducted no more than 5 working days after seal Data as of: November 2011 documents are submitted. Time: 1 day Procedure 1. Notarize signature on On the 6th working day the applicant receives the Cost: RUB 550 application for state registration of a legal following documents confirming state registration of a legal entity: Comments: After obtaining registration documents entity at the Federal Tax Service a company can order a Time: 1 day (1) Certificate of state registration of a legal entity in the Unified State Register of Legal Entities with seal at any seal producer. To do so, it is necessary to Cost: RUB 500 (200 rubles state duty + 300 rubles assigned main state registration number, show the following documents: certificate of state notary fees) (2) Certificate as a taxpayer with assigned individual registration, certificate of taxpayer registration, an Comments: In accordance with the Federal Law of number of a taxpayer, excerpt from the Unified State Register of Legal August 8, 2001 No. 129-FZ “On State Registration

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 57

(3) Excerpt from the Unified State Register of Legal Comments: A taxpayer within 7 days of opening Comments: State registration of a legal entity at Entities, a bank account notify the Federal Tax Service, the Federal Tax Service includes a data entry in the (4) Copy of the charter certified by the Federal Tax the Pension Fund and the Social Insurance Fund. Unified State Register of Legal Entities and a taxpayer Service. Notifications of required format with the bank registration. The Federal Tax Service electronically sends account number an applicant either mails or brings The following documents are required: information to the Pension Fund, Social Insurance personally. In the latter case a secretariat puts a (1) Application for state registration of a legal entity Fund, Mandatory Medical Insurance Fund and mark on the second copy that information has been (form R11001), Federal Service of State Statistics, which register received. Banks also inform the Federal Tax Service about opening bank accounts. (2) Minutes of a meeting establishing a legal entity, the company within 5 days from when they receive (3) Charter of a limited liability company (2 copies), information from the Federal Tax Service. STARTING A BUSINESS (4) Receipt confirming payment of a state duty. The state duty for state registration of a legal entity Kirov, Kirov Oblast increased in January 2011 to 4,000 rubles (The Tax An applicant receives a receipt confirming a list of Code, Article 333.33). Standard company legal form: Limited Liability Company documents and date of submission. State registration (LLC) is conducted no more than 5 working days after Procedure 5*. Obtain confirmation with Minimum capital requirement: RUB 5,000 (US$ 162) documents are submitted. On the 6th working day the applicant receives the statistics codes at the Federal Service of Data as of: November 2011 State Statistics following documents confirming state registration of a legal entity: Time: 5 days Procedure 1. Notarize signature on application for state registration of a legal (1) Certificate of state registration of a legal entity in Cost: No cost entity the Unified State Register of Legal Entities with Comments: The Federal Tax Service within 5 working Time: 1 day assigned main state registration number, days after state registration sends information (2) Certificate as a taxpayer with assigned individual about the legal entity to the Federal Service of State Cost: RUB 550 (200 rubles state duty + 350 rubles number of a taxpayer, Statistics which registers the new company. Then the notary fees) applicant can personally go to Rosstat and pick up the Comments: In accordance with the Federal Law of (3) Excerpt from the Unified State Register of Legal registration certificate with assigned statistics codes. August 8, 2001 No. 129-FZ “On State Registration Entities, of Legal Entities and Individual Entrepreneurs”, a (4) Copy of the charter certified by the Federal Tax Procedure 6*. Order and obtain a company signature on application for state registration of a Service. seal company must be notarized. Application should be Within no more than 5 working days from the Time: 2 days signed by a director of a company or other authorized moment of state registration the Federal Tax Service Cost: RUB 550 person. The following documents should be submit- sends information from the Unified State Register ted to the notary: minutes of meeting of founders Comments: After obtaining registration documents of Legal Entities to the Pension Fund, Mandatory on establishment of a limited liability company, at the Federal Tax Service a company can order a Medical Insurance Fund, Social Insurance Fund and charter (draft), passport of applicant who signs the seal at any seal producer. To do so, it is necessary to Federal Service of State Statistics, which register application, application (form R11001). The cost of show the following documents: certificate of state the company within 3 days from when they receive notarization varies. In Kirov the cost is 550 rubles. registration, certificate of taxpayer registration, an information from the Federal Tax Service and mail excerpt from the Unified State Register of Legal Procedure 2*. Open a temporary bank their registration certificates to the legal address of the company. Entities. The price of a seal depends on its model and account and deposit part of charter capital complexity of production. In Khabarovsk a seal costs The state duty for state registration of a legal entity Time: 2 days 550 on average. increased in January 2011 to 4,000 rubles (The Tax Cost: No cost Code, Article 333.33). Procedure 7*. Open the company bank Comments: At least 50% of the charter capital must account be paid before company incorporation. The balance Procedure 5*. Order and obtain a company Time: 2 days must be paid during the first year of operation. To seal Cost: RUB 4,000 (3,000 rubles commission for deposit charter capital a temporary bank account Time: 1 day should be opened. Time, cost and number of required opening bank account + 300 rubles for the card + Cost: RUB 1,000 700 rubles for certification of copies) documents might vary depending on the bank. The following documents are required to open a Comments: After obtaining registration documents Comments: On state registration of a legal entity temporary bank account: charter (draft), agreement at the Federal Tax Service a company can order a (LLC) a temporary bank account is transformed into and minutes of meeting. The minutes of meeting seal at any seal producer. To do so, it is necessary to a permanent bank account. To do so, it is necessary should indicate that the founders entrust their show the following documents: certificate of state to submit to a bank the documents received in representative (indicate name) to open a temporary registration, certificate of taxpayer registration, an procedure No.4 as well as a copy of an information bank account, deposit charter capital and receive the excerpt from the Unified State Register of Legal letter from the statistics service, an order appointing money back in case the registration does not happen. Entities. The price of a seal depends on its model and a chief accountant or an order authorizing the head The charter capital can be in a noncash form - a complexity of production. In Kirov a seal costs 1,000 of the company to act as chief accountant, an order common practice. (Law on LLC, Article 15). rubles on average. appointing a director. An additional agreement about opening a bank account is signed and a bank Procedure 3*. Pay registration fee for state Procedure 6. Open the company bank card with samples of signatures of the head of the registration in a bank and get proof thereof account company and the chief accountant and the seal print Time: 1 day Time: 2 days is prepared. Cost of opening of a bank account varies Cost: RUB 1,000 and depends upon each bank. Sometimes banks have Cost: No cost (included in procedure of state registra- special offers for small and medium-size enterprises tion at the Federal Tax Service) Comments: On state registration of a legal entity and do not charge for opening accounts. The average Comments: The registration fee of 4,000 rubles (LLC) a temporary bank account is transformed into cost of opening a bank account in Khabarovsk is must be paid before documents are submitted for a permanent bank account. To do so, it is necessary 4,000 rubles. registration. The registration fee doubled from 2,000 to submit to a bank the documents received in rubles to 4,000 rubles in January 2011. procedure No.4 as well as a copy of an information Procedure 8*. Inform the Federal Tax letter from the statistics service, an order appointing Service, the Pension Fund and the Social Procedure 4. Submit documents for a chief accountant or an order authorizing the head Insurance Fund of the company bank registration of a legal entity to one-stop of the company to act as chief accountant, an order account number shop at the Federal Tax Service and obtain appointing a director. An additional agreement Time: 1 day registration documents about opening a bank account is signed and a bank card with samples of signatures of the head of the Cost: No cost Time: 23 days Cost: RUB 4,000 company and the chief accountant and the seal print is prepared. Cost of opening of a bank account varies

* This procedure can be completed simultaneously with previous procedures. 58 DOING BUSINESS IN RUSSIA 2012

and depends upon each bank. Sometimes banks have Procedure 4. Register with the unified Procedure 8. Inform Federal Tax Service of special offers for small and medium-size enterprises register at the Federal Tax Service on the the company bank account number and do not charge for opening accounts. The average local level, to obtain the single number Time: 1 day cost of opening a bank account in Kirov is 1,000 of state registration and the number of Cost: No cost rubles. tax registration (identification number of taxpayer, INN) Comments: The representative of the newly founded Procedure 7. Inform the Federal Tax Service, company has to submit a notification (a standard the Pension Fund and the Social Insurance Time: 18 days form) in person or by mail to the Federal Tax Service Fund of the company bank account number Cost: RUB 4,000 giving notice of the opening of the bank account. Time: 1 day Comments: Documents required for registration: In addition, banks have the obligation to notify the Cost: No cost - Decision of the founders meeting; Pension Fund and the Social Insurance Fund of the opening of the bank account of a new legal entity. Comments: A taxpayer within 7 days of opening - Charter (2 copies); a bank account notify the Federal Tax Service, - Registration Application, notarized; Procedure 9. Register the company with the Pension Fund and the Social Insurance Fund. - Payment receipt. Moscow Center of Quotation of Work Notifications of required format with the bank The tax authorities sometimes implement a number Places account number an applicant either mails or brings of requirements, and failure to comply may lead to Time: 1 day personally. In the latter case a secretariat puts a the rejection of the application. In addition, recently Cost: No cost mark on the second copy that information has been the tax authorities stopped issuing the original of received. Banks also inform the Federal Tax Service Comments: All companies and individual entre- the Charter (Articles of Association) which is filed about opening bank accounts. preneurs employing personnel are required to be for state registration. Only a certified copy is issued. registered with the Moscow Center of Quotation of STARTING A BUSINESS As a result, if the company has to file the copy of Work Places having its local departments in each Moscow the Charter with any other state authorities, another district of Moscow irrespective of whether such copy of the Charter has to be requested by the tax companies are obliged to comply with the quotas (if Standard company legal form: Limited Liability Company authorities every time. The copy is usually issued the staff represents more than 100 persons) or not. (LLC) within 5 working days and requires a payment of RUR Minimum capital requirement: RUB 5,000 (US$ 162) 200 or RUR 400. STARTING A BUSINESS Data as of: November 2011 Murmansk, Murmansk Oblast Procedure 5. Notarize Bank Signature Card Standard company legal form: Limited Liability Company Procedure 1. Notarize registration Time: 1 day application and agreement on (LLC) Cost: RUB 1,200 RUB 400 (signatures and bank card) Minimum capital requirement: RUB 5,000 (US$ 162) establishment of a company + RUR 800 (notary fees) Data as of: November 2011 Time: 1 day Comments: For a limited liability company with 50 Cost: RUB 200 (RUB 200 per copy) employees, generally the General director and Chief Procedure 1. Notarize signature on Comments: Copy of the agreement of establishment accountant have a signature right. application for state registration of a legal of a company and the filled out and signed registra- Required documents: entity tion application must also be notarized. - Registration certificate, notarized must be original Time: 1 day Procedure 2. Deposit capital in the bank document ; Cost: RUB 450 (200 rubles state duty + 250 rubles and get proof thereof - Taxpayer Identification Number (INN) certificate, notary fees) Time: 1 day notarized must be original document; Comments: In accordance with the Federal Law of Cost: No cost - Charter, originals or notarized copies notarized; August 8, 2001 No. 129-FZ “On State Registration of Legal Entities and Individual Entrepreneurs”, a Comments: At least 50% of the charter capital shall - Documents confirming authority of the signatories signature on application for state registration of a be paid before company incorporation. The balance (decision on the founders on appointment/election company must be notarized. Application should must be paid in the first year of operation. In order of the Director etc.), notarized. be signed by a director of a company or other to open a bank account the following documents - Signature card with the print of the seal - notarized authorized person. The following documents should are required: (i) application form, notarized copy be submitted to the notary: minutes of meeting of the charter; (ii) notarized copy of the decision of Procedure 6. Make a seal in a private of founders on establishment of a limited liability establishment of the limited liability company; and company in order to open a bank account company, charter (draft), passport of applicant who (iii) notarized copy of the foundation agreement. The Time: 1 day signs the application, application (form R11001). The deposit of the capital requires opening an accumula- Cost: RUB 928 cost of notarization varies. In Murmansk the cost is tive bank account for the name of the entity which is Comments: The company need to make a company 450 rubles. not created yet. Depending on the bank, opening an seal before it opens a bank account. account may take more than 1 day mostly because of Procedure 2*. Open a temporary bank bank’s client acceptance procedures. Procedure 7. Open the company bank account and deposit part of charter capital Procedure 3. Pay registration fee account Time: 1 day Time: 1 day Time: 5 days Cost: No cost Cost: No cost Cost: No cost nominal Comments: At least 50% of the charter capital must be paid before company incorporation. The balance Comments: The registration fee must be paid for Comments: Banks may require documents related must be paid during the first year of operation. To the registration of the legal entity with the State to the founders of the newly established company deposit charter capital a temporary bank account Tax Inspectorate. Many applicants use Sberbank and investigate the founder’s history and its financial should be opened. Time, cost and number of required for paying the registration fee as the tax authorities status. Requirements in terms of client acceptance documents might vary depending on the bank. are familiar will the payment order issued by the procedure vary depending on the bank. The bank The following documents are required to open a Sberbank and in case of the payment order issued by finally provides the entrepreneur with a confirmation temporary bank account: charter (draft), agreement any other banks may request some additional confir- letter that contains details about the bank account. and minutes of meeting. The minutes of meeting mation that the payment was actually completed. The The entrepreneur needs this information to inform should indicate that the founders entrust their registration fee of RUR 4,000 shall be transferred to the Federal Tax Service about the opening of a bank representative (indicate name) to open a temporary the account of the State Tax Inspectorate. account through the required notification. bank account, deposit charter capital and receive the money back in case the registration does not happen.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 59

The charter capital can be in a noncash form - a complexity of production. In Murmansk a seal costs Procedure 2*. Open a temporary bank common practice. (Law on LLC, Article 15). 800 rubles on average. account and deposit part of charter capital Procedure 3*. Pay registration fee for state Procedure 6. Open the company bank Time: 1 day registration in a bank and get proof thereof account Cost: No cost Time: 1 day Time: 1 day Comments: At least 50% of the charter capital must Cost: No cost (included in procedure of state registra- Cost: RUB 1,500 be paid before company incorporation. The balance must be paid during the first year of operation. To tion at the Federal Tax Service) Comments: On state registration of a legal entity deposit charter capital a temporary bank account Comments: The registration fee of 4,000 rubles (LLC) a temporary bank account is transformed into should be opened. Time, cost and number of required must be paid before documents are submitted for a permanent bank account. To do so, it is necessary documents might vary depending on the bank. registration. The registration fee doubled from 2,000 to submit to a bank the documents received in The following documents are required to open a rubles to 4,000 rubles in January 2011. procedure No.4 as well as a copy of an information temporary bank account: charter (draft), agreement letter from the statistics service, an order appointing and minutes of meeting. The minutes of meeting Procedure 4. Submit documents for a chief accountant or an order authorizing the head should indicate that the founders entrust their registration of a legal entity to one-stop of the company to act as chief accountant, an order representative (indicate name) to open a temporary shop at the Federal Tax Service and obtain appointing a director. An additional agreement bank account, deposit charter capital and receive the registration documents about opening a bank account is signed and a bank money back in case the registration does not happen. Time: 20 days card with samples of signatures of the head of the The charter capital can be in a noncash form - a company and the chief accountant and the seal print Cost: RUB 4,000 common practice. (Law on LLC, Article 15). Comments: State registration of a legal entity at is prepared. Cost of opening of a bank account varies the Federal Tax Service includes a data entry in the and depends upon each bank. Sometimes banks have Procedure 3*. Pay registration fee for state Unified State Register of Legal Entities and a taxpayer special offers for small and medium-size enterprises registration in a bank and get proof thereof registration. and do not charge for opening accounts. The average Time: 1 day cost of opening a bank account in Murmansk is 1,500 The following documents are required: Cost: No cost (included in procedure of state registra- rubles. (1) Application for state registration of a legal entity tion at the Federal Tax Service) (form R11001), Procedure 7. Inform the Federal Tax Service, Comments: The registration fee of 4,000 rubles (2) Minutes of a meeting establishing a legal entity, the Pension Fund and the Social Insurance must be paid before documents are submitted for Fund of the company bank account number registration. The registration fee doubled from 2,000 (3) Charter of a limited liability company (2 copies), Time: 1 day rubles to 4,000 rubles in January 2011. (4) Receipt confirming payment of a state duty. Cost: No cost An applicant receives a receipt confirming a list of Procedure 4. Submit documents for documents and date of submission. State registration Comments: A taxpayer within 7 days of opening registration of a legal entity to one-stop is conducted no more than 5 working days after a bank account notify the Federal Tax Service, shop at the Federal Tax Service and obtain documents are submitted. the Pension Fund and the Social Insurance Fund. registration documents Notifications of required format with the bank On the 6th working day the applicant receives the Time: 9 days account number an applicant either mails or brings following documents confirming state registration of Cost: RUB 4,000 personally. In the latter case a secretariat puts a a legal entity: mark on the second copy that information has been Comments: State registration of a legal entity at (1) Certificate of state registration of a legal entity in received. Banks also inform the Federal Tax Service the Federal Tax Service includes a data entry in the the Unified State Register of Legal Entities with about opening bank accounts. Unified State Register of Legal Entities and a taxpayer assigned main state registration number, registration. STARTING A BUSINESS (2) Certificate as a taxpayer with assigned individual The following documents are required: number of a taxpayer, Novosibirsk, Novosibirsk Oblast (1) Application for state registration of a legal entity (3) Excerpt from the Unified State Register of Legal Standard company legal form: Limited Liability Company (form R11001), Entities, (LLC) (2) Minutes of a meeting establishing a legal entity, (4) Copy of the charter certified by the Federal Tax Minimum capital requirement: RUB 5,000 (US$ 162) (3) Charter of a limited liability company (2 copies), Service. Data as of: November 2011 (4) Receipt confirming payment of a state duty. The Federal Tax Service sends information from the An applicant receives a receipt confirming a list of Unified State Register of Legal Entities to the Pension Procedure 1. Notarize signature on documents and date of submission. State registration Fund, Mandatory Medical Insurance Fund, Social application for state registration of a legal is conducted no more than 5 working days after Insurance Fund and Federal Service of State Statistics, entity documents are submitted. which register the company within 5 working days Time: 1 day from when they receive information from the Federal On the 6th working day the applicant receives the Tax Service and mail their registration certificates to Cost: RUB 500 (200 rubles state duty + 300 rubles following documents confirming state registration of the legal address of the company. notary fees) a legal entity: The state duty for state registration of a legal entity Comments: In accordance with the Federal Law of (1) Certificate of state registration of a legal entity in increased in January 2011 to 4,000 rubles (The Tax August 8, 2001 No. 129-FZ “On State Registration the Unified State Register of Legal Entities with Code, Article 333.33). of Legal Entities and Individual Entrepreneurs”, a assigned main state registration number, signature on application for state registration of a (2) Certificate as a taxpayer with assigned individual Procedure 5*. Order and obtain a company company must be notarized. Application should number of a taxpayer, be signed by a director of a company or other seal (3) Excerpt from the Unified State Register of Legal authorized person. The following documents should Entities, Time: 1 day be submitted to the notary: minutes of meeting Cost: RUB 800 of founders on establishment of a limited liability (4) Copy of the charter certified by the Federal Tax Comments: After obtaining registration documents company, charter (draft), passport of applicant who Service. at the Federal Tax Service a company can order a signs the application, application (form R11001). The The Federal Tax Service sends information to the seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Novosibirsk the cost is Pension Fund, Mandatory Medical Insurance Fund, show the following documents: certificate of state 500 rubles. Social Insurance Fund and Federal Service of State registration, certificate of taxpayer registration, an Statistics which register the company. excerpt from the Unified State Register of Legal Entities. The price of a seal depends on its model and

* This procedure can be completed simultaneously with previous procedures. 60 DOING BUSINESS IN RUSSIA 2012

The state duty for state registration of a legal entity copies of registration documents and signatures on a Comments: At least 50% of the charter capital must increased in January 2011 to 4,000 rubles (The Tax bank card themselves. be paid before company incorporation. The balance Code, Article 333.33). must be paid during the first year of operation. To Procedure 10. Open the company bank deposit charter capital a temporary bank account Procedure 5. Obtain confirmation with account should be opened. Time, cost and number of required statistics codes at the Federal Service of Time: 1 day documents might vary depending on the bank. State Statistics Cost: RUB 1,000 The following documents are required to open a Time: 1 day Comments: On state registration of a legal entity temporary bank account: charter (draft), agreement and minutes of meeting. The minutes of meeting Cost: No cost (LLC) a temporary bank account is transformed into a permanent bank account. To do so, it is necessary to should indicate that the founders entrust their Comments: After receipt of registration documents at submit to a bank the documents received in procedure representative (indicate name) to open a temporary the Federal Tax Service the applicant can immediately No.4 as well as a copy of an information letter from bank account, deposit charter capital and receive the go to Rosstat, show the registration documents the statistics service, an order appointing a chief money back in case the registration does not happen. and obtain the statistics registration with assigned accountant or an order authorizing the head of the The charter capital can be in a noncash form - a statistics codes or wait for mail delivery. Applicants company to act as chief accountant, an order appoint- common practice. (Law on LLC, Article 15). prefer to pick up the registration certificates in ing a director. An additional agreement about opening Rosstat personally. Procedure 3*. Pay registration fee for state a bank account is signed and a bank card with samples registration in a bank and get proof thereof Procedure 6*. Obtain confirmation of of signatures of the head of the company and the chief registration at the Social Insurance Fund accountant and the seal print is prepared. Cost of Time: 1 day Cost: No cost (included in procedure of state Time: 5 days opening of a bank account varies and depends upon each bank. Sometimes banks have special offers for registration at the Federal Tax Service) Cost: No cost small and medium-size enterprises and do not charge Comments: The registration fee of 4,000 rubles Comments: The Federal Tax Service electronically for opening accounts. The average cost of opening a must be paid before documents are submitted for sends information about the new company to the bank account in Novosibirsk is 1,000 rubles. registration. The registration fee doubled from 2,000 Social Insurance Fund on the day of the state rubles to 4,000 rubles in January 2011. registration. Then Social Insurance Fund within 5 days Procedure 11. Inform the Federal Tax registers the company. Social Insurance Fund mails Service, the Pension Fund and the Social Procedure 4. Submit documents for the registration certificate if the company doesn’t pick Insurance Fund of the company bank registration of a legal entity to one-stop it up personally. account number shop at the Federal Tax Service and obtain registration documents Procedure 7*. Obtain confirmation of Time: 1 day registration at the Pension Fund Cost: No cost Time: 18 days Cost: RUB 4,000 Time: 5 days Comments: A taxpayer within 7 days of opening a bank account notify the Federal Tax Service, Comments: State registration of a legal entity at Cost: No cost the Pension Fund and the Social Insurance Fund. the Federal Tax Service includes a data entry in the Comments: On the day of state registration the Notifications of required format with the bank Unified State Register of Legal Entities and a taxpayer Federal Tax Service electronically sends information account number an applicant either mails or brings registration. about the new company to the Pension Fund. Then personally. In the latter case a secretariat puts a The following documents are required: the Pension Fund within 5 days registers the company mark on the second copy that information has been and mails the registration certificate if the company (1) Application for state registration of a legal entity received. Banks also inform the Federal Tax Service (form R11001), has not picked it up personally. about opening bank accounts. Since January 1, 2011 the Pension Fund has performed (2) Minutes of a meeting establishing a legal entity, the function of the Mandatory Medical Insurance STARTING A BUSINESS (3) Charter of a limited liability company (2 copies), Fund on registration (in accordance with the federal Omsk, Omsk Oblast (4) Receipt confirming payment of a state duty. law “On Mandatory Medical Insurance in the Russian Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Federation” of November 29, 2010 No 326-FZ, (LLC) documents and date of submission. State registration Article 17). Minimum capital requirement: RUB 5,000 (US$ 162) is conducted no more than 5 working days after documents are submitted. Data as of: November 2011 Procedure 8*. Order and obtain a company On the 6th working day the applicant receives the seal Procedure 1. Notarize signature on following documents confirming state registration of Time: 1 day application for state registration of a legal a legal entity: Cost: RUB 500 entity (1) Certificate of state registration of a legal entity in Comments: After obtaining registration documents Time: 1 day the Unified State Register of Legal Entities with assigned main state registration number, at the Federal Tax Service a company can order a Cost: RUB 300 (200 rubles state duty + 100 rubles seal at any seal producer. To do so, it is necessary to notary fees) (2) Certificate as a taxpayer with assigned individual show the following documents: certificate of state number of a taxpayer, registration, certificate of taxpayer registration, an Comments: In accordance with the Federal Law of August 8, 2001 No. 129-FZ “On State Registration (3) Excerpt from the Unified State Register of Legal excerpt from the Unified State Register of Legal Entities, Entities. The price of a seal depends on its model and of Legal Entities and Individual Entrepreneurs,” a (4) Copy of the charter certified by the Federal Tax complexity of production. In Novosibirsk a seal costs signature on application for state registration of a Service. 500 rubles on average. company must be notarized. Application should be signed by a director of a company or other authorized The Federal Tax Service sends electronically Procedure 9. Notarize documents person. The following documents should be submit- information to the Pension Fund, Mandatory Medical for opening a bank account including ted to the notary: minutes of meeting of founders Insurance Fund, Social Insurance Fund and Federal signatures on a bank card on establishment of a limited liability company, Service of State Statistics, which register the Time: 1 day charter (draft), passport of applicant who signs the company within 3-5 days from when they receive application, application (form R11001). The cost of Cost: RUB 1,020 information from the Federal Tax Service and mail notarization varies. In Omsk the cost is 300 rubles. their registration certificates to the legal address of Comments: To open a bank account, notarized copies the company. of documents confirming the registration of a new Procedure 2*. Open a temporary bank company are required, along with notarization of account and deposit part of charter capital The state duty for state registration of a legal entity increased in January 2011 to 4,000 rubles (The Tax signatures of authorized company representatives Time: 1 day Code, Article 333.33). on a bank card. As an alternative, some banks certify Cost: No cost

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 61

Procedure 5*. Order and obtain a company STARTING A BUSINESS (3) Charter of a limited liability company (2 copies), seal Perm, Perm Kray (4) Receipt confirming payment of a state duty. Time: 1 day Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Cost: RUB 500 (LLC) documents and date of submission. State registration is conducted no more than 5 working days after Comments: After obtaining registration documents Minimum capital requirement: RUB 5,000 (US$ 162) at the Federal Tax Service a company can order a documents are submitted. Data as of: November 2011 seal at any seal producer. To do so, it is necessary to On the 6th working day the applicant receives the show the following documents: certificate of state Procedure 1. Notarize signature on following documents confirming state registration of registration, certificate of taxpayer registration, an application for state registration of a legal a legal entity: excerpt from the Unified State Register of Legal entity (1) Certificate of state registration of a legal entity in Entities. The price of a seal depends on its model and the Unified State Register of Legal Entities with Time: 1 day complexity of production. In Omsk a seal costs 500 assigned main state registration number, Cost: RUB 600 (200 rubles state duty + 400 rubles rubles on average. (2) Certificate as a taxpayer with assigned individual notary fees) number of a taxpayer, Procedure 6. Notarize documents Comments: In accordance with the Federal Law of (3) Excerpt from the Unified State Register of Legal for opening a bank account including August 8, 2001 No. 129-FZ “On State Registration Entities, signatures on a bank card of Legal Entities and Individual Entrepreneurs,” a Time: 1 day signature on application for state registration of a (4) Copy of the charter certified by the Federal Tax Service. Cost: RUB 1,100 company must be notarized. Application should be signed by a director of a company or other authorized The Federal Tax Service sends electronically Comments: To open a bank account, notarized copies person. The following documents should be submit- information to the Pension Fund, Mandatory Medical of documents confirming the registration of a new ted to the notary: minutes of meeting of founders Insurance Fund, Social Insurance Fund and Federal company are required, along with notarization of on establishment of a limited liability company, Service of State Statistics, which register the signatures of authorized company representatives charter (draft), passport of applicant who signs the company and mail their registration certificates to the on a bank card. As an alternative, some banks certify application, application (form R11001). The cost of legal address of the company. copies of registration documents and signatures on a notarization varies. In Perm the cost is 600 rubles. bank card themselves. The state duty for state registration of a legal entity Procedure 2*. Open a temporary bank increased in January 2011 to 4,000 rubles (The Tax Procedure 7. Open the company bank Code, Article 333.33). account account and deposit part of charter capital Time: 1 day Time: 2 days Procedure 5*. Order and obtain a company Cost: No cost Cost: RUB 1,000 seal Comments: At least 50% of the charter capital must Comments: On state registration of a legal entity Time: 1 day be paid before company incorporation. The balance (LLC) a temporary bank account is transformed into a Cost: RUB 700 must be paid during the first year of operation. To permanent bank account. To do so, it is necessary to Comments: After obtaining registration documents deposit charter capital a temporary bank account submit to a bank the documents received in procedure at the Federal Tax Service a company can order a should be opened. Time, cost and number of required No.4 as well as a copy of an information letter from seal at any seal producer. To do so, it is necessary to documents might vary depending on the bank. the statistics service, an order appointing a chief show the following documents: certificate of state The following documents are required to open a accountant or an order authorizing the head of the registration, certificate of taxpayer registration, an temporary bank account: charter (draft), agreement company to act as chief accountant, an order appoint- excerpt from the Unified State Register of Legal and minutes of meeting. The minutes of meeting ing a director. An additional agreement about opening Entities. The price of a seal depends on its model and should indicate that the founders entrust their a bank account is signed and a bank card with samples complexity of production. In XXX a seal costs 700 representative (indicate name) to open a temporary of signatures of the head of the company and the chief rubles on average. bank account, deposit charter capital and receive the accountant and the seal print is prepared. Cost of money back in case the registration does not happen. opening of a bank account varies and depends upon Procedure 6. Open the company bank The charter capital can be in a noncash form - a each bank. Sometimes banks have special offers for account common practice. (Law on LLC, Article 15). small and medium-size enterprises and do not charge Time: 3 days for opening accounts. The average cost of opening a Procedure 3*. Pay registration fee for state Cost: RUB 1,500 bank account in Omsk is 1,000 rubles. registration in a bank and get proof thereof Comments: On state registration of a legal entity Procedure 8. Inform the Federal Tax Time: 1 day (LLC) a temporary bank account is transformed into a Service, the Pension Fund and the Social Cost: No cost (included in procedure of state permanent bank account. To do so, it is necessary to Insurance Fund of the company bank registration at the Federal Tax Service) submit to a bank the documents received in procedure No.4 as well as a copy of an information letter from account number Comments: The registration fee of 4,000 rubles the statistics service, an order appointing a chief Time: 1 day must be paid before documents are submitted for accountant or an order authorizing the head of the registration. The registration fee doubled from 2,000 Cost: No cost company to act as chief accountant, an order appoint- rubles to 4,000 rubles in January 2011. Comments: A taxpayer within 7 days of opening ing a director. An additional agreement about opening a bank account notify the Federal Tax Service, Procedure 4. Submit documents for a bank account is signed and a bank card with samples the Pension Fund and the Social Insurance Fund. registration of a legal entity to one-stop of signatures of the head of the company and the chief Notifications of required format with the bank shop at the Federal Tax Service and obtain accountant and the seal print is prepared. Cost of account number an applicant either mails or brings registration documents opening of a bank account varies and depends upon personally. In the latter case a secretariat puts a Time: 18 days each bank. Sometimes banks have special offers for mark on the second copy that information has been small and medium-size enterprises and do not charge received. Banks also inform the Federal Tax Service Cost: RUB 4,000 for opening accounts. The average cost of opening a about opening bank accounts. Comments: State registration of a legal entity at bank account in Perm is 1,500 rubles. the Federal Tax Service includes a data entry in the Unified State Register of Legal Entities and a taxpayer Procedure 7. Inform the Federal Tax Service, registration. the Pension Fund and the Social Insurance The following documents are required: Fund of the company bank account number (1) Application for state registration of a legal entity Time: 1 day (form R11001), Cost: No cost (2) Minutes of a meeting establishing a legal entity,

* This procedure can be completed simultaneously with previous procedures. 62 DOING BUSINESS IN RUSSIA 2012

Comments: A taxpayer within 7 days of opening Cost: RUB 4,000 and depends upon each bank. Sometimes banks have a bank account notify the Federal Tax Service, Comments: State registration of a legal entity at special offers for small and medium-size enterprises the Pension Fund and the Social Insurance Fund. the Federal Tax Service includes a data entry in the and do not charge for opening accounts. The average Notifications of required format with the bank Unified State Register of Legal Entities and a taxpayer cost of opening a bank account in Petrozavodsk is account number an applicant either mails or brings registration. 1,500 rubles. personally. In the latter case a secretariat puts a The following documents are required: mark on the second copy that information has been received. Banks also inform the Federal Tax Service (1) Application for state registration of a legal entity Procedure 7. Inform the Federal Tax Service, about opening bank accounts. (form R11001), the Pension Fund and the Social Insurance (2) Minutes of a meeting establishing a legal entity, Fund of the company bank account number STARTING A BUSINESS (3) Charter of a limited liability company (2 copies), Time: 1 day Petrozavodsk, Republic of Karelia (4) Receipt confirming payment of a state duty. Cost: No cost Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Comments: A taxpayer within 7 days of opening (LLC) documents and date of submission. State registration a bank account notify the Federal Tax Service, Minimum capital requirement: RUB 5,000 (US$ 162) is conducted no more than 5 working days after the Pension Fund and the Social Insurance Fund. documents are submitted. Data as of: November 2011 Notifications of required format with the bank On the 6th working day the applicant receives the account number an applicant either mails or brings Procedure 1. Notarize signature on following documents confirming state registration of personally. In the latter case a secretariat puts a application for state registration of a legal a legal entity: mark on the second copy that information has been entity (1) Certificate of state registration of a legal entity in received. Banks also inform the Federal Tax Service Time: 1 day the Unified State Register of Legal Entities with about opening bank accounts. Cost: RUB 400 (200 rubles state duty + 200 rubles assigned main state registration number, STARTING A BUSINESS (2) Certificate as a taxpayer with assigned individual notary fees) Rostov-on-Don, Rostov Oblast Comments: In accordance with the Federal Law of number of a taxpayer, August 8, 2001 No. 129-FZ “On State Registration (3) Excerpt from the Unified State Register of Legal Standard company legal form: Limited Liability Company of Legal Entities and Individual Entrepreneurs,” a Entities, (LLC) signature on application for state registration of a (4) Copy of the charter certified by the Federal Tax Minimum capital requirement: RUB 5,000 (US$ 162) company must be notarized. Application should be Service. Data as of: November 2011 signed by a director of a company or other authorized Within 5 working days from the moment of state Procedure 1. Notarize signature on person. The following documents should be submitted registration the Federal Tax Service sends electroni- application for state registration of a legal to the notary: minutes of meeting of founders on cally information to the Pension Fund, Mandatory entity establishment of a limited liability company, charter Medical Insurance Fund, Social Insurance Fund and (draft), passport of applicant who signs the application, Federal Service of State Statistics, which register the Time: 1 day application (form R11001). The cost of notarization company and mail their registration certificates to Cost: RUB 250 (200 rubles state duty + 50 rubles varies. In Petrozavodsk the cost is 400 rubles. the legal address of the company. notary fees) Procedure 2*. Open a temporary bank The state duty for state registration of a legal entity Comments: In accordance with the Federal Law of account and deposit part of charter capital increased in January 2011 to 4,000 rubles (The Tax August 8, 2001 No. 129-FZ “On State Registration Time: 1 day Code, Article 333.33). of Legal Entities and Individual Entrepreneurs”, a signature on application for state registration of a Cost: No cost Procedure 5*. Order and obtain a company company must be notarized. Application should Comments: At least 50% of the charter capital must seal be signed by a director of a company or other be paid before company incorporation. The balance Time: 1 day authorized person. The following documents should must be paid during the first year of operation. To be submitted to the notary: minutes of meeting Cost: RUB 800 deposit charter capital a temporary bank account of founders on establishment of a limited liability should be opened. Time, cost and number of required Comments: After obtaining registration documents company, charter (draft), passport of applicant who documents might vary depending on the bank. at the Federal Tax Service a company can order a signs the application, application (form R11001). The The following documents are required to open a seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Rostov-on-Don the cost temporary bank account: charter (draft), agreement show the following documents: certificate of state is 250 rubles. and minutes of meeting. The minutes of meeting registration, certificate of taxpayer registration, an should indicate that the founders entrust their excerpt from the Unified State Register of Legal Procedure 2*. Open a temporary bank representative (indicate name) to open a temporary Entities. The price of a seal depends on its model and account and deposit part of charter capital bank account, deposit charter capital and receive the complexity of production. In Perm a seal costs 800 Time: 1 day money back in case the registration does not happen. rubles on average. Cost: No cost The charter capital can be in a noncash form - a Comments: At least 50% of the charter capital must common practice. (Law on LLC, Article 15). Procedure 6. Open the company bank account be paid before company incorporation. The balance Procedure 3*. Pay registration fee for state Time: 1 day must be paid during the first year of operation. To deposit charter capital a temporary bank account registration in a bank and get proof thereof Cost: RUB 1,500 Time: 1 day should be opened. Time, cost and number of required Comments: On state registration of a legal entity documents might vary depending on the bank. Cost: No cost (included in procedure of state (LLC) a temporary bank account is transformed into The following documents are required to open a registration at the Federal Tax Service) a permanent bank account. To do so, it is necessary temporary bank account: charter (draft), agreement Comments: The registration fee of 4,000 rubles to submit to a bank the documents received in and minutes of meeting. The minutes of meeting must be paid before documents are submitted for procedure No.4 as well as a copy of an information should indicate that the founders entrust their registration. The registration fee doubled from 2,000 letter from the statistics service, an order appointing representative (indicate name) to open a temporary rubles to 4,000 rubles in January 2011. a chief accountant or an order authorizing the head bank account, deposit charter capital and receive the of the company to act as chief accountant, an order money back in case the registration does not happen. Procedure 4. Submit documents for appointing a director. An additional agreement registration of a legal entity to one-stop The charter capital can be in a noncash form - a about opening a bank account is signed and a bank common practice. (Law on LLC, Article 15). shop at the Federal Tax Service and obtain card with samples of signatures of the head of the registration documents company and the chief accountant and the seal print Time: 18 days is prepared. Cost of opening of a bank account varies

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 63

Procedure 3*. Pay registration fee for state Cost: No cost Procedure 11. Inform the Federal Tax registration in a bank and get proof thereof Comments: On completion of state registration at Service, the Pension Fund and the Social Time: 1 day the Federal Tax Service the applicant can personally Insurance Fund of the company bank Cost: No cost (included in procedure of state registra- go to the Social Insurance Fund, show the registration account number tion at the Federal Tax Service) documents obtained at the Federal Tax Service and Time: 1 day receive the registration certificate. Comments: The registration fee of 4,000 rubles Cost: No cost must be paid before documents are submitted for Procedure 7*. Obtain confirmation of Comments: A taxpayer within 7 days of opening registration. The registration fee doubled from 2,000 registration at the Pension Fund a bank account notify the Federal Tax Service, rubles to 4,000 rubles in January 2011. Time: 1 day the Pension Fund and the Social Insurance Fund. Notifications of required format with the bank Cost: No cost Procedure 4. Submit documents for account number an applicant either mails or brings registration of a legal entity to one-stop Comments: On completion of state registration of the personally. In the latter case a secretariat puts a shop at the Federal Tax Service and obtain new company at the Federal Tax Service the applicant mark on the second copy that information has been registration documents can personally go to the Pension Fund, show docu- received. Banks also inform the Federal Tax Service Time: 8 days ments of state registration obtained at the Federal Tax about opening bank accounts. Cost: RUB 4,000 Service and receive the certificate of registration at the Pension Fund. STARTING A BUSINESS Comments: State registration of a legal entity at the Federal Tax Service includes a data entry in the Procedure 8*. Order and obtain a company Saint-Petersburg Unified State Register of Legal Entities and a taxpayer seal Standard company legal form: Limited Liability Company registration. Time: 2 days (LLC) The following documents are required: Cost: RUB 525 Minimum capital requirement: RUB 5,000 (US$ 162) (1) Application for state registration of a legal entity Comments: After obtaining registration documents Data as of: November 2011 (form R11001), at the Federal Tax Service a company can order a Procedure 1. Notarize signature on (2) Minutes of a meeting establishing a legal entity, seal at any seal producer. To do so, it is necessary to application for state registration of a legal show the following documents: certificate of state (3) Charter of a limited liability company (2 copies), entity (4) Receipt confirming payment of a state duty. registration, certificate of taxpayer registration, an excerpt from the Unified State Register of Legal Time: 1 day An applicant receives a receipt confirming a list of Entities. The price of a seal depends on its model and Cost: RUB 400 (200 rubles state duty + 200 rubles documents and date of submission. complexity of production. In Rostov-on-Don a seal notary fees) At the end of the registration period an applicant costs 525 on average. Comments: In accordance with the Federal Law of receives the following documents confirming state August 8, 2001 No. 129-FZ “On State Registration registration of a legal entity: Procedure 9. Notarize documents for opening a bank account including of Legal Entities and Individual Entrepreneurs”, a (1) Certificate of state registration of a legal entity in signature on application for state registration of a signatures on a bank card the Unified State Register of Legal Entities with company must be notarized. Application should assigned main state registration number, Time: 1 day be signed by a director of a company or other (2) Certificate as a taxpayer with assigned individual Cost: RUB 1,200 authorized person. The following documents should number of a taxpayer, Comments: To open a bank account, notarized copies be submitted to the notary: minutes of meeting (3) Excerpt from the Unified State Register of Legal of documents confirming the registration of a new of founders on establishment of a limited liability Entities, company are required, along with notarization of company, charter (draft), passport of applicant who (4) Copy of the charter certified by the Federal Tax signatures of authorized company representatives signs the application, application (form R11001). The Service. on a bank card. As an alternative, some banks certify cost of notarization varies. In Saint Petersburg the cost is 400 rubles. The Federal Tax Service sends information to the copies of registration documents and signatures on a Pension Fund, Mandatory Medical Insurance Fund, bank card themselves. Procedure 2*. Open a temporary bank Social Insurance Fund and Federal Service of State Procedure 10. Open the company bank account and deposit part of charter capital Statistics, which register the company within 3-5 account Time: 1 day working days from when they receive information from the Federal Tax Service. Time: 1 day Cost: No cost The state duty for state registration of a legal entity Cost: RUB 1,750 Comments: At least 50% of the charter capital must increased in January 2011 to 4,000 rubles (The Tax Comments: On state registration of a legal entity be paid before company incorporation. The balance Code, Article 333.33). (LLC) a temporary bank account is transformed into must be paid during the first year of operation. To a permanent bank account. To do so, it is necessary deposit charter capital a temporary bank account Procedure 5. Obtain confirmation with to submit to a bank the documents received in should be opened. Time, cost and number of required statistics codes at the Federal Service of procedure No.4 as well as a copy of an information documents might vary depending on the bank. State Statistics letter from the statistics service, an order appointing The following documents are required to open a a chief accountant or an order authorizing the head temporary bank account: charter (draft), agreement Time: 7 days of the company to act as chief accountant, an order and minutes of meeting. The minutes of meeting Cost: No cost appointing a director. An additional agreement should indicate that the founders entrust their Comments: Within 3-5 working days after state about opening a bank account is signed and a bank representative (indicate name) to open a temporary registration the Federal Tax Service sends information card with samples of signatures of the head of the bank account, deposit charter capital and receive the about the new company to Rosstat for registration. company and the chief accountant and the seal print money back in case the registration does not happen. Then the registration certificate with assigned is prepared. Cost of opening of a bank account varies The charter capital can be in a noncash form - a statistics codes can be mailed to the legal address of and depends upon each bank. Sometimes banks have common practice. (Law on LLC, Article 15). the new company but in practice entrepreneurs prefer special offers for small and medium-size enterprises Procedure 3*. Pay registration fee for state to pick up the registration certificates in Rosstat and do not charge for opening accounts. The average registration in a bank and get proof thereof personally in order to avoid delays and losing the cost of opening a bank account in Rostov-on-Don is letter during mail delivery. 1,750 rubles. Time: 1 day Cost: No cost (included in procedure of state registra- Procedure 6*. Obtain confirmation of tion at the Federal Tax Service) registration at the Social Insurance Fund Comments: The registration fee of 4,000 rubles Time: 1 day must be paid before documents are submitted for

* This procedure can be completed simultaneously with previous procedures. 64 DOING BUSINESS IN RUSSIA 2012

registration. The registration fee doubled from 2,000 of production. In Saint Petersburg a seal costs 400 Procedure 2*. Open a temporary bank rubles to 4,000 rubles in January 2011. In Saint rubles on average. account and deposit part of charter capital Petersburg it is possible to pay the state duty at the Time: 1 day payment terminals located at the Federal Tax Service. Procedure 6. Open the company bank account Cost: No cost Procedure 4. Submit documents for Time: 3 days Comments: At least 50% of the charter capital must registration of a legal entity to one-stop Cost: RUB 1,500 be paid before company incorporation. The balance shop at the Federal Tax Service and obtain must be paid during the first year of operation. To Comments: On state registration of a legal entity registration documents deposit charter capital a temporary bank account (LLC) a temporary bank account is transformed into should be opened. Time, cost and number of required Time: 9 days a permanent bank account. To do so, it is necessary documents might vary depending on the bank. Cost: RUB 4,000 to submit to a bank the documents received in The following documents are required to open a procedure No.4 as well as a copy of an information Comments: State registration of a legal entity at temporary bank account: charter (draft), agreement letter from the statistics service, an order appointing the Federal Tax Service includes a data entry in the and minutes of meeting. The minutes of meeting a chief accountant or an order authorizing the head Unified State Register of Legal Entities and a taxpayer should indicate that the founders entrust their of the company to act as chief accountant, an order registration. representative (indicate name) to open a temporary appointing a director. An additional agreement The following documents are required: bank account, deposit charter capital and receive the about opening a bank account is signed and a bank (1) Application for state registration of a legal entity money back in case the registration does not happen. card with samples of signatures of the head of the (form R11001), The charter capital can be in a noncash form - a company and the chief accountant and the seal print common practice. (Law on LLC, Article 15). (2) Minutes of a meeting establishing a legal entity, is prepared. Cost of opening of a bank account varies (3) Charter of a limited liability company (2 copies), and depends upon each bank. Sometimes banks have Procedure 3*. Pay registration fee for state (4) Receipt confirming payment of a state duty. special offers for small and medium-size enterprises registration in a bank and get proof thereof An applicant receives a receipt confirming a list of and do not charge for opening accounts. The average Time: 1 day cost of opening a bank account in Saint Petersburg is documents and date of submission. State registration Cost: No cost (included in procedure of state 1,500 rubles. is conducted no more than 5 working days after registration at the Federal Tax Service) documents are submitted. Procedure 7. Inform the Federal Tax Service, Comments: The registration fee of 4,000 rubles Once state registration is completed, the Federal the Pension Fund and the Social Insurance must be paid before documents are submitted for Tax Service sends information from the Unified Fund of the company bank account number registration. The registration fee doubled from 2,000 State Register of legal Entities to the Pension Fund, Time: 1 day rubles to 4,000 rubles in January 2011. Mandatory Medical Insurance Fund, Social Insurance Fund as well as to the Federal Service of State Cost: No cost Procedure 4. Submit documents for Statistics, which register the company and send Comments: A taxpayer within 7 days of opening registration of a legal entity to one-stop their registration certificates back to the Federal Tax a bank account notify the Federal Tax Service, shop at the Federal Tax Service and obtain Service which passes them to the applicant together the Pension Fund and the Social Insurance Fund. registration documents with other registration documents. Notifications of required format with the bank Time: 9 days account number an applicant either mails or brings On the 6th working day the applicant receives the Cost: RUB 4,000 following documents confirming state registration of personally. In the latter case a secretariat puts a Comments: State registration of a legal entity at a legal entity: mark on the second copy that information has been received. Banks also inform the Federal Tax Service the Federal Tax Service includes a data entry in the (1) Certificate of state registration of a legal entity in about opening bank accounts. Unified State Register of Legal Entities and a taxpayer the Unified State Register of Legal Entities with registration. assigned main state registration number, STARTING A BUSINESS The following documents are required: (2) Certificate as a taxpayer with assigned individual Samara, Samara Oblast (1) Application for state registration of a legal entity number of a taxpayer, Standard company legal form: Limited Liability Company (form R11001), (3) Excerpt from the Unified State Register of Legal (LLC) (2) Minutes of a meeting establishing a legal entity, Entities, Minimum capital requirement: RUB 5,000 (US$ 162) (3) Charter of a limited liability company (2 copies), (4) Copy of the charter certified by the Federal Tax Service, Data as of: November 2011 (4) Receipt confirming payment of a state duty. as well as An applicant receives a receipt confirming a list of Procedure 1. Notarize signature on documents and date of submission. State registration (5) Certificate of registration in the Pension Fund, application for state registration of a legal is conducted no more than 5 working days after (6) Certificate of registration in the Mandatory entity documents are submitted. Medical Insurance Fund, Time: 1 day On the 6th working day the applicant receives the (7) Certificate of registration in the Social Insurance Cost: RUB 1,300 (200 rubles state duty for a following documents confirming state registration of Fund, signature of each of 5 founders + 300 rubles notary a legal entity: (8) Certificate of registration in the statistics service. fees) (1) Certificate of state registration of a legal entity in The state duty for state registration of a legal entity Comments: In accordance with the Federal Law of the Unified State Register of Legal Entities with increased in January 2011 to 4,000 rubles (The Tax August 8, 2001 No. 129-FZ “On State Registration assigned main state registration number, Code, Article 333.33). of Legal Entities and Individual Entrepreneurs”, a (2) Certificate as a taxpayer with assigned individual signature on application for state registration of a number of a taxpayer, company must be notarized. Application should be Procedure 5. Order and obtain a company (3) Excerpt from the Unified State Register of Legal signed by all founders of the company (5 founder seal Entities, Time: 1 day as in the standard case). The following documents should be submitted to the notary: minutes of (4) Copy of the charter certified by the Federal Tax Cost: RUB 400 meeting of founders on establishment of a limited Service. Comments: After obtaining registration documents liability company, draft charter, passport of applicant The Federal Tax Service sends information to the at the Federal Tax Service a company can order a seal who signs the application, application (form R11001). Pension Fund, Mandatory Medical Insurance Fund, at any seal producer. To do so, it is necessary to show The cost of notarization varies. In Samara the cost is Social Insurance Fund and Federal Service of State the following documents: certificate of state registra- 1,300 rubles. Statistics, which register the company within 3-5 tion, certificate of taxpayer registration, an excerpt working days from when they receive information from the Unified State Register of Legal Entities. The from the Federal Tax Service. price of a seal depends on its model and complexity

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 65

The state duty for state registration of a legal entity about opening a bank account is signed and a bank Procedure 3*. Pay registration fee for state increased in January 2011 to 4,000 rubles (The Tax card with samples of signatures of the head of the registration in a bank and get proof thereof Code, Article 333.33). company and the chief accountant and the seal print Time: 1 day is prepared. Cost of opening of a bank account varies Cost: No cost (included in procedure of state Procedure 5. Obtain confirmation with and depends upon each bank. Sometimes banks have registration at the Federal Tax Service) statistics codes at the Federal Service of special offers for small and medium-size enterprises State Statistics and do not charge for opening accounts. The average Comments: The registration fee of 4,000 rubles must be paid before documents are submitted for Time: 1 day cost of opening a bank account in Samara is 2,000 rubles. registration. The registration fee doubled from 2,000 Cost: No cost rubles to 4,000 rubles in January 2011. Comments: On completion of state registration the Procedure 10. Inform the Federal Tax Federal Tax Service sends information about the Service, the Pension Fund and the Social Procedure 4. Submit documents for registered legal entity to the funds and statistics. Insurance Fund of the company bank registration of a legal entity to one-stop Then the founder usually goes to Rosstat personally, account number shop at the Federal Tax Service and obtain registration documents shows the registration documents obtained from the Time: 1 day Federal Tax Service and on the same day receives Time: 9 days Cost: No cost from Rosstat the information letter with assigned Cost: RUB 4,000 statistics codes. Comments: A taxpayer within 7 days of opening a bank account notify the Federal Tax Service, Comments: State registration of a legal entity at Procedure 6*. Obtain confirmation of the Pension Fund and the Social Insurance Fund. the Federal Tax Service includes a data entry in the registration at the Social Insurance Fund Notifications of required format with the bank Unified State Register of Legal Entities and a taxpayer registration. Time: 2 days account number an applicant either mails or brings personally. In the latter case a secretariat puts a The following documents are required: Cost: No cost mark on the second copy that information has been (1) Application for state registration of a legal entity Comments: On completion of registration the Federal received. Banks also inform the Federal Tax Service (form R11001), Tax Service sends information about the registered about opening bank accounts. legal entity to the funds and statistics. Then within 1-3 (2) Minutes of a meeting establishing a legal entity, days the founder usually goes to the Social Insurance STARTING A BUSINESS (3) Charter of a limited liability company (2 copies), Fund and personally obtains the registration Saransk, Republic of Mordovia (4) Receipt confirming payment of a state duty. certificate. Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Procedure 7*. Obtain confirmation of (LLC) documents and date of submission. State registration registration at the Pension Fund is conducted no more than 5 working days after Minimum capital requirement: RUB 5,000 (US$ 162) documents are submitted. Time: 1 day Data as of: November 2011 On the 6th working day the applicant receives the Cost: No cost Procedure 1. Notarize signature on following documents confirming state registration of Comments: On completion of state registration the application for state registration of a legal a legal entity: Federal Tax Service sends information about the new entity (1) Certificate of state registration of a legal entity in company to the funds and statistics. After that within the Unified State Register of Legal Entities with Time: 1 day 1-3 days the founder personally goes to the Pension assigned main state registration number, Fund and receives the registration certificate. Cost: RUB 400 (200 rubles state duty + 200 rubles (2) Certificate as a taxpayer with assigned individual notary fees) It is not required to go to the Mandatory Medical number of a taxpayer, Insurance Fund as the Pension Fund in Samara Oblast Comments: In accordance with the Federal Law of (3) Excerpt from the Unified State Register of Legal also registers insurers in regard to the mandatory August 8, 2001 No. 129-FZ “On State Registration Entities, medical insurance. of Legal Entities and Individual Entrepreneurs”, a signature on application for state registration of a (4) Copy of the charter certified by the Federal Tax Procedure 8*. Order and obtain a company company must be notarized. Application should be Service. seal signed by a director of a company or other authorized The Federal Tax Service sends information to the Time: 1 day person. The following documents should be submit- Pension Fund, Mandatory Medical Insurance Fund, ted to the notary: minutes of meeting of founders Social Insurance Fund and Federal Service of State Cost: RUB 350 on establishment of a limited liability company, Statistics, which register the company within 3-5 Comments: After obtaining registration documents charter (draft), passport of applicant who signs the working days from when they receive information at the Federal Tax Service a company can order a application, application (form R11001). The cost of from the Federal Tax Service. seal at any seal producer. To do so, it is necessary to notarization varies. In Saransk the cost is 400 rubles. The state duty for state registration of a legal entity show the following documents: certificate of state increased in January 2011 to 4,000 rubles (The Tax Procedure 2*. Open a temporary bank registration, certificate of taxpayer registration, an Code, Article 333.33). excerpt from the Unified State Register of Legal account and deposit part of charter capital Entities. The price of a seal depends on its model and Time: 1 day Procedure 5. Obtain confirmation with complexity of production. In Samara a seal costs 350 Cost: No cost statistics codes at the Federal Service of on average. Comments: At least 50% of the charter capital must State Statistics Procedure 9. Open the company bank be paid before company incorporation. The balance Time: 1 day account must be paid during the first year of operation. To Cost: No cost deposit charter capital a temporary bank account Time: 2 days Comments: After state registration the Federal Tax should be opened. Time, cost and number of required Cost: RUB 2,000 Service sends information about the new company to documents might vary depending on the bank. Rosstat which registers the company on the next day. Comments: On state registration of a legal entity The following documents are required to open a The applicant can pick up the registration certificate (LLC) a temporary bank account is transformed into temporary bank account: charter (draft), agreement in Rosstat personally or wait for mail delivery. a permanent bank account. To do so, it is necessary and minutes of meeting. The minutes of meeting to submit to a bank the documents received in should indicate that the founders entrust their Procedure 6*. Obtain confirmation of procedure No.4 as well as a copy of an information representative (indicate name) to open a temporary registration at the Social Insurance Fund letter from the statistics service, an order appointing bank account, deposit charter capital and receive the Time: 2 days a chief accountant or an order authorizing the head money back in case the registration does not happen. of the company to act as chief accountant, an order The charter capital can be in a noncash form - a Cost: No cost appointing a director. An additional agreement common practice. (Law on LLC, Article 15).

* This procedure can be completed simultaneously with previous procedures. 66 DOING BUSINESS IN RUSSIA 2012

Comments: On completion of state registration the Cost: No cost Procedure 4. Submit documents for Federal Tax Service sends information about the new Comments: A taxpayer within 7 days of opening registration of a legal entity to one-stop company to the Social Insurance Fund which registers a bank account notify the Federal Tax Service, shop at the Federal Tax Service and obtain the company within 1-2 days. Then the applicant can the Pension Fund and the Social Insurance Fund. registration documents personally pick up the registration certificate at Social Notifications of required format with the bank Time: 18 days Insurance Fund or wait for mail delivery. account number an applicant either mails or brings Cost: RUB 4,000 personally. In the latter case a secretariat puts a Procedure 7*. Obtain confirmation of Comments: State registration of a legal entity at registration at the Pension Fund mark on the second copy that information has been received. Banks also inform the Federal Tax Service the Federal Tax Service includes a data entry in the Time: 2 days about opening bank accounts. Unified State Register of Legal Entities and a taxpayer Cost: No cost registration. STARTING A BUSINESS Comments: On completion of state registration the The following documents are required: Federal Tax Service sends information about the new Stavropol, Stavropol Kray (1) Application for state registration of a legal entity company to the Pension Fund which registers the Standard company legal form: Limited Liability Company (form R11001), company within 1-2 days. Then the applicant can (LLC) (2) Minutes of a meeting establishing a legal entity, personally receive the registration certificate at the Minimum capital requirement: RUB 5,000 (US$ 162) (3) Charter of a limited liability company (2 copies), Pension Fund or wait for mail delivery. Data as of: November 2011 (4) Receipt confirming payment of a state duty. Procedure 8*. Obtain confirmation of An applicant receives a receipt confirming a list of registration at the Mandatory Medical Procedure 1. Notarize signature on documents and date of submission. State registration Insurance Fund application for state registration of a legal is conducted no more than 5 working days after entity Time: 2 days documents are submitted. Time: 1 day Cost: No cost On the 6th working day the applicant receives the Cost: RUB 500 (200 rubles state duty + 300 rubles following documents confirming state registration of Comments: On completion of state registration the notary fees) a legal entity: Federal Tax Service sends information about the new company to the Mandatory Medical Insurance Comments: In accordance with the Federal Law of (1) Certificate of state registration of a legal entity in Fund which registers the company during 1-2 days. August 8, 2001 No. 129-FZ “On State Registration the Unified State Register of Legal Entities with After that an applicant can pick up the registration of Legal Entities and Individual Entrepreneurs”, a assigned main state registration number, certificate personally or wait for mail delivery. signature on application for state registration of a (2) Certificate as a taxpayer with assigned individual company must be notarized. Application should number of a taxpayer, Procedure 9*. Order and obtain a company be signed by a director of a company or other (3) Excerpt from the Unified State Register of Legal seal authorized person. The following documents should Entities, be submitted to the notary: minutes of meeting Time: 2 days (4) Copy of the charter certified by the Federal Tax of founders on establishment of a limited liability Cost: RUB 550 Service. company, charter (draft), passport of applicant who Comments: After obtaining registration documents signs the application, application (form R11001). The Within 5 working days from the moment of state at the Federal Tax Service a company can order a cost of notarization varies. In Stavropol the cost is registration the Federal Tax Service sends information seal at any seal producer. To do so, it is necessary to 500 rubles. from the Unified State Register of Legal Entities to the show the following documents: certificate of state Pension Fund, Mandatory Medical Insurance Fund, registration, certificate of taxpayer registration, an Procedure 2*. Open a temporary bank Social Insurance Fund and Federal Service of State excerpt from the Unified State Register of Legal account and deposit part of charter capital Statistics, which register the company within 3 days Entities. The price of a seal depends on its model and Time: 1 day from when they receive information from the Federal complexity of production. In Saransk a seal costs 550 Cost: No cost Tax Service and mail their registration certificates to rubles on average. the legal address of the company. Comments: At least 50% of the charter capital must Procedure 10. Open the company bank be paid before company incorporation. The balance The state duty for state registration of a legal entity account must be paid during the first year of operation. To increased in January 2011 to 4,000 rubles (The Tax Code, Article 333.33). Time: 1 day deposit charter capital a temporary bank account Cost: RUB 2,200 should be opened. Time, cost and number of required documents might vary depending on the bank. Procedure 5*. Order and obtain a company Comments: On state registration of a legal entity The following documents are required to open a seal (LLC) a temporary bank account is transformed into temporary bank account: charter (draft), agreement Time: 1 day a permanent bank account. To do so, it is necessary and minutes of meeting. The minutes of meeting to submit to a bank the documents received in Cost: RUB 600 should indicate that the founders entrust their procedure No.4 as well as a copy of an information Comments: After obtaining registration documents representative (indicate name) to open a temporary letter from the statistics service, an order appointing at the Federal Tax Service a company can order a bank account, deposit charter capital and receive the a chief accountant or an order authorizing the head seal at any seal producer. To do so, it is necessary to money back in case the registration does not happen. of the company to act as chief accountant, an order show the following documents: certificate of state The charter capital can be in a noncash form - a appointing a director. An additional agreement registration, certificate of taxpayer registration, an common practice. (Law on LLC, Article 15). about opening a bank account is signed and a bank excerpt from the Unified State Register of Legal card with samples of signatures of the head of the Procedure 3*. Pay registration fee for state Entities. The price of a seal depends on its model and company and the chief accountant and the seal print registration in a bank and get proof thereof complexity of production. In Stavropol a seal costs 600 rubles on average. is prepared. Cost of opening of a bank account varies Time: 1 day and depends upon each bank. Sometimes banks have Cost: No cost (included in procedure of state Procedure 6. Open the company bank special offers for small and medium-size enterprises registration at the Federal Tax Service) account and do not charge for opening accounts. The average cost of opening a bank account in Saransk is 2,200 Comments: The registration fee of 4,000 rubles Time: 1 day rubles. must be paid before documents are submitted for Cost: RUB 1,500 registration. The registration fee doubled from 2,000 Comments: On state registration of a legal entity Procedure 11. Inform the Federal Tax rubles to 4,000 rubles in January 2011. (LLC) a temporary bank account is transformed into Service, the Pension Fund and the Social a permanent bank account. To do so, it is necessary Insurance Fund of the company bank to submit to a bank the documents received in account number procedure No.4 as well as a copy of an information Time: 1 day

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 67

letter from the statistics service, an order appointing money back in case the registration does not happen. Procedure 6*. Obtain confirmation of a chief accountant or an order authorizing the head The charter capital can be in a noncash form - a registration at the Social Insurance Fund of the company to act as chief accountant, an order common practice. (Law on LLC, Article 15). Time: 3 days appointing a director. An additional agreement Cost: No cost about opening a bank account is signed and a bank Procedure 3*. Pay registration fee for state card with samples of signatures of the head of the registration in a bank and get proof thereof Comments: Within 5 days after state registration the company and the chief accountant and the seal print Time: 1 day Federal Tax Service sends information about the new is prepared. Cost of opening of a bank account varies Cost: No cost (included in procedure of state company to the Social Insurance Fund for registration. and depends upon each bank. Sometimes banks have registration at the Federal Tax Service) The registration certificate can be mailed by Social Insurance Fund to the legal address of the company special offers for small and medium-size enterprises Comments: The registration fee of 4,000 rubles however in practice entrepreneurs prefers personally and do not charge for opening accounts. The average must be paid before documents are submitted for pick up the registration certificate at Social Insurance cost of opening a bank account in Stavropol is 1,500 registration. The registration fee doubled from 2,000 Fund to avoid delays and losing the letter during mail rubles. rubles to 4,000 rubles in January 2011. delivery. Procedure 7. Inform the Federal Tax Service, Procedure 4. Submit documents for the Pension Fund and the Social Insurance Procedure 7*. Obtain confirmation of registration of a legal entity to one-stop registration at the Pension Fund Fund of the company bank account number shop at the Federal Tax Service and obtain Time: 1 day registration documents Time: 5 days Cost: No cost Cost: No cost Time: 8 days Comments: Within 5 days after state registration Comments: A taxpayer within 7 days of opening Cost: RUB 4,000 a bank account notify the Federal Tax Service, the Federal Tax Service sends information about the Comments: State registration of a legal entity at new company to the Pension Fund for registration. the Pension Fund and the Social Insurance Fund. the Federal Tax Service includes a data entry in the Notifications of required format with the bank The Pension Fund can mail the registration certificate Unified State Register of Legal Entities and a taxpayer to the legal address of the company but in practice account number an applicant either mails or brings registration. personally. In the latter case a secretariat puts a entrepreneurs prefer to personally pick up registration The following documents are required: mark on the second copy that information has been certificates at the Pension Fund to avoid delays and received. Banks also inform the Federal Tax Service (1) Application for state registration of a legal entity losing the letter during mail delivery. about opening bank accounts. (form R11001), Since January 1, 2011 the Pension Fund has performed (2) Minutes of a meeting establishing a legal entity, the function of the Mandatory Medical Insurance STARTING A BUSINESS (3) Charter of a limited liability company (2 copies), Fund on registration (in accordance with the federal law “On Mandatory Medical Insurance in the Russian Surgut, Khanty-Mansiisk Autonomous (4) Receipt confirming payment of a state duty. Okrug – Yugra Federation” of November 29, 2010 No 326-FZ, An applicant receives a receipt confirming a list of Article 17). Standard company legal form: Limited Liability Company documents and date of submission. State registration (LLC) is conducted no more than 5 working days after Procedure 8*. Order and obtain a company Minimum capital requirement: RUB 5,000 (US$ 162) documents are submitted. seal On the 6th working day the applicant receives the Data as of: November 2011 Time: 2 days following documents confirming state registration of Procedure 1. Notarize signature on a legal entity: Cost: RUB 1,500 application for state registration of a legal (1) Certificate of state registration of a legal entity in Comments: After obtaining registration documents entity the Unified State Register of Legal Entities with at the Federal Tax Service a company can order a Time: 1 day assigned main state registration number, seal at any seal producer. To do so, it is necessary to show the following documents: certificate of state Cost: RUB 1,000 (2) Certificate as a taxpayer with assigned individual registration, certificate of taxpayer registration, an number of a taxpayer, Comments: In accordance with the Federal Law of excerpt from the Unified State Register of Legal August 8, 2001 No. 129-FZ “On State Registration (3) Excerpt from the Unified State Register of Legal Entities. The price of a seal depends on its model and of Legal Entities and Individual Entrepreneurs”, a Entities, complexity of production. In Surgut a seal costs 1,500 signature on application for state registration of a (4) Copy of the charter certified by the Federal Tax rubles on average. company must be notarized. Application should be Service. signed by a director of a company or other authorized The Federal Tax Service sends information to the Procedure 9. Notarize documents person. The following documents should be submit- Pension Fund, Mandatory Medical Insurance Fund, for opening a bank account including ted to the notary: minutes of meeting of founders Social Insurance Fund and Federal Service of State signatures on a bank card on establishment of a limited liability company, Statistics, which register the company within 3-5 Time: 1 day charter (draft), passport of applicant who signs the working days from when they receive information Cost: RUB 1,200 application, application (form R11001). The cost of from the Federal Tax Service. Comments: To open a bank account, notarized copies notarization varies. In Surgut the cost is 1,000 rubles. The state duty for state registration of a legal entity of documents confirming the registration of a new Procedure 2*. Open a temporary bank increased in January 2011 to 4,000 rubles (The Tax company are required, along with notarization of account and deposit part of charter capital Code, Article 333.33). signatures of authorized company representatives Time: 1 day on a bank card. As an alternative, some banks certify Procedure 5. Obtain confirmation with copies of registration documents and signatures on a Cost: No cost statistics codes at the Federal Service of bank card themselves. Comments: At least 50% of the charter capital must State Statistics be paid before company incorporation. The balance Procedure 10. Open the company bank Time: 5 days must be paid during the first year of operation. To account Cost: No cost deposit charter capital a temporary bank account Time: 2 days Comments: Within 5 days from after state registra- should be opened. Time, cost and number of required Cost: RUB 1,500 documents might vary depending on the bank. tion the Federal Tax Service sends information about Comments: On state registration of a legal entity The following documents are required to open a the new company to the Federal Service of State (LLC) a temporary bank account is transformed into temporary bank account: charter (draft), agreement Statistics for registration. The Rosstat registration a permanent bank account. To do so, it is necessary and minutes of meeting. The minutes of meeting certificate can be mailed to the legal address of the to submit to a bank the documents received in should indicate that the founders entrust their company but in practice entrepreneurs prefer to pick procedure No.4 as well as a copy of an information representative (indicate name) to open a temporary up the registration certificate personally to avoid letter from the statistics service, an order appointing bank account, deposit charter capital and receive the delays and losing the letter during mail delivery. a chief accountant or an order authorizing the head

* This procedure can be completed simultaneously with previous procedures. 68 DOING BUSINESS IN RUSSIA 2012

of the company to act as chief accountant, an order The charter capital can be in a noncash form - a Procedure 6*. Order and obtain a company appointing a director. An additional agreement common practice. (Law on LLC, Article 15). seal about opening a bank account is signed and a bank Time: 1 day card with samples of signatures of the head of the Procedure 3*. Pay registration fee for state Cost: RUB 525 company and the chief accountant and the seal registration in a bank and get proof thereof print is prepared. Cost of opening of a bank account Time: 1 day Comments: After obtaining registration documents varies and depends upon each bank. Sometimes Cost: No cost (included in procedure of state at the Federal Tax Service a company can order a banks have special offers for small and medium-size registration at the Federal Tax Service) seal at any seal producer. To do so, it is necessary to show the following documents: certificate of state enterprises and do not charge for opening accounts. Comments: The registration fee of 4,000 rubles registration, certificate of taxpayer registration, an The average cost of opening a bank account in must be paid before documents are submitted for excerpt from the Unified State Register of Legal Surgut is1,500 rubles. registration. The registration fee doubled from 2,000 Entities. The price of a seal depends on its model and rubles to 4,000 rubles in January 2011. Procedure 11. Inform the Federal Tax complexity of production. In Tomsk a seal costs 525 Service, the Pension Fund and the Social Procedure 4. Submit documents for rubles on average. Insurance Fund of the company bank registration of a legal entity to one-stop account number Procedure 7*. Open the company bank shop at the Federal Tax Service and obtain account Time: 1 day registration documents Time: 3 days Cost: No cost Time: 20 days Cost: RUB 2,000 Comments: A taxpayer within 7 days of opening Cost: RUB 4,000 a bank account notify the Federal Tax Service, Comments: On state registration of a legal entity Comments: State registration of a legal entity at (LLC) a temporary bank account is transformed into the Pension Fund and the Social Insurance Fund. the Federal Tax Service includes a data entry in the Notifications of required format with the bank a permanent bank account. To do so, it is necessary Unified State Register of Legal Entities and a taxpayer to submit to a bank the documents received in account number an applicant either mails or brings registration. personally. In the latter case a secretariat puts a procedure No.4 as well as a copy of an information The following documents are required: mark on the second copy that information has been letter from the statistics service, an order appointing received. Banks also inform the Federal Tax Service (1) Application for state registration of a legal entity a chief accountant or an order authorizing the head about opening bank accounts. (form R11001), of the company to act as chief accountant, an order (2) Minutes of a meeting establishing a legal entity, appointing a director. An additional agreement STARTING A BUSINESS about opening a bank account is signed and a bank (3) Charter of a limited liability company (2 copies), Tomsk, Tomsk Oblast card with samples of signatures of the head of the (4) Receipt confirming payment of a state duty. company and the chief accountant and the seal print Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of is prepared. Cost of opening of a bank account varies (LLC) documents and date of submission. State registration and depends upon each bank. Sometimes banks have Minimum capital requirement: RUB 5,000 (US$ 162) is conducted no more than 5 working days after special offers for small and medium-size enterprises Data as of: November 2011 documents are submitted. and do not charge for opening accounts. The average At the end of the registration period the applicant cost of opening a bank account in Tomsk is 2,000 Procedure 1. Notarize signature on receives the following documents confirming state rubles. application for state registration of a legal registration of a legal entity: entity Procedure 8*. Inform the Federal Tax (1) Certificate of state registration of a legal entity in Service, the Pension Fund and the Social Time: 1 day the Unified State Register of Legal Entities with Insurance Fund of the company bank assigned main state registration number, Cost: RUB 250 (200 rubles state duty + 50 rubles account number notary fees) (2) Certificate as a taxpayer with assigned individual Time: 1 day Comments: In accordance with the Federal Law of number of a taxpayer, Cost: No cost August 8, 2001 No. 129-FZ “On State Registration (3) Excerpt from the Unified State Register of Legal of Legal Entities and Individual Entrepreneurs”, a Entities, Comments: A taxpayer within 7 days of opening a bank account notify the Federal Tax Service, signature on application for state registration of a (4) Copy of the charter certified by the Federal Tax the Pension Fund and the Social Insurance Fund. company must be notarized. Application should be Service. signed by a director of a company or other authorized Notifications of required format with the bank Within no more than 5 working days from the person. The following documents should be submit- account number an applicant either mails or brings moment of state registration the Federal Tax Service ted to the notary: minutes of meeting of founders personally. In the latter case a secretariat puts a sends information to the Pension Fund, Mandatory on establishment of a limited liability company, mark on the second copy that information has been Medical Insurance Fund, Social Insurance Fund and charter (draft), passport of applicant who signs the received. Banks also inform the Federal Tax Service Federal Service of State Statistics, which register the application, application (form R11001). The cost of about opening bank accounts. company within 3-5 working days from when they notarization varies. In Tomsk the cost is 250 rubles. receive information from the Federal Tax Service. STARTING A BUSINESS Procedure 2*. Open a temporary bank The state duty for state registration of a legal entity Tver, Tver Oblast account and deposit part of charter capital increased in January 2011 to 4,000 rubles (The Tax Standard company legal form: Limited Liability Company Code, Article 333.33). Time: 2 days (LLC) Cost: No cost Procedure 5*. Obtain confirmation with Minimum capital requirement: RUB 5,000 (US$ 162) Comments: At least 50% of the charter capital must statistics codes at the Federal Service of Data as of: November 2011 be paid before company incorporation. The balance State Statistics must be paid during the first year of operation. To Procedure 1. Notarize signature on deposit charter capital a temporary bank account Time: 5 days application for state registration of a legal should be opened. Time, cost and number of required Cost: No cost entity documents might vary depending on the bank. Comments: Certificate of statistics registration can Time: 1 day The following documents are required to open a be obtained after the Federal Tax Service completes Cost: RUB 400 (200 rubles state duty + 200 rubles temporary bank account: charter (draft), agreement the registration process and sends information about notary fees) and minutes of meeting. The minutes of meeting the new company to the funds and statistics. The should indicate that the founders entrust their Federal Tax Service sends this information only on Comments: In accordance with the Federal Law of representative (indicate name) to open a temporary Tuesdays and Thursdays, therefore if a new company August 8, 2001 No. 129-FZ “On State Registration bank account, deposit charter capital and receive the is registered on Friday the Rosstat registration can of Legal Entities and Individual Entrepreneurs”, a money back in case the registration does not happen. only be obtained on Wednesday. signature on application for state registration of a

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 69

company must be notarized. Application should be (4) Copy of the charter certified by the Federal Tax Comments: A taxpayer within 7 days of opening signed by a director of a company or other authorized Service. a bank account notify the Federal Tax Service, person. The following documents should be submit- The Federal Tax Service sends electronically informa- the Pension Fund and the Social Insurance Fund. ted to the notary: minutes of meeting of founders tion from the Unified State Register of Legal Entities Notifications of required format with the bank on establishment of a limited liability company, to the Pension Fund, Mandatory Medical Insurance account number an applicant either mails or brings charter (draft), passport of applicant who signs the Fund, Social Insurance Fund and Federal Service of personally. In the latter case a secretariat puts a application, application (form R11001). The cost of State Statistics, which register the company and mail mark on the second copy that information has been notarization varies. In Tver the cost is 400 rubles. their registration certificates to the legal address of received. Banks also inform the Federal Tax Service about opening bank accounts. Procedure 2*. Open a temporary bank the company. account and deposit part of charter capital The state duty for state registration of a legal entity STARTING A BUSINESS increased in January 2011 to 4,000 rubles (The Tax Time: 1 day Code, Article 333.33). Ulyanovsk, Ulyanovsk Oblast Cost: No cost Standard company legal form: Limited Liability Company Comments: At least 50% of the charter capital must Procedure 5*. Obtain confirmation with (LLC) be paid before company incorporation. The balance statistics codes at the Federal Service of Minimum capital requirement: RUB 5,000 (US$ 162) must be paid during the first year of operation. To State Statistics Data as of: November 2011 deposit charter capital a temporary bank account Time: 1 day should be opened. Time, cost and number of required Cost: RUB 550 Procedure 1*. Notarize signature on documents might vary depending on the bank. application for state registration of a legal The following documents are required to open a Comments: A representative of a new company entity temporary bank account: charter (draft), agreement personally applies to Tverstat and attaches copies of Time: 1 day and minutes of meeting. The minutes of meeting registration documents, charter, minutes of founders should indicate that the founders entrust their meeting. Then s/he obtains a payment document, Cost: RUB 500 (200 rubles state duty + 300 rubles representative (indicate name) to open a temporary pays in a bank, goes back to Tverstat and immediately notary fees) bank account, deposit charter capital and receive the receives the information letter (confirmation of Comments: In accordance with the Federal Law of money back in case the registration does not happen. registration). Since 2012 Rosstat will only issue August 8, 2001 No. 129-FZ “On State Registration The charter capital can be in a noncash form - a registration certificates with assigned statistics codes of Legal Entities and Individual Entrepreneurs”, a common practice. (Law on LLC, Article 15). free of charge. signature on application for state registration of a company must be notarized. Application should be Procedure 3*. Pay registration fee for state Procedure 6*. Order and obtain a company signed by a director of a company or other authorized registration in a bank and get proof thereof seal person. The following documents should be submitted Time: 1 day Time: 1 day to the notary: minutes of meeting of founders on Cost: No cost (included in procedure of state Cost: RUB 500 establishment of a limited liability company, charter registration at the Federal Tax Service) Comments: After obtaining registration documents (draft), passport of applicant who signs the application, Comments: The registration fee of 4,000 rubles at the Federal Tax Service a company can order a application (form R11001). The cost of notarization must be paid before documents are submitted for seal at any seal producer. To do so, it is necessary to varies. In Ulyanovsk the cost is 500 rubles. registration. The registration fee doubled from 2,000 show the following documents: certificate of state Procedure 2. Open a temporary bank rubles to 4,000 rubles in January 2011. registration, certificate of taxpayer registration, an account and deposit part of charter capital excerpt from the Unified State Register of Legal Procedure 4. Submit documents for Entities. The price of a seal depends on its model and Time: 1 day registration of a legal entity to one-stop complexity of production. In Tver a seal costs 500 Cost: No cost shop at the Federal Tax Service and obtain rubles on average. Comments: At least 50% of the charter capital must registration documents be paid before company incorporation. The balance Procedure 7*. Open the company bank Time: 22 days must be paid during the first year of operation. To account Cost: RUB 4,000 deposit charter capital a temporary bank account Time: 1 day should be opened. Time, cost and number of required Comments: State registration of a legal entity at Cost: RUB 1,800 documents might vary depending on the bank. the Federal Tax Service includes a data entry in the The following documents are required to open a Unified State Register of Legal Entities and a taxpayer Comments: On state registration of a legal entity temporary bank account: charter (draft), agreement registration. (LLC) a temporary bank account is transformed into a permanent bank account. To do so, it is necessary and minutes of meeting. The minutes of meeting The following documents are required: to submit to a bank the documents received in should indicate that the founders entrust their (1) Application for state registration of a legal entity procedure No.4 as well as a copy of an information representative (indicate name) to open a temporary (form R11001), letter from the statistics service, an order appointing bank account, deposit charter capital and receive the (2) Minutes of a meeting establishing a legal entity, a chief accountant or an order authorizing the head money back in case the registration does not happen. (3) Charter of a limited liability company (2 copies), of the company to act as chief accountant, an order The charter capital can be in a noncash form - a common practice. (Law on LLC, Article 15). (4) Receipt confirming payment of a state duty. appointing a director. An additional agreement about opening a bank account is signed and a bank An applicant receives a receipt confirming a list of Procedure 3*. Pay registration fee for state card with samples of signatures of the head of the documents and date of submission. State registration registration in a bank and get proof thereof company and the chief accountant and the seal print is conducted no more than 5 working days after is prepared. Cost of opening of a bank account varies Time: 1 day documents are submitted. and depends upon each bank. Sometimes banks have Cost: No cost (included in procedure of state On the 6th working day the applicant receives the special offers for small and medium-size enterprises registration at the Federal Tax Service) following documents confirming state registration of and do not charge for opening accounts. The average Comments: The registration fee of 4,000 rubles a legal entity: cost of opening a bank account in Tver is 1,800 rubles. must be paid before documents are submitted for (1) Certificate of state registration of a legal entity in registration. The registration fee doubled from 2,000 the Unified State Register of Legal Entities with Procedure 8*. Inform the Federal Tax rubles to 4,000 rubles in January 2011. assigned main state registration number, Service, the Pension Fund and the Social (2) Certificate as a taxpayer with assigned individual Insurance Fund of the company bank Procedure 4. Submit documents for number of a taxpayer, account number registration of a legal entity to one-stop (3) Excerpt from the Unified State Register of Legal Time: 1 day shop at the Federal Tax Service and obtain Entities, Cost: No cost registration documents Time: 18 days

* This procedure can be completed simultaneously with previous procedures. 70 DOING BUSINESS IN RUSSIA 2012

Cost: RUB 4,000 a permanent bank account. To do so, it is necessary temporary bank account: charter (draft), agreement Comments: State registration of a legal entity at to submit to a bank the documents received in and minutes of meeting. The minutes of meeting the Federal Tax Service includes a data entry in the procedure No.4 as well as a copy of an information should indicate that the founders entrust their Unified State Register of Legal Entities and a taxpayer letter from the statistics service, an order appointing representative (indicate name) to open a temporary registration. a chief accountant or an order authorizing the head bank account, deposit charter capital and receive the The following documents are required: of the company to act as chief accountant, an order money back in case the registration does not happen. appointing a director. An additional agreement The charter capital can be in a noncash form - a (1) Application for state registration of a legal entity about opening a bank account is signed and a bank common practice. (Law on LLC, Article 15). (form R11001), card with samples of signatures of the head of the (2) Minutes of a meeting establishing a legal entity, company and the chief accountant and the seal print Procedure 3*. Pay registration fee for state (3) Charter of a limited liability company (2 copies), is prepared. Cost of opening of a bank account varies registration in a bank and get proof thereof (4) Receipt confirming payment of a state duty. and depends upon each bank. Sometimes banks have Time: 1 day An applicant receives a receipt confirming a list of special offers for small and medium-size enterprises Cost: No cost (included in procedure of state documents and date of submission. State registration and do not charge for opening accounts. The average registration at the Federal Tax Service) is conducted no more than 5 working days after cost of opening a bank account in Ulyanovsk is 1,100 Comments: The registration fee of 4,000 rubles documents are submitted. rubles. must be paid before documents are submitted for On the 6th working day the applicant receives the Procedure 8*. Inform the Federal Tax registration. The registration fee doubled from 2,000 following documents confirming state registration of Service, the Pension Fund and the Social rubles to 4,000 rubles in January 2011. a legal entity: Insurance Fund of the company bank Procedure 4. Submit documents for (1) Certificate of state registration of a legal entity in account number registration of a legal entity to one-stop the Unified State Register of Legal Entities with Time: 1 day shop at the Federal Tax Service and obtain assigned main state registration number, Cost: No cost registration documents (2) Certificate as a taxpayer with assigned individual Comments: A taxpayer within 7 days of opening Time: 10 days number of a taxpayer, a bank account notify the Federal Tax Service, Cost: RUB 4,000 (3) Excerpt from the Unified State Register of Legal the Pension Fund and the Social Insurance Fund. Comments: State registration of a legal entity at Entities, Notifications of required format with the bank the Federal Tax Service includes a data entry in the (4) Copy of the charter certified by the Federal Tax account number an applicant either mails or brings Unified State Register of Legal Entities and a taxpayer Service. personally. In the latter case a secretariat puts a registration. mark on the second copy that information has been The Federal Tax Service sends electronically The following documents are required: information to the Pension Fund, Mandatory Medical received. Banks also inform the Federal Tax Service (1) Application for state registration of a legal entity Insurance Fund, Social Insurance Fund and Federal about opening bank accounts. (form R11001), Service of State Statistics, which register the STARTING A BUSINESS company and mail their registration certificates to the (2) Minutes of a meeting establishing a legal entity, legal address of the company. Vladikavkaz, Republic of North (3) Charter of a limited liability company (2 copies), The state duty for state registration of a legal entity Ossetia – Alania (4) Receipt confirming payment of a state duty. increased in January 2011 to 4,000 rubles (The Tax Standard company legal form: Limited Liability Company An applicant receives a receipt confirming a list of Code, Article 333.33). (LLC) documents and date of submission. State registration Minimum capital requirement: RUB 5,000 (US$ 162) is conducted no more than 5 working days after Procedure 5*. Obtain confirmation with documents are submitted. Data as of: November 2011 statistics codes at the Federal Service of At the end of the registration period an applicant State Statistics Procedure 1. Notarize signature on receives the following documents confirming state Time: 1 day application for state registration of a legal registration of a legal entity: Cost: No cost entity (1) Certificate of state registration of a legal entity in Comments: After state registration the Federal Tax Time: 1 day the Unified State Register of Legal Entities with Service within the one-stop shop sends information Cost: RUB 200 assigned main state registration number, about the new company to the funds and statistics. Comments: In accordance with the Federal Law of (2) Certificate as a taxpayer with assigned individual Then the founder personally goes to Rosstat and August 8, 2001 No. 129-FZ “On State Registration number of a taxpayer, on the same day receives an information letter with of Legal Entities and Individual Entrepreneurs”, a (3) Excerpt from the Unified State Register of Legal assigned statistics codes. signature on application for state registration of a Entities, Procedure 6*. Order and obtain a company company must be notarized. Application should (4) Copy of the charter certified by the Federal Tax seal be signed by a director of a company or other Service. authorized person. The following documents should Time: 1 day The Federal Tax Service sends information to the be submitted to the notary: minutes of meeting Pension Fund, Mandatory Medical Insurance Fund, Cost: RUB 800 of founders on establishment of a limited liability Social Insurance Fund and Federal Service of State Comments: After obtaining registration documents company, charter (draft), passport of applicant who Statistics, which register the company within 3-5 at the Federal Tax Service a company can order a signs the application, application (form R11001). The working days from when they receive information seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Vladikavkaz the cost is from the Federal Tax Service. show the following documents: certificate of state 200 rubles. The state duty for state registration of a legal entity registration, certificate of taxpayer registration, an increased in January 2011 to 4,000 rubles (The Tax excerpt from the Unified State Register of Legal Procedure 2*. Open a temporary bank Code, Article 333.33). Entities. The price of a seal depends on its model and account and deposit part of charter capital Time: 1 day complexity of production. In Ulyanovsk a seal costs Procedure 5. Obtain confirmation with 800 rubles on average. Cost: No cost statistics codes at the Federal Service of Procedure 7*. Open the company bank Comments: At least 50% of the charter capital must State Statistics be paid before company incorporation. The balance account Time: 4 days must be paid during the first year of operation. To Time: 3 days deposit charter capital a temporary bank account Cost: No cost Cost: RUB 1,100 should be opened. Time, cost and number of required Comments: Within 3-5 working days after state Comments: On state registration of a legal entity documents might vary depending on the bank. registration the Federal Tax Service sends information (LLC) a temporary bank account is transformed into The following documents are required to open a about the new company to the Federal Service of

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 71

State Statistics for registration. Then the information Procedure 10. Notarize documents be signed by a director of a company or other letter with assigned statistics codes can be mailed for opening a bank account including authorized person. The following documents should to the legal address of the new company but in signatures on a bank card be submitted to the notary: minutes of meeting practice entrepreneurs prefer to personally obtain the Time: 1 day of founders on establishment of a limited liability information letter at Rosstat in order to avoid delays company, charter (draft), passport of applicant who Cost: RUB 700 and losing the letter during mail delivery. signs the application, application (form R11001). The Comments: To open a bank account, notarized copies cost of notarization varies. In Vladivostok the cost is of documents confirming the registration of a new 500 rubles. Procedure 6*. Obtain confirmation of company are required, along with notarization of registration at the Social Insurance Fund signatures of authorized company representatives Procedure 2*. Open a temporary bank account and deposit part of charter capital Time: 1 day on a bank card. As an alternative, some banks certify copies of registration documents and signatures on a Cost: No cost Time: 1 day bank card themselves. Comments: It is envisaged that the Federal Tax Cost: No cost Service operates a one-stop shop and sends informa- Procedure 11. Open the company bank Comments: At least 50% of the charter capital must tion about the registered legal entity to the funds account be paid before company incorporation. The balance and statistics and then receives their registration Time: 1 day must be paid during the first year of operation. To deposit charter capital a temporary bank account certificates and passes all certificates to the applicant Cost: RUB 1,500 together with the registration documents issued by should be opened. Time, cost and number of required Comments: On state registration of a legal entity the Federal Tax Service. But in practice on completion documents might vary depending on the bank. (LLC) a temporary bank account is transformed into of state registration at the Federal Tax Service the The following documents are required to open a a permanent bank account. To do so, it is necessary founder personally goes to the Social Insurance temporary bank account: charter (draft), agreement to submit to a bank the documents received in Fund and on the same day receives the registration and minutes of meeting. The minutes of meeting procedure No.4 as well as a copy of an information certificate. should indicate that the founders entrust their letter from the statistics service, an order appointing representative (indicate name) to open a temporary Procedure 7*. Obtain confirmation of a chief accountant or an order authorizing the head bank account, deposit charter capital and receive the registration at the Pension Fund of the company to act as chief accountant, an order money back in case the registration does not happen. Time: 1 day appointing a director. An additional agreement The charter capital can be in a noncash form - a about opening a bank account is signed and a bank Cost: No cost common practice. (Law on LLC, Article 15). card with samples of signatures of the head of the Comments: It is envisaged that the Federal Tax company and the chief accountant and the seal print Procedure 3*. Pay registration fee for state Service operates a one-stop shop and sends informa- is prepared. Cost of opening of a bank account varies registration in a bank and get proof thereof tion about the registered legal entity to the funds and depends upon each bank. Sometimes banks have Time: 1 day and statistics and then receives their registration special offers for small and medium-size enterprises certificates and passes all certificates to the applicant Cost: No cost (included in procedure of state and do not charge for opening accounts. The average registration at the Federal Tax Service) together with the registration documents issued by cost of opening a bank account in Vladikavkaz is Comments: The registration fee of 4,000 rubles the Federal Tax Service. But in practice on completion 1,500 rubles. of state registration at the Federal Tax Service the must be paid before documents are submitted for founder personally goes to the Pension Fund and on Procedure 12. Inform the Federal Tax registration. The registration fee doubled from 2,000 the same day receives the registration certificate. Service, the Pension Fund and the Social rubles to 4,000 rubles in January 2011. Insurance Fund of the company bank Procedure 4. Submit documents for Procedure 8*. Obtain confirmation of account number registration at the Mandatory Medical registration of a legal entity to one-stop Insurance Fund Time: 1 day shop at the Federal Tax Service and obtain Cost: No cost Time: 1 day registration documents Comments: A taxpayer within 7 days of opening Cost: No cost Time: 20 days a bank account notify the Federal Tax Service, Cost: RUB 4,000 Comments: It is envisaged that the Federal Tax the Pension Fund and the Social Insurance Fund. Comments: State registration of a legal entity at Service operates a one-stop shop and sends Notifications of required format with the bank the Federal Tax Service includes a data entry in the information about the registered legal entity to the account number an applicant either mails or brings Unified State Register of Legal Entities and a taxpayer funds and statistics and then receive their registration personally. In the latter case a secretariat puts a registration. certificates and passes all certificates to the applicant mark on the second copy that information has been together with the registration documents issued by received. Banks also inform the Federal Tax Service The following documents are required: the Federal Tax Service. But in practice on completion about opening bank accounts. (1) Application for state registration of a legal entity of state registration at the Federal Tax Service the (form R11001), founder personally goes to the Mandatory Medical STARTING A BUSINESS (2) Minutes of a meeting establishing a legal entity, Insurance Fund and on the same day receives the Vladivostok, Primorsky Krai registration certificate. (3) Charter of a limited liability company (2 copies), Standard company legal form: Limited Liability Company (4) Receipt confirming payment of a state duty. Procedure 9*. Order and obtain a company (LLC) An applicant receives a receipt confirming a list of seal Minimum capital requirement: RUB 5,000 (US$ 162) documents and date of submission. State registration Time: 2 days Data as of: November 2011 is conducted no more than 5 working days after Cost: RUB 600 documents are submitted. Procedure 1. Notarize signature on Comments: After obtaining registration documents On the 6th working day the applicant receives the application for state registration of a legal at the Federal Tax Service a company can order a following documents confirming state registration of entity seal at any seal producer. To do so, it is necessary to a legal entity: show the following documents: certificate of state Time: 1 day (1) Certificate of state registration of a legal entity in registration, certificate of taxpayer registration, an Cost: RUB 500 (200 rubles state duty + 300 rubles the Unified State Register of Legal Entities with excerpt from the Unified State Register of Legal notary fees) assigned main state registration number, Entities. The price of a seal depends on its model and Comments: In accordance with the Federal Law of (2) Certificate as a taxpayer with assigned individual complexity of production. In Vladikavkaz a seal costs August 8, 2001 No. 129-FZ “On State Registration number of a taxpayer, 500 rubles on average. of Legal Entities and Individual Entrepreneurs”, a (3) Excerpt from the Unified State Register of Legal signature on application for state registration of a Entities, company must be notarized. Application should

* This procedure can be completed simultaneously with previous procedures. 72 DOING BUSINESS IN RUSSIA 2012

(4) Copy of the charter certified by the Federal Tax Comments: A taxpayer within 7 days of opening Procedure 4. Submit documents for Service. a bank account notify the Federal Tax Service, registration of a legal entity to one-stop The Federal Tax Service sends electronically the Pension Fund and the Social Insurance Fund. shop at the Federal Tax Service and obtain information to the Pension Fund, Mandatory Medical Notifications of required format with the bank registration documents Insurance Fund, Social Insurance Fund and Federal account number an applicant either mails or brings Time: 19 days personally. In the latter case a secretariat puts a Service of State Statistics, which register the Cost: RUB 4,000 company within 5 working days from when they mark on the second copy that information has been receive information from the Federal Tax Service and received. Banks also inform the Federal Tax Service Comments: State registration of a legal entity at mail registration certificates to the legal address of about opening bank accounts. the Federal Tax Service includes a data entry in the the company. Unified State Register of Legal Entities and a taxpayer STARTING A BUSINESS registration. The state duty for state registration of a legal entity increased in January 2011 to 4,000 rubles (The Tax Volgograd, Volgograd Oblast The following documents are required: Code, Article 333.33). Standard company legal form: Limited Liability Company (1) Application for state registration of a legal entity (LLC) (form R11001), Procedure 5*. Obtain confirmation with Minimum capital requirement: RUB 5,000 (US$ 162) (2) Minutes of a meeting establishing a legal entity, statistics codes at the Federal Service of Data as of: November 2011 (3) Charter of a limited liability company (2 copies), State Statistics (4) Receipt confirming payment of a state duty. Procedure 1. Notarize signature on Time: 2 days An applicant receives a receipt confirming a list of Cost: No cost application for state registration of a legal documents and date of submission. State registration entity Comments: The Federal Tax Service within no more is conducted no more than 5 working days after than 5 working days after state registration sends Time: 1 day documents are submitted. information about the legal entity to the Federal Cost: RUB 200 On the 6th working day the applicant receives the Service of State Statistics which registers the new Comments: In accordance with the Federal Law of following documents confirming state registration of company. Then the applicant can personally pick up August 8, 2001 No. 129-FZ “On State Registration a legal entity: the registration certificate with assigned statistic of Legal Entities and Individual Entrepreneurs”, a (1) Certificate of state registration of a legal entity in codes. signature on application for state registration of a the Unified State Register of Legal Entities with company must be notarized. Application should assigned main state registration number, Procedure 6*. Order and obtain a company be signed by a director of a company or other seal (2) Certificate as a taxpayer with assigned individual authorized person. The following documents should number of a taxpayer, Time: 1 day be submitted to the notary: minutes of meeting (3) Excerpt from the Unified State Register of Legal Cost: RUB 350 of founders on establishment of a limited liability Entities, Comments: After obtaining registration documents company, charter (draft), passport of applicant who (4) Copy of the charter certified by the Federal Tax at the Federal Tax Service a company can order a signs the application, application (form R11001). The Service. seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Volgograd the cost is show the following documents: certificate of state 200 rubles. Within mo more than 5 working days from the registration, certificate of taxpayer registration, an moment of state registration the Federal Tax Service Procedure 2*. Open a temporary bank sends information from the Unified State Register excerpt from the Unified State Register of Legal account and deposit part of charter capital Entities. The price of a seal depends on its model and of Legal Entities to the Pension Fund, Mandatory complexity of production. In Vladivostok a seal costs Time: 1 day Medical Insurance Fund, Social Insurance Fund and 350 on average. Cost: No cost Federal Service of State Statistics, which register the Comments: At least 50% of the charter capital must company and mail their registration certificates to Procedure 7*. Open the company bank be paid before company incorporation. The balance the legal address of the company. account must be paid during the first year of operation. To The state duty for state registration of a legal entity Time: 2 days deposit charter capital a temporary bank account increased in January 2011 to 4,000 rubles (The Tax Cost: RUB 2,200 should be opened. Time, cost and number of required Code, Article 333.33). Comments: On state registration of a legal entity documents might vary depending on the bank. (LLC) a temporary bank account is transformed into The following documents are required to open a Procedure 5*. Obtain confirmation with a permanent bank account. To do so, it is necessary temporary bank account: charter (draft), agreement statistics codes at the Federal Service of to submit to a bank the documents received in and minutes of meeting. The minutes of meeting State Statistics procedure No.4 as well as a copy of an information should indicate that the founders entrust their Time: 2 days letter from the statistics service, an order appointing representative (indicate name) to open a temporary Cost: No cost a chief accountant or an order authorizing the head bank account, deposit charter capital and receive the money back in case the registration does not happen. Comments: After receipt of documents of state of the company to act as chief accountant, an order registration at the Federal Tax Service a director of appointing a director. An additional agreement The charter capital can be in a noncash form - a common practice. (Law on LLC, Article 15). the company or his authorized representative goes about opening a bank account is signed and a bank to Rosstat and shows the registration certificate. card with samples of signatures of the head of the Procedure 3*. Pay registration fee for state Within 2 days the company is registered by Rosstat company and the chief accountant and the seal print registration in a bank and get proof thereof and obtains the registration certificate with assigned is prepared. Cost of opening of a bank account varies statistics codes. and depends upon each bank. Sometimes banks have Time: 1 day special offers for small and medium-size enterprises Cost: No cost (included in procedure of state Procedure 6*. Order and obtain a company and do not charge for opening accounts. The average registration at the Federal Tax Service) seal cost of opening a bank account in Vladivostok is Comments: The registration fee of 4,000 rubles Time: 2 days 2,200 rubles. must be paid before documents are submitted for Cost: RUB 500 registration. The registration fee doubled from 2,000 Procedure 8*. Inform the Federal Tax rubles to 4,000 rubles in January 2011. Comments: After obtaining registration documents Service, the Pension Fund and the Social at the Federal Tax Service a company can order a Insurance Fund of the company bank seal at any seal producer. To do so, it is necessary to account number show the following documents: certificate of state Time: 1 day registration, certificate of taxpayer registration, an excerpt from the Unified State Register of Legal Cost: No cost

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 73

Entities. The price of a seal depends on its model and Procedure 2*. Open a temporary bank (2) Certificate as a taxpayer with assigned individual complexity of production. In Volgograd a seal costs account and deposit part of charter capital number of a taxpayer, 500 rubles on average. Time: 1 day (3) Excerpt from the Unified State Register of Legal Procedure 7*. Open the company bank Cost: No cost Entities, account Comments: At least 50% of the charter capital must (4) Copy of the charter certified by the Federal Tax Service, Time: 1 day be paid before company incorporation. The balance as well as Cost: RUB 1,300 must be paid during the first year of operation. To deposit charter capital a temporary bank account (5) Certificate of registration in the Pension Fund Comments: On state registration of a legal entity should be opened. Time, cost and number of required (LLC) a temporary bank account is transformed into (6) Certificate of registration in the Mandatory documents might vary depending on the bank. a permanent bank account. To do so, it is necessary Medical Insurance Fund The following documents are required to open a to submit to a bank the documents received in (7) Certificate of registration in the Social Insurance temporary bank account: charter (draft), agreement procedure No.4 as well as a copy of an information Fund. and minutes of meeting. The minutes of meeting letter from the statistics service, an order appointing should indicate that the founders entrust their The state duty for state registration of a legal entity a chief accountant or an order authorizing the head representative (indicate name) to open a temporary increased in January 2011 to 4,000 rubles (The Tax of the company to act as chief accountant, an order bank account, deposit charter capital and receive the Code, Article 333.33). appointing a director. An additional agreement money back in case the registration does not happen. about opening a bank account is signed and a bank The charter capital can be in a noncash form - a Procedure 5. Obtain confirmation with card with samples of signatures of the head of the common practice. (Law on LLC, Article 15). statistics codes at the Federal Service of company and the chief accountant and the seal print State Statistics is prepared. Cost of opening of a bank account varies Procedure 3*. Pay registration fee for state Time: 2 days and depends upon each bank. Sometimes banks have registration in a bank and get proof thereof Cost: No cost special offers for small and medium-size enterprises Time: 1 day and do not charge for opening accounts. The average Comments: After completion of state registration at Cost: No cost (included in procedure of state registra- cost of opening a bank account in Volgograd is 1,300 the Federal Tax Service the applicant goes to Rosstat tion at the Federal Tax Service) rubles. and shows documents of state registration obtained Comments: The registration fee of 4,000 rubles at the Federal Tax Service. On the next day the Procedure 8*. Inform the Federal Tax must be paid before documents are submitted for applicant can pick up the registration certificate with Service, the Pension Fund and the Social registration. The registration fee doubled from 2,000 assigned statistics codes at Rosstat. Since October Insurance Fund of the company bank rubles to 4,000 rubles in January 2011. 1, 2011 Rosstat doesn’t issue information letters, only account number registration certificates. The registration certificates Procedure 4. Submit documents for are issued free of charge. Time: 1 day registration of a legal entity to one-stop Cost: No cost shop at the Federal Tax Service and obtain Procedure 6. Order and obtain a company Comments: A taxpayer within 7 days of opening registration documents seal a bank account notify the Federal Tax Service, Time: 10 days Time: 1 day the Pension Fund and the Social Insurance Fund. Cost: RUB 4,000 Cost: RUB 800 Notifications of required format with the bank account number an applicant either mails or brings Comments: State registration of a legal entity at Comments: After obtaining registration documents personally. In the latter case a secretariat puts a the Federal Tax Service includes a data entry in the at the Federal Tax Service a company can order a mark on the second copy that information has been Unified State Register of Legal Entities and a taxpayer seal at any seal producer. To do so, it is necessary to received. Banks also inform the Federal Tax Service registration. show the following documents: certificate of state about opening bank accounts. The following documents are required: registration, certificate of taxpayer registration, an excerpt from the Unified State Register of Legal STARTING A BUSINESS (1) Application for state registration of a legal entity (form R11001), Entities. The price of a seal depends on its model and complexity of production. In Voronezh a seal costs Voronezh, Voronezh Oblast (2) Minutes of a meeting establishing a legal entity, 800 rubles on average. Standard company legal form: Limited Liability Company (3) Charter of a limited liability company (2 copies), (LLC) (4) Receipt confirming payment of a state duty. Procedure 7. Open the company bank account Minimum capital requirement: RUB 5,000 (US$ 162) An applicant receives a receipt confirming a list of Data as of: November 2011 documents and date of submission. State registration Time: 1 day is conducted no more than 5 working days after Cost: RUB 2,000 Procedure 1. Notarize signature on documents are submitted. application for state registration of a legal Comments: On state registration of a legal entity entity Once state registration is completed, the Federal (LLC) a temporary bank account is transformed into Tax Service sends information from the Unified a permanent bank account. To do so, it is necessary Time: 1 day State Register of Legal Entities to the Pension Fund, to submit to a bank the documents received in Cost: RUB 1,000 (200 rubles state duty for a Mandatory Medical Insurance Fund and Social procedure No.4 as well as a copy of an information signature of each of 5 founders) Insurance Fund. The funds register the company and letter from the statistics service, an order appointing Comments: In accordance with the Federal Law of send their registration certificates back to the Federal a chief accountant or an order authorizing the head August 8, 2001 No. 129-FZ “On State Registration Tax Service which passes them to the applicant of the company to act as chief accountant, an order of Legal Entities and Individual Entrepreneurs”, a together with other registration documents. appointing a director. An additional agreement signature on application for state registration of a Registration information from the Pension Fund is about opening a bank account is signed and a bank company must be notarized. Application should be included in the Unified State Register of Legal Entities card with samples of signatures of the head of the signed by all founders of the company (5 founder and the registration certificate is mailed to the legal company and the chief accountant and the seal print as in the standard case). The following documents address of the company. is prepared. Cost of opening of a bank account varies and depends upon each bank. Sometimes banks have should be submitted to the notary: minutes of meet- On the 8th working day the applicant receives the special offers for small and medium-size enterprises ing of founders on establishment of a limited liability following documents confirming state registration of and do not charge for opening accounts. The average company, charter (draft), passport of applicant who a legal entity: signs the application, application (form R11001). The cost of opening a bank account in Voronezh is 2,000 (1) Certificate of state registration of a legal entity in cost of notarization varies. In Voronezh the cost is rubles. the Unified State Register of Legal Entities with 1,000 rubles. assigned main state registration number,

* This procedure can be completed simultaneously with previous procedures. 74 DOING BUSINESS IN RUSSIA 2012

Procedure 8. Inform the Federal Tax registration. The registration fee doubled from 2,000 show the following documents: certificate of state Service, the Pension Fund and the Social rubles to 4,000 rubles in January 2011. registration, certificate of taxpayer registration, an Insurance Fund of the company bank excerpt from the Unified State Register of Legal Procedure 4. Submit documents for account number Entities. The price of a seal depends on its model and registration of a legal entity to one-stop Time: 1 day complexity of production. In Vyborg a seal costs 500 shop at the Federal Tax Service and obtain rubles on average. Cost: No cost registration documents Comments: A taxpayer within 7 days of opening Time: 22 days Procedure 7*. Open the company bank account a bank account notify the Federal Tax Service, Cost: RUB 4,000 the Pension Fund and the Social Insurance Fund. Time: 2 days Comments: State registration of a legal entity at Notifications of required format with the bank the Federal Tax Service includes a data entry in the Cost: RUB 900 account number an applicant either mails or brings Unified State Register of Legal Entities and a taxpayer Comments: On state registration of a legal entity personally. In the latter case a secretariat puts a registration. (LLC) a temporary bank account is transformed into mark on the second copy that information has been a permanent bank account. To do so, it is necessary received. Banks also inform the Federal Tax Service The following documents are required: to submit to a bank the documents received in about opening bank accounts. (1) Application for state registration of a legal entity procedure No.4 as well as a copy of an information (form R11001), STARTING A BUSINESS letter from the statistics service, an order appointing (2) Minutes of a meeting establishing a legal entity, Vyborg, Leningrad Oblast a chief accountant or an order authorizing the head (3) Charter of a limited liability company (2 copies), of the company to act as chief accountant, an order Standard company legal form: Limited Liability Company (4) Receipt confirming payment of a state duty. appointing a director. An additional agreement (LLC) An applicant receives a receipt confirming a list of about opening a bank account is signed and a bank Minimum capital requirement: RUB 5,000 (US$ 162) documents and date of submission. State registration card with samples of signatures of the head of the Data as of: November 2011 is conducted no more than 5 working days after company and the chief accountant and the seal print documents are submitted. is prepared. Cost of opening of a bank account varies and depends upon each bank. Sometimes banks have Procedure 1. Notarize signature on On the 6th working day the applicant receives the special offers for small and medium-size enterprises application for state registration of a legal following documents confirming state registration of and do not charge for opening accounts. The average entity a legal entity: Time: 1 day cost of opening a bank account in Vyborg is 900 (1) Certificate of state registration of a legal entity in rubles. Cost: RUB 450 (200 rubles state duty + 250 rubles the Unified State Register of Legal Entities with notary fees) assigned main state registration number, Procedure 8*. Inform the Federal Tax Comments: In accordance with the Federal Law of (2) Certificate as a taxpayer with assigned individual Service, the Pension Fund and the Social August 8, 2001 No. 129-FZ “On State Registration number of a taxpayer, Insurance Fund of the company bank of Legal Entities and Individual Entrepreneurs”, a (3) Excerpt from the Unified State Register of Legal account number signature on application for state registration of a Entities, Time: 1 day company must be notarized. Application should be (4) Copy of the charter certified by the Federal Tax Cost: No cost signed by a director of a company or other authorized Service. person. The following documents should be submit- Comments: A taxpayer within 7 days of opening ted to the notary: minutes of meeting of founders Within no more than 5 working days from the a bank account notify the Federal Tax Service, on establishment of a limited liability company, moment of state registration the Federal Tax Service the Pension Fund and the Social Insurance Fund. charter (draft), passport of applicant who signs the sends information from the Unified State Register Notifications of required format with the bank application, application (form R11001). The cost of of Legal Entities to the Pension Fund, Mandatory account number an applicant either mails or brings notarization varies. In Vyborg the cost is 450 rubles. Medical Insurance Fund, Social Insurance Fund and personally. In the latter case a secretariat puts a Federal Service of State Statistics, which register the mark on the second copy that information has been Procedure 2*. Open a temporary bank company and mail their registration certificates to received. Banks also inform the Federal Tax Service account and deposit part of charter capital the legal address of the company. about opening bank accounts.

Time: 1 day The state duty for state registration of a legal entity STARTING A BUSINESS Cost: No cost increased in January 2011 to 4,000 rubles (The Tax Yakutsk, Republic of Sakha – Yakutia Comments: At least 50% of the charter capital must Code, Article 333.33). be paid before company incorporation. The balance Standard company legal form: Limited Liability Company must be paid during the first year of operation. To Procedure 5*. Obtain confirmation with (LLC) deposit charter capital a temporary bank account statistics codes at the Federal Service of Minimum capital requirement: RUB 5,000 (US$ 162) State Statistics should be opened. Time, cost and number of required Data as of: November 2011 documents might vary depending on the bank. Time: 2 days The following documents are required to open a Cost: RUB 300 (cost of a round trip to Saint Procedure 1. Notarize signature on temporary bank account: charter (draft), agreement Petersburg) application for state registration of a legal and minutes of meeting. The minutes of meeting Comments: After receipt of documents of state entity should indicate that the founders entrust their registration at the Federal Tax Service a director of the Time: 1 day representative (indicate name) to open a temporary company or his authorized representative goes to the Cost: RUB 300 (200 rubles state duty + 100 rubles bank account, deposit charter capital and receive the Federal Service of State Statistics (in Saint Petersburg, notary fees) money back in case the registration does not happen. 39 Professor Popov Str.) and shows the certificate Comments: In accordance with the Federal Law of The charter capital can be in a noncash form - a of state registration. Within 2 days the company is August 8, 2001 No. 129-FZ “On State Registration common practice. (Law on LLC, Article 15). registered by Rosstat and obtains the registration of Legal Entities and Individual Entrepreneurs”, a Procedure 3*. Pay registration fee for state certificate with assigned statistics codes. signature on application for state registration of a registration in a bank and get proof thereof Procedure 6*. Order and obtain a company company must be notarized. Application should be Time: 1 day seal signed by a director of a company or other authorized person. The following documents should be submit- Cost: No cost (included in procedure of state Time: 1 day ted to the notary: minutes of meeting of founders registration at the Federal Tax Service) Cost: RUB 500 on establishment of a limited liability company, Comments: The registration fee of 4,000 rubles Comments: After obtaining registration documents charter (draft), passport of applicant who signs the must be paid before documents are submitted for at the Federal Tax Service a company can order a application, application (form R11001). The cost of seal at any seal producer. To do so, it is necessary to notarization varies. In Yakutsk the cost is 300 rubles.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 75

Procedure 2*. Open a temporary bank mail their registration certificates to the legal address Cost: RUB 400 (200 rubles state duty + 200 rubles account and deposit part of charter capital of the company. notary fees) Time: 1 day The state duty for state registration of a legal entity Comments: In accordance with the Federal Law of Cost: RUB 500 increased in January 2011 to 4,000 rubles (The Tax August 8, 2001 No. 129-FZ “On State Registration Code, Article 333.33). of Legal Entities and Individual Entrepreneurs”, a Comments: At least 50% of the charter capital must signature on application for state registration of a be paid before company incorporation. The balance Procedure 5*. Order and obtain a company company must be notarized. Application should must be paid during the first year of operation. To seal be signed by a director of a company or other deposit charter capital a temporary bank account authorized person. The following documents should should be opened. Time, cost and number of required Time: 1 day be submitted to the notary: minutes of meeting documents might vary depending on the bank. Cost: RUB 600 of founders on establishment of a limited liability The following documents are required to open a Comments: After obtaining registration documents company, charter (draft), passport of applicant who temporary bank account: charter (draft), agreement at the Federal Tax Service a company can order a signs the application, application (form R11001). The and minutes of meeting. The minutes of meeting seal at any seal producer. To do so, it is necessary to cost of notarization varies. In Yaroslavl the cost is should indicate that the founders entrust their show the following documents: certificate of state 400 rubles. representative (indicate name) to open a temporary registration, certificate of taxpayer registration, an bank account, deposit charter capital and receive the excerpt from the Unified State Register of Legal Procedure 2*. Open a temporary bank money back in case the registration does not happen. Entities. The price of a seal depends on its model and account and deposit part of charter capital The charter capital can be in a noncash form - a complexity of production. In Yakutsk a seal costs 600 Time: 1 day common practice. (Law on LLC, Article 15). rubles on average. Cost: No cost Procedure 3*. Pay registration fee for state Procedure 6. Open the company bank Comments: At least 50% of the charter capital must registration in a bank and get proof thereof account be paid before company incorporation. The balance Time: 1 day Time: 1 day must be paid during the first year of operation. To deposit charter capital a temporary bank account Cost: No cost (included in procedure of state registra- Cost: RUB 1,200 tion at the Federal Tax Service) should be opened. Time, cost and number of required Comments: On state registration of a legal entity documents might vary depending on the bank. Comments: The registration fee of 4,000 rubles (LLC) a temporary bank account is transformed into The following documents are required to open a must be paid before documents are submitted for a permanent bank account. To do so, it is necessary temporary bank account: charter (draft), agreement registration. The registration fee doubled from 2,000 to submit to a bank the documents received in and minutes of meeting. The minutes of meeting rubles to 4,000 rubles in January 2011. procedure No.4 as well as a copy of an information should indicate that the founders entrust their Procedure 4. Submit documents for letter from the statistics service, an order appointing representative (indicate name) to open a temporary a chief accountant or an order authorizing the head registration of a legal entity to one-stop bank account, deposit charter capital and receive the of the company to act as chief accountant, an order shop at the Federal Tax Service and obtain money back in case the registration does not happen. appointing a director. An additional agreement registration documents The charter capital can be in a noncash form - a about opening a bank account is signed and a bank common practice. (Law on LLC, Article 15). Time: 20 days card with samples of signatures of the head of the Cost: RUB 4,000 company and the chief accountant and the seal print Procedure 3*. Pay registration fee for state Comments: State registration of a legal entity at is prepared. Cost of opening of a bank account varies registration in a bank and get proof thereof the Federal Tax Service includes a data entry in the and depends upon each bank. Sometimes banks have Time: 1 day Unified State Register of Legal Entities and a taxpayer special offers for small and medium-size enterprises Cost: No cost (included in procedure of state registra- registration. and do not charge for opening accounts. The average tion at the Federal Tax Service) The following documents are required: cost of opening a bank account in Yakutsk is 1200 rubles. Comments: The registration fee of 4,000 rubles (1) Application for state registration of a legal entity must be paid before documents are submitted for (form R11001), Procedure 7. Inform the Federal Tax Service, registration. The registration fee doubled from 2,000 (2) Minutes of a meeting establishing a legal entity, the Pension Fund and the Social Insurance rubles to 4,000 rubles in January 2011. Fund of the company bank account number (3) Charter of a limited liability company (2 copies), Procedure 4. Submit documents for (4) Receipt confirming payment of a state duty. Time: 1 day registration of a legal entity to one-stop An applicant receives a receipt confirming a list of Cost: No cost shop at the Federal Tax Service and obtain documents and date of submission. State registration Comments: A taxpayer within 7 days of opening registration documents is conducted no more than 5 working days after a bank account notify the Federal Tax Service, Time: 20 days the Pension Fund and the Social Insurance Fund. documents are submitted. Cost: RUB 4,000 At the end of the registration period the applicant Notifications of required format with the bank account number an applicant either mails or brings Comments: State registration of a legal entity at receives the following documents confirming state the Federal Tax Service includes a data entry in the registration of a legal entity: personally. In the latter case a secretariat puts a mark on the second copy that information has been Unified State Register of Legal Entities and a taxpayer (1) Certificate of state registration of a legal entity in received. Banks also inform the Federal Tax Service registration. the Unified State Register of Legal Entities with about opening bank accounts. The following documents are required: assigned main state registration number, (1) Application for state registration of a legal entity STARTING A BUSINESS (2) Certificate as a taxpayer with assigned individual (form R11001), number of a taxpayer, Yaroslavl, Yaroslavl Oblast (2) Minutes of a meeting establishing a legal entity, (3) Excerpt from the Unified State Register of Legal Standard company legal form: Limited Liability Company (3) Charter of a limited liability company (2 copies), Entities, (LLC) (4) Receipt confirming payment of a state duty. (4) Copy of the charter certified by the Federal Tax Minimum capital requirement: RUB 5,000 (US$ 162) Service. An applicant receives a receipt confirming a list of documents and date of submission. State registration The Federal Tax Service sends electronically Data as of: November 2011 is conducted no more than 5 working days after information to the Pension Fund, Mandatory Medical Procedure 1. Notarize signature on documents are submitted. Insurance Fund, Social Insurance Fund and Federal application for state registration of a legal On the 6th working day the applicant receives the Service of State Statistics, which register the entity company within 5 working days from when they following documents confirming state registration of receive information from the Federal Tax Service and Time: 1 day a legal entity:

* This procedure can be completed simultaneously with previous procedures. 76 DOING BUSINESS IN RUSSIA 2012

(1) Certificate of state registration of a legal entity in personally. In the latter case a secretariat puts a Comments: State registration of a legal entity at the Unified State Register of Legal Entities with mark on the second copy that information has been the Federal Tax Service includes a data entry in the assigned main state registration number, received. Banks also inform the Federal Tax Service Unified State Register of Legal Entities and a taxpayer (2) Certificate as a taxpayer with assigned individual about opening bank accounts. registration. number of a taxpayer, STARTING A BUSINESS The following documents are required: (3) Excerpt from the Unified State Register of Legal (1) Application for state registration of a legal entity Entities, Yekaterinburg, Sverdlovsk Oblast (form R11001), (4) Copy of the charter certified by the Federal Tax Standard company legal form: Limited Liability Company (2) Minutes of a meeting establishing a legal entity, (LLC) Service. (3) Charter of a limited liability company (2 copies), The Federal Tax Service sends information from Minimum capital requirement: RUB 5,000 (US$ 162) (4) Receipt confirming payment of a state duty. the Unified State Register of Legal Entities to the Data as of: November 2011 An applicant receives a receipt confirming a list of Pension Fund, Mandatory Medical Insurance Fund, documents and date of submission. State registration Social Insurance Fund and Federal Service of State Procedure 1. Notarize signature on application for state registration of a legal is conducted no more than 5 working days after Statistics, which register the company within 5 days documents are submitted. from when they receive information from the Federal entity On the 6th working day the applicant receives the Tax Service and mail their registration certificates to Time: 1 day the legal address of the company. following documents confirming state registration of Cost: RUB 300 (200 rubles state duty + 100 rubles a legal entity: The state duty for state registration of a legal entity notary fees) (1) Certificate of state registration of a legal entity in increased in January 2011 to 4,000 rubles (The Tax Comments: In accordance with the Federal Law of Code, Article 333.33). the Unified State Register of Legal Entities with August 8, 2001 No. 129-FZ “On State Registration assigned main state registration number, of Legal Entities and Individual Entrepreneurs”, a (2) Certificate as a taxpayer with assigned individual Procedure 5*. Order and obtain a company signature on application for state registration of a number of a taxpayer, seal company must be notarized. Application should Time: 1 day be signed by a director of a company or other (3) Excerpt from the Unified State Register of Legal Entities, Cost: RUB 600 authorized person. The following documents should be submitted to the notary: minutes of meeting (4) Copy of the charter certified by the Federal Tax Comments: After obtaining registration documents of founders on establishment of a limited liability Service. at the Federal Tax Service a company can order a company, charter (draft), passport of applicant who seal at any seal producer. To do so, it is necessary to Within no more than 5 working days from the signs the application, application (form R11001). The show the following documents: certificate of state moment of state registration the Federal Tax Service cost of notarization varies. In Yekaterinburg the cost registration, certificate of taxpayer registration, an sends information from the Unified State Register is 300 rubles. excerpt from the Unified State Register of Legal of Legal Entities to the Pension Fund, Mandatory Entities. The price of a seal depends on its model and Procedure 2*. Open a temporary bank Medical Insurance Fund, Social Insurance Fund and Federal Service of State Statistics, which register the complexity of production. In Yaroslavl a seal costs account and deposit part of charter capital 600 rubles on average. company and mail their registration certificates to the Time: 1 day legal address of the company. Procedure 6. Open the company bank Cost: No cost The state duty for state registration of a legal entity account Comments: At least 50% of the charter capital must increased in January 2011 to 4,000 rubles (The Tax Time: 3 days be paid before company incorporation. The balance Code, Article 333.33). Cost: RUB 1,100 must be paid during the first year of operation. To deposit charter capital a temporary bank account Comments: On state registration of a legal entity Procedure 5*. Obtain confirmation with should be opened. Time, cost and number of required (LLC) a temporary bank account is transformed into statistics codes at the Federal Service of documents might vary depending on the bank. a permanent bank account. To do so, it is necessary State Statistics The following documents are required to open a to submit to a bank the documents received in Time: 1 day temporary bank account: charter (draft), agreement procedure No.4 as well as a copy of an information and minutes of meeting. The minutes of meeting Cost: No cost letter from the statistics service, an order appointing should indicate that the founders entrust their Comments: After receipt of registration documents a chief accountant or an order authorizing the head representative (indicate name) to open a temporary at the Federal Tax Service a director of the company of the company to act as chief accountant, an order bank account, deposit charter capital and receive the or an authorized representative personally goes to appointing a director. An additional agreement money back in case the registration does not happen. Rosstat with a certificate of state registration. On the about opening a bank account is signed and a bank The charter capital can be in a noncash form - a same day Rosstat registers the company and issues card with samples of signatures of the head of the common practice. (Law on LLC, Article 15). their registration certificate. company and the chief accountant and the seal print is prepared. Cost of opening of a bank account varies Procedure 3*. Pay registration fee for state Procedure 6*. Order and obtain a company and depends upon each bank. Sometimes banks have registration in a bank and get proof thereof seal special offers for small and medium-size enterprises Time: 1 day Time: 1 day and do not charge for opening accounts. The average Cost: RUB 500 cost of opening a bank account in Yaroslavl is 1100 Cost: No cost (included in procedure of state rubles. registration at the Federal Tax Service) Comments: After obtaining registration documents Comments: The registration fee of 4,000 rubles at the Federal Tax Service a company can order a Procedure 7. Inform the Federal Tax Service, must be paid before documents are submitted for seal at any seal producer. To do so, it is necessary to the Pension Fund and the Social Insurance registration. The registration fee doubled from 2,000 show the following documents: certificate of state Fund of the company bank account number rubles to 4,000 rubles in January 2011. registration, certificate of taxpayer registration, an Time: 1 day excerpt from the Unified State Register of Legal Procedure 4. Submit documents for Entities. The price of a seal depends on its model and Cost: No cost registration of a legal entity to one-stop complexity of production. In Yekaterinburg a seal Comments: A taxpayer within 7 days of opening shop at the Federal Tax Service and obtain costs 500 rubles on average. a bank account notify the Federal Tax Service, registration documents the Pension Fund and the Social Insurance Fund. Procedure 7*. Open the company bank Time: 30 days Notifications of required format with the bank account Cost: RUB 4,000 account number an applicant either mails or brings Time: 2 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 77

Cost: RUB 2.500 Comments: BuildCo obtains the technical conditions construction permit. The document issuance time and Comments: On state registration of a legal entity of connection to water supply and sanitation systems. costs are established at the federal level and requires (LLC) a temporary bank account is transformed into The applicant submits a request with full information submission of the following documents: application, a permanent bank account. To do so, it is necessary about the facility. Connection fee is based on the all technical conditions and land titles. The document to submit to a bank the documents received in Vodokanal tariffs. Payment for connection is made is issued by the Department of Architecture and procedure No.4 as well as a copy of an information in accordance with a schedule attached to the Urban Development. agreement. letter from the statistics service, an order appointing Procedure 8. Obtain construction permit a chief accountant or an order authorizing the head Procedure 4*. Obtain technical conditions at Architecture and Urban Development of the company to act as chief accountant, an order for heavy shower sewage services at Department of Urban Development Policy appointing a director. An additional agreement Production Department of Water and Committee of Irkutsk City about opening a bank account is signed and a bank Sewage Facilities, Municipal Unitary card with samples of signatures of the head of the Time: 7 days Organization company and the chief accountant and the seal print Cost: No cost is prepared. Cost of opening of a bank account varies Time: 30 days Comments: Construction permits are issued by and depends upon each bank. Sometimes banks have Cost: No cost the Committee for Urban Development Policy. The special offers for small and medium-size enterprises Comments: BuildCo obtains the technical conditions list of documents, time and costs are regulated by and do not charge for opening accounts. The average of connection to storm drain systems. Technical the Russian Federal UDC and the Irkutsk Service cost of opening a bank account in Yekaterinburg is conditions of storm drain systems are not mandatory. Rendering Rules. No technical specification approvals 2500 rubles. However, many would go and get these technical of the project are required for a construction permit. Procedure 8*. Inform the Federal Tax conditions. For that purpose, they would submit an application with the land title. Procedure 9. Request compliance certificate Service, the Pension Fund and the Social of the building with the technical conditions Insurance Fund of the company bank Procedure 5*. Obtain technical conditions from the water utility at Vodokanal, account number for telephone connection at any service Municipal Unitary Organization—water Time: 1 day provider utility Cost: No cost Time: 14 days Time: 18 days Comments: A taxpayer within 7 days of opening Cost: No cost Cost: No cost a bank account notify the Federal Tax Service, Comments: BuildCo obtains the technical specifica- Comments: To connect to water supply and the Pension Fund and the Social Insurance Fund. tion for landline telephone connection and concluding sanitation systems, BuildCo lodges an inquiry with Notifications of required format with the bank a contract with any service provider. The applicant the Irkutsk Vodokanal Municipal Unitary Enterprise account number an applicant either mails or brings submits the following document package: applica- with enclosed application, work completion reports, personally. In the latter case a secretariat puts a tion, official documents for the land plot (cadastral equipment certificates, commissioning reports and mark on the second copy that information has been passport, resolution of the city mayor authorizing the acceptance reports. If the submitted documents received. Banks also inform the Federal Tax Service design, draft design and design estimates). No fees are in full order (a field visit is made to a residential about opening bank accounts. are charged for connection and contract conclu- building in progress; however, they may choose not sion. After the completion of construction, a fee is to go to a warehouse), and connection is technically collected for telephone number assignment in the available (it is, as the technical conditions have been LIST OF PROCEDURES process of connection to the telephone line. already obtained), the organization issues a certificate of compliance with the technical conditions. DEALING WITH CONSTRUCTION Procedure 6*. Request geological survey PERMITS of the land plot at any organization Procedure 10. Receive inspection from with permission from a self-regulating the water utility at Vodokanal, Municipal Irkutsk, Irkutsk Oblast organization Unitary Organization—water utility Warehouse value: RUB 26,120,000 (US$ 844,063) Time: 30 days Time: 1 day Data as of: November 2011 Cost: RUB 75,000 [based on the warehouse size, 3 Cost: No cost borings are required at RUB 25,000 each] Comments: Prior to connection, a survey should Procedure 1. Request a topographic survey Comments: BuildCo places an order for engineering/ be held for compliance with technical conditions of of the land plot at Licensed company geodesic survey of the land plot to determine the connection to water supply and sanitation systems. Time: 30 days soil composition and collect other data required for Cost: RUB 50,000 designing. The assignment should be performed by Procedure 11. Obtain compliance certificate a specialized SRO, licensed for engineering/geodesic of the building with the technical conditions Comments: BuildCo’s representatives place an order from the water utility at Vodokanal, for land survey at 1:500 (for an area up to 1 ha) by surveys. The applicant submits the following docu- ments: Application, draft building design, designer’s Municipal Unitary Organization—water a specialized organization with an SRO license for utility geodesic operations. The applicant submits the assignment. The tests should be performed in following documents: 1) Application/contract. 2) accordance with the construction standards (SNiPs). Time: 45 days Land plot title (cadastral plan) and land boundaries. The cost depends on the estimated scope of work, in Cost: No cost particular, on the number of holes to be drilled in the Comments: BuildCo obtains a certificate of Procedure 2*. Obtain technical conditions plot area. compliance with technical conditions based on test for electricity connection at Irkutsk Electric outcomes. Supply Network Company Procedure 7. Obtain development plan of land plot (GPZU) at Architecture and Time: 25 days Procedure 12. Connect to water services Urban Development Department of Urban Cost: No cost at Vodokanal, Municipal Unitary Development Policy Committee of Irkutsk Organization—water utility Comments: BuildCo applies for the technical City Time: 6 days conditions for electricity connection Time: 30 days Cost: RUB 244,300 [water supply connection Cost: Procedure 3*. Obtain technical conditions Cost: No cost RUB 106,446; sanitation system connection Cost: to connect to water and sewage services at Comments: In accordance with the Urban RUB 137,854.] Urban Development Policy Committee of Development Code, a land development plan is a Comments: BuildCo obtains the technical conditions Irkutsk City document that contains key land plot information: of connection to water supply and sanitation systems. Time: 21 days boundary coordinates, authorized use and technical The applicant submits a request with full information Cost: No cost conditions. The document is required for obtaining a about the facility. Connection fee is based on the

* This procedure can be completed simultaneously with previous procedures. 78 DOING BUSINESS IN RUSSIA 2012

Vodokanal tariffs. Payment for connection is made application or contract; 2) legal documents for the and color-marked boundaries of the territory. General in accordance with a schedule attached to the land plot (cadastral plan) and plot borderes. The layout of the company/organization internal lines at agreement. company staff perform site work and develop a 1:500 (in the event of construction/renovation of a layout/topographic plan. Installed communication building location on the compound of a company/ Procedure 13. Obtain compliance certificate lines are checked during the inspection. The organization with a different owner); 9) estimated of the building with the technical conditions applicant receives an approved plan and topographic balance of water consumption and disposal in the from the phone utility at any service survey report. connected facility (m3/day) with an indication of the provider (who issued technical conditions) water use purposes (potable, utilities, industrial), Time: 3 days Procedure 2. Obtain development plan of including fire-fighting. The estimate should be made land plot (GPZU) at Architecture and Urban Cost: No cost by a license design organization and provided on Development Committee of Kaliningrad the designer’s official stationary; 10) information Comments: BuildCo obtains a certificate of compli- City ance with technical conditions. The procedure is free about the composition of drain water planned for of charge. Time: 30 days discharging into the sewerage; 11) information about Cost: No cost sub-subscribers; 12) copies of the water supply and/ Procedure 14. Request and connect to Comments: The procedure is governed by the or sanitation specifications that had been issued telephone services at any service provider Administrative regulation of the Principal City earlier (if available). If the technical conditions are (who issued technical conditions) Architect’s Department of the Committee for collected by an authorized agent, a duly documented Time: 3 days Architecture and Urban Development of the customer’s power of attorney should be filed. Cost: RUB 3,000 Kaliningrad Mayor’s Office on provision of the Procedure 5*. Obtain technical conditions Comments: The telephone number is assigned at the municipal service of land development plan issuance. to connect to heavy shower sewage at time of conclusion of a contract for connection to a BuildCo’s representative files an application with the Gidrotekhnik, Municipal Unitary Enterprise Committee for Architecture and Urban Development telephone network, and is chargeable according to the Time: 14 days provider tariffs. of the Kaliningrad Mayor’s Office in conformity with the Guidelines “On the Procedure of Completing the Cost: RUB 5,186 Procedure 15. Obtain occupancy permit Land Development Plan Form”, submitting the fol- Comments: A representative of the customer lodges at Architecture and Urban Development lowing documents: power of attorney; copies of titles with Gidrotechnik Municipal Unitary Enterprise an Department of Urban Development Policy to the land plot and permanent structure/property; application and document package (land title, topo- Committee of Irkutsk City technical passport of permanent structures situated graphic survey at 1:500 and authorization document). Time: 7 days on the land plot; cadastral layout of the land plot with After the land plot survey by Gidrotechnik staff, a list of coordinates; topographic survey of the land a hydrologic land survey certificate and technical Cost: No cost plot with surface and underground communications conditions are issued. Comments: The facility occupancy permit is issued at 1:500 and valid for no longer than 2 years; technical in accordance with the requirements of the UDC and conditions for connection of the permanent structure Procedure 6*. Obtain technical conditions the service regulation. to engineering/technical support networks—for to connect to fixed telephone line. property under construction/renovation. Conclude agreement at Rostelekom, OJSC, Procedure 16. Obtain cadastral passport Kaliningrad Division of the building at Bureau of technical Procedure 3. Obtain technical conditions Time: 30 days inventorization to connect to electricity at Yantarenergo, Cost: RUB 5,200 [technical conditions: RUB 2,700; Time: 30 days OJSC Number: RUB 2,500] Cost: RUB 30,000 Time: 30 days Comments: The applicant applies to Rostelecom Comments: The facility cadastral passport is required Cost: No cost OJSC or another telephone company and submits for further registration of property interests in the Comments: BuildCo applies for the technical the following documents: application, general layout FRS. At the same time, a technical passport is made; conditions for electricity connection. with the land plot plan, consolidated network diagram it shows the actual parameters of the newly built (master layout), land title, legal entity establishing property. Procedure 4. Obtain technical conditions to documents, document confirming the authority the connect to water and sewage at Municipal of the CEO. Procedure 17. Registration of the building Unitary Organization Vodokanal—water at the Federal Service of State Registration, utility Procedure 7. Obtain certificate of Cadastre and Cartography (Rostreestr) Time: 14 days compliance of the project design from Time: 30 days the water utility at Municipal Unitary Cost: RUB 32,167 [RUB 0 for technical conditions and Organization Vodokanal—water utility Cost: RUB 30,000 contract conclusion. RUB 32,167 (tariffs: water supply: Comments: Property titles for the new building are RUB 694,000 per m3/hour; water disposal: RUB Time: 30 days registered in compliance with the Federal Law “On 635,000 per m3/hour)] Cost: No cost Real Property Rights Registration” by the Irkutsk Comments: The applicant applies to Vodokanal Comments: To obtain design clearance, the applicant Oblast Department of the Federal Service for State and submits the following documents: 1)notarized applies submits the following documents: operating Registration, Cadastre and Cartography after submit- copies of incorporation documents (certificate of design and a free-form application. ting the application, cadastral passport, incorporation state registration and articles of association); 2) documents, occupancy permit and land titles. documents confirming the signee’s authority (power Procedure 8*. Obtain certificate of compliance of the project design from the DEALING WITH CONSTRUCTION PERMITS of attorney, ID); 3) copies of land title documents (for the title holder); 4) information about the boundaries phone utility at Rostelekom, OJSC Kaliningrad, Kaliningrad Oblast of the land plot, where a permanent structure is Time: 30 days Warehouse value: RUB 26,120,000 (US$ 844,063) planned to be built, or where a permanent structure Cost: No cost Data as of: November 2011 subject to renovation is located; 5) information about Comments: To obtain design clearance, the applicant the authorized use of the land plot (an authoriza- applies to Rostelecom OJSC or another telephone Procedure 1. Request a topographic survey tion letter from the Kaliningrad Committee for company and submits the following documents: of the land plot at any licensed organization Architecture and Urban Development); 6) informa- application, design documentation, Land plot title Time: 17 days tion about the utmost parameters of the authorized documentation, legal entity establishing documents, construction/renovation of permanent structures Cost: RUB 16,000 document confirming the authority the of the CEO. related to the land plot; 7) situational facility plan Comments: An application is lodged with a with residential area positioning; 8) topographic company with a SRO license for this type of work. survey with facility setting, at 1:500, with all surface The applicant provides the following documents: 1) and underground communications and structures

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 79

Procedure 9. Request geological survey Vodokanal engineering and technical systems is public construction supervisory agency (if there are of the land plot at Commercial enterprise compiled. provisions for public construction supervision) about with a permission from the self-regulating compliance of the facility with technical regulations Procedure 12*. Obtain confirmation of organization for engineering geological and design documentation. compliance of building with technical surveys conditions for telephone connection at Procedure 15. Obtain cadastral passport Time: 12 days Rostelekom, OJSC, Kaliningrad Division of the building at Kaliningrad Division of Cost: RUB 70,000 Time: 2 days the Federal State Unitary Organization “Rostechinventarizatsia—Federal BTI”— Comments: A representative of the customer Cost: No cost contacts any SRO-authorized company for the bureau of technical inventory conduct of engineering/geodesic surveys. The Procedure 13. Obtain a technical passport Time: 15 days customer provides the following documents: applica- of the building at Kaliningrad Division of Cost: RUB 3,000 tion, building draft design and designer assignment. the Federal State Unitary Organization Comments: The applicant submits a package The work is based on the soil composition and other “Rostechinventarizatsia—Federal BTI”— of documents to the Kaliningrad Office of collected data, as required for the designed. The cost bureau of technical inventory Rostechinventarizatsia – Federal BTI. is RUB 60-80 thousand for soil engineering/geodesic Time: 15 days surveys, borings and laboratory test outcomes (RUB Cost: RUB 55,000 Procedure 16. Registration of the building 15-20 thousand per boring). at the Federal Service of State Registration, Comments: The applicant applies to the Kaliningrad Cadastre and Cartography (Rostreestr) Procedure 10. Obtain construction permit Office of Rostechinventarizatsia – Federal BTI and at Architecture and Urban Development submits a package of documents together with the Time: 10 days Committee of Kaliningrad City application for inventory and issuance of a technical Cost: RUB 15,000 Time: 10 days passport. The following documents must be enclosed: Comments: The applicant applies to the Municipal Cost: No cost organization establishing documents (articles of Unitary Enterprise and submits the following docu- association, (a copy of) state registration certificate, ments: documents confirming capacity of the legal Comments: It is a municipal service provided in (a copy of) tax registration certificate, excerpt from entity and its representative’s authority; state fee pay- accordance with the Administrative Regulation of the Uniform Register of Legal Entities (issued no ment voucher; construction permit, the developer’s the Committee of Architecture and Construction later than 3 months prior to the submission), land title/authorization documents for the land where the of the Kaliningrad City Administration on provision title documents: property interests registration construction project has been accomplished; facility of the municipal service of construction permit certificate, commissioning permit, occupancy permit, occupancy permit; cadastral passport of the newly issuance. The applicant lodges a construction completed project acceptance report issued by an established property. permit application with the following attachments: acceptance commission, order for approval of the 1) land titles; 2) land development plan; 3) design acceptance commission report, certificate of state Procedure 17. Sign agreement with water documentation materials: 3.1) explanatory note; 3.2) registration of the land title (copies bearing official utility at Municipal Unitary Organization land plot layout in line with the land development seals of the organization), document confirming the Vodokanal—water utility plan, with marked permanent structure are, access authority of the CEO to sign a service contract with Time: 18 days roads and paths, public servitude and archeological Rostechinventarizatsia – Federal BTI, list of items Cost: RUB 63,196 heritage area boundaries; 3.3) land plot arrangement subject to technical inventory. layout confirming location of the linear object Comments: The following documents should be within the red lines, approved by the area planning Procedure 14. Obtain occupancy permit provided for conclusion of an agreement with legal documents, as applicable to linear objects; 3.4) at Architecture and Urban Development entities – building owners: 1) application for conclu- diagrams showing architectural decisions; 3.5) Committee of Kaliningrad City sion of an agreement for water supply and drain/ pollutant collection; 2) certificate of official registra- information about engineering equipment, aggregate Time: 10 days plan of engineering/technical support with points tion of the title; 3) certificate of official registration of Cost: No cost of connection of the designed permanent structure the enterprise; 4) certificate of tax registration (INN/ to engineering/technical support lines; 3.6) project Comments: The applicant submits an occupancy KPP); 5) articles of association of the enterprise; 6) of organization of construction/renovation of a permit with enclosed documents according to the list minutes of an incorporation meeting about the CEO permanent structure; 3.7) project of organization of established by the regulation on provision of the mu- appointment or an order of the CEO appointment; demolition or dismantling of permanent structures, nicipal service of occupancy permit issuance. These 7) banking information; 8) order of appointment of a or their parts; 4) positive conclusion of the State documents include: 1) land title; 2) land development contact person for the contract (full name, position, Expertise on the design documentation (as applied plan; 3) construction permit; 4) permanent structure contact telephone number); 9) water supply and to the design documentation of projects stipulated in acceptance report (in case of construction, renova- sanitation balance, or an estimate; 10) diagram of Article 49 of the Russian Federal Urban Development tion, major repairs under a contract); 5) document distribution of operating responsibilities for water and Code); 5) permit for deviation from the utmost confirming compliance of the newly built permanent sewage lines (in a standalone building). parameters of the authorized construction/renovation structure with technical regulations and signed by the (if the person concerned has been issued such a person in charge of the construction; 6) document DEALING WITH CONSTRUCTION PERMITS permit); 6) notarized written consent of all owners of confirming compliance of the newly built permanent Kaluga, Kaluga Oblast the permanent structure in the event of the structure structure with technical regulations and signed by Warehouse value: RUB 26,120,000 (US$ 844,063) renovation. the person in charge of the construction (or the developer or customer in the event of construction, Data as of: November 2011 Procedure 11. Obtain confirmation of renovation, major repairs under a contract), except compliance of the building with technical for construction/renovation/major repair of individual Procedure 1. Obtain development plan of conditions for connection to water and residential buildings; 7) documents confirming land plot (GPZU) at Architecture and Urban sewage at Municipal Unitary Organization compliance of the newly built, renovated or repaired Development Department Vodokanal—water utility permanent structure with technical conditions, and Time: 30 days Time: 9 days signed by officials of the organizations in charge of Cost: No cost engineering/technical network maintenance (if any); Cost: No cost Comments: The land development plan is a manda- 8) diagram of the newly built, renovated or repaired tory document submitted by the developer/customer Comments: The applicant submits a request to permanent structure with location of engineering/ Vodokanal for a municipal service provision along to obtain official design appraisal, construction permit technical support networks within the land area, and building occupation permit. Development plans with the construction project title, construction and planned land layout, signed by the person in project address, numbers of the Vodokanal technical are drawn for land plots designated for construc- charge of the construction (and the developer or tion and renovation of permanent structures. The conditions and a power of attorney. Based on the customer in the event of construction/renovation/ inspection outcomes, a report of connection to document contains key land plot data: boundary major repairs under a contract); 9) conclusion of a coordinates, authorized use and specifications. The

* This procedure can be completed simultaneously with previous procedures. 80 DOING BUSINESS IN RUSSIA 2012

following documents should be submitted to obtain Procedure 6. Obtain technical conditions Procedure 12. Receive inspection during it: a) documents proving the applicant’s rights to the for electricity connection at MRSK Center construction works at Rostekhnadzor land plot; b) topographic/geodesic materials from and Privolzhme, OJSC, Kalugaenergo Time: 1 day the boundary-setting file with the land delimitation Division Cost: No cost and current encumbrances; c) X and Y coordinate Time: 30 days catalog; c) documents certifying cadastral registration Comments: Rostechnadzor staff inspect lifting of the land plot. The document is issued by the Cost: No cost mechanisms used in the construction process (if any). Department of Architecture and Urban Development Comments: BuildCo applies for the technical conditions for electricity connection Procedure 13*. Obtain confirmation of in accordance with the established municipal service compliance of the building with technical rendering rules. Procedure 7. Obtain certificate of conditions for connection to water and Procedure 2*. Obtain technical conditions compliance of the project design from the sewage at Kaluga Oblast Vodokanal—water to connect to water and sewage at water utility at Kaluga Oblast Vodokanal— utility Centrtelekom water utility Time: 21 days Time: 30 days Time: 25 days Cost: No cost Cost: RUB 62,974 Cost: RUB 8,000 Comments: According to the Urban Development Comments: BuildCo obtains the conditions of Comments: The final construction design, compliant Code, documentary evidence of compliance of the connection to water supply and sanitation systems. to the prior technical conditions, is submitted to the newly built warehouse with the technical conditions The applicant submits a request to Kaluga Oblast water supplier for clearance. is mandatory for obtaining an occupancy permit. Vodokanal OJSC with full information about the facil- This document is issued by Kaluga Oblast Vodokanal Procedure 8. Obtain certificate of LLC after checking the water supply and sanitation ity. Connection fee is based on the Vodokanal tariffs compliance of the project design from the and amounts to RUB 28,870 per m3 of water supply systems. phone utility at Centrtelekom a day, and RUB 21,760 per m3 of water disposal a day. Time: 7 days Procedure 14*. Obtain compliance Payment for connection is made in accordance with a certificate from the phone utility confirming Cost: RUB 2,000 schedule attached to the agreement. the building’s compliance with the technical Procedure 3*. Obtain technical conditions Comments: The final construction design, compliant conditions at Centrtelekom, OJSC to the prior technical conditions, is submitted to the to connect to heavy shower sewage at telephone company for clearance. Time: 11 days Kalugaspetsavtodor Cost: No cost Time: 30 days Procedure 9. Obtain certificate of Comments: The telephone company is notified about Cost: No cost compliance of the project design from completion of work, with enclosed reports, that the heavy shower sewage utility at Comments: BuildCo obtains the technical conditions serves as a basis for issuance of technical conditions. Kalugaspetsavtodor of connection to the storm drain system and conclud- Time: 17 days Procedure 15*. Obtain clearance on the ing a contract. No fees are charged for connection and compliance of the construction with the at contract conclusion . Cost: No cost Kalugaspetsavtodor Comments: The final construction design, compliant Procedure 4. Request a topographic survey Time: 11 days of the land plot at Kaluga Engineering and to the prior technical conditions, is submitted to the organization for clearance. Cost: No cost Construction Survey Organization (TISIZ) Comments: According to the Urban Development Time: 16 days Procedure 10. Obtain clearance of project Code, documentary evidence of compliance of the Cost: RUB 20,000 documentation from the Traffic Police at newly built warehouse with the technical conditions GIBDD Division in Kaluga City—traffic Comments: BuildCo places an order for land survey at is mandatory for obtaining an occupancy permit 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 ha, police Time: 11 days Procedure 16*. Obtain a technical passport over 10 ha) by a specialized organization with an SRO of the building at Bureau of technical license for geodesic operations. The applicant submits Cost: No cost inventorization the following documents: 1) Application/contract. 2) Comments: The final construction design is submit- Time: 30 days Land plot title (cadastral plan) and land boundaries. A ted to the road police for clearance. report is prepared as a result of the topographic survey Cost: RUB 9,300 with a layout of buildings and structures; underground, Procedure 11. Obtain construction permit Comments: Technical passport of a facility is surface and above-surface communication lines; design at Architecture and Urban Development required for obtaining an occupancy permit. It elements; fencing, roads, etc. Department describes physical parameters of the built facility. Procedure 5*. Request geological survey Time: 10 days The document is available from BTI Public Enterprise, or any bureau of technical inventory. To obtain a of the land plot at Kaluga Engineering and Cost: No cost technical passport, the applicant should submit an Construction Survey Organization (TISIZ) Comments: Before starting construction, BuildCo application and the building design, incorporation Time: 21 days needs to obtain a construction permit. Its absence entails a penalty, according to Clause 1 of Article 9.5 documents, construction permit, cadastral passport Cost: RUB 30,000 of the Administrative Offense Code. Besides, in ac- of the land and land lease agreement or title. Tariffs Comments: BuildCo places an order for engineering/ cordance with Article 222 of the Russian Federal Civil for issuing technical passports are established by the geodesic survey of the land plot to determine the Code, such property may be considered by a court organization itself, and as a rule, they are not easily soil composition and collect other data required for as unauthorized construction, and may be subject available. designing. The assignment should be performed by to removal at the expense of the building entity. To Procedure 17. Request occupancy permit a specialized SRO, licensed for engineering/geodesic obtain a construction permit, BuildCo needs to lodge at Architecture and Urban Development surveys. The applicant submits the following docu- an application with the Construction and Land Issues Department ments: applicant, draft building design, designer’s Department, with the following documents attached Time: 21 days assignment. The tests should be performed in land titles, land development plan and design accordance with the construction standards (SNiPs). documentation materials. The construction permit Cost: No cost The cost depends on the estimated scope of work, in issuance procedure is governed by the administrative Comments: To obtain a permit for commissioning particular, on the number of holes to be drilled in the regulation on the municipal service of issuance of the facility, the applicant submits, in accordance with plot area. permits for construction/renovation/major repair of the Russian Federal Urban Development Code, all permanent structures. required documents to the Kaluga City Department of Construction and Land Issues.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 81

Procedure 18. Receive inspection for cadastral passport, incorporation documents, Procedure 5*. Request technical conditions occupancy permit at Architecture and occupancy permit and land titles. for a telephone connection at GTS or TVT Urban Development Department DEALING WITH CONSTRUCTION PERMITS Time: 22 days Time: 1 day Cost: No cost Kazan, Republic of Tatarstan Cost: No cost Comments: BuildCo obtains technical specification Comments: Upon receipt of an application and Warehouse value: RUB 26,120,000 (US$ 844,063) for landline telephone connection and concluding documents for a facility occupancy permit, the staff Data as of: November 2011 a contract. No fees are charged for connection of the Kaluga City Construction and Land Issues and contract conclusion. After the completion of Department make an inspection and decide, whether Procedure 1. Request a topographic survey construction, a fee is collected for telephone number to issue the permit or reject the application. of the land plot at any specialialized assignment immediately during connection to the organization telephone line. Procedure 19. Obtain occupancy permit Time: 10 days at Architecture and Urban Development Procedure 6*. Request geological survey of Department Cost: RUB 15,000 the land plot at KazTISIZ, OJSC Comments: BuildCo places of an order for land survey Time: 10 days Time: 30 days at 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to Cost: No cost 10 ha, over 10 ha) by a specialized organization with Cost: RUB 7,500 Comments: A decision to reject or issue an an SRO license for geodesic operations. The applicant Comments: BuildCo places an order for engineering/ occupancy permit is issued to the applicant in 10 days submits the following documents: 1) Application/ geodesic survey of the land plot to determine the upon application by the Department of Construction contract. 2) Land plot title (cadastral plan) and land soil composition and collect other data required for and Land Issues of the city of Kaluga. boundaries. designing. The assignment should be performed by a specialized SRO, licensed for engineering/geodesic Procedure 20. Sign agreement with water Procedure 2*. Obtain clearance on surveys. The applicant submits the following docu- and sewage utility at Kaluga Oblast compliance with the city zoning rules ments: applicant, draft building design, designer’s Vodokanal—water utility at Center of Architecture and Urban assignment. The tests should be performed in Time: 14 days Development accordance with the construction standards (SNiPs). Cost: No cost Time: 21 days The cost depends on the estimated scope of work, Comments: The network connection report is signed Cost: No cost in particular, on the number of holes to be drilled in the plot area. In our case, there will be 5-7 holes, 10 upon completion of procedures related to physical Comments: The development plan should be meters deep. connection of the internal lines to the main networks. approved by the Principal Architect. Urban development regulations pertaining to real property Procedure 7*. Request inspection from Procedure 21*. Sign agreement with the use and construction-related changes apply to all phone utility at Centrtelekom, OJSC the state expertise at State Expertize—for areas and each land plot. These regulations include: construction Time: 7 days authorized real property uses (the owners may opt for Time: 1 day Cost: No cost the acceptable use and change them depending on Cost: No cost Comments: The network connection report is signed the market situation; in specially reserved situations upon completion of procedures related to physical it is subject to certain conditions and clearances for Comments: BuildCo lodges an application with the connection of the internal lines to the main networks. criteria of non-damaging adjacent properties); land State Expertise of the Republic of Tatarstan with a area and linear dimension (width, length) margins copy of the development design operating documents Procedure 22*. Sign agreement (minimum/maximum); margins of the construction to obtain an assignment for environmental study. with heavy shower sewage utility at authorized on the land plots; minimal building setback Procedure 8*. Laboratory works by Kalugaspetsavtodor from the land plot boundary; maximum indicators; Rospotrebnadzor—the Consumer height of the buildings/number of stories; plot Time: 10 days Protection Agency at Center for Hygiene Cost: No cost development rate (ratio of the land area covered by buildings to the total land area); land use rate (ratio and Epidemiology Comments: The network connection report is signed of the total surface area of all existing buildings and Time: 18 days upon completion of procedures related to physical that of potential buildings to the total land area); car Cost: RUB 18,000 connection of the internal lines to the main networks. parking indicators; other indicators and requirements. Comments: Laboratory surveys environmental Procedure 23*. Obtain cadastral passport Procedure 3. Obtain technical conditions conditions at the land plot. of the building at Bureau of technical for electricity connection at Kazan Electric inventorization Procedure 9*. Obtain clearance of allocation Supply Network of land plot at Center for Development of Time: 5 days Time: 30 days Initial Documentation, Municipal Unitary Cost: No cost Cost: No cost Organization Comments: After an occupancy permit is obtained, Comments: BuildCo applies for technical conditions Time: 2 days BuildCo may proceed with cadastral registration of for electricity connection Cost: No cost the facility and obtaining a cadastral passport for it. Generally, the cadastral passport is drawn by the Procedure 4*. Obtain technical Comments: The laboratory testing outcomes are sent same organization that had prepared the technical conditions for water and sewage services to the State Expertise of the Republic of Tatarstan for passport. The cadastral passport drafting cost is part at Vodokanal—Municipal Unitary a conclusion on the possibility to build a warehouse of the technical passport drafting cost. Organization—water utility on the given land plot. Then the document is submitted for the GPZU issuance along with the other Procedure 24. Registration of the building Time: 22 days documents. at the Federal Service of State Registration, Cost: No cost Procedure 10*. Obtain development plan of Cadastre and Cartography (Rostreestr) Comments: BuildCo obtains technical conditions of connection to water supply and sanitation systems. land plot (GPZU) at Architecture and Urban Time: 30 days Development Department Cost: RUB 15,000 The applicant submits the following document package: application, land title (cadastral passport, Time: 30 days Comments: Property titles for the new building are draft design and design estimates). The connection Cost: No cost registered in compliance with the Federal Law “On is paid for at the time of the contract execution. To be Real Property Rights Registration” by a department Comments: The following documents are required paid for at the time of connection. of the Federal Service for State Registration, Cadastre to obtain the GPZU: application, draft design, and Cartography after submitting applications,

* This procedure can be completed simultaneously with previous procedures. 82 DOING BUSINESS IN RUSSIA 2012

all technical conditions, land titles, conclusion Cost: No cost newly built warehouse with the technical conditions is of GosExpertiza conclusion and design approval Comments: 5 inspections take place according to the mandatory for obtaining an occupancy permit. certificate. approved inspection agenda based on the construc- Procedure 25*. Obtain compliance Procedure 11*. Obtain technical conditions tion schedule. certificate of the building with the phone to connect to heavy shower sewage at GTS Procedure 18. Receive inspection during utility at Gosstroynadzor—construction or TVT construction works at Department of supervision Time: 14 days Outdoor Territory Improvement Time: 7 days Cost: No cost Time: 1 day Cost: No cost Comments: Compound landscaping plan and storm Cost: No cost Comments: The telephone company is notified about drain diagram should be provided. Comments: 5 inspections take place according to the completion of work, with enclosed reports that serves as a basis for issuance of technical conditions. Procedure 12. Obtain certificate of approved inspection agenda based on the construc- compliance of the project design from tion schedule. Procedure 26. Connect to water services at the water utility at FBUZ Hygiene and Procedure 19. Receive inspection during Gosstroynadzor—construction supervision Epidemiology Center construction works at State Construction Time: 29 days Time: 14 days Supervision Agency Cost: RUB 37,137 Cost: No cost Time: 1 day Comments: The network connection report is signed Comments: The final construction design, compliant Cost: No cost upon completion of procedures related to physical to the prior technical conditions, is submitted to the Comments: 5 inspections take place according to the connection of the internal lines to the main networks. water supplier for clearance. approved inspection agenda based on the construc- The contract amount is paid in full. Procedure 13*. Obtain certificate of tion schedule. Procedure 27*. Request and connect to compliance of the project design from Procedure 20. Receive inspection during telephone services at Gosstroynadzor— the phone utility at State Expertize—for construction works at State Construction construction supervision construction Supervision Agency Time: 10 days Time: 14 days Time: 1 day Cost: No cost Cost: No cost Cost: No cost Procedure 28. Obtain clearance from the Comments: The final construction design, compliant Comments: 5 inspections take place according to the Construction Supervision Authority at to the prior technical conditions, is submitted to the approved inspection agenda based on the construc- Gosstroynadzor—construction supervision telephone company for clearance. tion schedule. Time: 3 days Procedure 14*. Obtain certificate of Procedure 21. Receive inspection during Cost: No cost compliance of the project design from the construction works at Municipal Unitary Comments: Based on inspection outcomes and heavy shower sewage utility at Architecture Organization Vodokanal—water utility certificates of the warehouse compliance with and Urban Development Department Time: 1 day the technical conditions of network maintenance Time: 14 days Cost: No cost companies, the Public Construction Control Agency Cost: No cost Comments: 5 inspections take place according to the issues its conclusion, which is required for obtaining Comments: The final construction design, compliant approved inspection agenda based on the construc- an occupancy permit. to the prior technical conditions, is submitted to the tion schedule. Procedure 29. Obtain a technical passport Department for clearance. Procedure 22. Notify the authorities of end of the building at Gosstroynadzor— Procedure 15. Obtain construction permit at of construction works at TVT construction supervision Fire Department Time: 1 day Time: 30 days Time: 10 days Cost: No cost Cost: RUB 30,000 Cost: No cost Comments: BuildCo submits of a construction Comments: The technical passport of a facility Comments: Before starting construction, BuildCo completion notification to Gosstroynadzor of the is required for obtaining an occupancy permit. It needs to obtain a construction permit. Its absence Republic of Tatarstan. describes physical parameters of the built facility. The entails a penalty, according to Clause 1 of Article 9.5 document is available from the Municipal Enterprise of the Administrative Offense Code. Construction Procedure 23. Obtain confirmation of of Technical Inventory and Real Property Evaluation, permits are issued by the Municipal Establishment compliance of the building with technical the Kazan Subsidiary of Rostechinventarizatsia – “Urban Permit Department of the Executive conditions for connection to water and Federal BTI, or any bureau of technical inventory. Committee of the Kazan City Municipality”. sewage at Department of External Territory Improvement Procedure 30. Obtain occupancy permit at Procedure 16. Notify the authorities of Gosstroynadzor—construction supervision Time: 7 days commencement of construction works at Time: 15 days Cost: No cost Rospotrebnadzor Cost: No cost Comments: According to the Urban Development Time: 1 day Comments: The occupancy permit application is sub- Code, documentary evidence of compliance of the mitted with the following documents attached: land Cost: No cost newly built warehouse with the technical conditions is title, GPZU, construction permit, report of completed Comments: BuildCo should send a notification about mandatory for obtaining an occupancy permit. the construction beginning date 10 days in advance. construction acceptance by the developer, documents The following construction-related documents should Procedure 24*. Obtain compliance certificate certifying the facility compliance with technical condi- be enclosed with the notification: construction permit, of the building with the heavy shower sewage tions, diagram with the facility positioning within the schedule, list of responsible persons. Based on the utility at Department for Urban Development land plot area. The process is governed by a relevant notification, the State Construction Control develops Permissions of Kazan City regulation. The accepted project and declared design construction inspection schedules, and share them Time: 7 days information are compared. with BuildCo. Cost: No cost Procedure 31. Obtain cadastral passport Procedure 17. Receive inspection during Comments: According to the Urban Development of the building at Municipal Unitary construction works at GIBDD—traffic police Code, documentary evidence of compliance of the Organization Vodokanal—water utility Time: 1 day Time: 21 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 83

Cost: No cost Procedure 4*. Obtain technical conditions Procedure 9*. Obtain certificate of Comments: After an occupancy permit is obtained, for telephone connection and sign compliance of the project design from the the developer may proceed with obtaining a cadastral agreement at Rostelekom phone utility at Rostelekom passport for it in the Oblast Department of the Time: 3 days Time: 5 days Federal Service for State Registration, Cadastre and Cost: RUB 7,740 Cost: RUB 2,510 Cartography. Comments: BuildCo obtains the technical specifica- Comments: The final construction design, compliant Procedure 32. Registration of the building tion for landline telephone connection and concluding to the prior technical conditions, is submitted to the at the Federal Service of State Registration, a contract. No fees are charged for connection telephone company for clearance. Cadastre and Cartography (Rostreestr) and contract conclusion. After the completion of Procedure 10*. Obtain certificate of at Department of External Territory construction, a fee is collected for telephone number compliance of the project design from the Improvement assignment immediately during connection to the telephone line in accordance with approved tariffs. heavy shower sewage utility at Committee Time: 24 days The tariffs are available at: http://kem.sibirtelecom. on Road Facilities, Territorial Improvement, Cost: RUB 15,000 sibnet.ru/?id=125 Transport and Communication Comments: Property tfor the new building are reg- Time: 14 days Procedure 5*. Obtain technical conditions istered in compliance with the Federal Law “On Real Cost: No cost Property Rights Registration” by a department of the for connecting to the heavy shower sewage Comments: The final construction design, compliant Federal Service for State Registration, Cadastre and and sign agreement at Committee on to the prior technical conditions, is submitted to the Cartography after submitting application cadastral Road Facilities, Territorial Improvement, organization for clearance. passport, incorporation documents, occupancy Transport and Communication permit and land titles. Time: 7 days Procedure 11*. Obtain clearance of project documentation from the Traffic Police at DEALING WITH CONSTRUCTION PERMITS Cost: No cost Comments: BuildCo obtains the technical conditions GIBDD Division in Kemerovo City—traffic Kemerovo, Kemerovo Oblast of connection to storm drain systems. police Warehouse value: RUB 26,120,000 (US$ 844,063) Time: 75 days Procedure 6*. Request a topographic Cost: No cost Data as of: November 2011 survey of the land plot at Arkhproekt, LLC Procedure 1. Obtain development plan of Time: 27 days Procedure 12. Obtain construction permit at land plot (GPZU) at Architecture and Urban Cost: RUB 43,000 City Administration Development Department Comments: BuildCo places an order for land survey at Time: 14 days Time: 18 days 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Cost: No cost Cost: No cost ha, over 10 ha) by a specialized organization with an Comments: The procedure is performed in Comments: The land development plan is a manda- SRO license for geodesic operations. The applicant accordance with the established regulations. A tory document submitted by the developer/customer submits the following documents: 1) Application/ construction permit application is submitted along to obtain official design appraisal, construction permit contract. 2) Land plot title (cadastral plan) and land with the following documents: 1) land title 2) and building occupation permit. Development plans boundaries. A report is prepared as a result of the land development plan 3) materials of the design are drawn for land plots designated for construction topographic survey with a layout of buildings and documentation. and renovation of permanent structures. The structures; underground, surface and above-surface Procedure 13. Notify the authorities of document contains key land plot data: boundary communication lines; design elements; fencing, roads, coordinates, authorized use and technical conditions. etc. commencement of construction works at Inspection of the State Construction Procedure 2. Obtain technical conditions Procedure 7*. Request geological survey of Supervision of Kemerovo Oblast the land plot at Geotekhnika, LLC for electricity connection at North Kuzbass Time: 1 day Energy Company, OJSC Time: 30 days Cost: No cost Time: 30 days Cost: RUB 93,000 Comments: Only a notification is required to make Cost: No cost Comments: BuildCo places an order for engineering/ sure that the inspectors would not be unaware about Comments: BuildCo applies for technical conditions geodesic survey of the land plot to determine the the construction in progress. for electricity connection. soil composition and collect other data required for designing. The assignment should be performed by Procedure 14. Obtain certificate of Procedure 3. Obtain technical conditions a specialized SRO, licensed for engineering/geodesic compliance of the building with technical for connecting to water and sewage surveys. The applicant submits the following docu- conditions received from the water utility at services and sign agreement at North ments: applicant, draft building design, designer’s North Kuzbass Energy Company, OJSC Kuzbass Energy Company, OJSC assignment. The tests should be performed in Time: 45 days Time: 27 days accordance with the construction standards (SNiPs). Cost: No cost The cost depends on the estimated scope of work, in Cost: RUB 53,004 [water supply: RUB 37,100; Comments: According to the Urban Development particular, on the number of holes to be drilled in the sanitation: RUB 15,904. Tariffs: water supply: RUB Code, documentary evidence of compliance of the plot area. 28,000 per m3/day; sanitation: RUB 14,000 per newly built warehouse with the technical conditions m3/day. Cited from: http://www.skek/ru/contents/ Procedure 8. Obtain certificate of is mandatory for obtaining an occupancy permit. assets/files/documents/openinfo/teplovodo/form- compliance of the project design from zayavka-water-2010.pdf] the water utility at North Kuzbass Energy Procedure 15*. Obtain certificate of compliance of the building with technical Comments: BuildCo Obtains the technical conditions Company, OJSC conditions received from the phone utility of connection to water supply and sanitation systems. Time: 14 days The applicant submits a request to SKEK with full at Rostelekom Cost: No cost information about the facility. Payment for connec- Time: 8 days tion is made in accordance with a schedule attached Comments: The final construction design, compliant Cost: RUB 250 to the prior technical conditions, is submitted to the to the agreement. Comments: The telephone company is notified about water supplier for clearance. completion of work, with enclosed reports, which serves as a basis for issuance of technical conditions.

* This procedure can be completed simultaneously with previous procedures. 84 DOING BUSINESS IN RUSSIA 2012

Procedure 16*. Obtain certificate of Cost: RUB 15,000 The applicant submits a request to Vodokanal OJSC compliance of the building with technical Comments: The title to the property is registered in with full information about the facility (according to a conditions received from the heavy compliance with the Federal Law “On Real Property form available at the company’s web-site on in the of- shower sewage utility at Committee on Rights Registration” after submitting based on an fice). Payment for connection is made in accordance Road Facilities, Territorial Improvement, applications, cadastral passport, incorporation with a schedule attached to the agreement. Transport and Communication documents, occupancy permit and land titles. Procedure 4*. Obtain technical conditions Time: 10 days Procedure 24. Sign agreement with the to connect to heavy shower sewage at Cost: No cost water utility at North Kuzbass Energy Territory Improvement Department of Comments: According to the Urban Development Company, OJSC Khabarovsk Municipality Code, documentary evidence of compliance of the Time: 11 days Time: 14 days newly built warehouse with the technical conditions Cost: No cost Cost: No cost is mandatory for obtaining an occupancy permit. Comments: An application is lodged with SKEK, Comments: BuildCo obtains the technical condi- Procedure 17. Obtain occupancy permit at with enclosed receiving reports on all elements and tions of connection to the storm drain system and City Administration establishing documents (contract concluded by the concluding a contract. An application is filed with the Time: 17 days owner). Khabarovsk Landscaping Department, In response, they send technical conditions that include both con- Cost: No cost DEALING WITH CONSTRUCTION PERMITS nection to storm drain and landscaping requirements Comments: In order to obtain a permit for to the adjacent area: building access, pathways, etc. commissioning the facility, the applicant submits, Khabarovsk, Khabarovsk Kray in accordance with the Russian Federal Urban Warehouse value: RUB 26,120,000 (US$ 844,063) Procedure 5. Obtain development plan Development Code, all required documents to the Data as of: November 2011 of land plot (GPZU) at Department of Committee for Construction Control of the Kemerovo Architecture, Construction and Land Use of City Administration. Procedure 1. Request a topographic survey Khabarovsk City of the land plot at any organization Procedure 18. Sign agreement with water Time: 30 days Time: 45 days and sewage utility at North Kuzbass Energy Cost: No cost Company, OJSC Cost: RUB 60,000 Comments: The land development plan is a manda- Time: 11 days Comments: BuildCo places an order for land survey at tory document submitted by the developer/customer 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 to obtain official design appraisal, construction permit Cost: No cost ha, over 10 ha) by a specialized organization with an and building occupation permit. Development plans Comments: The network connection report is signed SRO license for geodesic operations. The applicant are drawn for land plots designated for construction upon completion of procedures related to physical submits the following documents: 1) Application/ and renovation of permanent structures. The connection of the internal lines to the main networks. contract. 2) Land plot title (cadastral plan) and land document contains key land plot data: boundary Procedure 19*. Sign agreement with the boundaries. A report is prepared as a result of the coordinates, authorized use, issued technical condi- phone utility at Rostelekom topographic survey with a layout of buildings and tions. The following documents should be submitted structures; underground, surface and above-surface to obtain it: application, draft design, document Time: 7 days communication lines; design elements; fencing, roads, titles. The document is issued by the Department of Cost: No cost etc. If the land has been surveyed, the topographic Architecture and Land Use. Comments: The network connection report is signed survey report is available in the archives of the upon completion of procedures related to physical Department of Architecture. Procedure 6. Obtain technical conditions connection of the internal lines to the main networks. for electricity connection at Khabarovsk Procedure 2*. Request geological survey of City Electrical Network, OJSC Procedure 20*. Sign agreement with heavy the land plot at any organization Time: 16 days shower sewage utility at Committee on Time: 21 days Cost: No cost Road Facilities, Territorial Improvement, Cost: RUB 318,000 [estimated 5 borings, 12 meters Transport and Communication Comments: BuildCo applies for the technical each, total: 60 meters. Cost: RUB 5,300 per meter, conditions for electricity connection Time: 7 days total: RUB 318,000.] Cost: No cost Comments: BuildCo places an order for engineering/ Procedure 7. Obtain certificate of Comments: The network connection report is signed geodesic survey of the land plot to determine the compliance of the project design from upon completion of procedures related to physical soil composition and collect other data required for the water utility at Municipal Unitary connection of the internal lines to the main networks. designing. The assignment should be performed by Organization Vodokanal—water utility a specialized SRO, licensed for engineering/geodesic Time: 14 days Procedure 21*. Obtain a technical passport surveys. The applicant submits the following docu- Cost: No cost of the building at Bureau of technical ments: applicant, draft building design, designer’s Comments: The final construction design, compliant inventory—federal assignment. The tests should be performed in to the prior technical conditions, is submitted to the accordance with the construction standards (SNiPs). Time: 36 days water supplier for clearance. Cost: RUB 15,000 The cost depends on the estimated scope of work, in particular, on the number of holes to be drilled in Comments: After an occupancy permit is obtained, Procedure 8*. Obtain certificate of the plot area. In our case, there will be 5-7 holes, 12 the developer may proceed with cadastral registration compliance of the project design from the meters deep each. Generally, the same company of the facility and obtaining a cadastral passport for it. heavy shower sewage utility at Territory would offer topographic surveys as well. Improvement Department of Khabarovsk Procedure 22*. Receive inspection from the Municipality Procedure 3*. Obtain technical conditions electricity utility at Rostekhnadzor for water and sewage systems and Time: 7 days Time: 13 days sign agreement at Municipal Unitary Cost: No cost Cost: No cost Organization Vodokanal—water utility Comments: The final construction design, compliant Procedure 23. Registration of the building Time: 30 days to the prior technical conditions, is submitted to the Landscaping Department for clearance. at the Federal Service of State Registration, Cost: RUB 116,050 [estimate is based on the tariff of Cadastre and Cartography (Rostreestr) RUB 53,882 per cubic meter of water a day and RUB Procedure 9*. Obtain clearance of project at Federal Agency on State Registration, 39,309 per cubic meter of sanitation a day] documentation from the Traffic Police at Cadastre and Cartography (Rosreestr) Comments: BuildCo obtains the technical conditions GIBDD—traffic police Time: 35 days of connection to water supply and sanitation systems. Time: 10 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 85

Cost: No cost Procedure 15. Receive inspection during is mandatory for obtaining an occupancy permit. This Comments: The final construction design is submit- construction works at Inspection of the document is issued by Vodokanal MUE after checking ted to the road police for clearance. State Architecture and Construction the water supply and sanitation systems. Supervision of Khabarovsk Krai Procedure 22*. Obtain certificate of Procedure 10*. Obtain certificate of Government compliance from fire department at State compliance of the project design from the Fire Supervision Division in a district Time: 1 day heavy shower sewage utility at Territory Cost: No cost Time: 4 days Improvement Department of Khabarovsk Comments: Construction progress inspections take Municipality Cost: No cost place on average once a month. Time: 17 days Comments: The final construction design is submit- ted to the fire department for clearance. Procedure 16. Receive inspection during Cost: No cost construction works at Inspection of the Comments: According to the Urban Development Procedure 11. Obtain certificate of State Architecture and Construction Code, documentary evidence of compliance of the compliance from Architecture department Supervision of Khabarovsk Krai newly built warehouse with the technical conditions at Department of Architecture, Government is mandatory for obtaining an occupancy permit. This Construction and Land Use of Khabarovsk document is issued by the Landscaping Department Time: 1 day City after checking the storm drain connection and Cost: No cost Time: 14 days landscaping work. Comments: Construction progress inspections take Cost: No cost place on average once a month. Procedure 23*. Sign agreement with the Comments: The construction design with all phone utility at Rostelekom, Vostoktelekom clearances is submitted to the Architecture Unit Procedure 17. Receive inspection during or other company construction works at Inspection of the of the Department of Architecture and Urbank Time: 14 days Development, where it is inspected by experts and State Architecture and Construction signed by the Principal City Architect. Supervision of Khabarovsk Krai Cost: RUB 34,400 Government Comments: To connect to telephone network, one Procedure 12. Obtain construction permit at needs to apply to a fixed communication provider Time: 1 day Department of Architecture, Construction (such as Vostoktelecom or Rostelecom) with incorpo- and Land Use of Khabarovsk City Cost: No cost ration documents and a cover letter. Upon contract Time: 10 days Comments: Construction progress inspections take execution, payment is made in accordance with the place on average once a month. Cost: No cost established tariffs. Comments: Before starting construction, BuildCo Procedure 18. Receive inspection during Procedure 24*. Obtain a technical passport needs to obtain a construction permit. Its absence construction works at Inspection of the of the building at Khabarovsk Krai State entails a penalty, according to Clause 1 of Article State Architecture and Construction Unitary Organization of Technical Inventory 9.5 of the Administrative Offense Code. Besides, in Supervision of Khabarovsk Krai and Real Estate Appraisal or federal bureau accordance with Article 222 of the Russian Federal Government of technical inventory Civil Code, such property may be considered by a Time: 1 day Time: 30 days court as unauthorized construction, and may be Cost: No cost subject to removal at the expense of the building Cost: RUB 35,000 entity. To obtain a construction permit, the applicant Comments: Construction progress inspections take Comments: The technical passport is required for needs to lodge an application with the Department place on average once a month. obtaining an occupancy permit. It describes physical parameters of the built facility. The document is of Architecture, Construction and Land Use, with the Procedure 19. Receive inspection during available from the Khabarovsk Kray State Unitary following documents attached: land titles, explanatory construction works at Inspection of the note, land plot layout diagrams (2 types), information Enterprise of Technical Inventory and Real Property State Architecture and Construction Evaluation, Subsidiary of Rostechinventarizatsia – about engineering equipment, combined engineering Supervision of Khabarovsk Krai network layout, construction plan with clearances. Federal BTI, or any bureau of technical inventory. To Government obtain a technical passport, the applicant should Procedure 13. Register with the inspection Time: 1 day submit an application and the building design, incor- authorities at Inspection of the State Cost: No cost poration documents, construction permit, cadastral Architecture and Construction Supervision Comments: Construction progress inspections take passport of the land and land lease agreement or title. of Khabarovsk Krai Government place on average once a month. Tariffs for issuing technical passports are established Time: 1 day by the organization itself and ,as a rule, they are not Cost: No cost Procedure 20. Receive inspection during easily available. construction works at Inspection of the Comments: BuildCo should send a notification about State Architecture and Construction Procedure 25. Request occupancy permit at the construction beginning date 10 days in advance. Supervision of Khabarovsk Krai Department of Architecture, Construction The following construction-related documents Government and Land Use of Khabarovsk City should be enclosed with the notification: construc- Time: 3 days tion permit, schedule, list of responsible persons. Time: 1 day For properties not subject ot public review and Cost: No cost Cost: No cost construction control (as in our case), the procedure is Comments: Construction progress inspections take Comments: The occupancy permit application is sub- not mandatory, though customers sometimes would place on average once a month. mitted with the following documents attached: land carry it out. title, GPZU, construction permit, report of completed Procedure 21. Obtain confirmation of construction acceptance by the developer, documents Procedure 14. Receive inspection during compliance of the building with technical certifying the facility compliance with technical condi- construction works at Inspection of the conditions for connection to water and tions, diagram with the facility positioning within the State Architecture and Construction sewage at Municipal Unitary Organization land plot area. The document samples are available Supervision of Khabarovsk Krai Vodokanal—water utility at the web-site of the Department of Architecture Government Time: 22 days and Urban Development. Time: 1 day Cost: No cost Procedure 26. Receive inspection Cost: No cost Comments: According to the Urban Development from the Department of Architecture Comments: Construction progress inspections take Code, documentary evidence of compliance of the and Construction at Department of place on average, once a month newly built warehouse with the technical conditions

* This procedure can be completed simultaneously with previous procedures. 86 DOING BUSINESS IN RUSSIA 2012

Architecture, Construction and Land Use of Procedure 32. Sign agreement with water Comments: BuildCo obtains the technical condi- Khabarovsk City utility at Vodokanal—Municipal Unitary tions of connection to the storm drain system and Time: 3 days Organization—water utility concludes a contract. No fees are charged for connection and contract conclusion; there is a fee for Cost: No cost Time: 5 days technical conditions only. Comments: After submission of a commissioning Cost: No cost application, an inspector of the Department of Comments: Resource supply contract (subscriber Procedure 6*. Request geological survey of Architecture and Urban Development visits the agreement) may be concluded only by the facility title the land plot at Spetsstroyproekt, CJSC project to inspect all elements of the project and work holder, subject to physical connection to the network. Time: 22 days reports. After this, the inspector issues a conclusion DEALING WITH CONSTRUCTION PERMITS Cost: RUB 12,000 about the facility readiness for commissioning. Kirov, Kirov Oblast Comments: BuildCo places an order for engineering/ Procedure 27. Obtain occupancy permit at geodesic survey of the land plot to determine the Department of Architecture, Construction Warehouse value: RUB 26,120,000 (US$ 844,063) soil composition and collect other data required for and Land Use of Khabarovsk City Data as of: November 2011 designing. The assignment should be performed by a Time: 4 days specialized SRO, licensed for engineering/geodesic sur- Procedure 1. Request a topographic survey veys. The applicant submits the following documents: Cost: No cost of the land plot at MOA Arkhitektura applicant, draft building design, designer’s assignment. Comments: Based on the Inspection conclusion, an Time: 14 days The tests should be performed in accordance with the occupancy permit is prepared by the Department of Cost: RUB 12,000 construction standards (SNiPs). The cost depends Architecture and Urban Development. on the estimated scope of work, in particular, on the Comments: The procedure is performed, when there number of holes to be drilled in the plot area. In our Procedure 28. Connect to water and sewage are no records of a topographic survey in the Kirov case, there will be 5-7 holes, 10 meters deep. services at Gorvodokanal, Municipal City Urban Development Support System (ISOGD), Unitary Organization—water utility maintained by the Municipal Budget Department Procedure 7. Obtain development plan of Time: 30 days “Architektura”. In that case, it may be performed by a land plot (GPZU) at Architecture and Urban specialized organization with SRO access. The price Cost: No cost Development Department is established in the contract. Placement of an order Time: 30 days Comments: The network connection report is signed for land survey at 1:500/1:2,000/1:5000 (for areas upon completion of procedures related to physical up to 1 ha, up to 10 ha, over 10 ha) by a specialized Cost: No cost connection of the internal lines to the main networks. organization with an SRO license for geodesic Comments: The list of attachments, application Procedure 29. Sign agreement with operations. The applicant submits the following format, review procedure and time limits are set forth heavy shower sewage utility at Territory documents: 1) Application/contract. 2) Land plot title in the administrative regulation on the municipal Improvement Department of Khabarovsk (cadastral plan) and land boundaries. service “Issuance of an development plan of a land Municipality plot” situated on the territory of the Kirov City Procedure 2. Obtain technical conditions Municipality are posted at the official web-site of the Time: 30 days for electricity connection at Kirovenergo Kirov City Administration. No public review conclu- Cost: No cost Time: 30 days sion may be required, though. The development plan Comments: The network connection report is signed Cost: No cost is prepared by Architektura MBD. The Department upon completion of procedures related to physical Comments: BuildCo applies for the technical of Architecture and Urban Development issues the connection of the internal lines to the main networks. conditions for electricity connection development plan and an order for approval of the land development plan. Procedure 30. Obtain cadastral passport Procedure 3*. Obtain technical conditions of the building at Khabarovsk Krai State for water and sewage systems and sign Procedure 8. Obtain certificate of Unitary Organization of Technical Inventory agreement at KKS, OJSC compliance of the project design from the and Real Estate Appraisal or federal bureau water utility at KKS, OJSC Time: 30 days of technical inventory Time: 14 days Cost: RUB 69,205 Time: 14 days Cost: No cost Comments: BuildCo obtains the technical conditions Cost: RUB 1,000 of connection to water supply and sanitation systems. Comments: The final construction design, compliant Comments: After an occupancy permit is obtained, The applicant submits the following document to the prior technical conditions, is submitted to the the developer may proceed with cadastral registration package: application, land title, cadastral passport, water supplier for clearance. of the facility and obtaining a cadastral passport for draft design and design estimates. Procedure 9*. Obtain certificate of it. Generally, the cadastral passport is prepared by compliance of the project design from the the same organization that prepared the technical Procedure 4*. Request technical conditions phone utility at Rostelekom passport. The cadastral passport drafting cost is part for a telephone connection at Rostelekom, of the technical passport drafting cost. OJSC Time: 14 days Cost: No cost Procedure 31. Registration of the building Time: 21 days Comments: The final construction design, compliant at the Federal Service of State Registration, Cost: No cost to the prior technical conditions, is submitted to the Cadastre and Cartography (Rostreestr) Comments: BuildCo obtains the technical specifica- telephone company for clearance. Time: 10 days tion for landline telephone connection and concludes a contract. No fees are charged for connection Cost: RUB 15,000 Procedure 10*. Obtain certificate of and contract conclusion. After the completion of compliance of the project design from the Comments: Title to the property is registered in construction, a fee is collected for telephone number heavy shower sewage utility at Department compliance with the Federal Law “On Real Property assignment immediately during connection to the for Road Facilities, Municipal Unitary Rights Registration” by a department of the Federal telephone line. Organization Service for State Registration, Cadastre and Cartography after submitting an application, cadastral Procedure 5*. Obtain technical conditions Time: 14 days passport, incorporation documents, occupancy to connect to heavy shower sewage at Cost: RUB 2,200 permit and land titles. Department for Road Facilities, Municipal Unitary Organization Procedure 11. Obtain construction permit at Architecture and Urban Development Time: 21 days Department of Kirov City Cost: RUB 1,100 Time: 10 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 87

Cost: No cost Procedure 18. Receive inspection during Procedure 25*. Sign agreement with heavy Comments: The application is lodged with the construction works at Gosstroynadzor— shower sewage utility at Department multi-functional center. The list of documents, construction supervision for Road Facilities, Municipal Unitary application format, procedure and time limits are set Time: 1 day Organization forth in the administrative regulation on the municipal Cost: No cost Time: 1 day service “Issuance of permits for construction of Comments: In accordance with the approved Cost: No cost permanent structures on the territory of the Kirov City inspection agenda, based on the construction work Municipality”, posted at the official web-site of the Kirov Comments: This is a legal act of recognition and plan. Approximate number of inspections: 6 City Administration in the Municipal Services section. confirmation of fulfillment of all binding regulatory requirements. Procedure 12. Notify the authorities of Procedure 19. Notify the authorities of end commencement of construction works at of construction works at Gosstroynadzor— Procedure 26. Obtain a technical Gosstroynadzor—construction supervision construction supervision passport of the building at Federal State Time: 1 day Organization “Land Cadastre Chamber” Time: 1 day Cost: No cost Time: 30 days Cost: No cost Comments: BuildCo submits the of a construction Cost: RUB 28,000 Comments: The developer should send a notification completion notification to Gosstroynadzor about the construction beginning date 10 days in ad- Comments: The technical passport of a facility vance. The following construction-related documents is required for obtaining an occupancy permit. It Procedure 20. Obtain confirmation of describes physical parameters of the built facility. should be enclosed with the notification: construction compliance of the building with technical permit, schedule, list of responsible persons. Based The document is available from the Kirov Subsidiary conditions for connection to water and of Rostechinventarizatsia – Federal Bureau of on the notification, the State Construction Control sewage at KKS, OJSC would develop construction inspection schedules, Technical Inventory (BTI SUE), or any bureau of Time: 10 days and share them with the developer. technical inventory. Cost: No cost Procedure 27. Obtain occupancy permit Procedure 13. Receive inspection during Comments: According to the Urban Development construction works at Gosstroynadzor— at Architecture and Urban Development Code, documentary evidence of compliance of the Department of Kirov City construction supervision newly built warehouse with the technical conditions Time: 1 day is mandatory for obtaining an occupancy permit. This Time: 10 days Cost: No cost document is issued by KKC OJSC after checking the Cost: No cost Comments: In accordance with the approved water supply and sanitation systems. Comments: The application is lodged with the multi-functional center. The list of documents, inspection agenda, based on the construction work Procedure 21*. Obtain compliance plan. Approximate number of inspections: 6 application format, procedure and time limits are certificate of the building with the technical set forth in the administrative regulation on the Procedure 14. Receive inspection during conditions from the phone utility at municipal service “Issuance of permits for occupancy construction works at Gosstroynadzor— Rostelekom of permanent structures on the territory of the Kirov construction supervision Time: 10 days City Municipality, posted at the official web-site Time: 1 day Cost: No cost of the Kirov City Administration in the Municipal Services section. Cost: No cost Comments: The telephone company is notified about Comments: In accordance with the approved completion of work, with enclosed reports that serves Procedure 28. Obtain cadastral passport of inspection agenda, based on the construction work as a basis for issuance of technical conditions. the building at Federal State Organization plan. Approximate number of inspections: 6 Procedure 22*. Obtain compliance “Land Cadastre Chamber” Procedure 15. Receive inspection during certificate of the building with the technical Time: 21 days construction works at Gosstroynadzor— conditions from the heaby shower sewage Cost: No cost [part of the technical passport cost] construction supervision utility at Department for Road Facilities, Comments: After an occupancy permit is obtained, Municipal Unitary Organization Time: 1 day the developer may proceed with obtaining a Time: 10 days cadastral passport for it in the Kirov Subsidiary of Cost: No cost Cost: No cost Rostechinventarizatsia - Federal Bureau of Technical Comments: In accordance with the approved Inventory”, or BTI. inspection agenda, based on the construction work Comments: According to the Urban Development plan. Approximate number of inspections: 6 Code, documentary evidence of compliance of the Procedure 29. Registration of the building newly built warehouse with the technical conditions, at the Federal Service of State Registration, is mandatory for obtaining an occupancy permit Cadastre and Cartography (Rostreestr) Procedure 16. Receive inspection during Procedure 23. Sign agreement with water Time: 21 days construction works at Gosstroynadzor— and sewage utility at KKS, OJSC Cost: RUB 15,000 construction supervision Time: 1 day Comments: Titles to the property built are registered Time: 1 day Cost: RUB 550 in compliance with the Federal Law “On Real Cost: No cost Comments: This is a legal act of recognition and Property Rights Registration” by a department of the Comments: In accordance with the approved confirmation of fulfillment of all binding regulatory Federal Service for State Registration, Cadastre and inspection agenda, based on the construction work requirements. Cartography after submitting application, cadastral plan. Approximate number of inspections: 6 passport, incorporation documents, occupancy Procedure 24*. Sign agreement with the permit and land titles. Procedure 17. Receive inspection during phone utility at Rostelekom construction works at Gosstroynadzor— construction supervision Time: 1 day Time: 1 day Cost: RUB 5,100 Cost: No cost Comments: This is a legal act of recognition and confirmation of fulfillment of all binding regulatory Comments: In accordance with the approved requirements. inspection agenda, based on the construction work plan. Approximate number of inspections: 6

* This procedure can be completed simultaneously with previous procedures. 88 DOING BUSINESS IN RUSSIA 2012

DEALING WITH CONSTRUCTION PERMITS be prepared by the local government when preparing Procedure 10*. Request and obtain approval Moscow the city development plan of the land plot; (2) if from Moscomarchitectura on engineering the city development plan of the land plot does not supply of the facility Warehouse value: RUB 26,120,000 (US$ 844,063) contain this information, the technical conditions as Time: 14 days Data as of: November 2011 well as the information on payment for connection Cost: RUB 4,500 to such services must be provided by the respective Procedure 1. Request and obtain the agency within 14 business days after receiving the Procedure 11. Request and obtain Extract development plan of land plot at the request, however in practice it takes longer. from Minutes of Meeting and Decision Moscow Architecture and City Planning According to the fee schedule of Moscow State of the ‘Reglament’ Commission by the Committee Unitary Enterprise “Vodokanal” for 2009, the fee for Chief Architect of Moscow on approval Time: 120 days obtaining the technical conditions has been increased of architectural design (facades, profiles, Cost: No cost from RUB 17,673 to RUB 21,300. color) and the certificate of approval of Comments: The Moscow Architecture and City architectural design Planning Committee ( MoskomArchitektura) A one Procedure 6*. Request and obtain technical Time: 30 days stop shop has been implemented in order to deal Cost: No cost with all procedures related to the Land. The applicant conditions to connect to electricity with does not have to go to each agency in order to obtain MOESK Procedure 12. Request and obtain Extract documents. The applicant applies for the copy devel- Time: 30 days from Minutes of Meeting and Decision opment plan of the land plot at Moskomarchitecture Cost: No cost of the ‘Reglament’ Commission by the which will deal with all the steps. Comments: Technical conditions are determined by Chief Architect of Moscow on approval The legal time limit is 1 month but in practice this the electricity company MOESK. of architectural design (facades, profiles, takes on average 6 months according to private Under Government Regulation No. 83 dated 13 color) and the certificate of approval of sector contributors. February 2006, (1) a list of technical conditions must architectural design Procedure 2*. Request and obtain Act of be prepared by the local government when preparing Time: 30 days Moscow Geological—Geodesic Department the city development plan of the land plot; (2) if Cost: No cost the city development plan of the land plot does not Time: 45 days Comments: The decision on construction is a contain this information, the technical conditions as prerequisite for beginning to collect all design Cost: RUB 39,000 well as the information on payment for connection documents. By law, obtaining the decision should Comments: The applicant obtains a geodesic map of to such services must be provided by the respective not take more than 30 days. However, the deadline the plot with all communication lines indicated and agency within 14 business days after receiving the is never respected, and this procedure takes 60 days analyzed. request, however in practice it takes longer. on average. As of January 1, 2009, the fee for obtaining a Under Government Regulation No. 83 dated 13 geodesic map of the plot from the Moscow February 2006, (1) a list of technical conditions must Procedure 13*. Request and obtain the Geological –Geodesic Department has increased from be prepared by the local government when preparing approval of conditions for designs by RUB 36,700 to RUB 39,000. the city development plan of the land plot; (2) if Department of Preparation of Project the city development plan of the land plot does not Approvals Procedure 3*. Request and obtain contain this information, the technical conditions as Time: 14 days an engineering ecological survey— well as the information on payment for connection Cost: RUB 12,100 Mosgorgeotrest or any other licensed to such services must be provided by the respective Comments: The seal of the Department entity agency within 14 business days after receiving the of Preparation of Project Approvals of Time: 45 days request, however in practice it takes longer. MoskomArchitektura is placed on the cover page of Cost: RUB 100,000 Procedure 7*. Request and obtain technical the conditions list. Comments: This is one of the pieces of information conditions to connect to telephone line needed for project design – information about Procedure 14*. Request and obtain approval from Moscow City Telephone Service of conditions for designs by the Ministry conditions of your land plot – geological, geodesic and (MGTS) ecological. of Civil Defense, Emergencies and Natural Time: 30 days There are 5 types of mandatory engineering surveys. Disaster Management (MChS) All or a few of them are requested depending on the Cost: RUB 5,000 Time: 14 days land plot and surrounding territory conditions. Comments: Technical conditions are set by the Cost: RUB 14,728 district telephone network services, which are either In our case there could be 2-3 types of surveys. Comments: MChS specifies whether a shelter for civil branches of the Moscow City Telephone Service Mosgorgeotrest does these surveys. Private defense must be constructed on the site. licensed companies also can do these surveys but (MGTS) or private operators. Procedure 15*. Request and obtain approval they are requested to get the results ‘stamped’ by Procedure 8*. Request and obtain technical of conditions for designs with Sanitary Mosgorgeotrest. conditions for heavy shower sewage Services (Rospotrebnadzor) Time: 30 days Procedure 4*. Request and obtain Time: 30 days sanitary and epidemiological Cost: RUB 10,000 Cost: RUB 13,800 certificate—Rospotrebnadzor Comments: These technical conditions are also Comments: The Sanitary Services (Rospotrebnadzor) Time: 30 days required for the project design. analyze the drawings and designs according to Cost: No cost sanitary norms and conditions. Procedure 9*. Request and obtain technical Procedure 16*. Request and obtain the Procedure 5*. Request and obtain technical conditions to install radio from the Moscow approval from State Inspection of Road conditions from water services and sewage Broadcasting Network Safety (GIBBD) Time: 30 days Time: 30 days Time: 30 days Cost: RUB 21,300 Cost: RUB 4,500 Cost: RUB 8,837 Comments: The technical conditions are defined by Comments: These technical conditions are also Comments: The State Inspectorate of Road Safety the Moscow water and the sewage company. required for the project design and needed by law (GIBBD) analyzes the drawings and designs according Under Government Regulation No. 83 dated 13 for civil security. It is supposed to be used for public to its norms and conditions. February 2006, (1) a list of technical conditions must announcements (likein case of force majeure).

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 89

Procedure 17*. Request and obtain - An application form. Procedure 32*. Receive inspection from the the approval from Department of - Documents confirming title to the land. Moscow Committee of State Construction Comprehensive Well-Being of City - Town (planning) plan of land. Supervision during engineering works Time: 30 days - Relevant project documentation. Time: 1 day Cost: RUB 4,600 After reforms in 2006, the statutory time line of Cost: No cost Comments: The Department of Comprehensive issuing the permit fell from 30 days to 10. Comments: Construction activities are not inter- Well-Being of the city analyzes the drawings and This is free of charge. rupted during inspections. These inspections need designs according to its norms and conditions. not be requested. The third inspection takes place Procedure 24. Request and obtain an during engineering work Procedure 18*. Request and obtain approval opening order of production of works from for project design from Department of the Union of Administrative Technical Procedure 33*. Order and receive results Nature Management and Environment Inspections (UATI) of laboratory tests of foundation pits Protection of Moscow from Mosgorgeotrest for the acceptance Time: 1 day Time: 21 days commission Cost: RUB 30,000 Cost: RUB 29,455 Time: 1 day Comments: The Department of Nature Use analyzes Procedure 25. Inform the Moscow District Cost: RUB 10,000 the drawings and designs according to its norms and Municipality about the work schedule, Comments: During the construction phase of an conditions. get a stamp and leave a copy of the work approved project, the building company has to obtain schedule results of laboratory tests which are then required by Procedure 19*. Request and obtain approval Time: 1 day the acceptance commission. of Volumes of «Outline of Construction Cost: No cost Arrangement» and “GenPlan” from Procedure 34*. Receive an inspection from GenPlan Institute Procedure 26. Inform the Department the Mosgorgeotrest to make sure that Time: 30 days of Nature Management about the work the building has been built where it was planned to be Cost: RUB 30,000 schedule, get a stamp and leave a copy of the work schedule Time: 1 day Procedure 20*. Request and obtain Time: 1 day Cost: RUB 50,000 approval of conditions for designs by Local Cost: No cost Government (uprava) Procedure 35*. Receive inspection by Union Time: 7 days Procedure 27. Inform the Traffic Police of Administrative Technical Inspections (UATI)—I Cost: No cost about the work schedule, get a stamp and leave a copy of the work schedule Comments: The seal of the local government is Time: 1 day placed on the cover page of the conditions list. Time: 1 day Cost: No cost Cost: No cost Comments: Construction activities are not inter- Procedure 21*. Request and obtain approval rupted during inspections. These inspections need of conditions for designs by Prefect’s Office Procedure 28. Inform the Fire Department not be requested. Time: 14 days about the work schedule, get a stamp and leave a copy of the work schedule The first inspection takes place during foundation Cost: No cost construction. Comments: The seal of the local government is Time: 1 day Procedure 36*. Receive inspection by Union placed on the cover page of the conditions list. Cost: No cost of Administrative Technical Inspections Procedure 22. Request and obtain approval Procedure 29. Inform the Rospotrebnadzor (UATI)—II on project by Moscow State Expertise about the work schedule, get a stamp and Time: 1 day leave a copy of the work schedule Time: 45 days Cost: No cost Time: 1 day Cost: RUB 59,500 Comments: Construction activities are not inter- Comments: The Moscow State Expertise relies on Cost: No cost rupted during inspections. These inspections need internal expertise. In accordance with the Moscow Procedure 30. Receive inspection from the not be requested. Government regulation “Regulation of the document Moscow Committee of State Construction The second inspection takes place during structure preparation by the “Moscow State Expertise” No. Supervision during foundation works construction. 670, dated 29 July 2008 should be no more than 60 days and is conducted regardless of project size. In Time: 1 day Procedure 37*. Receive inspection by Union practice, this takes about 45 days. The fee for issuing Cost: No cost of Administrative Technical Inspections project approval is calculated according to a formula Comments: Construction activities are not inter- (UATI)—III based on the square meters. rupted during inspections. These inspections need Time: 1 day According to the article 49 of the City Planning not be requested. Cost: No cost Code, this approval on project by the Moscow State The first inspection takes place during foundation Comments: Construction activities are not inter- Expertise is not needed for a two-story warehouse construction. rupted during inspections. These inspections need with a total surface up to 1,500 m2 with non- Procedure 31*. Receive inspection from not be requested. The third inspection takes place residential or production purposes if they are not during engineering work considered dangerous, technically difficult or unique. from the Moscow Committee of State Yet, in practice, this approval is often required. Construction Supervision during structure Procedure 38*. Receive inspection by Union works of Administrative Technical Inspections Procedure 23. Request and obtain Time: 1 day (UATI)—IV Permission for construction Cost: No cost Time: 1 day Time: 10 days Comments: Construction activities are not inter- Cost: No cost Cost: No cost rupted during inspections. These inspections need Comments: Construction activities are not Comments: To obtain the building permit, not be requested. interrupted during inspections. These inspections BuildCo must submit the following documents to The second inspection takes place during structure need not be requested and take place at least once the Moscow State Committee of Construction construction. a month during the construction cycle. The Union of Supervision: Administrative Technical Inspections (UATI) inspects

* This procedure can be completed simultaneously with previous procedures. 90 DOING BUSINESS IN RUSSIA 2012

whether the construction boundaries have remained representatives from different backgrounds, such as boundaries and authorized use; it is required for the same. ecology, the prefecture, the local government, the development of design documents for construction, sanitary services, the company, and the designer. construction permit and occupancy permits. The Procedure 39*. Receive inspection by Union After the commission has convened, BuildCo collects development plan regulates and establishes what of Administrative Technical Inspections the signatures of all its members. and where can be built on the land plot area. A land (UATI)—V The time line established by Government of Moscow development plan is developed for a separate land Time: 1 day Resolution No. 530, dated November 7, 2001, for the plot that has been registered by the State, with estab- Cost: No cost relevant authorities to appoint representatives to the lished development rules in the Land Use Regulations, Comments: Construction activities are not Approval Commission is 10 days. The time required and subject to availability of a duly approved planning interrupted during inspections. These inspections for approval of the building depends on the state of and border-setting project. need not be requested and take place at least once the building (whether it is ready to be occupied or Procedure 2. Request a topographic a month during the construction cycle. The UATI not) and on the inspection results. In practice, this survey of the land plot at Murmansk inspects whether the construction boundaries have takes on average 60 days. The most difficult part is to Land Surveying Enterprise, OJSC, convene the commission members and gather their remained the same. with permission from a self-regulating signatures for approval. Procedure 40*. Receive inspection by Union organization of Administrative Technical Inspections Procedure 45. Request and receive the Time: 25 days (UATI)—VI Disposition on operation of building Cost: RUB 139,350 [RUB 92,900-185,800. Estimate Time: 1 day (Occupancy Permit) based on the cost of RUB 10,000-20,000 per 100 m2] Cost: No cost Time: 10 days Comments: Placement of an order for land survey at Comments: Construction activities are not Cost: No cost 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 interrupted during inspections. These inspections Comments: Obtaining an occupancy permit takes ha, over 10 ha) by a specialized organization with an need not be requested and take place at least once 10 days. SRO license for geodesic operations. The applicant a month during the construction cycle. The UATI submits the following documents: 1) Application/ Procedure 46. Obtain a technical passport inspects whether the construction boundaries have contract. 2) Land plot title (cadastral plan) and land of the building remained the same. boundaries. Time: 30 days Procedure 3*. Request geological survey of Procedure 41*. Receive inspection by Union Cost: RUB 55,000 of Administrative Technical Inspections the land plot at Arctic Marine Engineering (UATI)—VII Procedure 47. Register the building after and Geological Expeditions, OJSC (OAO Rosreestr AMIGE) Time: 1 day completion in Time: 60 days Cost: No cost Time: 30 days Cost: RUB 100,000 Comments: Construction activities are not Cost: RUB 15,000 interrupted during inspections. These inspections Comments: According to the Russian Federation Civil Comments: BuildCo places an order for engineering/ need not be requested and take place at least once Code, the right to own and “create” immovable things, geodesic survey of the land plot to determine the a month during the construction cycle. The UATI including buildings, is subject to state registration soil composition and collect other data required for inspects whether the construction boundaries have at the Unified State Register of rights to immovable designing. The assignment should be performed by remained the same. assets and associated transactions. a specialized SRO, licensed for engineering/geodesic surveys. The applicant submits the following docu- To complete the registration, BuildCo must submit Procedure 42. Connect to water services ments: applicant, draft building design, designer’s an application, the real property plan, and approval assignment. The tests should be performed in Time: 30 days of the building, confirming the fact that real property accordance with the construction standards (SNiPs). Cost: No cost has been created. The state registration must be The cost depends on the estimated scope of work, in Comments: Construction activities are not processed within a month of the application date. particular, on the number of holes to be drilled in the interrupted during inspections. These inspections Payment of a duty is required for registration. The plot area. need not be requested and take place at least once amount of the duty is determined by the local a month during the construction cycle. The UATI authorities. The maximum duty is established by the Procedure 4. Obtain technical conditions inspects whether the construction boundaries have Russian government at RUB 7,500 for legal persons. for electricity connection at Kolenergo, remained the same. The state duty for building registration is RUB 15,000 OJSC (for legal entities). Procedure 43*. Request and connect to Time: 45 days telephone services DEALING WITH CONSTRUCTION PERMITS Cost: No cost Time: 10 days Murmansk, Murmansk Oblast Comments: BuildCo applies for the technical conditions for electricity connection. Cost: RUB 8,640 Warehouse value: RUB 26,120,000 (US$ 844,063) Comments: According to Decree # 312, as of Data as of: November 2011 Procedure 5. Obtain technical conditions February 27, 2009 by Moscow City Telephone for water, sewage and heavy shower Network Company the cost of connection works is Procedure 1. Obtain development plan of sewage systems and sign agreement at now RUB 8,640 and done in 10 days. land plot (GPZU) at Urban Development Murmanskvodokanal, OJSC and Territorial Development Committee of Time: 30 days Procedure 44*. Request and obtain Extract Murmansk City from Minutes of Meeting and Decision Cost: RUB 131,889 [1.325 x RUB 99,161,44 per m3 + of the ‘Reglament’ Commission by the Time: 30 days RUB 500 for technical related with contract drafting] Chief Architect of Moscow on approval Cost: No cost Comments: BuildCo obtains the technical condi- of architectural design (facades, profiles, Comments: The land development plan is a manda- tions of connection to water supply and sanitation color) and the certificate of approval of tory document submitted by the developer/customer systems from Murmansk Vodokanal OJSC. The architectural design to obtain official design appraisal, construction permit applicant submits the following document package: Time: 60 days and building occupation permit. Land development application, land title (a copy of the Murmansk plans are prepared for built-up land plots, land Oblast Administration on land allocation, for the Cost: No cost plots allocated for construction and renovation of owner – a copy of state property registration, for Comments: BuildCo files application forms with permanent structures. It is prepared as part of land leaser: copy of lease agreement with a note of state the Moscow State Committee of Construction planning documentation (or sometimes as a separate registration); information about the boundaries of Supervision in order to convene the Approval document) with information about the land plot the land plot where they plan to build or renovate Commission. The commission includes

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 91

a permanent structure (a copy of duly approved document issuance time limits are followed; however, Procedure 13*. Sign agreement with the boundary plan of the land plot); facility general layout in reality the document may be picked up only on the phone utility at North-West Telekom, OJSC and a topographic map of the land plot at 1:500 with following working day, as it is prepared by the close of Time: 1 day all existing surface and underground communications business time. Cost: No cost and structures (approved by relevant maintenance organizations). Within 15 days upon receipt of the Procedure 8. Obtain compliance certificate Comments: This is a legal act of recognition and application and document package, Murmansk of the building with the technical confirmation of fulfillment of all requirements Vodokanal issues technical conditions of connection conditions from the water utility at imposed by the telephone company. Murmanskvodokanal, OJSC to water supply and sanitation systems. When Procedure 14. Obtain cadastral passport necessary, the term is extended for up to 30 days. Time: 3 days of the building at Federal Service of State Connection fees are based on the tariffs of Murmansk Cost: No cost Registration, Cadastre and Catrography Vodokanal OJSC and amount to RUB 99,161.44 per Comments: After the construction of the water Time: 20 days cubic meter. The connection is paid for at the time of supply and sanitation lines, these are (separately) Cost: No cost the contract execution. The agreement drafting costs demostrated to the Vodokanal inspectors. The are RUB 500. construction design (pre-approved by Vodokanal) Comments: After an occupancy permit is obtained, the developer may proceed with obtaining a cadastral Procedure 6*. Request technical conditions and as-built documentation (fact of work accom- plished) are also provided. If the design and as-built passport for it in the Murmansk Oblast Department for a telephone connection at North-West of the Federal Service for State Registration, Cadastre Telekom, OJSC documentation meet the requirements, Vodokanal issues a certificate of compliance with technical and Cartography. Time: 14 days conditions, which serves as a pre-requisite document Cost: No cost [after the connstruction is completed, Procedure 15. Registration of the building for issuance of an occupancy permit. at the Federal Service of State Registration, the cost of connection of one number will be RUB Rostreestr 2,500 + contract drafting Cost: RUB 500] Procedure 9*. Obtain compliance certificate Cadastre and Cartography ( ) of the building with the technical conditions at Federal Service of State Registration, Comments: BuildCo obtains the technical specifica- Cadastre and Catrography tion for landline telephone connection and concludes from the phone utility at North-West a contract with North-Western Telecom OJSC. In Telekom, OJSC Time: 30 days principle, telephone connections with the requested Time: 30 days Cost: RUB 15,000 parameters may be offered by other service providers; Cost: No cost Comments: Titles to the property built are registered however, North-Western Telecom is the largest player in compliance with the Federal Law “On Real on this market. The applicant submits documents Procedure 10. Obtain a technical Property Rights Registration” by the Murmansk and makes payment at the time of execution of the passport of the building at State Unitary Oblast Department of the Federal Service for State connection contract. The contract drafting cost is Organization of Technical Inventory of Registration, Cadastre and Cartography after submit- RUB 500. Murmansk Oblast ting application, cadastral passport, incorporation documents, occupancy permit and land titles. Procedure 7. Obtain construction permit Time: 30 days at Urban Development and Territorial Cost: RUB 35,000 Procedure 16. Sign agreement with water Development Committee of Murmansk City Comments: The technical passport shows the actual utility at Murmanskvodokanal, OJSC parameters of the newly built property. The docu- Time: 10 days Time: 30 days ment may be obtained from the Murmansk Oblast Cost: No cost Public Unitary Enterprise for Technical Inventory. To Cost: No cost Comments: Before starting construction, BuildCo obtain the passport, the applicant provides an ap- Comments: The connection to water supply networks needs to obtain a construction permit. Its absence plication along with the building design, incorporation is performed after issuance of a title to the newly built entails a penalty, according to Clause 1 of Article documents, mailing address, construction permit, property. The applicant and officials of Murmansk 9.5 of the Administrative Offense Code. Besides, in cadastral land certificate and land lease agreement or Vodokanal OJSC conclude a contract and sign an accordance with Article 222 of the Russian Federal title. The technical passport issuance tariffs are set act establishing a boundary between internal and Civil Code, such property may be considered by a by the agency itself, and this information is not, as a external networks. The customer shall send lodge court as unauthorized construction, and may be rule, easily available. with Murmansk Vodokanal: 1) notarized copies subject to removal at the expense of the building of establishing documents, as well documents entity. The developer should, within ten days upon Procedure 11. Obtain occupancy permit confirming the signee’s authority ; 2) land titles; 3) receipt of a construction permit, provide to the at Urban Development and Territorial facility layout with position in the residential area; Committee for Urban and Territorial Development Development Committee of Murmansk City 4) site topographic plan at 1:500 (with all surface of the Murmansk City Administration information Time: 10 days and underground communications and structures), about the area, height and number of stories of the Cost: No cost cleared by maintenance organizations; 5) water planned permanent structure, engineering/technical consumption and disposal balance of facility being Comments: The occupancy permit application is sub- support networks, one copy of engineering survey connected, listing all water usage types, including mitted with the following documents attached: land report and one copy of all design documentation fire-fighting; 6) information about sub-subscribers. title, GPZU, construction permit, report of completed sections, as stipulated in Clauses 2, 8-10 and 11.1 Murmansk Vodokanal shall, in 30 days upon receipt construction acceptance by the developer, documents of Part 2 of Article 48 of the Russian Federal UDC of an application. certifying the facility compliance with technical condi- for publishing in the municipal urban development tions, diagram with the facility positioning within the support system (Part 18, Article 51). PS: Failure to DEALING WITH CONSTRUCTION PERMITS land plot area. Facility occupancy permit is drawn in fulfill the requirements of Clause 18 of Article 51 line with the requirements of the UDC and Permit Novosibirsk, Novosibirsk Oblast would later on constitute grounds for rejection of an Issuance Regulation, adopted in Murmansk. occupancy permit application by a local authority Warehouse value: RUB 26,120,000 (US$ 844,063) (Part 7 of Article 55 of the Russian Federal UDC). Procedure 12. Connect to water, sewage Data as of: November 2011 Construction permits are issued by the Committee and heavy shower sewage services at Procedure 1. Request a topographic survey for Urban Planning, Architecture and Territorial Murmanskvodokanal, OJSC Development of the Murmansk City Administration. of the land plot at Design organization Time: 30 days By resolution of the Murmansk City Administration with permission from a self-regulating No. 1828 of 05.10.2011, this procedure is governed Cost: No cost organization by the administrative regulation on the municipal Comments: This is a legal act of recognition and Time: 25 days service “Construction permit issuance”, rendered by confirmation of fulfillment of all binding regulatory Cost: RUB 70,000 requirements the Urban and Territorial Development Department Comments: BuildCo places an order for land survey at of the Murmansk City Administration Officially, the 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 ha,

* This procedure can be completed simultaneously with previous procedures. 92 DOING BUSINESS IN RUSSIA 2012

over 10 ha) by a specialized organization with an SRO Procedure 6*. Request technical conditions of the Administrative Offense Code. Besides, in ac- license for geodesic operations. The applicant submits for a telephone connection at Rostelekom cordance with Article 222 of the Russian Federal Civil the following documents: 1) Application/contract. 2) Time: 16 days Code, such property may be considered by a court Land plot title (cadastral plan) and land boundaries. A as unauthorized construction, and may be subject Cost: No cost report is prepared as a result of the topographic survey to removal at the expense of the building entity. with a layout of buildings and structures; underground, Comments: BuildCo obtains the technical specifica- To obtain a construction permit, BuildCo needs to surface and above-surface communication lines; design tion for landline telephone connection and concluding lodge an application with the Construction and Land elements; fencing, roads, etc. a contract. No fees are charged for connection Issues Department, with the following documents and contract conclusion. After the completion of attached land titles, land development plan and Procedure 2*. Request geological survey construction, a fee is collected for telephone number design documentation materials. An administrative of the land plot at Commercial licensed assignment immediately during connection to the regulation on provision of the municipal service of company telephone line in accordance with approved tariffs. issuance of permanent structure occupancy permits Time: 33 days Procedure 7. Obtain certificate of has been drafted. Cost: RUB 60,000 compliance of the project design from the Procedure 12. Obtain confirmation of Comments: BuildCo places an order for engineering/ water utility at Gorvodokanal, Municipal compliance of the building with technical geodesic survey of the land plot to determine the Unitary Organization—water utility conditions for connection to water and soil composition and collect other data required for Time: 10 days sewage at Gorvodokanal—water utility designing. The assignment should be performed by Cost: No cost a specialized SRO, licensed for engineering/geodesic Time: 5 days surveys. The applicant submits the following docu- Comments: The design documents are cleared in Cost: No cost ments: applicant, draft building design, designer’s the normal course of business on reception days Comments: According to the Urban Development assignment. The tests should be performed in (twice a week: on Tuesdays and Thursdays) with Code, documentary evidence of compliance of the accordance with the construction standards (SNiPs). relevant notes made on the drawings. No additional newly built warehouse with the technical conditions The cost depends on the estimated scope of work, in documents are drafted. The approval process is is mandatory for obtaining an occupancy permit. particular, on the number of holes to be drilled in the performed in the presence of the visitor on the day of plot area. application. If so desired, the approved design may Procedure 13*. Obtain compliance be picked up on the following reception day. certificate of the building with the technical Procedure 3. Obtain development plan of conditions from the phone utility at land plot (GPZU) at Main Department of Procedure 8*. Obtain technical conditions Sibirtelekom to connect to heavy shower sewage at Main Architecture and Urban Development of Time: 5 days Novosibirsk City Department of Territory Improvement and Planting of Novosibirsk City Cost: No cost Time: 30 days Time: 30 days Comments: According to the Urban Development Cost: No cost Code, documentary evidence of compliance of the Cost: No cost Comments: The land development plan is a manda- newly built warehouse with the technical conditions tory document submitted by the developer/customer Comments: To obtain the technical conditions, is mandatory for obtaining an occupancy permit. to obtain official design appraisal, construction permit BuildCo needs to provide a list of plants located on and building occupation permit. Land development the allotted land plot, as well as an excerpt from the Procedure 14. Obtain a technical passport plans are prepared for built-up land plots, land minutes of a meeting of the Novosibirsk Labor Issues of the building at Bureau of technical plots allocated for construction and renovation of and Land Development Board, along with a layout inventory—federal permanent structures. The document contains key of the allotted land plot. Technical conditions are Time: 30 days land plot data: boundary coordinates, authorized use, prepared based on decision of the TC preparation Cost: RUB 52,000 team. The team meets every two weeks. issued technical conditions. The following documents Comments: The technical passport of a facility should be submitted to obtain it: application, draft Procedure 9*. Obtain certificate of is required for obtaining an occupancy permit. It design, document titles. The document is issued compliance of the project design from the describes physical parameters of the built facility. by the Department of Architecture and Urban phone utility at Sibirtelekom The document is available from the Novosibirsk Development of the Novosibirsk Mayor’s Office. Time: 10 days Subsidiary of Rostechinventarizatsia, or any bureau of technical inventory. To obtain a technical passport, Procedure 4. Obtain technical conditions Cost: No cost the applicant should submit an application and the for electricity connection at Novosibirsk Comments: The final construction design, compliant City Electric Supply Networks building design, incorporation documents, construc- to the prior technical conditions, is submitted to the tion permit, cadastral passport of the land and land Time: 15 days telephone company for clearance. lease agreement or title. Tariffs for issuing technical Cost: No cost Procedure 10*. Obtain compliance passports are established by the organization itself, Comments: BuildCo applies for the technical certificate from the heavy shower sewage and as a rule, they are not easily available. conditions for electricity connection utility at Main Department of Territory Procedure 15. Obtain occupancy permit Procedure 5. Obtain technical conditions Improvement and Planting of Novosibirsk at Inspection for architecture and for water services and sign agreement City construction supervision at Gorvodokanal, Municipal Unitary Time: 10 days Time: 10 days Organization—water utility Cost: No cost Cost: No cost Time: 34 days Comments: The design documents are cleared on Comments: To obtain a permit for commissioning Cost: RUB 42,784 reception days with relevant notes made on the the facility, the applicant submits, in accordance Comments: Technical conditions of connection to drawings, additional documents are also drafted. with the Russian Federal Urban Development water supply and sanitation systems. The applicant Procedure 11. Obtain construction Code, all required documents to the Architectural submits a request to City Vodokanal MUE with full permit at Inspection for architecture and and Construction Inspectorate Department of the information about the facility (according to a form construction supervision Novosibirsk City Mayor’s Office. An administrative available at the company’s web-site on in the office). regulation on provision of the municipal service of Payment for connection is made in accordance with a Time: 10 days issuance of permanent structure occupancy permits schedule attached to the agreement. Cost: No cost has been drafted. Comments: Before starting construction, BuildCo needs to obtain a construction permit. Its absence entails a penalty, according to Clause 1 of Article 9.5

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 93

Procedure 16. Connect to water and sewage Comments: The survey is required for forecasting Procedure 9. Obtain certificate of services at Gorvodokanal—water utility possible changes in the geologic conditions in compliance of the project design from the Time: 18 days the process of the facility interaction with the water utility at Omskvodokanal, OJSC— environment. Cost: RUB 185,000 water utility Comments: The network connection report is signed Procedure 3. Obtain development plan of Time: 1 day upon completion of procedures related to physical land plot (GPZU) at Municipal Architecture Cost: No cost connection of the internal lines to the main networks. and Urban Development Department Comments: The final construction design, compliant Procedure 17*. Connect to telephone Time: 30 days to the prior technical conditions, is submitted to the services at Sibirtelekom Cost: No cost water supplier for clearance. Time: 5 days Comments: The application is lodged upon collection Procedure 10. Obtain certificate of Cost: RUB 25,000 of technical conditions and land title registration compliance of the project design from the phone utility at Rostelekom Comments: The network connection report is signed Procedure 4*. Obtain technical conditions upon completion of procedures related to physical for water services and sign agreement at Time: 4 days connection of the internal lines to the main networks. Omskvodokanal, OJSC—water utility Cost: No cost Procedure 18*. Obtain cadastral passport Time: 30 days Comments: The final construction design, compliant of the building at Bureau of technical Cost: RUB 62,262 to the prior technical conditions, is submitted to the telephone company for clearance. inventory—federal Comments: To obtain technical conditions of connec- Time: 13 days tion to water supply and sanitation systems, BuildCo Procedure 11. Obtain certificate of Cost: No cost [cadastral passport drafting cost is part needs to lodge an application Omsk Vodokanal compliance of the project design from the of the technical passport drafting cost] OJSC; the specifications may be picked up within one heavy shower sewage utility at Municipal Comments: After an occupancy permit is obtained, month. Facilities Department of Omsk City the developer may proceed with cadastral registration Time: 3 days of the facility and obtaining a cadastral passport for it. Procedure 5. Obtain technical conditions Cost: No cost Generally, the cadastral passport is prepared by the for electricity connection at Omskelectro, same organization that had prepared the technical Municipal Unitary Organization Comments: The final construction design, compliant passport. The cadastral passport drafting cost is part Time: 30 days to the prior technical conditions, is submitted to the of the technical passport drafting cost. Cost: No cost organization for clearance. Procedure 19. Registration of the building Comments: Apply for technical conditions for Procedure 12. Obtain construction permit at the Federal Service of State Registration, electricity connection. at Municipal Architecture and Urban Cadastre and Cartography (Rostreestr) Development Department Procedure 6*. Obtain technical conditions Time: 30 days for phone services and sign agreement at Time: 10 days Cost: RUB 15,000 Sibirtelekom Cost: No cost Comments: Titles to the property built are registered Time: 30 days Comments: The procedure is performed in in compliance with the Federal Law “On Real Cost: RUB 1,500 [technical conditions are free of accordance with the established regulations. A Property Rights Registration” by a department of charge; number cost is RUB 1,500] construction permit application is submitted along the Federal Service for State Registration, Cadastre with the following documents: 1) land title 2) Comments: Obtaining technical specification for and Cartography based after submitting application, land development plan 3) materials of the design landline telephone connection and concluding cadastral passport, incorporation documents, documentation. occupancy permit and land titles. a contract. No fees are charged for connection and contract conclusion. After the completion of Procedure 13. Obtain permit to start Procedure 20*. Sign agreement with water construction, a fee is collected for telephone number excavation works at Administrative and utility at Gorvodokanal—water utility assignment immediately during connection to the Technical Inspection of Omsk City Time: 10 days telephone line in accordance with approved tariffs. Time: 14 days Cost: No cost Procedure 7. Obtain technical conditions Cost: No cost Comments: Application is lodged with City to connect to heavy shower sewage at Comments: BuildCo should start working on Vodokanal MUE together with reports and establish- Municipal Facilities Department of Omsk getting permissions, on average, 2 months ahead ing documents (contract concluded by the owner). City of the scheduled earthwork commencement date. DEALING WITH CONSTRUCTION PERMITS Time: 30 days The following documents are submitted to the Inspectorate for obtaining a warrant for earthwork: Omsk, Omsk Oblast Cost: RUB 1,500 [technical conditions are free of 1) application in conformity with Article 251 of the charge; number cost is RUB 1,500] Warehouse value: RUB 26,120,000 (US$ 844,063) Landscaping Regulation, including a guarantee to Data as of: November 2011 Comments: Obtaining technical conditions of restore landscape and keep to the requirements of connection to storm drain systems. the Landscaping Regulation.; 2) operating design/ Procedure 1. Request a topographic survey Procedure 8. Conduct Laboratory works at documents cleared by a competent structural units of the land plot at Omskarkhhitektura of the Omsk City Administration, as authorized by Municipal Organization the Rospotrebnadzor (Russian Consumer Agency’s) Laboratory at Hygiene Center in the Mayor of the City of Omsk; 3) work schedule; 4) Time: 19 days Omsk Oblast transportation diagram after a road section is closed; Cost: RUB 10,000 5) clearance from a competent structural units of Time: 14 days Comments: A report is prepared as a result of the topo- the Omsk City Administration, as authorized by the graphic survey with a layout of buildings and structures; Cost: RUB 15,000 Mayor of the City of Omsk of an open method of underground, surface and above-surface communication Comments: Occupational conditions, level of earthwork on street lanes and congested roads; 6) lines; design elements; fencing, roads, etc. lighting, radioactivity, water quality, level of noise order or articles of association for legal entities and and air exchange should be analyzed and surveyed. individual entrepreneurs; 7) power of attorney to the Procedure 2. Request geological survey of Developers prefer to perform these tasks, as in future, name of an employee in charge – for legal entities and the land plot at Geoecology, LLC when the warehouse will be in operation, it may be individual entrepreneurs; 8) letter addressed to the Time: 30 days inspected by RosPotrebNadzor, and violations will Head of the Administrative and Technical Inspection Cost: RUB 85,000 entail a order to close down the warehouse. of the Omsk City Administration.

* This procedure can be completed simultaneously with previous procedures. 94 DOING BUSINESS IN RUSSIA 2012

Procedure 14*. Legalize the permit for describes physical parameters of the built facility. The Comments: After an occupancy permit is obtained, excavation and other construction related document is available from the Omsk Subsidiary of the developer may proceed with cadastral registration works at Administrative and Technical Rostechinventarizatsia – Federal BTI, or any bureau of of the facility and obtaining a cadastral passport for it. Inspection of Omsk City technical inventory. To obtain a technical passport, Procedure 28. Registration of the building Time: 7 days the applicant should submit an application and the building design, incorporation documents, construc- at the Federal Service of State Registration, Rostreestr Cost: No cost tion permit, cadastral passport of the land and land Cadastre and Cartography ( ) Comments: The performance of work not related lease agreement or title. Tariffs for issuing technical Time: 30 days to earthwork requires a separate permit from the passports are established by the organization itself, Cost: RUB 15,000 Administrative and Technical Inspection of the Omsk and as a rule, they are not easily available. Comments: Titles to the property built are registered City Administration. Procedure 21. Request occupancy permit at in compliance with the Federal Law “On Real Procedure 15*. Obtain clearance of the Construction Department of Omsk City Property Rights Registration” by a department of the places of storage for the construction Federal Service for State Registration, Cadastre and Time: 10 days material at Administrative and Technical Cartography after submitting application, cadastral Inspection of Omsk City Cost: No cost passport, incorporation documents, occupancy Comments: The application is lodged with the Omsk permit and land titles. Time: 7 days Construction Department. The following documents Cost: No cost are enclosed with the application: KS-11 Report, Procedure 29. Sign agreement with the Comments: According to the Urban Development land title documents, construction permit, GPZU, water utility at Omskvodokanal, OJSC— Code, documentary evidence of compliance of the construction technical passport and incorporation water utility newly built warehouse with the technical conditions documents Time: 14 days is mandatory for obtaining an occupancy permit. Procedure 22. Receive inspection for Cost: No cost Procedure 16*. Obtain permit to start occupancy permit at Municipal Architecture Comments: The application is lodged with Omsk excavation works at Administrative and and Urban Development Department Vodokanal OJSC together with reports and establish- ing documents (contract concluded by the owner). Technical Inspection of Omsk City Time: 10 days Time: 7 days Cost: No cost DEALING WITH CONSTRUCTION PERMITS Cost: No cost Comments: Department staff review the submitted Perm, Perm Kray documents and visit the construction site Procedure 17. Obtain compliance certificate Warehouse value: RUB 26,120,000 (US$ 844,063) of the building with the technical conditions Procedure 23. Obtain occupancy permit at Data as of: November 2011 from the water and sewage utility at Construction Department of Omsk City Omskvodokanal, OJSC—water utility Time: 10 days Procedure 1. Request a topographic survey Time: 3 days of the land plot at Cadastre engineer and Cost: No cost Cost: No cost Division of City Plan of Department of Comments: A compliance report is compiled based Comments: According to the Urban Development Plannning and Territory Development of on the inspection outcomes and a decision is taken Perm City Code, documentary evidence of compliance of the on rejection or issuance of an occupation permit. newly built warehouse with the technical conditions Time: 30 days is mandatory for obtaining an occupancy permit. This Procedure 24. Sign agreement with water Cost: RUB 5,000 document is issued by Omskl Vodokanal OJSC after and sewage utility at Omskvodokanal, Comments: BuildCo places of an order for land survey checking the water supply and sanitation systems. OJSC—water utility at 1:500/1:2,000/1:5000 (for areas up to 1 ha, up Procedure 18*. Obtain compliance Time: 5 days to 10 ha, over 10 ha) by a specialized organization certificate of the building with the technical Cost: No cost with an SRO license for geodesic operations. The applicant submits the following documents: 1) conditions from the phone utility at Comments: The network connection report is signed Application/contract. 2) Land plot title (cadastral Sibirtelekom upon completion of procedures related to physical plan) and land boundaries. A report is prepared as connection of the internal lines to the main networks. Time: 7 days a result of the topographic survey with a layout of Cost: No cost Procedure 25*. Sign agreement with the buildings and structures; underground, surface and Comments: The telephone company is notified about phone utility at Rostelekom, OJSC above-surface communication lines; design elements; completion of work, with enclosed reports that serve Time: 5 days fencing, roads, etc. as a basis for issuance of technical conditions. Cost: No cost Procedure 2. Obtain technical conditions Procedure 19*. Obtain compliance Comments: The network connection report is signed for electricity connection at Permenergo certificate of the building with the technical upon completion of procedures related to physical Time: 30 days conditions from the heavy shower sewage connection of the internal lines to the main networks. Cost: No cost utility at Municipal Facilities Department of Comments: BuildCo applies for the technical Omsk City Procedure 26*. Sign agreement with conditions for electricity connection Time: 3 days heavy shower sewage utility at Municipal Cost: No cost Procedure 3*. Obtain technical conditions Facilities Department of Omsk City to connect to water and sewage services at Comments: According to the Urban Development Time: 5 days Novogor-Prikamie, LLC Code, documentary evidence of compliance of the Cost: No cost newly built warehouse with the technical conditions Time: 30 days is mandatory for obtaining an occupancy permit. Comments: The network connection report is signed Cost: No cost upon completion of procedures related to physical Comments: BuildCo obtains technical conditions of Procedure 20. Obtain a technical passport connection of the internal lines to the main networks. connection to water supply and sanitation systems. of the building at Bureau of technical The applicant submits a request with full information inventorization—federal Procedure 27. Obtain cadastral passport of the building at Center for Technical about the facility. Payment for connection is made Time: 14 days inventorization and Land Management in accordance with a schedule attached to the Cost: RUB 1,000 agreement. Time: 22 days Comments: The technical passport of a facility Cost: No cost is required for obtaining an occupancy permit. It

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 95

Procedure 4*. Obtain technical Procedure 9. Receive inspection during Comments: BuildCo submits an application indicating conditions for telephone connection at construction works at Gosstroynadzor of the requirement connected capacity. Uralsvyazinform, OJSC Perm Krai—construction supervision Procedure 17. Request and connect to Time: 14 days Time: 1 day telephone services at Rostelekom, JSC, Cost: No cost Cost: No cost Uralsvyazinform Comments: BuildCo obtains the technical specifica- Comments: The outcomes of the construction Time: 14 days tion for landline telephone connection and concluding control are recorded in as-built documentation. One Cost: RUB 3,500 a contract. No fees are charged for connection inspection takes place every month. Comments: To connect to telephone network, and contract conclusion. After the completion of BuildCo needs to apply to a fixed communication construction, a fee is collected for telephone number Procedure 10. Receive inspection during provider with incorporation documents and a cover assignment immediately during connection to the construction works at Gosstroynadzor of letter. Upon contract execution, payment is made in telephone line in accordance with approved tariffs. Perm Krai—construction supervision Time: 1 day accordance with the established tariffs. Procedure 5*. Request geological survey of Cost: No cost the land plot at Specialized agency Procedure 18. Obtain a technical passport Comments: The outcomes of the construction of the building at Bureau of technical Time: 50 days control are recorded in as-built documentation. One inventorization—federal Cost: RUB 165,000 [RUB 55,000 per boring] inspection takes place every month. Time: 20 days Comments: BuildCo placesan order for engineering/ Procedure 11. Receive inspection during Cost: RUB 39,000 [RUB 39,000 - 20 days (standard geodesic survey of the land plot to determine the time), RUB 78,000 - 10 days, RUB 117,000 - 5 days] soil composition and collect other data required for construction works at Gosstroynadzor of designing. The assignment should be performed by Perm Krai—construction supervision Comments: The technical passport of a facility a specialized SRO, licensed for engineering/geodesic Time: 1 day is required for obtaining an occupancy permit. It describes physical parameters of the built facility. surveys. The applicant submits the following docu- Cost: No cost The document is available from the State Unitary ments: applicant, draft building design, designer’s Comments: The outcomes of the construction assignment. The tests should be performed in Enterprise for Technical Inventory of Real Property control are recorded in as-built documentation. One in the Yaroslavl Oblast, or any bureau of technical accordance with the construction standards (SNiPs). inspection takes place every month. The cost depends on the estimated scope of work, in inventory. To obtain a technical passport, the ap- particular, on the number of holes to be drilled in the Procedure 12. Receive inspection during plicant should submit an application and the building plot area. construction works at Gosstroynadzor of design, incorporation documents, construction Perm Krai—construction supervision permit, cadastral passport of the land and land Procedure 6. Obtain development plan of lease agreement or title. Tariffs for issuing technical land plot (GPZU) at Planning and Territory Time: 1 day passports are established by the organization itself, Development Department of Perm City Cost: No cost and as a rule, they are not easily available. Comments: The outcomes of the construction Time: 14 days Procedure 19. Obtain occupancy permit control are recorded in as-built documentation. One Cost: No cost inspection takes place every month. at Planning and Territory Development Comments: The land development plan is a manda- Department of Perm City tory document submitted by the developer/customer Procedure 13. Receive inspection during Time: 10 days to obtain official design appraisal, construction permit construction works at Gosstroynadzor of Cost: No cost and building occupation permit. Land development Perm Krai—construction supervision Comments: To obtain a permit for commissioning plans are prepared for built-up land plots, land Time: 1 day plots allocated for construction and renovation of the facility, the applicant submits, in accordance with Cost: No cost permanent structures. The document contains key the Russian Federal Urban Development Code, all land plot data: boundary coordinates, authorized use, Comments: The outcomes of the construction required documents to the Perm City Department of issued technical conditions. The following documents control are recorded in as-built documentation. One Area Planning and Architecture and Development. inspection takes place every month. should be submitted to obtain it: application, draft Procedure 20. Obtain cadastral passport design, document titles. Procedure 14. Receive inspection during of the building at Bureau of technical Procedure 7. Obtain construction permit construction works at Gosstroynadzor of inventorization—federal at Planning and Territory Development Perm Krai—construction supervision Time: 14 days Department of Perm City Time: 1 day Cost: No cost Time: 10 days Cost: No cost Comments: After an occupancy permit is obtained, Cost: No cost Comments: The outcomes of the construction the developer may proceed with cadastral registration Comments: The procedure is performed in control are recorded in as-built documentation. One of the facility and obtaining a cadastral passport for accordance with the established regulations. A inspection takes place every month. it. Generally, the cadastral passport is drawn by the construction permit application is submitted along same organization that had prepared the technical with the following documents: 1) land title 2) passport. The cadastral passport drafting cost is part land development plan 3) materials of the design Procedure 15. Receive inspection during of the technical passport drafting cost. documentation. construction works at Gosstroynadzor of Perm Krai—construction supervision Procedure 21. Registration of the building Procedure 8. Notify the authorities of at the Federal Service of State Registration, Time: 1 day Cadastre and Cartography (Rostreestr) commencement of construction works at Cost: No cost Gosstroynadzor of Perm Krai—construction Time: 21 days Comments: The outcomes of the construction supervision Cost: RUB 15,000 control are recorded in as-built documentation. One Time: 1 day inspection takes place every month. Comments: Titles to the property built are registered Cost: No cost in compliance with the Federal Law “On Real Procedure 16. Connect to water services at Property Rights Registration” by a department of the Comments: Before the beginning of construction Federal Service for State Registration, Cadastre and (renovation/major repairs), the developer should Novogor-Prikamie, LLC Cartography after submitting application, cadastral submit a notification about the beginning of Time: 35 days passport, incorporation documents, occupancy construction. Cost: RUB 102,650 permit and land titles.

* This procedure can be completed simultaneously with previous procedures. 96 DOING BUSINESS IN RUSSIA 2012

DEALING WITH CONSTRUCTION PERMITS Procedure 5*. Obtain technical conditions OJSC) and as-built documentation (fact of work Petrozavodsk, Republic of Karelia for water, sewage and heavy shower accomplished) are also provided. If the design and sewage systems and sign agreement at as-built documentation meet the requirements, Warehouse value: RUB 26,120,000 (US$ 844,063) Petrozavodsk Communal Systems, OJSC Petrozavodsk Municipal Systems OJSC issues a Data as of: November 2011 Time: 30 days certificate of compliance with technical conditions, which serves as a pre-requisite document for Procedure 1. Obtain development plan of Cost: RUB 31,742 issuance of an occupancy permit. land plot (GPZU) at Architecture and Urban Procedure 6*. Obtain technical conditions Development Department of Petrozavodsk Procedure 10*. Obtain compliance for telephone connection and sign City certificate of the building with the phone agreement at Svyazservice, LLC Time: 30 days utility at Svyazservice, LLC Time: 14 days Cost: No cost Time: 30 days Cost: RUB 500 Comments: The land development plan is a manda- Cost: No cost Comments: BuildCo obtains technical specification tory document submitted by the developer/customer Comments: The telephone company is notified about for landline telephone connection and concluding to obtain official design appraisal, construction permit completion of work, with enclosed reports, that a contract with SvyazService OJSC. In principle, and building occupation permit. Land development serves as a basis for issuance of technical conditions. telephone connections with the requested parameters plans are prepared for built-up land plots, land may be offered by other service providers; however, plots allocated for construction and renovation of Procedure 11. Request occupancy permit SvyazService is the largest player on this market. The permanent structures. A land development plan at Architecture and Urban Development applicant submits documents and makes payment at is developed for a separate land plot that has been Department of Petrozavodsk City the time of execution of the connection contract. The registered by the State, with established development Time: 10 days contract drafting cost is RUB 500. rules in the Land Use Regulations, and subject to Cost: No cost availability of a duly approved planning and border- Procedure 7. Obtain construction permit Comments: The application is lodged with setting project. at Architecture and Urban Development the Department of Architecture and Urban Procedure 2*. Request a topographic survey Department of Petrozavodsk City Developmentof the Petrozavodsk City District of the land plot at Petrozavodsk Urban Time: 14 days Administration. Development Bureau, Municipal Unitary Cost: No cost Procedure 12. Obtain a technical passport Organization Comments: Before starting construction, BuildCo of the building at Bureau of technical Time: 35 days needs to obtain a construction permit. Its absence inventorization—state unitary enterprise Cost: RUB 92,900 [estimated RUB 10,000-15,000 entails a penalty, according to Clause 1 of Article 9.5 Time: 30 days of the Administrative Offense Code. Construction per 100 m2] Cost: RUB 35,000 permits are issued by the Committee for Urban Comments: BuildCo places an order for land survey at Planning, Architecture and Land Use of the Comments: The technical passport shows the actual 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Petrozavodsk Administration. The list of documents, parameters of the newly built property. The docu- ha, over 10 ha) by a specialized organization with an time and costs are regulated by the Russian Federal ment may be obtained from the Petrozavodsk Bureau SRO license for geodesic operations. The applicant UDC. Officially, the document issuance time limits of Technical Inventory (BTI). To obtain the passport, submits the following documents: 1) Application/ are followed; however, in reality the document may be the applicant provides an application along with the contract. 2) Land plot title (cadastral plan) and land picked up only on the following working day, as it is building design, incorporation documents, mailing ad- boundaries. prepared by the close of business time. dress, construction permit, cadastral land certificate, Procedure 3*. Request geological survey land lease agreement or title. The technical passport Procedure 8. Notify the authorities of of the land plot at Petrozavodsk Urban issuance tariffs are set by the agency itself, and this commencement of construction works Development Bureau, Municipal Unitary information is not, as a rule, easily available. at Inspection for architecture and Organization construction supervision Procedure 13. Obtain occupancy permit Time: 45 days at Architecture and Urban Development Time: 1 day Cost: RUB 80,000 [4 borings in total, 10 meters each, Department of Petrozavodsk City Cost: No cost RUB 2,000 per meter boned including laboratory Time: 10 days Comments: Before starting construction work, water study] Cost: No cost BuildCo should notify the Inspectorate of the State Comments: BuildCo places an order for engineering/ Architectural and Construction Supervision of the Comments: The occupancy permit application is sub- geodesic survey of the land plot to determine the Ministry of Construction of the Republic of Karelia mitted with the following documents attached: land soil composition and collect other data required for about the construction work beginning date (10 days title, GPZU, construction permit, report of completed designing. The assignment should be performed by prior to the scheduled beginning of the construction construction acceptance by the developer, documents a specialized SRO, licensed for engineering/geodesic work). The notification should be submitted along certifying the facility compliance with technical condi- surveys. The applicant submits the following docu- with construction documentation, construction per- tions, diagram with the facility positioning within the ments: applicant, draft building design, designer’s mit, work schedule and a list of responsible persons. land plot area. Facility occupancy permit is prepared assignment. The tests should be performed in Based on the notification, the Inspectorate of the according to the requirements of the UDC and Permit accordance with the construction standards (SNiPs). State Architectural and Construction Supervision Issuance Regulation, adopted in Petrozavodsk. The cost depends on the estimated scope of work, in of the Ministry of Construction of the Republic of particular, on the number of holes to be drilled in the Procedure 14. Sign agreement with the Karelia develops schedules of construction progress plot area. water, sewage and heavy shower sewage inspections and shares them with the developer. utility at Petrozavodsk Communal Systems, Procedure 4. Obtain technical conditions Procedure 9. Obtain compliance certificate OJSC for electricity connection at Petrozavodsk of the building with the water, sewage Time: 30 days Communal Systems, OJSC and heavy shower sewage utility at Cost: RUB 104,264 Time: 15 days Petrozavodsk Communal Systems, OJSC Comments: This is a legal act of recognition and Cost: No cost Time: 3 days confirmation of fulfillment of all binding regulatory Comments: BuildCo applies for the technical Cost: No cost requirements conditions for electricity connection Comments: After construction the water supply and sanitation lines these are separately examined by the Vodokanal inspectors. The construction design (pre-approved by Petrozavodsk Municipal Systems

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 97

Procedure 15. Sign agreement with the Comments: Apply for technical conditions for and costs are established at the federal level and phone utility at Svyazservice, LLC electricity connection requires submission of the following documents: Time: 1 day application, draft design, all technical conditions Procedure 3*. Obtain technical conditions and land titles. The document is issued by the Cost: No cost for water and sewage services at Department of Architecture and Urban Development. Comments: This is a legal act of recognition and Vodokanal, OJSC—water utility confirmation of fulfillment of all binding regulatory Time: 30 days Procedure 7. Obtain construction permit at Architecture and Urban Development requirements. Cost: No cost Department of Rostov-on-Don City, Procedure 16. Obtain cadastral passport Comments: Obtaining technical conditions of con- Municipal Organization of the building at Bureau of technical nection to water supply and sanitation systems. The inventorization—state unitary enterprise applicant submits the following document package Time: 14 days Cost: No cost Time: 20 days to Rostov-on-Don City Vodokanal OJSC: application, legal documents for the land plot (cadastral passport, Comments: Construction permits are issued by the Cost: No cost draft designa nd design estimates). Connection fee Department of Architecture and Urban Development. Comments: After an occupancy permit is obtained, is basedin on the Vodokanal tariffs. aP yment for The list of documents, time and costs are regu- the developer may proceed with obtaining a cadastral connection is made in accordance with a schedule lated by the Russian Federal UDF. From the formal passport for it in the State Unitary Enterprise attached to the agreement. standpoint, the document issuance time is complied “Petrozavodsk Bureau of Technical Inventory (BTI)”. with; however, in reality it can be obtained on the Procedure 4*. Obtain technical conditions Procedure 17. Registration of the building following working day only, as it is prepared by the for telephone connection at Komstar- close of business time. at the Federal Service of State Registration, Regions, Rostelekom or other companies Cadastre and Cartography (Rostreestr) Time: 14 days Procedure 8. Obtain compliance certificate Time: 30 days of the building with the water and sewage Cost: No cost Cost: RUB 15,000 utility at Rostov-on-Don Vodokanal, Comments: Obtaining technical specification for OJSC—water utility Comments: Titles to the property built are registered landline telephone connection and concluding a in compliance with the Federal Law “On Real contract with Komstar-Regions OJSC. In principle, Time: 7 days Property Rights Registration” by the Republic of telephone connections with the requested parameters Cost: No cost Karelia Department of the Federal Service for State may be offered by other service providers; however, Comments: As required by the UDC, in order to Registration, Cadastre and Cartography after submit- Komstar-Regions is the largest player on this market. obtain an occupational permit, the developer should ting application, cadastral passport, incorporation The applicant submits the following document provide a confirmation of the facility compliance documents, occupancy permit and land titles. package: application, official documents for the land with the technical conditions. For that purpose, the Procedure 18. Sign agreement with the plot (cadastral passport, resolution of the city mayor developer should send a letter to the agency that water utility at Petrozavodsk Communal authorizing the design, draft design and design issued the specification and receives a certificate Systems, OJSC estimates). No fees are charged for connection and of compliance with the technical conditions. This contract conclusion. procedure is free of charge. Time: 30 days Cost: No cost Procedure 5*. Request geological survey Procedure 9. Request connection to the Comments: Connection to water supply networks is of the land plot at Any commercial water and sewage utility at Rostov-on-Don performed after issuance of a title to the newly built organization with corresponding Vodokanal, OJSC—water utility property. The applicant and Petrozavodsk Vodokanal permission from a self-regulating Time: 4 days organization OJSC conclude a contract and sign an act establishing Cost: No cost a boundary between internal and external networks. Time: 60 days Comments: To connect to water supply and sanita- Cost: RUB 150,000 [cost estimate for 5-7 borings, tion systems, the applicant lodges an inquiry with DEALING WITH CONSTRUCTION PERMITS 10 meters each (including water analysis), RUB Rostov-on-Don City Vodokanal OJSC with enclosed Rostov-on-Don, Rostov Oblast 2,000-3,000 per boring per meter] application, work completion reports, equipment Warehouse value: RUB 26,120,000 (US$ 844,063) Comments: Placement of an order for engineering/ certificates, commissioning reports and acceptance geodesic survey of the land plot to determine the reports. Data as of: November 2011 soil composition and collect other data required for Procedure 10. Connect to water services at Procedure 1. Request a topographic designing. The assignment should be performed Rostov-on-Don Vodokanal, OJSC—water survey of the land plot at Any commercial by a specialized SRO, licensed for engineering/ utility organization with corresponding geodesic surveys. The applicant submits the permission from a self-regulating following documents: applicant, draft building Time: 28 days organization design, designer’s assignment. The tests should Cost: RUB 32,125 be performed in accordance with the construction Time: 35 days Comments: Connection to water supply networks standards (SNiPs). The cost depends on the is performed after issuance of a title to the newly Cost: RUB 77,450 [estimated RUB 10,000-20,000 estimated scope of work, in particular, on the per 100 m2 of the land plot] built property. The applicant and Rostov-on-Don number of holes to be drilled in the plot area. In our Vodokanal OJSC conclude a contract and sign an Comments: Placement of an order for land survey at case, there will be 5-7 holes, 10 meters deep. The act establishing a boundary between internal and 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 prices of GidroSpetzFundamentStroy OJSC are RUB external networks. ha, over 10 ha) by a specialized organization with an 2,000-3,000 per meter of the plot area. SRO license for geodesic operations. The applicant Procedure 11. Obtain compliance certificate submits the following documents: 1) Application/ Procedure 6. Obtain development plan of of the building with the phone utility at contract. 2) Land plot title (cadastral plan) and land land plot (GPZU) at Architecture and Urban Komstar-Regions, Rostelekom or other boundaries. A report is prepared as a result of the Development Department of Rostov-on- companies Don City, Municipal Organization topographic survey with a layout of buildings and Time: 3 days structures; underground, surface and above-surface Time: 30 days Cost: No cost communication lines; design elements; fencing, roads, Cost: No cost etc. Comments: As required by the UDC, in order to Comments: In accordance with the Urban obtain an occupational permit, the developer should Procedure 2. Obtain technical conditions Development Code, a land development plan is a provide a confirmation of the facility compliance for electricity connection at Rostovenergo document that contains key land plot information: with the technical conditions. For that purpose, the boundary coordinates, authorized use and technical Time: 30 days developer should send a letter to the agency that conditions. The document is required for obtaining issued the specification and receives a certificate Cost: No cost a construction permit. The document issuance time

* This procedure can be completed simultaneously with previous procedures. 98 DOING BUSINESS IN RUSSIA 2012

of compliance with the technical conditions. This Comments: After an occupancy permit is obtained, Procedure 4. Obtain technical conditions procedure is free of charge. the developer may proceed with obtaining a cadastral for electricity connection at Lenenergo, passport for it in the Oblast Department of the OJSC—electicity supply provider Procedure 12*. Request and connect to Federal Service for State Registration, Cadastre and Time: 30 days telephone services at Komstar-Regions, Cartography. Rostelekom or other companies Cost: No cost Time: 1 day Procedure 18. Registration of the building Comments: Apply for technical conditions for at the Federal Service of State Registration, Cost: RUB 4,800 electricity connection Cadastre and Cartography (Rostreestr) Comments: Telephone number is assigned at the Procedure 5*. Obtain technical conditions Time: 32 days time of conclusion of a contract for connection to a for telephone connection at North-West telephone network, and is chargeable according to Cost: RUB 15,000 Telekom, OJSC the provider tariffs. In 2011, the charge per number in Comments: Titles to the property built are registered Time: 30 days Komstar-Regions OJSC was RUB 4,800. in compliance with the Federal Law “On Real Property Cost: RUB 4,000 Rights Registration” by the Rostov Oblast Department Procedure 13*. Sign agreement with of the Federal Service for State Registration, Cadastre Comments: Obtaining technical specification for the phone utility at Komstar-Regions, and Cartography based on an applications, cadastral landline telephone connection and concluding Rostelekom or other companies passport, incorporation documents, occupancy a contract. No fees are charged for connection Time: 14 days permit and land titles. and contract conclusion. After the completion of Cost: No cost construction, a fee is collected for telephone number DEALING WITH CONSTRUCTION PERMITS assignment immediately during connection to the Comments: A work acceptance report is signed upon telephone line in accordance with approved tariffs. completion of the work by the telephone company Saint-Petersburg staff and the line testing Warehouse value: RUB 26,120,000 (US$ 844,063) Procedure 6. Request geological survey of Data as of: November 2011 the land plot at GGS of Urban Development Procedure 14*. Conclude agreement on and Architecture Committee of Saint connection services from the phone utility Procedure 1. Request a topographic survey Petersburg Time: 1 day of the land plot at Urban Development Time: 60 days Cost: No cost and Architecture Committee of Saint Cost: RUB 50,000 Comments: After all documents pertaining to Petersburg Comments: Placement of an order for engineering/ telephone connection are signed, the parties execute Time: 30 days geodesic survey of the land plot to determine the a service contract. This procedure may be run only Cost: RUB 4,645 [estimate based on RUB 50,0000 soil composition and collect other data required for upon acquisition of a title to the completed project. per 10,000 m2] designing. The applicant submits the following docu- Procedure 15. Obtain a technical passport Comments: Placement of an order for land survey at ments: applicant, draft building design, designer’s of the building at Bureau of technical 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 assignment. The tests should be performed in inventory—federal and municipal ha, over 10 ha) by a specialized organization with an accordance with the construction standards (SNiPs). The cost depends on the estimated scope of work, in Time: 30 days SRO license for geodesic operations. The applicant submits the following documents: 1) Application/ particular, on the number of holes to be drilled in the Cost: RUB 12,000 contract. 2) Land plot title (cadastral plan) and land plot area. Comments: Technical passport of a facility is required boundaries. A report is prepared as a result of the for obtaining an occupancy permit. It describes topographic survey with a layout of buildings and Procedure 7. Obtain development plan of physical parameters of the built facility. The docu- structures; underground, surface and above-surface land plot (GPZU) at Urban Development ment is available from the Municipal Enterprise of communication lines; design elements; fencing, roads, and Architecture Committee of Saint Technical Inventory and Real Property Evaluation, the etc. Petersburg Rostov Subsidiary of Rostechinventarizatsia – Federal Time: 30 days Procedure 2. Obtain technical conditions BTI, or any bureau of technical inventory. To obtain Cost: No cost a technical passport, the applicant should submit an to connect to water and sewage services Comments: Land development plan is a mandatory application and the building design, incorporation at Committee on Energy and Engeneering document submitted by the developer/customer to documents, mailing address, construction permit, Facilities of Saint Petersburg obtain official design appraisal, construction permit cadastral passport of the land and land lease agree- Time: 30 days and building occupation permit. Development plans ment or title. Tariffs for issuing technical passports Cost: No cost are drawn for land plots designated for construction are established by the organization itself, and as a Comments: Obtaining technical conditions of and renovation of permanent structures. A land rule, they are not easily available. There is a legal way connection to water supply and sanitation systems. development plan is developed for a separate land of expediting the procedure to pick up the technical The applicant submits a request with full information plot that has been registered by the State, with estab- passport in 5 days instead of the standard 30. about the facility to the Saint-Petersburg Committee lished development rules in the Land Use Regulations, Procedure 16. Obtain occupancy permit for Energy and Engineering Support. Connection and subject to availability of a duly approved planning at Architecture and Urban Development fees are determined on case by case basis and this and border-setting project. The process is governed Department of Rostov-on-Don City, information is not publicly available. by the procedure of interaction of the structural Municipal Organization units of the Committee for Urban Development and Procedure 3*. Obtain compliance certificate Architecture and the State Establishment “Center Time: 10 days from water and sewage utility at Committee for Information Support of Urban Development Cost: No cost on Energy and Engeneering Facilities of Activities” in preparation, approval, registration and Comments: Facility occupancy permit is drawn in line Saint Petersburg issuance of land development plots. with the requirements of the UDC and the Rostov-on- Time: 30 days Don local regulation on permit issuance. Procedure 8. Obtain construction permit at Cost: No cost Service for State Construction Supervision Procedure 17. Obtain cadastral passport Comments: Final construction design, compliant and Expertise of Saint Petersburg to the prior technical conditions, is cleared with of the building at Federal Service of State Time: 10 days Registration, Cadastre and Cartography the Saint-Petersburg Committee for Energy and (Rosreestr) Engineering Support. Cost: No cost Comments: Before starting construction, BuildCo Time: 25 days needs to obtain a construction permit. Its absence Cost: No cost entails a penalty, according to Clause 1 of Article 9.5 of the Administrative Offense Code. Besides, in

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 99

accordance with Article 222 of the Russian Federal water” does not apply to property. The permit is Comments: BuildCo places an order for land survey at Civil Code, such property may be considered by a issued on the basis of laboratory studies. 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 court as unauthorized construction, and may be ha, over 10 ha) by a specialized organization with an subject to removal at the expense of the building Procedure 14. Connect to water services SRO license for geodesic operations. The applicant entity. To obtain a construction permit, BuildCo at State Unitary Organization Saint submits the following documents: 1) Application/ needs to lodge an application with the Department Petersburg Vodokanal—water utility contract. 2) Land plot title (cadastral plan) and land of Architecture, Construction and Land Use, with Time: 21 days boundaries. the following documents attached: land titles, Cost: RUB 75,293 Procedure 2. Obtain technical conditions explanatory note, land plot layout diagrams (2 types), Comments: Done on the basis of a water supply information about engineering equipment, combined for electricity connection at Samara City and sanitation contract. Connection tariffs are Electric Supply Networks, CJSC engineering network layout, construction plan with determined on case by case basis and there is no clearances. information available for public. Time: 30 days Cost: No cost Procedure 9. Notify the authorities of Procedure 15. Request and connect to commencement of construction works at Comments: BuildCo applies for the techinical telephone services at North-West Telekom, conditions for electricity connection Service for State Construction Supervision OJSC and Expertise of Saint Petersburg Time: 30 days Procedure 3*. Obtain technical Time: 1 day conditions for connecting to water and Cost: RUB 200 Cost: No cost sewage services and sign agreement at Comments: To connect to telephone network, Comments: The construction company should inform Samaradovokanal, Municipal Unitary BuildCo needs to apply to a fixed communication Organization—water utility the Saint-Petersburg State Construction Supervision provider with incorporation documents and a cover and Expertise Service about the beginning of letter. Upon contract execution, payment is made in Time: 14 days construction work. accordance with the established tariffs. Cost: RUB 166,133 [connection tariffs: water supply: Procedure 10*. Request connection to the RUB 103,085 with max consumption, sanitation: RUB Procedure 16. Obtain occupancy permit at 63,048.] water and sewage utility at State Unitary Service for State Construction Supervision Comments: Obtaining technical conditions of con- Organization Saint Petersburg and Expertise of Saint Petersburg Vodokanal—water utility nection to water supply and sanitation systems. The Time: 10 days applicant submits the following document package: Time: 7 days Cost: No cost application, land title documents (cadastral passport, Cost: No cost Comments: For an occupancy permit, BuildCo draft design and design estimates). Payment for Comments: Submitted only after technical conditions needs to lodge documents with the Saint Petersburg connection is made in accordance with a schedule are cleared and the required consumption volume is Public Construction Supervision and Review Service; attached to the agreement. identified. documents may be picked up in 10 days. Procedure 4*. Obtain technical conditions Procedure 11. Receive inspection from the Procedure 17. Obtain cadastral passport for telephone connection and sign water utility at State Unitary Organization of the building at Federal Service of State agreement at Volgatelekom Saint Petersburg Vodokanal—water utility Registration, Cadastre and Cartography Time: 10 days Time: 30 days (Rosreestr) Cost: RUB 4,900 [technical conditions are issued Cost: No cost Time: 25 days free of charge. Connection cost (the first number Comments: Conclusion is issued after verification Cost: RUB 3,200 allocation cost is urban settlements)] of compliance of the application with technical Comments: After an occupancy permit is obtained, Comments: BuildCo obtains technical specification specification. After construction the water supply and the developer may proceed with cadastral registration for landline telephone connection and concludes a sanitation lines, they are (separately) demonstrated of the facility and obtaining a cadastral passport for contract. to the Vodokanal inspectors. The construction it. Generally, the cadastral passport is drawn by the Procedure 5*. Obtain technical conditions design (pre-approved by Petrozavodsk Municipal same organization that had prepared the technical Systems OJSC) and as-built documentation (fact of for connecting to the heavy shower sewage passport. The cadastral passport drafting cost is part and sign agreement at Samara Municipal work accomplished) are also provided. If the design of the technical passport drafting cost. and as-built documentation meet the requirements, Territory Improvement and Ecology Petrozavodsk Municipal Systems OJSC issues a Procedure 18. Registration of the building Department certificate of compliance with technical conditions, at the Federal Service of State Registration, Time: 20 days which serves as a pre-requisite document for contract Cadastre and Cartography (Rostreestr) Cost: No cost conclusion. Time: 30 days Comments: Obtaining technical conditions of Procedure 12. Sign agreement with Cost: RUB 15,000 connection to the storm drain system and concluding water and sewage utility at State Unitary Comments: This is a legal act of recognition and a contract. Organization Saint Petersburg Vodokanal— confirmation by the State of the emergence, limita- Procedure 6*. Request geological survey of water utility tion/encumbrance, assignment or cessation of rights the land plot at SamaraTICIZ, LLC Time: 10 days to real property. State registation is the only evidence of registered interests. Time: 30 days Cost: No cost Cost: RUB 15,000 Comments: The contract terms and conditions DEALING WITH CONSTRUCTION PERMITS Comments: BuildCo places an order for engineering/ depend on water consumption volume. The contract Samara, Samara Oblast geodesic survey of the land plot to determine the is concluded for 1 year with optional extension. soil composition and collect other data required for Warehouse value: RUB 26,120,000 (US$ 844,063) Procedure 13*. Obtain approval of the designing. The assignment should be performed by Data as of: November 2011 Sanitary-epidemological station for the a specialized SRO, licensed for engineering/geodesic use of drinking water at Saint Petersburg Procedure 1. Request a topographic survey surveys. The applicant submits the following docu- Hygiene and Epidemiology Center of the land plot at Gorzhilproekt Municipal ments: applicant, draft building design, designer’s Organization assignment. The tests should be performed in Time: 14 days accordance with the construction standards (SNiPs). Cost: RUB 5,000 Time: 7 days The cost depends on the estimated scope of work, Comments: Permit is mandatory, as there will be peo- Cost: RUB 30,000 in particular, on the number of holes to be drilled in ple working in the building. The term “industrial-use

* This procedure can be completed simultaneously with previous procedures. 100 DOING BUSINESS IN RUSSIA 2012

the plot area. In our case, there will be 5-7 holes, 10 permit, schedule, list of responsible persons. Based Comments: In accordance with the approved meters deep. on the notification, the State Construction Control inspection agenda, based on the construction work would develop construction inspection schedules, plan. Approximate number of inspections: 7 (1 – pit Procedure 7. Obtain development plan and share them with the developer. excavation, 2 – foundation pouring, etc.) of land plot (GPZU) at Construction and Architecture Department of Samara City Procedure 13. Receive inspection during Procedure 20. Notify the authorities of end Time: 30 days construction works at Gosstroynadzor— of construction works at Gosstroynadzor— construction supervision construction supervision Cost: No cost Comments: The land development plan is a manda- Time: 1 day Time: 1 day tory document submitted by the developer/customer Cost: No cost Cost: No cost to obtain official design appraisal, construction permit Comments: In accordance with the approved Comments: Submission of a construction completion and building occupation permit. The following docu- inspection agenda, based on the construction work notification to Gosstroynadzor ments should be submitted to obtain it: draft design, plan. Approximate number of inspections: 7 (1 – pit all technical conditions, land titles. The document is excavation, 2 – foundation pouring, etc.) Procedure 21. Obtain certificate of issued by the Samara Department of Construction compliance of construction with technical and Architecture. Procedure 14. Receive inspection during conditions at Samaradovokanal, Municipal construction works at Gosstroynadzor— Unitary Organization—water utility Procedure 8. Obtain certificate of construction supervision Time: 7 days compliance of the project design from Time: 1 day Cost: No cost the water utility at Samaradovokanal, Cost: No cost Municipal Unitary Organization—water Comments: According to the Urban Development utility Comments: In accordance with the approved Code, documentary evidence of compliance of the inspection agenda, based on the construction work newly built warehouse with the technical conditions Time: 14 days plan. Approximate number of inspections: 7 (1 – pit is mandatory for obtaining an occupancy permit. Cost: No cost excavation, 2 – foundation pouring, etc.) It requires an as-built survey. The conclusion is Comments: The final construction design, compliant issued after verifying the application compliance to the prior technical conditions, is submitted to the Procedure 15. Receive inspection during with the technical conditions. An operating design water supplier for clearance. construction works at Gosstroynadzor— (pre-approved by Vodokanal) an as-built documenta- construction supervision tion (fact of work accomplished) are provided. If the Procedure 9*. Obtain certificate of Time: 1 day design and as-built documentation are compliant, compliance of the project design from the Cost: No cost Vodokanal issues a certificate of compliance with phone utility at Volgatelekom Comments: In accordance with the approved technical conditions required for obtaining an Time: 14 days inspection agenda, based on the construction work occupancy permit for a newly built property. Cost: No cost plan. Approximate number of inspections: 7 (1 – pit Procedure 22*. Obtain compliance Comments: The final construction design, compliant excavation, 2 – foundation pouring, etc.) certificate of the building with the technical to the prior technical conditions, is submitted to the conditions from the phone utility at telephone company for clearance. Procedure 16. Receive inspection during construction works at Gosstroynadzor— Volgatelekom Procedure 10*. Obtain certificate of construction supervision Time: 7 days compliance of the project design from the Time: 1 day Cost: No cost heavy shower sewage utility at Samara Cost: No cost Comments: The telephone company is notified about Municipal Territory Improvement and completion of work, with enclosed reports, which Ecology Department Comments: In accordance with the approved inspection agenda, based on the construction work serves as a basis for issuance of technical conditions. Time: 14 days plan. Approximate number of inspections: 7 (1 – pit Procedure 23*. Obtain compliance Cost: No cost excavation, 2 – foundation pouring, etc.) certificate of the building with the technical Comments: The final construction design, compliant Procedure 17. Receive inspection during conditions from the heavy shower sewage to the prior technical conditions, is submitted to the utility at Samara Municipal Territory organization for clearance. construction works at Gosstroynadzor— construction supervision Improvement and Ecology Department Procedure 11. Obtain construction permit at Time: 1 day Time: 7 days Construction and Architecture Department Cost: No cost Cost: No cost of Samara City Comments: In accordance with the approved Comments: Document confirming the newly built Time: 10 days inspection agenda, based on the construction work warehouse with technical conditions of connection to Cost: No cost plan. Approximate number of inspections: 7 (1 – pit storm drain system. Comments: Before starting construction, BuildCo excavation, 2 – foundation pouring, etc.) Procedure 24. Sign agreement with water needs to obtain a construction permit. Its absence and sewage utility at Samaradovokanal, entails a penalty, according to Clause 1 of Article 9.5 Procedure 18. Receive inspection during construction works at Gosstroynadzor— Municipal Unitary Organization—water of the Administrative Offense Code. Construction utility permits are issued by the Samara City Department construction supervision of Construction and Architecture. The list of docu- Time: 1 day Time: 1 day ments, time and costs are regulated by the Russian Cost: No cost Cost: RUB 1,020,550 [RUB 550 for drafting connec- tion documents. Payment of the remaining amount: Federal UDC. Comments: In accordance with the approved RUB 1,020,000] inspection agenda, based on the construction work Procedure 12. Notify the authorities of Comments: This is a legal act of recognition and commencement of construction works at plan. Approximate number of inspections: 7 (1 – pit excavation, 2 – foundation pouring, etc.) confirmation of fulfillment of all binding regulatory Gosstroynadzor—construction supervision requirements. It is paid for at the time of connection Time: 1 day Procedure 19. Receive inspection during contract execution. Cost: No cost construction works at Gosstroynadzor— construction supervision Procedure 25*. Sign agreement with the Comments: The developer should send a notification phone utility at Volgatelekom about the construction beginning date 10 days in ad- Time: 1 day Time: 1 day vance. The following construction-related documents Cost: No cost should be enclosed with the notification: construction Cost: RUB 4,900

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 101

Comments: This is a legal act of recognition and DEALING WITH CONSTRUCTION PERMITS following documents: applicant, draft building confirmation of fulfillment of all binding regulatory design, designer’s assignment. The tests should requirements. Saransk, Republic of Mordovia be performed in accordance with the construction Warehouse value: RUB 26,120,000 (US$ 844,063) standards (SNiPs). The cost depends on the Procedure 26*. Sign agreement with heavy Data as of: November 2011 estimated scope of work, in particular, on the number shower sewage utility at Samara Municipal of holes to be drilled in the plot area. In our case, Territory Improvement and Ecology Procedure 1. Request a topographic survey there will be 5-7 holes, 10 meters deep. Department of the land plot at Cadastre Municipal Time: 1 day Organizatioin Procedure 7. Obtain development plan of land plot (GPZU) at Architecture and Urban Cost: No cost Time: 7 days Development Department Comments: This is a legal act of recognition and Cost: RUB 20,000 Time: 30 days confirmation of fulfillment of all binding regulatory Comments: BuildCo places an order for land survey at requirements. 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Cost: No cost Comments: The following documents are required to Procedure 27. Obtain a technical passport ha, over 10 ha) by a specialized organization with an SRO license for geodesic operations. The applicant obtain it: application, draft design, all technical condi- of the building at Bureau of technical submits the following documents: 1) Application/ tions and land titles. The document is issued by the inventorization—federal contract. 2) Land plot title (cadastral plan) and land Department of Architecture and Urban Development. Time: 30 days boundaries The process is performed in accordance with the Cost: RUB 25,000 Saransk City administrative regulation on provision of Procedure 2. Obtain technical conditions the municipal service of issuance of documents about Comments: Technical passport of a facility is required for electricity connection at ZAO—TF Watt for obtaining an occupancy permit. It describes approval of land development plan. Time: 15 days physical parameters of the built facility. The Procedure 8. Obtain certificate of document is available from the Municipal Enterprise Cost: No cost compliance of the project design from the of Technical Inventory and Real Property Evaluation, Comments: BuildCo applies for the techinical water utility at Gorvodokanal, Municipal Rostechinventarizatsia – Federal BTI, or any bureau of conditions for electricity connection. Organization—water utility technical inventory. Procedure 3*. Obtain technical Time: 10 days Procedure 28. Obtain occupancy permit at conditions for connecting to water and Cost: No cost Construction and Architecture Department sewage services and sign agreement at Comments: The final construction design, compliant of Samara City Gorvodokanal, Municipal Organization— to the prior technical conditions, is submitted to the Time: 10 days water utility water supplier for clearance. Cost: No cost Time: 14 days Procedure 9*. Obtain certificate of Comments: Occupancy permit application is submit- Cost: RUB 45,326 compliance of the project design from the ted with the following documents attached: land Comments: Obtaining technical conditions of con- phone utility at Volgatelekom title, GPZU, construction permit, report of completed nection to water supply and sanitation systems. The Time: 10 days construction acceptance by the developer, documents applicant submits the following document package: certifying the facility compliance with technical condi- application, land title documents (cadastral passport, Cost: No cost tions, diagram with the facility positioning within the draft design and design estimates). Payment for Comments: The final construction design, compliant land plot area. Facility occupancy permit is drawn in connection is made in accordance with a schedule to the prior technical conditions, is submitted to the line with the requirements of the UDC. attached to the agreement. telephone company for clearance. Procedure 29. Obtain cadastral passport Procedure 4*. Obtain technical conditions Procedure 10*. Obtain certificate of of the building at Bureau of technical for telephone connection and sign compliance of the project design from the inventorization—federal agreement at Volgatelekom heavy shower sewage utility at Department Time: 21 days Time: 14 days of Communal Facilities and Territory Improvement, Municipal Organization Cost: No cost [part of the technical passport drafting Cost: No cost Time: 10 days cost] Comments: BuildCo obtains technical specification Comments: After an occupancy permit is obtained, for landline telephone connection and concludes a Cost: No cost the developer may proceed with cadastral registration contract. Comments: The final construction design, compliant of the facility and obtaining a cadastral passport for to the prior technical conditions, is submitted to the it. Generally, the cadastral passport is drawn by the Procedure 5*. Obtain technical conditions organization for clearance. same organization that had prepared the technical for connecting to the heavy shower sewage passport. The cadastral passport drafting cost is part and sign agreement at Department Procedure 11. Obtain construction permit of the technical passport drafting cost. of Communal Facilities and Territory at Architecture and Urban Development Improvement, Municipal Organization Department of Saransk City Procedure 30. Registration of the building Time: 20 days Time: 10 days at the Federal Service of State Registration, Cost: No cost Cadastre and Cartography (Rostreestr) Cost: RUB 1,500 Comments: Before starting construction, BuildCo Time: 21 days Comments: Obtaining technical conditions of connection to the storm drain system and concluding needs to obtain a construction permit. Its absence Cost: RUB 15,000 a contract. entails a penalty, according to Clause 1 of Article 9.5 Comments: Titles to the property built are registered of the Administrative Offense Code. Construction in compliance with the Federal Law “On Real Procedure 6*. Request geological survey of permits are issued by the Saransk City Department Property Rights Registration” by a department of the land plot at MordovTICIZ, OJSC of Construction and Architecture. The list of docu- the Federal Service for State Registration, Cadastre Time: 21 days ments, time and costs are regulated by the Russian and Cartography based on an applications, cadastral Cost: RUB 15,000 Federal UDC. passport, incorporation documents, occupancy Comments: BuildCo places an order for engineering/ permit and land titles. Procedure 12. Notify the authorities of geodesic survey of the land plot to determine the commencement of construction works at soil composition and collect other data required for Gosstroynadzor—construction supervision designing. The assignment should be performed Time: 1 day by a specialized SRO, licensed for engineering/ geodesic surveys. The applicant submits the Cost: No cost

* This procedure can be completed simultaneously with previous procedures. 102 DOING BUSINESS IN RUSSIA 2012

Comments: The developer should send a notification Procedure 19. Receive inspection during Procedure 25*. Sign agreement with the about the construction beginning date 10 days in ad- construction works at Gosstroynadzor— phone utility at Volgatelekom vance. The following construction-related documents construction supervision Time: 1 day should be enclosed with the notification: construction Time: 1 day Cost: RUB 4,900 permit, schedule, list of responsible persons. Based Cost: No cost on the notification, the State Construction Control Comments: This is a legal act of recognition and would develop construction inspection schedules, Comments: In accordance with the approved confirmation of fulfillment of all binding regulatory and share them with the developer. inspection agenda, based on the construction work requirements. plan. Approximate number of inspections: 7 (1 – pit Procedure 13. Receive inspection during excavation, 2 – foundation pouring, etc.). Procedure 26*. Sign agreement with heavy construction works at Gosstroynadzor— shower sewage utility at Department construction supervision Procedure 20. Notify the authorities of end of Communal Facilities and Territory of construction works at Gosstroynadzor— Improvement, Municipal Organization Time: 1 day construction supervision Time: 1 day Cost: No cost Time: 1 day Cost: No cost Comments: In accordance with the approved Cost: No cost inspection agenda, based on the construction work Comments: This is a legal act of recognition and plan. Approximate number of inspections: 7 (1 – pit Comments: Submission of a construction completion confirmation of fulfillment of all binding regulatory excavation, 2 – foundation pouring, etc.). notification to Gosstroynadzor. requirements. Procedure 14. Receive inspection during Procedure 21. Obtain compliance certificate Procedure 27. Obtain a technical passport construction works at Gosstroynadzor— of the building with the technical conditions of the building at Bureau of technical construction supervision from the water and sewage utility at inventorization—federal Gorvodokanal, Municipal Organization— Time: 1 day Time: 30 days water utility Cost: No cost Cost: RUB 26,762 Time: 10 days Comments: In accordance with the approved Comments: A technical passport of a facility is inspection agenda, based on the construction work Cost: No cost required for obtaining an occupancy permit. It plan. Approximate number of inspections: 7 (1 – pit Comments: According to the Urban Development describes physical parameters of the built facility. excavation, 2 – foundation pouring, etc.). Code, documentary evidence of compliance of the See Resolution of the Government of the Russian newly built warehouse with the technical conditions Federation No. 921 dated December 4, 2,000 “On Procedure 15. Receive inspection during is mandatory for obtaining an occupancy permit. State Technical Registration and Technical Inventory construction works at Gosstroynadzor— The applicant concludes a contract for technological of Permanent Structures in the Russian Federation”. construction supervision connection of the facility to water supply and Procedure 28. Obtain occupancy permit Time: 1 day sanitation systems. To conclude the contact, the at Urban Development and Architecture Cost: No cost applicant submits the following document package: application, title establishing documents, copies of Department of Saransk Comments: In accordance with the approved state registration of land property, land plot location Time: 10 days inspection agenda, based on the construction work (general layout and topographic survey report), Cost: No cost plan. Approximate number of inspections: 7 (1 – pit cadastral number of the land plot and facility design. excavation, 2 – foundation pouring, etc.). Comments: Occupancy permit application is submit- Procedure 22*. Obtain compliance ted with the following documents attached: land Procedure 16. Receive inspection during certificate of the building with the technical title, GPZU, construction permit, report of completed construction works at Gosstroynadzor— conditions from the phone utility at construction acceptance by the developer, documents construction supervision Volgatelekom certifying the facility compliance with technical condi- Time: 1 day tions, diagram with the facility positioning within the Time: 10 days Cost: No cost land plot area. The process is governed by a relevant Cost: No cost regulation. The accepted project and declared design Comments: In accordance with the approved Comments: The telephone company is notified about information are compared. inspection agenda, based on the construction work completion of work, with enclosed reports, which plan. Approximate number of inspections: 7 (1 – pit serves as a basis for issuance of technical conditions. Procedure 29. Obtain cadastral passport excavation, 2 – foundation pouring, etc.. of the building at Bureau of technical Procedure 23*. Obtain compliance inventorization—federal Procedure 17. Receive inspection during certificate of the building with the technical construction works at Gosstroynadzor— Time: 21 days conditions from the heavy shower sewage construction supervision Cost: No cost [part of the technical passport drafting utility at Department of Communal cost] Time: 1 day Facilities and Territory Improvement, Cost: No cost Municipal Organization Comments: After an occupancy permit is obtained, the developer may proceed with obtaining a cadastral Comments: In accordance with the approved Time: 10 days passport for it in the same agency that had prepared inspection agenda, based on the construction work Cost: No cost the technical passport. Its cost is part of the technical plan. Approximate number of inspections: 7 (1 – pit Comments: Document confirming the newly built passport drafting cost. excavation, 2 – foundation pouring, etc.). warehouse with technical conditions of connection to Procedure 18. Receive inspection during storm drain system. construction works at Gosstroynadzor— Procedure 30. Registration of the building Procedure 24. Sign agreement with water construction supervision at the Federal Service of State Registration, and sewage utility at Gorvodokanal, Cadastre and Cartography (Rostreestr) Time: 1 day Municipal Organization—water utility Time: 21 days Cost: No cost Time: 4 days Cost: RUB 15,000 Comments: In accordance with the approved Cost: RUB 77,960 inspection agenda, based on the construction work Comments: Titles to the property built are registered Comments: This is a legal act of recognition and plan. Approximate number of inspections: 7 (1 – pit in compliance with the Federal Law “On Real Property confirmation of fulfillment of all binding regulatory excavation, 2 – foundation pouring, etc.). Rights Registration” and the administrative regulation requirements. It is paid for at the time of connection by a department of the Federal Service for State contract execution. Registration, Cadastre and Cartography based on

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 103

an applications, cadastral passport, incorporation designing. The assignment should be performed by construction permit application is submitted along documents, occupancy permit and land titles. a specialized SRO, licensed for engineering/geodesic with the following documents: 1) land title 2) surveys. The applicant submits the following docu- land development plan 3) materials of the design DEALING WITH CONSTRUCTION PERMITS ments: applicant, draft building design, designer’s documentation. Full list is available at: http://www. Stavropol, Stavropol Kray assignment. The tests should be performed in stavadm.ru/municipal-services/services/ accordance with the construction standards (SNiPs). Warehouse value: RUB 26,120,000 (US$ 844,063) The cost depends on the estimated scope of work, in Procedure 13. Notify the authorities of Data as of: November 2011 particular, on the number of holes to be drilled in the commencement of construction works at Ministry of Construction of Stavropol Krai Procedure 1. Obtain development plan plot area. Time: 1 day of land plot (GPZU) at Architecture and Procedure 7*. Request a topographic survey Cost: No cost Construction Service of Stavropol City, of the land plot at StavropolTICIZ, OJSC Comments: Despite the fact that the facility is not one-stop shop Time: 16 days subject to supervision, usually the notification would Time: 30 days Cost: RUB 10,000 still be sent. The notification and a copy of design Cost: No cost Comments: BuildCo places an order for land survey at documentation are submitted to the competent body Comments: The land development plan is a manda- 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 within 3 days upon receipt of the construction permit. tory document submitted by the developer/customer ha, over 10 ha) by a specialized organization with an to obtain official design appraisal, construction SRO license for geodesic operations. The applicant Procedure 14. Obtain compliance certificate permit and building occupation permit. The land submits the following documents: 1) Application/ of the building with the technical conditions development plans are prepared for built-up land contract. 2) Land plot title (cadastral plan) and land from the water and sewage utility and sign plots, land plots allocated for construction/renovation boundaries. A report is prepared as a result of the agreement with the utility at Vodokanal, of permanent structures. The document contains key topographic survey with a layout of buildings and Municipal Unitary Organization—water land plot data: boundary coordinates, authorized use, structures; underground, surface and above-surface utility issued technical conditions. communication lines; design elements; fencing, roads, Time: 11 days etc. Procedure 2. Obtain technical Cost: No cost conditions for electricity connection at Procedure 8. Obtain certificate of Comments: According to the Urban Development Stavropolenergoinvest compliance of the project design from Code, documentary evidence of compliance of the Time: 20 days the water utility at Vodokanal, Municipal newly built warehouse with the technical conditions Unitary Organization—water utility is mandatory for obtaining an occupancy permit. This Cost: No cost document is issued by Vodokanal MUE after checking Time: 5 days Comments: BuildCo applies for the techinical the water supply and sanitation systems. conditions for electricity connection. Cost: No cost Comments: The final construction design, compliant Procedure 15*. Obtain compliance Procedure 3*. Obtain technical conditions to the prior technical conditions, is submitted to the certificate of the building with the technical for connecting to water and sewage water supplier for clearance. conditions from the phone utility and sign services and sign agreement at Vodokanal, agreement with the utility at GTS YuTK Municipal Unitary Organization—water Procedure 9*. Obtain certificate of Time: 3 days utility compliance of the project design from the Cost: RUB 600 Time: 30 days phone utility at Rostelekom, YuTK Comments: The telephone company is notified about Time: 5 days Cost: RUB 41,853 completion of work, with enclosed reports, which Comments: Obtaining technical conditions of Cost: RUB 700 serves as a basis for issuance of technical conditions. connection to water supply and sanitation systems. Comments: The final construction design, compliant The applicant submits a request to Vodokanal OJSC to the prior technical conditions, is submitted to the Procedure 16*. Obtain compliance with full information about the facility. telephone company for clearance. certificate of the building with the technical conditions from the heavy shower sewage Procedure 4*. Obtain technical conditions Procedure 10*. Obtain certificate of utility and sign agreement at Committee for for telephone connection and sign compliance of the project design from the City Facilities of Stavropol City agreement at Rostelekom, YuTK heavy shower sewage utility at Committee Time: 7 days Time: 3 days for City Facilities of Stavropol City Cost: No cost Cost: RUB 1,500 Time: 5 days Comments: The City Economy Committee of the Comments: BuildCo obtains technical specification Cost: No cost Stavropol City Administration issues a certificate for landline telephone connection and concludes Comments: The final construction design, compliant of compliance with technical conditions of rain and a contract (see tariffs for technical conditions and to the prior technical conditions, is submitted to the drainage water disposal from the facility compound connection at: http://stv.south.rt.ru/service/tariffs). organization for clearance. for 6 days upon the date of application from a physical or legal person, provided that the application Procedure 5*. Obtain technical conditions Procedure 11*. Obtain compliance for connecting to the heavy shower sewage has been submitted with a complete package of certificate from the heating utility at Urban documents. Since the Stavropol City Administration and sign agreement at Committee for City Development Committee of Stavropol City Facilities of Stavropol City does not manage storm drain networks, no mainte- Time: 11 days nance contracts are concluded. Companies situated Time: 14 days Cost: No cost in Stavropol discharge rain and drainage water into Cost: No cost Comments: Clearance is required even when there the city storm drain system free of charge. Comments: Obtaining technical conditions of are no heating lines under the land plot. There are no Procedure 17. Obtain compliance certificate connection to storm drain systems. uniform confirmed heating line maps in Stavropol. of the building with the technical conditions Procedure 6. Request geological survey of Procedure 12. Obtain construction permit from the water and sewage utility at State the land plot at Specialized agency at Urban Development Committee of Unitary Organization “Krai Technical Time: 30 days Stavropol City Inventorization” Cost: RUB 55,000 Time: 10 days Time: 30 days Comments: BuildCo places an order for engineering/ Cost: No cost Cost: RUB 18,700 geodesic survey of the land plot to determine the Comments: The procedure is performed in Comments: A technical passport of a facility is soil composition and collect other data required for accordance with the established regulations. A required for obtaining an occupancy permit. It

* This procedure can be completed simultaneously with previous procedures. 104 DOING BUSINESS IN RUSSIA 2012

describes physical parameters of the built facility. DEALING WITH CONSTRUCTION PERMITS Procedure 6. Obtain development plan of The document is available from the “Kray Technical Surgut, Khanty-Mansiisk Autonomous Okrug land plot (GPZU) at Municipal Architecture Inventorization” office, or any bureau of technical and Urban Development Department Warehouse value: RUB 26,120,000 (US$ 844,063) inventory. To obtain a technical passport, the ap- Time: 16 days plicant should submit an application and the building Data as of: November 2011 Cost: No cost design, incorporation documents, construction permit, cadastral passport of the land and land Procedure 1. Request a topographic survey Comments: The land development plan is a manda- lease agreement or title. Tariffs for issuing technical of the land plot at Specialized agency tory document submitted by the developer/customer passports are established by the organization itself, Time: 10 days to obtain official design appraisal, construction permit and as a rule, they are not easily available. Cost: RUB 8,000 and building occupation permit. Land development plans are prepared for built-up land plots, land plots Procedure 18. Obtain occupancy permit Comments: BuildCo places an order for land survey at allocated for construction/renovation of permanent at Urban Development Committee of 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 structures. The document contains key land plot Stavropol City ha, over 10 ha) by a specialized organization with an data: boundary coordinates, authorized use, issued SRO license for geodesic operations. The applicant Time: 10 days technical conditions. submits the following documents: 1) Application/ Cost: No cost contract. 2) Land plot title (cadastral plan) and land Procedure 7. Obtain construction permit Procedure 19. Obtain cadastral passport of boundaries. A report is prepared as a result of the at Municipal Architecture and Urban the building at State Unitary Organization topographic survey with a layout of buildings and Development Department “Krai Technical inventorization” structures; underground, surface and above-surface Time: 10 days communication lines; design elements; fencing, roads, Cost: No cost Time: 10 days etc. Cost: RUB 1,000 Comments: The procedure is performed in Procedure 2. Obtain technical conditions Comments: After an occupancy permit is obtained, accordance with the established regulations. A for electricity connection at Surgut City the developer may proceed with cadastral registration construction permit application is submitted along of the facility and obtaining a cadastral passport for Electric Supply Network, LLC with the following documents: 1) land title 2) it. Generally, the cadastral passport is drawn by the Time: 22 days land development plan 3) materials of the design same organization that had prepared the technical Cost: No cost documentation. passport. The cadastral passport drafting cost is part Comments: BuildCo applies for the techinical Procedure 8. Notify the authorities of of the technical passport drafting cost. conditions for electricity connection commencement of construction works Procedure 20. Sign agreement with water at Inspection for architecture and Procedure 3*. Obtain technical conditions construction supervision and sewage utility at Vodokanal, Municipal for connecting to water and sewage Unitary Organization—water utility services at Gorvodokanal, Municipal Time: 1 day Time: 7 days Unitary Organization—water utility Cost: No cost Cost: No cost Time: 30 days Comments: A notification about the beginning of the Comments: Application is lodged with Vodokanal Cost: No cost construction is sent to the Inspectorate 10 days prior MUE, with enclosed receiving reports on all elements to the beginning of construction/renovation/marjor Comments: Obtaining technical conditions of repairs. and establishing documents (contract concluded by connection to water supply and sanitation systems. the owner). The applicant submits a request with full information Procedure 9. Obtain compliance certificate about the facility. Connection fee amounts to RUB of the building with the technical Procedure 21*. Sign agreement with the 3 phone utility at GTS YuTK 30,461 per m of water supply a day, and RUB 38,246 conditions from the water and sewage per m3 of water disposal a day. Payment for connec- utility at Gorvodokanal, Municipal Unitary Time: 8 days tion is made in accordance with a schedule attached Organization—water utility Cost: No cost to the agreement. Time: 7 days Procedure 22. Registration of the building Procedure 4*. Obtain technical conditions Cost: No cost at the Federal Service of State Registration, for telephone connection at Rostelekom, Comments: According to the Urban Development Cadastre and Cartography (Rostreestr) Surgut Territorial Telecom Center Code, documentary evidence of compliance of the Time: 14 days Time: 10 days newly built warehouse with the technical conditions Cost: RUB 15,000 Cost: No cost is mandatory for obtaining an occupancy permit. This document is issued by City Vodokanal MUE after Comments: Titles to the property built are registered Comments: BuildCo obtains technical specification checking the water supply and sanitation systems. in compliance with the Federal Law “On Real for landline telephone connection and concludes a Property Rights Registration” by a department of contract. Procedure 10*. Connect to water and the Federal Service for State Registration, Cadastre sewage services at Gorvodokanal, Procedure 5*. Request geological survey of and Cartography based on an applications, cadastral Municipal Unitary Organization—water the land plot at Specialized agency passport, incorporation documents, occupancy utility permit and land titles. Time: 15 days Time: 30 days Cost: RUB 200,000 Procedure 23. Sign agreement with the Cost: RUB 71,293 Comments: BuildCo places an order for engineering/ water utility at Vodokanal, Municipal Comments: Submission of an application indicating geodesic survey of the land plot to determine the Unitary Organization—water utility the requirement connected capacity. Conclusion of soil composition and collect other data required for Time: 16 days a contract for the service of connection water supply designing. The assignment should be performed by and/or sanitation networks with connection terms. Cost: No cost a specialized SRO, licensed for engineering/geodesic Discharge of connection terms under the contract Comments: Application is lodged with Vodokanal surveys. The applicant submits the following docu- for connection to water supply and/or sanitation MUE, with enclosed receiving reports on all elements ments: applicant, draft building design, designer’s networks. and establishing documents (contract concluded by assignment. The tests should be performed in the owner). accordance with the construction standards (SNiPs). The cost depends on the estimated scope of work, in particular, on the number of holes to be drilled in the plot area.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 105

Procedure 11*. Obtain compliance Unitary Enterprise of the city of Surgut (6 Dzerzhinsky Procedure 2*. Request geological survey of certificate of the building with the technical Street), or RosTechInventarizatsia Federal State the land plot at Commercial organization conditions from the phone utility at Unitary Enterprise). 8) documentary evidence of the with permission from a self-regulating Rostelekom, Surgut Territorial Telecom completed project compliance with the requirements organization Center of the technical regulations signed by the prime Time: 23 days contractor and customer; 9) layout (geodesic survey) Time: 5 days reflecting the location of the completed project and Cost: RUB 25,000 Cost: No cost engineering systems within the land plot area, signed Comments: BuildCo places an order for engineering/ Comments: The telephone company is notified about by the customer and prime contractor; 10) certificates geodesic survey of the land plot to determine the completion of work, with enclosed reports, which issued by operating agencies about compliance with soil composition and collect other data required for serves as a basis for issuance of technical conditions. technical requirements and operating readiness of the designing. The assignment should be performed by engineering networks: power supply, heating, water a specialized SRO, licensed for engineering/geodesic Procedure 12*. Connect to telephone surveys. The applicant submits the following docu- services at Rostelekom, Surgut Territorial supply, water sanitation, gas supply; 11) certificate issued by the Federal Public Unitary Enterprise ments: applicant, draft building design, designer’s Telecom Center “West-Siberian Zonal R&D Institute for Standard assignment. The tests should be performed in Time: 10 days and Pilot Design of Residential and Public Buildings” accordance with the construction standards (SNiPs). Cost: RUB 4,500 stating that the design had been filed in the Urban The cost depends on the estimated scope of work, in Comments: To connect to telephone network, Development Archive. 12) certificate issued by the particular, on the number of holes to be drilled in the BuildCo needs to apply to a fixed communication Urban Development Cadastre Unit of the Department plot area. provider with incorporation documents and a cover of Architecture and Urban Development (Office 317) Procedure 3. Obtain technical conditions letter. Upon contract execution, payment is made in regarding delivery of the geodesic survey; 13) land for electricity connection at Gorseti, accordance with the established tariffs. development plan. LLC—electricity utility Procedure 13*. Obtain a technical passport Procedure 16. Obtain cadastral passport Time: 15 days of the building at Bureau of technical of the building at Bureau of technical Cost: No cost inventorization—municipal inventorization—municipal Comments: BuildCo applies for the techinical Time: 10 days Time: 20 days conditions for electricity connection Cost: RUB 20,000 Cost: RUB 7,000 Procedure 4. Obtain technical conditions Comments: A technical passport of a facility is Comments: After an occupancy permit is obtained, for connecting to water and sewage required for obtaining an occupancy permit. It the developer may proceed with cadastral registration services and sign agreement at Veola Voda of the facility and obtaining a cadastral passport for describes physical parameters of the built facility. Tomsk, LLC—water utility The document is available from the Surgut BTI MUE, it. Generally, the cadastral passport is drawn by the or any bureau of technical inventory. To obtain a same organization that had prepared the technical Time: 30 days technical passport, the applicant should submit an passport. The cadastral passport drafting cost is part Cost: No cost application and the building design, incorporation of the technical passport drafting cost. Comments: Obtaining technical conditions of documents, construction permit, cadastral passport Procedure 17. Registration of the building connection to water supply and sanitation systems. of the land and land lease agreement or title. Tariffs The applicant submits a request to Veola Water at the Federal Service of State Registration, for issuing technical passports are established by the Tomsk OJSC with full information about the facility. Cadastre and Cartography (Rostreestr) organization itself, and as a rule, they are not easily Connection fee is based on the Vodokanal tariffs . available. Time: 21 days Payment for connection is made in accordance with a Cost: RUB 15,000 schedule attached to the agreement. Procedure 14*. Obtain certificate confirming that a copy of the design has Comments: Titles to the property built are registered Procedure 5*. Obtain technical conditions in compliance with the Federal Law “On Real been delivered to the Urban Development for telephone connection and sign Property Rights Registration” by a department of Archives agreement at Sibirtelekom, OJSC the Federal Service for State Registration, Cadastre Time: 5 days and Cartography based on an applications, cadastral Time: 20 days Cost: No cost passport, incorporation documents, occupancy Cost: No cost Comments: To obtain an occupancy permit, BuildCo permit and land titles. Comments: BuildCo obtains technical specification needs to provide a certificate stating that a copy of for landline telephone connection and concludes a DEALING WITH CONSTRUCTION PERMITS the design has been delivered to the urban develop- contract. ment archives. Tomsk, Tomsk Oblast Procedure 6. Obtain development plan of Procedure 15. Obtain occupancy permit Warehouse value: RUB 26,120,000 (US$ 844,063) land plot (GPZU) at Main Department of at Municipal Architecture and Urban Data as of: November 2011 Architecture and Urban Development of Development Department Tomsk City Procedure 1. Request a topographic survey Time: 10 days of the land plot at Commercial organization Time: 30 days Cost: No cost with permission from a self-regulating Cost: No cost Comments: BuildCo must submit the following organization Comments: The land development plan is a manda- documents: 1) occupancy permit application; 2) Time: 11 days tory document submitted by the developer/customer land ownership documents: lease agreement or to obtain official design appraisal, construction permit Cost: RUB 55,000 land title; 3) title to buildings and structures (for and building occupation permit. Development plans renovations); 4) copy of the construction permit; 5) Comments: BuildCo places an order for land survey at are drawn for land plots designated for construction facility commissioning certificate (for construction/ 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 and renovation of permanent structures. The renovation/major repairs under a contract) indicating ha, over 10 ha) by a specialized organization with an document contains key land plot data: boundary the facility capacity and productivity; 6) conclusion SRO license for geodesic operations. The applicant coordinates, authorized use and technical conditions. of public construction supervision agencies (for submits the following documents: 1) Application/ In accordance with Clause 17 of Article 17 of the facilities with design documents subject to public contract. 2) Land plot title (cadastral plan) and land UDC, it should be issued by the local self-government review in accordance with Article 49 of the Urban boundaries agencies free of charge, within 30 days. The process Development Code) (Building 21, 30 Let Pobedy is carried out in accordance with the prescribed Street); 7) documentary evidence of compliance of procedure. the completed project parameters with the design documentation (certificate issued by BTI Municipal

* This procedure can be completed simultaneously with previous procedures. 106 DOING BUSINESS IN RUSSIA 2012

Procedure 7. Obtain certificate of Procedure 13. Obtain occupancy permit at DEALING WITH CONSTRUCTION PERMITS compliance of the project design from Architecture and Construction Inspection Tver, Tver Oblast the water utility at Veola Voda Tomsk, Department of Tomsk City Warehouse value: RUB 26,120,000 (US$ 844,063) LLC—water utility Time: 10 days Data as of: November 2011 Time: 6 days Cost: No cost Cost: No cost Comments: To obtain a permit for commissioning Comments: The final construction design, compliant the facility, the applicant submits, in accordance Procedure 1. Obtain clerance from the to the prior technical conditions, is submitted to the with the Russian Federal Urban Development Code, Committee on Protection of Historical water supplier for clearance. all required documents to the Main Department of Buildings at Commettee on State Protection Architecture and Urban Development of the Mayor’s of Cultural Heritage in Tver Oblast Procedure 8*. Obtain certificate of Office. compliance of the project design from the Time: 30 days phone utility at Sibirtelekom, OJSC Procedure 14. Connect to water and sewage Cost: No cost Time: 10 days services at Veola Voda Tomsk, LLC—water Comments: To obtain a GPZU, BuildCo needs to get utility Cost: No cost a certificate stating that the facility is not situated in a Time: 30 days Comments: The final construction design, compliant cultural/historic protected area Cost: RUB 62,802 to the prior technical conditions, is submitted to the Procedure 2. Obtain technical conditions for telephone company for clearance. Comments: Network connection report is signed connecting to water and sewage services upon completion of procedures related to physical and sign agreement at Tvervodokanal, Procedure 9. Obtain construction permit at connection of the internal lines to the main networks. Architecture and Construction Inspection OJSC Department of Tomsk City Procedure 15. Connect to telephone Time: 40 days Time: 10 days services at Rostelekom Cost: No cost Cost: No cost Time: 30 days Comments: Obtaining technical conditions of con- Comments: The procedure is performed in Cost: RUB 11,000 nection to water supply and sanitation systems. The accordance with the established regulations. A Comments: Network connection report is signed applicant submits a request to Tver Vodokanal LLC construction permit application is submitted along upon completion of procedures related to physical with full information about the facility. Connection with the following documents: 1) land title 2) connection of the internal lines to the main networks. fee is based on the Vodokanal tariffs and amounts to land development plan 3) materials of the design RUB 20,000 per m3 of water supply a day, and RUB documentation. Procedure 16. Obtain cadastral passport 20,000 per m3 of water disposal a day. Payment for of the building at Bureau of technical connection is made in accordance with a schedule Procedure 10. Obtain compliance certificate inventorization—federal attached to the agreement. of the building with the water and sewage Time: 13 days Procedure 3*. Obtain technical conditions utility at Veola Voda Tomsk, LLC—water Cost: No cost utility for telephone connection and sign Comments: After an occupancy permit is obtained, agreement at Centrtelekom, OJSC Time: 5 days the developer may proceed with cadastral registration Time: 25 days Cost: No cost of the facility and obtaining a cadastral passport for Cost: No cost Comments: According to the Urban Development it. The cadastral passport is drawn on the basis of the Code, documentary evidence of compliance of the technical passport data. Comments: BuildCo obtains technical specification newly built warehouse with the technical conditions for landline telephone connection and concludes a is mandatory for obtaining an occupancy permit. This Procedure 17. Registration of the building contract. document is issued by Vodokanal after checking the at the Federal Service of State Registration, Cadastre and Cartography (Rostreestr) Procedure 4*. Obtain technical conditions water supply and sanitation systems. for heavy shower sewage services at MUP Time: 30 days ZHEK Procedure 11*. Obtain compliance Cost: RUB 15,000 certificate of the building with the phone Time: 30 days Comments: Titles to the property built are registered utility at Rostelekom Cost: No cost in compliance with the Federal Law “On Real Time: 5 days Property Rights Registration” by a department of Comments: Obtaining technical conditions of Cost: No cost the Federal Service for State Registration, Cadastre connection to the storm drain system and concluding Comments: The telephone company is notified about and Cartography based on an applications, cadastral a contract. completion of work, with enclosed reports, which passport, incorporation documents, occupancy Procedure 5. Request a topographic survey serves as a basis for issuance of technical conditions. permit and land titles. of the land plot at Commercial organization Procedure 12. Obtain a technical passport Procedure 18. Sign agreement with the with permission from a self-regulating of the building at Bureau of technical water utility at Veola Voda Tomsk, LLC— organization inventorization water utility Time: 22 days Time: 30 days Time: 10 days Cost: RUB 3,252 Cost: RUB 35,000 Cost: No cost Comments: BuildCo places an order for land survey at Comments: A technical passport of a facility is Comments: Application is lodged with Veola Water 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 ha, required for obtaining an occupancy permit. It Tomsk LLC, with enclosed receiving reports on all over 10 ha) by a specialized organization with an SRO describes physical parameters of the built facility. elements and establishing documents (contract license for geodesic operations. The applicant submits The document is available from the Tomsk Subsidiary concluded by the owner). the following documents: 1) Application/contract. 2) of Rostechinventarizatsia BTI, or any bureau of Land plot title (cadastral plan) and land boundaries. A technical inventory. To obtain a technical passport, report is prepared as a result of the topographic survey the applicant should submit an application and the with a layout of buildings and structures; underground, building design, incorporation documents, construc- surface and above-surface communication lines; design tion permit, cadastral passport of the land and land elements; fencing, roads, etc. lease agreement or title. Procedure 6*. Request geological survey of the land plot at Design institutes Time: 38 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 107

Cost: RUB 100,000 [5 borings, RUB 20,000 each] the utilities of the distrcit, where the warehouse Procedure 19. Obtain certificate of Comments: BuildCo places an order for engineering/ construction is planned. compliance for the building from the water and sewage utility at Tvervodokanal, OJSC geodesic survey of the land plot to determine the Procedure 13*. Obtain clearance from the soil composition and collect other data required for organization providing heating services at Time: 14 days designing. The assignment should be performed by “Gazprom Mezhregiongaz Tver”, LLC Cost: RUB 3,000 a specialized SRO, licensed for engineering/geodesic Comments: According to the Urban Development surveys. The applicant submits the following docu- Time: 1 day Code, documentary evidence of compliance of the ments: applicant, draft building design, designer’s Cost: No cost newly built warehouse with the technical conditions assignment. The tests should be performed in Comments: The final construction design should be is mandatory for obtaining an occupancy permit. accordance with the construction standards (SNiPs). cleared with the gas supplier to ensure that all current This document is issued by Tver Vodokanal LLC after The cost depends on the estimated scope of work, in gas lines in the neighborhood are taken into account. checking the water supply and sanitation systems. particular, on the number of holes to be drilled in the plot area. Procedure 14*. Obtain clerance from the Procedure 20. Obtain certificate of Architechtural Committee at Architecture Procedure 7. Obtain development plan of compliance of the building from the Department of Tver City phone utility at Gorproekt by Tver City land plot (GPZU) at Municipal Architecture Time: 1 day and Urban Development Department Administration, Municipal Unitary Cost: No cost Organization Time: 30 days Comments: To obtain a construction permit, BuildCo Time: 14 days Cost: No cost needs to provide a draft construction design cleared Cost: RUB 1,000 Comments: The land development plan is a manda- by the city Architecture Department tory document submitted by the developer/customer Comments: Post-construction survey report should to obtain official design appraisal, construction permit Procedure 15. Obtain construction permit at be available before obtaining a document confirming and building occupation permit. Development plans Architecture Department of Tver City the warehouse compliance with technical conditions of connection to the telephone network and storm are drawn for land plots designated for construction Time: 26 days drain. and renovation of permanent structures. The Cost: No cost document contains key land plot data: boundary Comments: Before starting construction, BuildCo Procedure 21. Obtain compliance certificate coordinates, authorized use and technical conditions. to obtain a construction permit. Its absence entails of the building with the phone utility at The document is issued by the Department of a penalty, according to Clause 1 of Article 9.5 of the Centrtelekom, OJSC and other commercial Architecture and Urban Development. Administrative Offense Code. Besides, in accordance companies Procedure 8. Obtain certificate of with Article 222 of the Russian Federal Civil Code, Time: 7 days compliance of the project design from the such property may be considered by a court as Cost: No cost unauthorized construction, and may be subject to water utility at Tvervodokanal, OJSC Comments: According to the Urban Development removal at the expense of the building entity. To Time: 7 days Code, documentary evidence of compliance of the obtain a construction permit, BuildCo to lodge an newly built warehouse with the technical conditions Cost: RUB 1,250 application with the Construction and Land Issues is mandatory for obtaining an occupancy permit. It Comments: The final construction design, compliant Department, with all previously collected documents to the prior technical conditions, is submitted to the requires an as-built survey. Procedure 16. Sign agreement on water water supplier for clearance. Procedure 22. Obtain compliance certificate supply at Tvervodokanal, OJSC—clients of the building with the water utility at MUP Procedure 9. Request connection to the division ZHEK electricity utility at Tverenergo—MRSK Time: 1 day Center, OJSC Time: 11 days Cost: No cost Time: 30 days Cost: RUB 1,000 Comments: In order to make a connection to the Comments: According to the Urban Development Cost: No cost water supply system, the supplier needs to check Code, documentary evidence of compliance of the the metering station. For that, transportation should Procedure 10*. Obtain certificate of newly built warehouse with the technical conditions be provided to take an expert from Tver Vodokanal compliance of the project design from the is mandatory for obtaining an occupancy permit. It Subscriber Unit to the site. phone utility at Centrtelekom requires an as-built survey. Time: 2 days Procedure 17. Sign agreement on clerance Procedure 23. Obtain a technical passport of water at Tvervodokanal, OJSC—water Cost: RUB 50 of the building at Bureau of technical supply workshop Comments: The final construction design, compliant inventorization—regional and municipal to the prior technical conditions, is submitted to the Time: 14 days Time: 17 days telephone company for clearance. Cost: RUB 1,000 Cost: RUB 50,000 Comments: In order to make a connection to the Procedure 11*. Obtain certificate of Comments: In accordance with the UDC, obtaining an water supply system, the supplier needs to flush the compliance of the project design from the occupancy permit requires provision of a certificate internal lines. The procedure is performed without heavy shower sewage utility at MUP ZHEK describing the newly built property. The certificate an advance application by the Water Transportation (which is mostly the technical passport) is issued Time: 2 days Shop of Tver Vodokanal, which representative should by Tver Oblast BTI SUE, or any bureau of technical Cost: RUB 3,000 be taken to the site. The procedure cannot be inventory. To obtain the certificate, the applicant Comments: The final construction design, compliant generally merged with the metering station checkup submits an application and building design, incorpora- to the prior technical conditions, is submitted to the procedure, as it is performed by a different unit of Tver tion documents, construction permit, land cadastral organization for clearance. Vodokanal. passport, lease agreement or title. Certificate Procedure 12*. Obtain clearance of the Procedure 18. Obtain conclusion of issuance tariffs are established by the organization city’s Communical Services department the bacteriology analysis of water at itself, and, as a rule, are not easily available. on the location of the building at Rospotrebnadzor Procedure 24. Request occupancy permit at Administration of a district Time: 7 days Inspection for architecture and construction Time: 1 day Cost: RUB 500 supervision Cost: No cost Comments: Baceriologig water tests should be Time: 11 days Comments: The final construction design, compliant performed to connect to water supply netwrok; the test Cost: No cost to the prior technical conditions, is cleared with outcomes should be provided to Tver Vodokanal LLC.

* This procedure can be completed simultaneously with previous procedures. 108 DOING BUSINESS IN RUSSIA 2012

Comments: To obtain a permit for commissioning DEALING WITH CONSTRUCTION PERMITS surveys. The applicant submits the following docu- the facility, the applicant submits, in accordance ments: applicant, draft building design, designer’s with the Russian Federal Urban Development Code, Ulyanovsk, Ulyanovsk Oblast assignment. The tests should be performed in all required documents to the Architectural and Warehouse value: RUB 26,120,000 (US$ 844,063) accordance with the construction standards (SNiPs). Construction Control Inspectorate of the Tver City Data as of: November 2011 The cost depends on the estimated scope of work, Administration. in particular, on the number of holes to be drilled in Procedure 1. Request a topographic survey the plot area. In our case, there will be 5-7 holes, 10 Procedure 25. Obtain occupancy permit of the land plot at Oil and Gas Design meters deep. at Municipal Architecture and Urban Company, LLC Procedure 7. Obtain development plan of Development Department Time: 7 days Time: 35 days land plot (GPZU) at Architecture and Urban Cost: RUB 20,000 Development Committee of Ulyanovsk City Cost: No cost Comments: BuildCo places an order for land survey at Time: 30 days 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Procedure 26. Sign agreement with water Cost: No cost and sewage utility at Tvervodokanal, ha, over 10 ha) by a specialized organization with an OJSC—technical division SRO license for geodesic operations. The applicant Comments: The land development plan is a manda- submits the following documents: 1) Application/ tory document submitted by the developer/customer Time: 11 days contract. 2) Land plot title (cadastral plan) and land to obtain official design appraisal, construction permit Cost: RUB 43,558 boundaries. and building occupation permit. Land development Comments: Network connection report is signed plans are prepared for built-up land plots, land plots upon completion of procedures related to physical Procedure 2. Obtain technical conditions allocated for construction/renovation of permanent connection of the internal lines to the main networks. for electricity connection at Ulyanovsk structures. A land development plan is developed for Network Company, OJSC a separate land plot that has been registered by the Procedure 27. Sign agreement with the Time: 15 days State, with established development rules in the Land phone utility at Centrtelekom, OJSC Cost: No cost Use Regulations, and subject to availability of a duly Time: 7 days approved planning and border-setting project. The Comments: BuildCo applies for the techinical following documents should be submitted to obtain Cost: RUB 8,000 conditions for electricity connection it: application, draft design, all technical conditions Comments: Network connection report is signed and document titles. upon completion of procedures related to physical Procedure 3*. Obtain technical connection of the internal lines to the main networks. conditions for connecting to water and Procedure 8. Obtain certificate of sewage services and sign agreement at compliance of the project design from Procedure 28. Obtain a technical passport Ulyanovsk Vodokanal, Municipal Unitary of the building at Federal Service on State the water utility at Ulyanovsk Vodokanal, Organization—water utility Municipal Unitary Organization—water Registration, Cadastre and Cartography Time: 14 days (Rosreestr), Land Cadastre Chamber utility Cost: RUB 54,255 Time: 10 days Time: 45 days Comments: Obtaining technical conditions of con- Cost: No cost Cost: No cost [payment has been made during the nection to water supply and sanitation systems. The Comments: The final construction design, compliant step of obtaining a BTI certificate] applicant submits the following document package: to the prior technical conditions, is submitted to the Comments: After an occupancy permit is obtained, application, land title documents (cadastral passport, water supplier for clearance. the developer may proceed with cadastral registration draft design and design estimates). Payment for of the facility and obtaining a cadastral passport for connection is made in accordance with a schedule Procedure 9*. Obtain certificate of it. Generally, the cadastral passport is drawn by the attached to the agreement. compliance of the project design from the same organization that had prepared the certificate of phone utility at Volgatelekom the parameters of the newly built property. Procedure 4*. Obtain technical conditions for telephone connection and sign Time: 10 days Procedure 29. Registration of the building agreement at Volgatelekom Cost: No cost at the Federal Service of State Registration, Time: 15 days Comments: The final construction design, compliant Cadastre and Cartography (Rostreestr) Cost: No cost to the prior technical conditions, is submitted to the Time: 30 days telephone company for clearance. Comments: BuildCo obtains technical specification Cost: RUB 15,000 for landline telephone connection and concludes a Procedure 10*. Obtain certificate of Comments: Titles to the property built are registered contract. compliance of the project design from the in compliance with the Federal Law “On Real heavy shower sewage utility at Department Procedure 5*. Obtain technical conditions Property Rights Registration” by a department of of Communal Facilities and Territory for connecting to the heavy shower sewage the Federal Service for State Registration, Cadastre Improvement, Municipal Organization and Cartography based on an applications, cadastral and sign agreement at Department Time: 10 days passport, incorporation documents, occupancy of Communal Facilities and Territory permit and land titles. Improvement, Municipal Organization Cost: No cost Time: 20 days Comments: The final construction design, compliant Procedure 30. Sign agreement with the Cost: No cost to the prior technical conditions, is submitted to the water utility at Tvervodokanal, LLC—water organization for clearance. utility Comments: Obtaining technical conditions of connection to the storm drain system and concluding Time: 22 days Procedure 11. Obtain construction permit a contract. at Architecture and Urban Development Cost: No cost Committee of Ulyanovsk City Comments: Application is lodged with Tver Procedure 6*. Request geological survey of Time: 10 days Vodokanal LLC, with enclosed receiving reports on the land plot at UlyanovskTICIZ, OJSC all elements and establishing documents (contract Time: 21 days Cost: No cost concluded by the owner). Cost: RUB 15,000 Comments: Before starting construction, BuildCo needs to obtain a construction permit. Its absence Comments: BuildCo places an order for engineering/ entails a penalty, according to Clause 1 of Article 9.5 geodesic survey of the land plot to determine the of the Administrative Offense Code. Construction soil composition and collect other data required for permits are issued by the Committee for Construction designing. The assignment should be performed by and Architecture of the Ulyanovsk Mayor’s Office. a specialized SRO, licensed for engineering/geodesic

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 109

The list of documents, time and costs are regulated Cost: No cost Procedure 24. Sign agreement with water by the Russian Federal UDC. Comments: In accordance with the approved and sewage utility at Ulyanovsk Vodokanal, Municipal Unitary Organization—water Procedure 12. Notify the authorities of inspection agenda, based on the construction work utility commencement of construction works at plan. Approximate number of inspections: 7 (1 – pit Gosstroynadzor—construction supervision excavation, 2 – foundation pouring, etc.) Time: 4 days Time: 1 day Procedure 19. Receive inspection during Cost: RUB 550 [drafting of connection documents] Cost: No cost construction works at Gosstroynadzor— Comments: This is a legal act of recognition and construction supervision confirmation of fulfillment of all binding regulatory Comments: The developer should send a notification requirements. It is paid for at the time of connection about the construction beginning date 10 days in ad- Time: 1 day contract execution. vance. The following construction-related documents Cost: No cost should be enclosed with the notification: construction Comments: In accordance with the approved Procedure 25*. Sign agreement with the permit, schedule, list of responsible persons. Based inspection agenda, based on the construction work phone utility at Volgatelekom on the notification, the State Construction Control plan. Approximate number of inspections: 7 (1 – pit Time: 1 day would develop construction inspection schedules, and excavation, 2 – foundation pouring, etc.) Cost: RUB 4,900 share them with the developer. Procedure 20. Notify the authorities of end Comments: This is a legal act of recognition and Procedure 13. Receive inspection during of construction works at Gosstroynadzor— confirmation of fulfillment of all binding regulatory construction works at Gosstroynadzor— construction supervision requirements construction supervision Time: 1 day Procedure 26*. Sign agreement with heavy Time: 1 day Cost: No cost shower sewage utility at Department Cost: No cost Comments: Submission of a construction completion of Communal Facilities and Territory Comments: In accordance with the approved notification to Gosstroynadzor Improvement, Municipal Organization inspection agenda, based on the construction work Time: 1 day plan. Approximate number of inspections: 7 (1 – pit Procedure 21. Obtain compliance certificate excavation, 2 – foundation pouring, etc.) of the building with the technical conditions Cost: No cost from the water and sewage utility at Comments: This is a legal act of recognition and Procedure 14. Receive inspection during Ulyanovsk Vodokanal, Municipal Unitary confirmation of fulfillment of all binding regulatory construction works at Gosstroynadzor— Organization—water utility requirements construction supervision Time: 10 days Procedure 27. Obtain a technical passport Time: 1 day Cost: No cost of the building at Bureau of technical Cost: No cost Comments: According to the Urban Development inventorization—federal Comments: In accordance with the approved Code, documentary evidence of compliance of the Time: 30 days inspection agenda, based on the construction work newly built warehouse with the technical conditions Cost: RUB 30,000 plan. Approximate number of inspections: 7 (1 – pit is mandatory for obtaining an occupancy permit. Comments: A technical passport of a facility is excavation, 2 – foundation pouring, etc.) It requires an as-built survey. The conclusion is required for obtaining an occupancy permit. It issued after verifying the application compliance Procedure 15. Receive inspection during describes physical parameters of the built facility. The with the technical conditions. An operating design construction works at Gosstroynadzor— document is available from the Municipal Enterprise (pre-approved by Vodokanal) an as-built documenta- construction supervision of Technical Inventory and Real Property Evaluation, tion (fact of work accomplished) are provided. If the the Ulyanovsk Subsidiary of Rostechinventarizatsia – Time: 1 day design and as-built documentation are compliant, Federal BTI, or any bureau of technical inventory. Cost: No cost Vodokanal issues a certificate of compliance with Comments: In accordance with the approved technical conditions required for obtaining an Procedure 28. Obtain occupancy permit inspection agenda, based on the construction work occupancy permit for a newly built property. at Architecture and Urban Development plan. Approximate number of inspections: 7 (1 – pit Procedure 22*. Obtain compliance Committee of Ulyanovsk City excavation, 2 – foundation pouring, etc.) certificate of the building with the technical Time: 10 days Procedure 16. Receive inspection during conditions from the phone utility at Cost: No cost construction works at Gosstroynadzor— Volgatelekom Comments: Occupancy permit application is submit- construction supervision Time: 10 days ted with the following documents attached: land Time: 1 day Cost: No cost title, GPZU, construction permit, report of completed construction acceptance by the developer, documents Cost: No cost Comments: The telephone company is notified about certifying the facility compliance with technical Comments: In accordance with the approved completion of work, with enclosed reports, which conditions, diagram with the facility positioning inspection agenda, based on the construction work serves as a basis for issuance of technical conditions. within the land plot area. Facility occupancy permit plan. Approximate number of inspections: 7 (1 – pit is drawn in line with the requirements of the UDC excavation, 2 – foundation pouring, etc.) Procedure 23*. Obtain compliance certificate of the building with the technical and the administrative regulations of the Committee Procedure 17. Receive inspection during conditions from the heavy shower sewage for Architecture and Urban Development of the construction works at Gosstroynadzor— utility at Department of Communal Ulyanovsk City Mayor’s Office on the provision of the construction supervision Facilities and Territory Improvement, municipal service of issuance of an occupancy permit. Time: 1 day Municipal Organization Procedure 29. Obtain cadastral passport Cost: No cost Time: 10 days of the building at Bureau of technical Comments: In accordance with the approved Cost: No cost inventorization—federal inspection agenda, based on the construction work Comments: Document confirming the newly built Time: 21 days plan. Approximate number of inspections: 7 (1 – pit warehouse with technical conditions of connection to Cost: No cost [part of the technical passport cost] excavation, 2 – foundation pouring, etc.) storm drain system. Comments: After an occupancy permit is obtained, Procedure 18. Receive inspection during the developer may proceed with obtaining a cadastral construction works at Gosstroynadzor— passport for it in the Oblast Department of the construction supervision Federal Service for State Registration, Cadastre and Cartography. Time: 1 day

* This procedure can be completed simultaneously with previous procedures. 110 DOING BUSINESS IN RUSSIA 2012

Procedure 30. Registration of the building accordance with the construction standards (SNiPs). Procedure 10*. Obtain certificate of at the Federal Service of State Registration, The cost depends on the estimated scope of work, in compliance of project design with the Cadastre and Cartography (Rostreestr) particular, on the number of holes to be drilled in the technical conditions from the sewage utility Time: 21 days plot area. at Vladvodostok Cost: RUB 15,000 Procedure 4. Obtain technical Time: 14 days Comments: Titles to the property built are registered conditions for electricity connection at Cost: No cost in compliance with the Federal Law “On Real Vladikavkazenergo Comments: The final construction design, compliant Property Rights Registration” by a department of Time: 23 days to the prior technical conditions, is submitted to the the Federal Service for State Registration, Cadastre Cost: No cost organization for clearance. and Cartography based on an applications, cadastral Comments: BuildCo applies for the techinical passport, incorporation documents, occupancy Procedure 11*. Obtain certificate of conditions for electricity connection permit and land titles. compliance of the project design from the heavy shower sewage utility at Vladikavkaz Procedure 5*. Obtain technical conditions DEALING WITH CONSTRUCTION PERMITS Rain Sewage, Municipal Unitary for water services and sign agreement at Organization Vladikavkaz, Republic of North Ossetia – Alania Vodokanal—water utility Time: 14 days Warehouse value: RUB 26,120,000 (US$ 844,063) Time: 30 days Cost: No cost Data as of: November 2011 Cost: RUB 67,300 Comments: The final construction design, compliant Comments: Obtaining technical conditions of to the prior technical conditions, is submitted to the Procedure 1. Obtain development plan of connection to water supply and sanitation systems. organization for clearance. land plot (GPZU) at Architecture and Urban The applicant submits a request to Vodokanal MUE Development Department of Vladikavkaz with full information about the facility. Connection Procedure 12. Obtain construction permit City fee is based on the Vodokanal tariffs and amounts to at City Administration represented by the Time: 23 days RUB 26,177.55 per m3 of water a day. Payment for Architecture Department connection is made in accordance with a schedule Cost: No cost Time: 10 days attached to the agreement. Comments: The land development plan is a manda- Cost: No cost tory document submitted by the developer/customer Procedure 6*. Obtain technical conditions Comments: The procedure is performed in to obtain official design appraisal, construction permit for connecting to heavy shower accordance with the established regulations. A and building occupation permit. Development plans sewage services and sign agreement at construction permit application is submitted along are drawn for land plots designated for construction Vladvodostok with the following documents: 1) land title 2) and renovation of permanent structures. The land development plan 3) materials of the design document contains key land plot data: boundary Time: 30 days documentation. coordinates, authorized use and specifications. In Cost: RUB 21,649 accordance with Clause 17 of Article 17 of the UDC, Comments: Obtaining technical conditions of con- Procedure 13. Notify the authorities of it should be issued by the local self-government nection to water supply and sanitation systems. The commencement of construction works at agencies free of charge, within 30 days. The process applicant submits a request to Vladvodostok MUE Inspection for construction supervision is carried out in accordance with the prescribed with full information about the facility. Connection Time: 1 day procedure. fee is based on the Vladvodostok tariffs and amounts to RUB 19,056.78 per m3 of water supply a day, Cost: No cost Procedure 2. Request a topographic and RUB 19,056.78 per m3 of water disposal a day. Comments: A notification about the beginning of survey of the land plot at any organization Payment for connection is made in accordance with a construction work is filed with enclosed construction with permission from a self-regulating schedule attached to the agreement. permit, design documentation and construction organization schedule. Time: 25 days Procedure 7*. Obtain technical conditions Procedure 14. Notify authorities of Cost: RUB 20,000 for telephone connection and sign agreement at YuTK - South Telecom, OJSC commencement of construction works Comments: BuildCo places an order for land survey at Time: 30 days at Architecture and Urban Development 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Department of Vladikavkaz City ha, over 10 ha) by a specialized organization with an Cost: RUB 5,000 Time: 1 day SRO license for geodesic operations. The applicant Comments: BuildCo obtains technical specification submits the following documents: 1) Application/ for landline telephone connection and concludes Cost: No cost contract. 2) Land plot title (cadastral plan) and land a contract. The application is filed with enclosed Comments: A notification about the beginning of boundaries. A report is prepared as a result of the development plan and title documents construction work is filed with enclosed construction topographic survey with a layout of buildings and permit, design documentation and construction structures; underground, surface and above-surface Procedure 8*. Obtain technical conditions schedule. communication lines; design elements; fencing, roads, for connecting to the heavy shower sewage Procedure 15. Receive inspection during etc. and sign agreement at Vladikavkaz Rain Sewage, Municipal Unitary Organization construction works at Vladikavkaz City Procedure 3*. Request geological survey Time: 30 days Administration of the land plot at any organization Cost: RUB 30,000 Time: 1 day with permission from a self-regulating Cost: No cost organization Procedure 9. Obtain certificate of Comments: The construction process is monitored Time: 30 days compliance of the project design from by construction control agencies; construction Cost: RUB 100,000 the water utility at Vodokanal, Municipal progress documents, concealed work reports and Comments: BuildCo places an order for engineering/ Unitary Organization—water utility work acceptance reports are inspected. Inspection geodesic survey of the land plot to determine the Time: 14 days frequency: once a month soil composition and collect other data required for Cost: No cost Procedure 16. Receive inspection during designing. The assignment should be performed by Comments: The final construction design, compliant construction works at Vladikavkaz City a specialized SRO, licensed for engineering/geodesic to the prior technical conditions, is submitted to the Administration surveys. The applicant submits the following docu- water supplier for clearance. ments: applicant, draft building design, designer’s Time: 1 day assignment. The tests should be performed in Cost: No cost

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 111

Comments: The construction process is monitored document is issued by Vodokanal MUE after checking Comments: Application is lodged with Vodokanal by construction control agencies; construction the water supply and sanitation systems. MUE, with enclosed receiving reports on all elements progress documents, concealed work reports and and establishing documents (contract concluded by work acceptance reports are inspected. Inspection Procedure 23*. Conduct inspection during the owner). frequency: once a month construction works at Vladvodostok Time: 11 days DEALING WITH CONSTRUCTION PERMITS Procedure 17. Receive inspection during Cost: No cost construction works at Vladikavkaz City Vladivostok, Primorsky Krai Administration Comments: According to the Urban Development Warehouse value: RUB 26,120,000 (US$ 844,063) Code, documentary evidence of compliance of the Data as of: November 2011 Time: 1 day newly built warehouse with the technical conditions Cost: No cost is mandatory for obtaining an occupancy permit. Procedure 1. Request a topographic Comments: The construction process is monitored This document is issued by Vladivodostok MUE after survey of the land plot at any organization by construction control agencies; construction checking the water supply and sanitation systems. with permission from a self-regulating progress documents, concealed work reports and organization work acceptance reports are inspected. Inspection Procedure 24*. Conduct inspection during Time: 20 days frequency: once a month construction works at YuTK—South Telecom, OJSC Cost: RUB 50,000 Procedure 18. Receive inspection during Time: 3 days Comments: Application is lodged with a company construction works at Vladikavkaz City Cost: RUB 5,000 licensed for this type of work. Terms of reference Administration and land plot titles are attached. The contractor’s Comments: The telephone company is notified about staff come out, perform site work and develop a Time: 1 day completion of work, with enclosed reports, which topographic plan/diagram. The customer receives Cost: No cost serves as a basis for issuance of technical conditions. approved topographic plan and report. A copy is Comments: The construction process is monitored sent to the Architecture Department. by construction control agencies; construction Procedure 25*. Conduct inspection during construction works at Vladikavkaz Rain progress documents, concealed work reports and Procedure 2*. Request geological survey Sewage, Municipal Unitary Organization work acceptance reports are inspected. Inspection of the land plot at any organization frequency: once a month Time: 7 days with permission from a self-regulating Cost: No cost Procedure 19. Receive inspection during organization construction works at Vladikavkaz City Comments: According to the Urban Development Time: 20 days Administration Code, documentary evidence of compliance of the Cost: RUB 290,000 newly built warehouse with the technical conditions Comments: The soil properties of the land allocated Time: 1 day is mandatory for obtaining an occupancy permit Cost: No cost for the building foundation, are identified. An ap- plication is lodged with a special licensed company, Comments: The construction process is monitored Procedure 26. Obtain occupancy permit documents for land are attached, and a standard by construction control agencies; construction at Architecture and Urban Development assignment is filed. As a rule, it is ordered along progress documents, concealed work reports and Department of Vladikavkaz City with topographic survey from the same company. work acceptance reports are inspected. Inspection Time: 14 days Borings are made in the section, where they examine frequency: once a month Cost: No cost soil, after which they issue a conclusion about its Procedure 20. Receive inspection during Comments: To obtain a permit for commissioning appropriateness for the foundation. construction works at Vladikavkaz City the facility, the applicant submits, in accordance Procedure 3*. Obtain development plan of Administration with the Russian Federal Urban Development Code, all required documents to the Department of land plot (GPZU) at Urban Development Time: 1 day Architecture and Urban Development. and Architecture Department of Cost: No cost Vladivostok Comments: The construction process is monitored Procedure 27. Obtain a technical passport of the building at Bureau of technical Time: 30 days by construction control agencies; construction Cost: No cost progress documents, concealed work reports and inventorization Comments: Application is submitted with land titles, work acceptance reports are inspected. Inspection Time: 14 days all technical conditions, explanatory note describing frequency: once a month Cost: RUB 15,000 design documentation, diagrams with architectural Procedure 21. Receive inspection during Comments: After an occupancy permit is obtained, concepts and network layouts. construction works at Vladikavkaz City the developer may proceed with cadastral registration Procedure 4. Obtain technical conditions Administration of the facility and obtaining a cadastral passport for it. for electricity connection at Vladivostok Time: 1 day Procedure 28. Registration of the building enterprise of Electricity Grids—electricity Cost: No cost at the Federal Service of State Registration, utility Cadastre and Cartography (Rostreestr) Comments: The construction process is monitored Time: 30 days Time: 25 days by construction control agencies; construction Cost: No cost progress documents, concealed work reports and Cost: RUB 15,000 Comments: BuildCo applies for the techinical work acceptance reports are inspected. Inspection Comments: Titles to the property built are registered conditions for electricity connection. frequency: once a month in compliance with the Federal Law “On Real Procedure 22. Conduct inspection during Property Rights Registration” by a department of Procedure 5*. Obtain technical construction works at Vodokanal, Municipal the Federal Service for State Registration, Cadastre conditions for connecting to water and Unitary Organization—water utility and Cartography based on an applications, cadastral sewage services and sign agreement passport, incorporation documents, occupancy at Primvodokanal, Krai State Unitary Time: 11 days permit and land titles. Organization—water utility Cost: No cost Time: 14 days Comments: According to the Urban Development Procedure 29. Sign agreement with the Cost: RUB 61,961 Code, documentary evidence of compliance of the water utility at Vodokanal, Municipal newly built warehouse with the technical conditions Unitary Organization—water utility Comments: Application for issuance of technical is mandatory for obtaining an occupancy permit. This Time: 13 days conditions is submitted with enclosed incorporation documents (notarized copies), documents confirming Cost: RUB 300

* This procedure can be completed simultaneously with previous procedures. 112 DOING BUSINESS IN RUSSIA 2012

the signee’s authority, land titles, situational plan at Comments: Land plot title documentation, GPZU, Procedure 17. Receive inspection from the 1:2,000, topographic map of the plot at 1:500, master documents of the legal entity, full design documenta- water utility at Primvodokanal, Krai State layout of the facility with its positioning , copy of tion, construction permit, occupancy permit, land Unitary Organization—water utility the design explanatory note. Technical connection survey and power of attorney are lodged with the BTI; Time: 14 days contract may be picked up immediately; one can a standard application is filed, the facility is measured; Cost: No cost determine the capacity within one year and pick up and technical and cadastral passports are prepared the technical connection contract later. simultaneously. Procedure 18. Receive inspection from the Procedure 6*. Obtain technical conditions Procedure 12. Notify the authorities of water utility at Primvodokanal, Krai State for telephone connection and sign commencement of construction works at Unitary Organization—water utility agreement at Rostelekom, OJSC— Gosstroynadzor—construction supervision Time: 1 day Vostoktelekom, New Telephone Company, Time: 1 day Cost: No cost Beeline Cost: No cost Comments: An inspector of Vodokanal makes a field visit to inspect the system elements, compile Time: 14 days Comments: A notification is filed, no later than 7 days work certificates, run tests and prepare an inspection Cost: RUB 22,500 prior to the construction beginning with enclosed certificate. Comments: The application for technical conditions copies of the construction permit, explanatory note is submitted to any network company in accordance and construction schedule . Procedure 19. Obtain clearance for with a standard form indicating the characteristics, connection from the water utility at design concepts of the building in progress, number Procedure 13. Receive inspection during construction works at Gosstroynadzor— Primvodokanal, Krai State Unitary capacity, signee’s authorization documents and Organization—water utility documents of the legal entity. technical conditions construction supervision Time: 7 days are issued free of charge, only technical installation of Time: 1 day the network is charged at about RUB 20,000-25,000. Cost: No cost Cost: No cost The work could be performed by the customer itself, Comments: The construction process is monitored by Comments: Based on the inspection report, BuildCo subject to license availability. construction control agencies; construction progress receives a signed and stamped permit for connection to water supply networks. Procedure 7*. Obtain technical conditions documents, concealed work reports and work ac- from the City Facility Services at Territory ceptance reports are inspected. The procedure is not Procedure 20. Obtain compliance Improvement Department of Vladivostok mandatory; however, if there is a warning, the project certificate of the building with the Municipality is placed under control. The board (commission) technical conditions from the phone utility convenes every two months. Time: 30 days at Organization which issued technical conditions Cost: No cost Procedure 14. Receive inspection during Time: 7 days Comments: Application is submitted with draft construction works at Gosstroynadzor— design, land titles and legal entity’s documents. construction supervision Cost: No cost Time: 1 day Comments: The telephone company is notified about Procedure 8. Obtain certificate of Cost: No cost completion of work, with enclosed reports, which compliance of the project design from the serves as a basis for issuance of technical conditions. water utility at Primvodokanal, Krai State Comments: The construction process is monitored by Unitary Organization—water utility construction control agencies; construction progress Procedure 21. Obtain compliance certificate documents, concealed work reports and work ac- Time: 14 days of the building with the technical conditions ceptance reports are inspected. The procedure is not from the heavy shower sewage utility at Cost: No cost mandatory; however, if there is a warning, the project Territory Improvement Department of Comments: Design documentation and technical is placed under control. The board (commission) Vladivostok Municipality conditions are lodged with the water supplier. convenes every two months. Time: 14 days Procedure 9. Obtain certificate of Procedure 15. Receive inspection during Cost: No cost compliance of the project design from construction works at Gosstroynadzor— Comments: The Department is informed about the the phone utility at Rostelekom, OJSC— construction supervision completion of work with enclosed reports and techni- Vostoktelekom, New Telephone Company, Time: 1 day cal conditions; a compliance certificate is issued. Beeline Cost: No cost Time: 3 days Procedure 22. Obtain a technical Comments: The construction process is monitored by passport of the building at Primorsk Cost: No cost construction control agencies; construction progress Krai State Unitary Organization of Comments: Design documentation and technical documents, concealed work reports and work ac- Technical inventorization and Real Estate conditions are lodged with the telephone company. ceptance reports are inspected. The procedure is not Appraisal or federal bureau of technical mandatory; however, if there is a warning, the project inventorization Procedure 10. Obtain certificate of is placed under control. The board (commission) compliance of the project design from the convenes every two months. Time: 30 days heavy shower sewage utility at Territory Cost: RUB 80,000 Improvement Department of Vladivostok Procedure 16. Receive inspection during Comments: Land plot title documentation, GPZU, Municipality construction works at Gosstroynadzor— documents of the legal entity, full design documenta- Time: 20 days construction supervision tion, construction permit, occupancy permit, land Cost: No cost Time: 1 day survey and power of attorney are lodged with the BTI; a standard application is filed, the facility is measured; Comments: Design documentation and technical Cost: No cost and technical and cadastral passports are prepared conditions are lodged with the landscaping depart- Comments: The construction process is monitored by simultaneously. ment on special days and in special reception hours; construction control agencies; construction progress the documents are checked, signed and stamped. documents, concealed work reports and work ac- Procedure 23. Obtain occupancy permit ceptance reports are inspected. The procedure is not Procedure 11. Obtain construction permit at Urban Development and Architecture mandatory; however, if there is a warning, the project Department of Vladivostok at Urban Development and Architecture is placed under control. The board (commission) Department of Vladivostok convenes every two months. Time: 10 days Time: 10 days Cost: No cost Cost: No cost

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 113

Comments: Application is lodged in accordance with Cost: RUB 30,000 Comments: The final construction design, compliant the established form, with a list of documents – in Comments: The land development plan is a manda- to the prior technical conditions, is submitted to the strict compliance with the UDC. The application is tory document submitted by the developer/customer water supplier for clearance. glued on a file folder, the file is delivered to the “single to obtain official design appraisal, construction permit window”, and the permit may be picked up in 10 days. Procedure 9*. Obtain certificate of and building occupation permit. Development plans compliance of the project design from the Procedure 24. Registration of the building are drawn for land plots designated for construction heavy shower sewage utility at Municipal and renovation of permanent structures. The at the Federal Service of State Registration, Facilities Department of Volgograd City Cadastre and Cartography (Rostreestr) document contains key land plot data: boundary coordinates, authorized use and specifications. Draft Time: 14 days Time: 10 days design, specifications, incorporation documents and Cost: No cost Cost: RUB 15,000 land lease agreement are required for its issuance. Comments: The final construction design, compliant Comments: In order to register the building, BuildCo Though the UDC stipulates that the local authorities to the prior technical conditions, is submitted to the must submit company establishing documents, should prepare and approve GPZUs free of charge, organization for clearance. cadastral registration, and state fee payment voucher. in reality the Volgograd Administration requires that applicants submit prepared GPZUs, which are Procedure 10. Obtain construction permit Procedure 25. Sign agreement with the subsequently approved. at Urban Development and Architecture water utility at Primvodokanal, Krai State Committee of Volgograd City Procedure 4. Obtain technical conditions Unitary Organization—water utility Time: 18 days Time: 7 days for electricity connection at Volgograd Interdistrict Electric Supply Network, Cost: No cost Cost: No cost Municipal Unitary Organization Comments: The procedure is performed in accordance with the established regulations. A Procedure 26. Sign agreement with the Time: 30 days phone utility at New Telephone Company construction permit application is submitted along Cost: No cost with the following documents: 1) land title 2) (NTK), Vostoktelekom, Interdaltelekom Comments: BuildCo applies for the techinical and others land development plan 3) materials of the design conditions for electricity connection. documentation. Time: 1 day Cost: No cost Procedure 5*. Obtain technical Procedure 11. Receive Laboratory results conditions for connecting to water and from Consumer Protection Agency at DEALING WITH CONSTRUCTION PERMITS sewage services and sign agreement at Rospotrebnadzor Volgograd Vodokanal, Municipal Unitary Time: 50 days Volgograd, Volgograd Oblast Organization—water utility Cost: RUB 100,000 Warehouse value: RUB 26,120,000 (US$ 844,063) Time: 25 days Data as of: November 2011 Cost: RUB 3,000 Procedure 12. Obtain permit for Comments: BuildCo obtains the technical conditions construction works on external wiring at Procedure 1. Request a topographic Volgograd Housing and Public Utilities, survey of the land plot at any organization of connection to water supply and sanitation systems. The applicant submits a request to Volgograd City Municipal Organization, Division for with permission from a self-regulating Territory Improvement organization Vodokanal MUE with full information about the facility. Connection fee is based on the Vodokanal Time: 10 days Time: 30 days tariffs and amounts to RUB 15,150.70 per m3 of Cost: No cost Cost: RUB 10,000 water supply a day, and RUB 15,846.72 per m3 of Comments: To perform earthwork for engineering Comments: BuildCo places an order for land survey at water disposal a day. Payment for connection is systems, BuildCo needs to obtain an appropriate 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 made in accordance with a schedule attached to the permit from the administration or housing and ha, over 10 ha) by a specialized organization with an agreement. utilities agency of the relevant district. SRO license for geodesic operations. The applicant submits the following documents: 1) Application/ Procedure 6*. Obtain technical conditions Procedure 13. Obtain a technical passport contract. 2) Land plot title (cadastral plan) and land for telephone connection and sign of the building at Bureau of technical boundaries. agreement at YuTK - South Telecom, OJSC inventorization—municipal Time: 20 days Procedure 2*. Request geological survey Time: 30 days of the land plot at any organization Cost: No cost Cost: RUB 91,000 with permission from a self-regulating Comments: BuildCo obtains technical specification Comments: A technical passport of a facility is organization for landline telephone connection and concludes a required for obtaining an occupancy permit. It contract. Time: 30 days describes physical parameters of the built facility. The document is available from the Bureau of Cost: RUB 313,000 Procedure 7*. Obtain technical conditions for connecting to the heavy shower sewage Technical Inventory Center, or any bureau of technical Comments: BuildCo places an order for engineering/ inventory. To obtain a technical passport, the ap- geodesic survey of the land plot to determine the and sign agreement at Municipal Facilities Department of Volgograd City plicant should submit an application and the building soil composition and collect other data required for design, incorporation documents, construction designing. The assignment should be performed by Time: 21 days permit, cadastral passport of the land and land a specialized SRO, licensed for engineering/geodesic Cost: No cost lease agreement or title. Tariffs for issuing technical surveys. The applicant submits the following docu- Comments: BuildCo obtains the technical conditions passports are established by the organization itself, ments: applicant, draft building design, designer’s of connection to storm drain systems. and as a rule, they are not easily available. assignment. The tests should be performed in accordance with the construction standards (SNiPs). Procedure 8. Obtain certificate of Procedure 14. Obtain compliance certificate The cost depends on the estimated scope of work, in compliance of the project design from of the building with the technical conditions particular, on the number of holes to be drilled in the the water utility at Volgograd Vodokanal, from the water and sewage utility at plot area. Municipal Unitary Organization—water Volgograd Vodokanal, Municipal Unitary utility Organization—water utility Procedure 3. Obtain development plan of land plot (GPZU) at Architecture Time: 30 days Time: 10 days Committee of Volgograd City Cost: RUB 3,000 Cost: No cost Time: 51 days Comments: According to the Urban Development Code, documentary evidence of compliance of the

* This procedure can be completed simultaneously with previous procedures. 114 DOING BUSINESS IN RUSSIA 2012

newly built warehouse with the technical conditions Procedure 21. Obtain cadastral passport Procedure 3*. Request geological survey of is mandatory for obtaining an occupancy permit. This of the building at Bureau of technical the land plot at Geologia, LLC document is issued by Volgograd City Vodokanal inventorization Time: 30 days MUE after checking the water supply and sanitation Time: 27 days Cost: RUB 30,000 systems. Cost: No cost [included into the technical passport Comments: BuildCo places an order for engineering/ Procedure 15*. Obtain compliance cost] geodesic survey of the land plot to determine the certificate of the building with the technical Comments: After an occupancy permit is obtained, soil composition and collect other data required for conditions from the phone utility at YuTK— the developer may proceed with cadastral registration designing. The assignment should be performed by South Telecom, OJSC of the facility and obtaining a cadastral passport for a specialized SRO, licensed for engineering/geodesic Time: 10 days it. Generally, the cadastral passport is drawn by the surveys. The applicant submits the following docu- ments: applicant, draft building design, designer’s Cost: RUB 600 same organization that had prepared the technical passport. The cadastral passport drafting cost is part assignment. The tests should be performed in Comments: The telephone company is notified about of the technical passport drafting cost. accordance with the construction standards (SNiPs). completion of work, with enclosed reports, which The cost depends on the estimated scope of work, in serves as a basis for issuance of technical conditions. Procedure 22. Registration of the building particular, on the number of holes to be drilled in the at the Federal Service of State Registration, plot area. Procedure 16*. Obtain compliance Cadastre and Cartography (Rostreestr) certificate of the building with the technical Time: 30 days Procedure 4*. Obtain expect conclusion conditions from the heavy shower sewage cerifying absence of historic buildings on Cost: RUB 15,000 utility at Municipal Facilities Department of the land plot at Inspection for Monuments Volgograd City Comments: Titles to the property built are registered Protection Time: 10 days in compliance with the Federal Law “On Real Property Rights Registration” by a department of Time: 18 days Cost: No cost the Federal Service for State Registration, Cadastre Cost: RUB 5,200 Comments: According to the Urban Development and Cartography based on an applications, cadastral Comments: The inspectorate prepares an expert Code, documentary evidence of compliance of the passport, incorporation documents, occupancy conclusion that there are no objects listed in the newly built warehouse with the technical conditions permit and land titles. Uniform Cultural Heritage Register (register of is mandatory for obtaining an occupancy permit. historic and cultural monuments) within the land plot Procedure 23. Sign agreement with the Procedure 17. Obtain occupancy permit perimeter. This conclusion is required for obtianing water utility at Volgograd Vodokanal, the GPZU. at Urban Development and Architecture Municipal Unitary Organization—water Committee of Volgograd City utility Procedure 5. Obtain clearance from the Time: 10 days Time: 30 days Department of Culture at Department of Culture of Voronezh City Cost: No cost Cost: No cost Time: 10 days Comments: To obtain a permit for commissioning Comments: Application is lodged with City the facility, the applicant submits, in accordance Vodokanal MUE, with enclosed receiving reports on Cost: No cost with the Russian Federal Urban Development Code, all elements and establishing documents (contract Comments: Based on the expert conclusion of the all required documents to the Committee for Urban concluded by the owner). Monument Protection Inspectorate, the Voronezh Development and Architecture of the Volgograd City Oblast Department of Culture issues a certificate Administration. DEALING WITH CONSTRUCTION PERMITS required issuance of a land development plan Procedure 18. Sign agreement with water Voronezh, Voronezh Oblast (GPZU). and sewage utility at Volgograd Vodokanal, Warehouse value: RUB 26,120,000 (US$ 844,063) Procedure 6. Obtain drawings of the land Municipal Unitary Organization—water Data as of: November 2011 development plan at Chief Architect Office utility of Voronezh City Time: 10 days Procedure 1. Obtain technical passport Time: 60 days Cost: No cost at State Unitary Organization “Voronezholbtechinventorization” Cost: RUB 25,000 Comments: Network connection report is signed Comments: As specified in the list of documents Time: 30 days upon completion of procedures related to physical required for issuance of a construction permit, connection of the internal lines to the main networks. Cost: RUB 1,000 [RUB 1,000; expedited: RUB 2,000] the applicant should obtain a drawing of the land Procedure 19*. Sign agreement with the Comments: To obtain a GPZU, BuildCo needs to development plan. Although the Department of phone utility at YuTK—South Telecom, provide a certificate stating that there are no buildings Urban Development and Architecture is listed as OJSC and structures on the land plot one of possible providers, in fact the Department of Architecture and Urban Development would only Procedure 2*. Request a topographic survey Time: 10 days accept documents drafted by the Department. The of the land plot at Design organization Cost: RUB 4,800 time largely depends on the workload of the limited with permission from a self-regulating Comments: Network connection report is signed professional staff. upon completion of procedures related to physical organization connection of the internal lines to the main networks. Time: 20 days Procedure 7. Obtain technical conditions for Cost: RUB 25,000 electricity connection at Voronezh Network Procedure 20*. Sign agreement with Company, OJSC Comments: BuildCo places an order for land survey at heavy shower sewage utility at Municipal Time: 18 days Facilities Department of Volgograd City 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 ha, over 10 ha) by a specialized organization with an SRO Cost: No cost Time: 10 days license for geodesic operations. The applicant submits Comments: BuildCo applies for the techinical Cost: No cost the following documents: 1) Application/contract. 2) conditions for electricity connection. Comments: Network connection report is signed Land plot title (cadastral plan) and land boundaries. A upon completion of procedures related to physical report is prepared as a result of the topographic survey Procedure 8*. Obtain technical connection of the internal lines to the main networks. with a layout of buildings and structures; underground, conditions for connecting to water and surface and above-surface communication lines; design sewage services and sign agreement at elements; fencing, roads, etc. Voronezh Vodokanal, Municipal Unitary Organization—water utility Time: 18 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 115

Cost: RUB 115,212 [for connection: RUB 23 x 662 x Procedure 13*. Obtain certificate of received by the Principal Artist. Upon his clearance, 6 months = RUB 91,356, sanitation: RUB 7 x 587 x 6 compliance of the project design from the Principal Artist will forward the materials to the months - RUB 23,856. Payment may be broken down the phone utility at Rostelekom, JSC, Principal Architect for approval. to 2 installments] Voronezhsvyaz Procedure 18. Obtain construction permit Comments: Obtaining technical conditions of Time: 3 days at Municipal Urban Development and connection to water supply and sanitation systems. Cost: No cost Architecture Department The applicant submits a request to Voronezh Vodokanal MUE with full information about the facil- Comments: The final construction design, compliant Time: 30 days ity (according to a form available at the company’s to the prior technical conditions, is submitted to the Cost: No cost organization for clearance. Once a week officials web-site on in the office). Connection fee is based Comments: Before starting construction, BuildCo of network companies come to the Department of on the Vodokanal tariffs. Payment for connection is needs to obtain a construction permit. Its absence Urban Development and Architecture to receive made in accordance with a schedule attached to the entails a penalty, according to Clause 1 of Article visitors, inter alia, for construction design clearance. agreement. 9.5 of the Administrative Offense Code. Besides, in Questions, if any, are resolved by the technical accordance with Article 222 of the Russian Federal Procedure 9*. Obtain technical conditions department of the relevant organization on the case- Civil Code, such property may be considered by a for telephone connection and sign by-case basis; if there are no questions, the designed court as unauthorized construction, and may be agreement at Rostelekom, OJSC; is approved in the presence of the visitor. subject to removal at the expense of the building Voronezhsvyazinform, OJSC Procedure 14*. Obtain certificate of entity. To obtain a construction permit, BuildCo to Time: 17 days compliance of the project design from lodge an application with the Construction and Land Cost: No cost the heavy shower sewage utility at Heavy Issues Department, with the following documents Comments: BuildCo obtains the technical specifica- shower sewage utility attached land titles, land development plan and design documentation materials. The construction tion for landline telephone connection and concludes Time: 3 days a contract. permit issuance procedure is governed by the Cost: No cost municipal regulation on provision of the municipal Procedure 10*. Obtain technical conditions Comments: The final construction design, compliant service of development and issuance of permits for connecting to the heavy shower sewage to the prior technical conditions, is submitted to the for construction, renovation and major repairs of and sign agreement at Gorkomkhoz, organization for clearance. Once a week officials permanent structures. Municipal Unitary Organization of network companies come to the Department of Procedure 19. Request connection Time: 6 days Urban Development and Architecture to receive visitors, inter alia, for construction design clearance. to the water and sewage utility at Cost: No cost Questions, if any, are resolved by the technical Voronezh Vodokanal, Municipal Unitary Comments: BuildCo obtains the technical conditions department of the relevant organization on the case- Organization—water utility of connection to storm drain systems. The applicant by-case basis; if there are no questions, the designed Time: 1 day submits a request to Gorkomkhoz MUE with full is approved in the presence of the visitor. Cost: No cost information about the facility. No fee is charged for connection, thought the developer should, as a rule, Procedure 15. Obtain clearance from Procedure 20. Receive inspection from perform partial upgrade of the network. The scope of Consumer Protection Agency at the water utility at Voronezh Vodokanal, work is determined on a case-by-case basis. Rospotrebnadzor Municipal Unitary Organization—water Procedure 11. Obtain development plan Time: 18 days utility of land plot (GPZU) at Municipal Urban Cost: RUB 6,800 Time: 14 days Development and Architecture Department Comments: RosPotrebNadzor checks for compliance Cost: No cost Time: 10 days with sanitary, environmental, noise, soil contamina- tion standards and issues a clearance. The clearance Procedure 21. Connect to water and sewage Cost: No cost is required for all construction permits in Voronezh services at Voronezh Vodokanal, Municipal Comments: The land development plan is a manda- Unitary Organization—water utility Procedure 16. Obtain clearance of project tory document submitted by the developer/customer Time: 2 days to obtain official design appraisal, construction permit design communication lines at Division of Cost: RUB 67,500 and building occupation permit. Development plans Undergroud Communications of Office of are drawn for land plots designated for construc- Chief Architect of Urban Development and Procedure 22. Obtain compliance certificate tion and renovation of permanent structures. The Architecture Department of the building with the water utility at document contains key land plot data: boundary Time: 1 day Voronezh Vodokanal, Municipal Unitary coordinates, authorized use and technical conditions. Cost: No cost Organization—water utility All documents that have been collected earlier, are Time: 10 days required. Comments: In addition to clearance from the techni- cal specification entities, one should collect approvals Cost: No cost Procedure 12. Obtain certificate of from the Underground Communications Unit of the Comments: According to the Urban Development compliance of the project design from Department of Architecture and Urban Development Code, documentary evidence of compliance of the the water utility at Voronezh Vodokanal, under the Principal Architect’s Office. newly built warehouse with the technical conditions Municipal Unitary Organization—water is mandatory for obtaining an occupancy permit. utility Procedure 17. Obtain clerance of project design from the Department of This document is issued by Voronezh Vodokanal Time: 3 days Architecture at Office of Chief Architect MUE after checking the water supply and sanitation Cost: No cost of Department of Urban Development and systems. Comments: The final construction design, compliant Architecture Procedure 23. Connect to telephone to the prior technical conditions, is submitted to the Time: 35 days services at Rostelekom, OJSC organization for clearance. Once a week officials Cost: No cost Time: 7 days of network companies come to the Department of Urban Development and Architecture to receive Comments: Building façade and façade color scheme Cost: RUB 1,000 visitors, inter alia, for construction design clearance. clearance with the Principal City Artist. The artist Comments: Network connection report is signed Questions, if any, are resolved by the technical receives visitors no more than for 3 hours, once upon completion of procedures related to physical department of the relevant organization on the case- a week, with appointments made in advance; the connection of the internal lines to the main networks. reception may be often terminated earlier than the by-case basis; if there are no questions, the designed is approved in the presence of the visitor. established time. As a result, the applicant may have to come there several times before he/she can be

* This procedure can be completed simultaneously with previous procedures. 116 DOING BUSINESS IN RUSSIA 2012

Procedure 24*. Obtain compliance Procedure 30. Registration of the building designing. The assignment should be performed by certificate of the building with the phone at the Federal Service of State Registration, a specialized SRO, licensed for engineering/geodesic utility at Rostelekom, OJSC Cadastre and Cartography (Rostreestr) surveys. The applicant submits the following docu- Time: 7 days Time: 30 days ments: applicant, draft building design, designer’s assignment. The tests should be performed in Cost: No cost Cost: RUB 15,000 accordance with the construction standards (SNiPs). Comments: The telephone company is notified about Comments: Titles to the property built are registered The cost depends on the estimated scope of work, in completion of work, with enclosed reports, which in compliance with the Federal Law “On Real particular, on the number of holes to be drilled in the serves as a basis for issuance of technical conditions. Property Rights Registration” by a department of plot area. the Federal Service for State Registration, Cadastre Procedure 25. Connect to sewage services and Cartography based on an applications, cadastral Procedure 4. Obtain technical conditions at Gorkomkhoz, Municipal Unitary passport, incorporation documents, occupancy for electricity connection at Vyborg City Organization permit and land titles. Electricity Systems—electricity utility Time: 10 days Procedure 31. Sign agreement with the Time: 30 days Cost: No cost water utility at Voronezh Vodokanal, Cost: No cost Procedure 26*. Obtain compliance Municipal Unitary Organization—water Comments: BuildCo applies for the techinical certificate of the building with the heavy utility conditions for electricity connection. shower sewage utility at Gorkomkhoz, Time: 14 days Procedure 5*. Obtain technical conditions Municipal Unitary Organization Cost: No cost for connecting to water and sewage Time: 14 days Comments: Application is lodged with Voronezh services and sign agreement at Vyborg Cost: No cost Vodokanal MUE, with enclosed receiving reports on Vodokanal, OJSC—water utility Comments: Gorkomkhoz MUE is notified about the all elements and establishing documents (contract Time: 2 days work completion with attached certificates, based concluded by the owner). Cost: No cost on which a certificate of compliance with technical DEALING WITH CONSTRUCTION PERMITS Comments: BuildCo obtains the technical conditions conditions is issued. of connection to water supply and sanitation systems. Vyborg, Leningrad Oblast Procedure 27. Obtain a technical The applicant lodges with Vodokanal the following passport of the building at Warehouse value: RUB 26,120,000 (US$ 844,063) document package with Vodokanal: application for State Unitary Organization Data as of: November 2011 technical conditions of the facility connection to “Voronezholbtechinventorization” water supply and sanitation network; copies of land Procedure 1. Obtain development plan title; information about the boundaries of the land Time: 30 days of land plot (GPZU) at Committee on plot, where permanent structure construction or Cost: RUB 50,000 Management of Municipal Property and renovation is planned (copy of duly approved land Comments: A technical passport of a facility is Urban Development of Vyborg Municipal plot boundary plan); facility layout and land plot required for obtaining an occupancy permit. It Raion of Leningrad Oblast topographical layout at 1:500, with all existing surface describes physical parameters of the built Time: 30 days and underground communications and structures facility. The document is available from (cleared by maintenance organizations). Cost: No cost Voronezhobltechinventarizatsia, or any bureau of technical inventory. To obtain a technical passport, Comments: The land development plan is a manda- Procedure 6*. Obtain technical conditions the applicant should submit an application and the tory document submitted by the developer/customer for telephone connection and sign building design, incorporation documents, construc- to obtain official design appraisal, construction permit agreement at Rostelekom, OJSC tion permit, cadastral passport of the land and land and building occupation permit. Land development Time: 14 days plans are prepared for built-up land plots, land plots lease agreement or title. Tariffs for issuing technical Cost: No cost passports are established by the organization itself, allocated for construction/renovation of permanent and as a rule, they are not easily available. structures. A land development plan is developed for Procedure 7*. Obtain technical conditions a separate land plot that has been registered by the for connecting to the heavy shower sewage Procedure 28. Obtain occupancy permit State, with established development rules in the Land and sign agreement at Vyborg Vodokanal at Municipal Urban Development and Use Regulations, and subject to availability of a duly OJSC—water utility, Vyborg Municipality Architecture Department approved planning and border-setting project. Time: 14 days Time: 10 days Procedure 2*. Request a topographic survey Cost: RUB 19,050 Cost: No cost of the land plot at Karta, LLC, geodesic Comments: BuildCo obtains the technical conditions Comments: To obtain a permit for commissioning company with permission from a self- of connection to water supply and sanitation systems. the facility, the applicant submits, in accordance with regulating organization The applicant submits the following document the Russian Federal Urban Development Code, all re- Time: 35 days package to Vyborg Vodokanal MUE application and quired documents to the Voronezh City Department Cost: RUB 65,030 legal documents for the land plot (cadastral passport, of Architecture and Urban Development. draft designa nd design estimates). Connection fee is Comments: BuildCo places an order for land survey at based on the Vyborg District tariffs. Procedure 29. Obtain cadastral passport of 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 the building at State Unitary Organization ha, over 10 ha) by a specialized organization with an Procedure 8*. Obtain construction permit “Voronezholbtechinventorization” SRO license for geodesic operations. The applicant at Committee on Management of Municipal Time: 10 days submits the following documents: 1) Application/ Property of Vyborg City, Committee Cost: No cost [Included into the technical passport contract. 2) Land plot title (cadastral plan) and land of State Construction Supervision and cost] boundaries. State Expertise of Leningrad Oblast via Comments: After an occupancy permit is obtained, Procedure 3*. Request geological survey autonomous organization “Department of the developer may proceed with cadastral registration of the land plot at Oblgasteplostroy, LLC State Expertize of Leningrad Oblast” of the facility and obtaining a cadastral passport for (member of a self-regulating organization) Time: 10 days it. Generally, the cadastral passport is drawn by the Time: 60 days Cost: No cost same organization that had prepared the technical Cost: RUB 750,000 [3 borings] Comments: The project construction permit is passport. The cadastral passport drafting cost is part a basis for architectural plan implementation, Comments: BuildCo places an order for engineering/ of the technical passport drafting cost. issued to the customer/developer by executive geodesic survey of the land plot to determine the authorities of Russian Federal constituents, or by soil composition and collect other data required for

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 117

local self-government agencies. One should compile with the building design, incorporation documents, Registration, Cadastre and Cartography based on a package of documents required for the permit. mailing address, construction permit, cadastral land an applications, cadastral passport, incorporation Application for construction permit should be lodged. certificate and land lease agreement or title. The documents, occupancy permit and land titles. Construction permits are issued by the Architecture technical passport issuance tariffs are set by the and Urban Development Unit of the Vyborg agency itself, and this information is not, as a rule, Procedure 20. Sign agreement with the Municipal Unitary Enterprise. The list of documents, easily available. water utility at Vyborg Vodokanal OJSC— time and cost are regulated by the Russian Federal water utility Urban Development Code. Officially, the document Procedure 14. Obtain occupancy permit Time: 30 days at Committee on Management of issuance time is followed, though in reality it can be Cost: No cost Municipal Property of Vyborg, Division of picked up on the following day only, as the document Comments: Connection to water supply networks is is prepared by the close of business time. Architecture and Urban Development of KUMIG of Vyborg City performed after issuance of a title to the newly built property. The applicant and Vyborg Vodokanal OJSC Procedure 9. Notify the authorities of Time: 10 days commencement of construction works conclude a contract and sign an act establishing a Cost: No cost at Committee for State Construction boundary between internal and external networks. Comments: Occupancy permit application is submit- Supervision and State Expertise of DEALING WITH CONSTRUCTION PERMITS Leningrad Oblast, Department of State ted with the following documents attached: land Expertise of Leningrad Oblast title, GPZU, construction permit, report of completed Yakutsk, Republic of Sakha – Yakutia construction acceptance by the developer, documents Warehouse value: RUB 26,120,000 (US$ 844,063) Time: 1 day certifying the facility compliance with technical Cost: No cost conditions, diagram with the facility positioning Data as of: November 2011 Comments: The construction company should inform within the land plot area. Procedure 1. Request a topographic about the beginning of construction work. Before survey of the land plot at any organization starting construction work, the developer should Procedure 15. Sign agreement with water and sewage utility at Vyborg Vodokanal with permission from a self-regulating notify the Leningrad Oblast State Expertise about the organization construction work beginning date, 10 days prior to OJSC—water utility the scheduled beginning of the construction work. Time: 1 day Time: 18 days The notification should be submitted along with Cost: RUB 29,532 Cost: RUB 116,000 [average Cost: RUB 15,000 per construction documentation, construction permit, Comments: This is a legal act of recognition and 100 m2] work schedule and a list of responsible persons. confirmation of fulfillment of all binding regulatory Comments: Application for topographic survey is lodged with one of licensed companies; an expert Procedure 10. Obtain compliance certificate requirements. visit for approval purposes is requested. All approvals of the building with the technical conditions Procedure 16. Sign agreement with the and clearances are handled by the contractor, the from the water and sewage utility at Vyborg phone utility at Rostelekom, OJSC customer receives an approved topographic report Vodokanal OJSC—water utility Time: 1 day already. The applicant shall provide the following Time: 30 days Cost: No cost documents: 1) application or contract; 2) legal Cost: No cost documents for the land plot (cadastral plan) and plot Comments: This is a legal act of recognition and boundaries. A report is prepared as a result of the Comments: As required by the UDC, in order to confirmation of fulfillment of all binding regulatory topographic survey with a layout of buildings and obtain an occupational permit, the developer should requirements. provide a confirmation of the facility compliance structures; underground, surface and above-surface with the technical conditions. For that purpose, the Procedure 17. Sign agreement with heavy communication lines; design elements; fencing, roads, developer should send a letter to the agency that shower sewage utility at Vyborg Vodokanal etc. issued the specification and receives a certificate of OJSC—water utility Procedure 2. Request geological survey compliance with the technical conditions. Time: 1 day of the land plot at any organization Procedure 11. Obtain compliance certificate Cost: No cost with permission from a self-regulating of the building with the technical conditions Comments: This is a legal act of recognition and organization from the phone utility at Rostelekom, OJSC confirmation of fulfillment of all binding regulatory Time: 14 days Time: 30 days requirements. Cost: RUB 300,000 Cost: No cost Procedure 18. Obtain cadastral passport Comments: BuildCo places an order for engineering/ of the building at Bureau of technical geodesic survey of the land plot to determine the Procedure 12. Obtain compliance certificate inventorization—regional and municipal soil composition and collect other data required for of the building with the technical conditions designing. The assignment should be performed by Time: 20 days from the heavy shower sewage utility at a specialized SRO, licensed for engineering/geodesic Vyborg Vodokanal OJSC—water utility Cost: No cost [part of the cost of obtaining a surveys. The applicant submits the following docu- Time: 3 days technical passport ] ments: applicant, draft building design, designer’s Cost: No cost Comments: After an occupancy permit is obtained, assignment. The tests should be performed in the developer may proceed with cadastral registration Comments: The developer should provide a confirma- accordance with the construction standards (SNiPs). of the facility and obtaining a cadastral passport for tion of compliance of the newly built property with The cost depends on the estimated scope of work, in it. Generally, the cadastral passport is drawn by the the technical conditions. For that purpose, the particular, on the number of holes to be drilled in the same organization that had prepared the technical developer sends a letter to the organization that plot area. passport. The cadastral passport drafting cost is part issued the specifications and obtains an certificate of of the technical passport drafting cost. Procedure 3. Obtain development plan of compliance with technical conditions. land plot (GPZU) at Municipal Architecture Procedure 19. Registration of the building Procedure 13. Obtain a technical passport and Urban Development Department at the Federal Service of State Registration, of the building at Bureau of technical Time: 32 days Cadastre and Cartography (Rostreestr) inventorization—regional and municipal Cost: No cost Time: 30 days Time: 30 days Comments: The land development plan is a manda- Cost: RUB 15,000 Cost: RUB 35,000 tory document submitted by the developer/customer Comments: Titles to the property built are registered Comments: The technical passport shows the actual to obtain official design appraisal, construction permit in compliance with the Federal Law “On Real parameters of the newly built property. To obtain the and building occupation permit. The procedure Property Rights Registration” by the Leningrad certificate, the applicant provides an application along is governed by the administrative regulation of Oblast Department of the Federal Service for State

* This procedure can be completed simultaneously with previous procedures. 118 DOING BUSINESS IN RUSSIA 2012

the municipal function “Land Development Plan Procedure 9. Obtain construction permit Procedure 16. Receive inspection from the Issuance”. Development plans are drawn for land at Municipal Architecture and Urban water utility at Vodokanal, OJSC—water plots designated for construction and renovation Development Department utility of permanent structures. A land development plan Time: 10 days Time: 1 day is developed for a separate land plot that has been Cost: No cost Cost: No cost registered by the State, with established development rules in the Land Use Regulations, and subject to Comments: Application is prepared, documents are Comments: Vodokanal expert checks the newly availability of a duly approved planning and border- filed and listed: GPZU (copy), collected technical built water supply and sanitation systems with the setting project. conditions, land titles, draft design, design documents technical conditions and tests the system elements and estimates, designer license. The file folder is for readiness to connection, Procedure 4. Obtain technical conditions then submitted to the Architecture Department; a for electricity connection and sign response should be received in 10 days (it could be Procedure 17. Obtain compliance certificate agreement at Yakutskenergo sent to the “single window”, but they would often of the building with the technical conditions from the water and sewage utility at Time: 30 days reject it). Single window is a novelty in utility service. Vodokanal, OJSC—water utility Cost: No cost It could be used for submission of documents, but that would extend the processing time, and the Time: 10 days Comments: BuildCo applies for the techinical service is rarely used. conditions for electricity connection. Cost: No cost Procedure 10. Notify the authorities of Comments: A compliance report is compiled based Procedure 5*. Obtain technical conditions commencement of construction works at on the inspection outcomes, then it is registered, for water and sewage services and sign Inspection for architecture supervision cleared and attached to the package of documents for agreement at Vodokanal, OJSC—water occupation permit request. utility Time: 1 day Procedure 18. Request connection to the Time: 30 days Cost: No cost Comments: A notification about the beginning of heavy shower and sewage utility at Service Cost: RUB 54,380 [estimate based on the following for City Facilities Management tariffs: water supply: RUB 31,386 per m3 of water, construction work is filed 10 days in advance, with Time: 1 day sanitation: RUB 11,262 per m3 x 24 working days + enclosed permit for construction, design documents, 1,136 x 11,262 x 24 working days] construction schedule and plan of work. Although Cost: No cost our project is not subject to review, construction Comments: Application is lodged with the water Comments: A work completion notification is filed, contractors would always send a notification about along with a request for a conclusion about the supplier with attached consumption estimates and the beginning of construction. properties, and the land titles. Technical conditions of project readiness in terms of technical conditions of design and technical connection contract are provided Procedure 11. Receive inspection during storm drain systems, roads, etc. based on document review. Water supply tariff: RUB construction from Architecture Supervision Procedure 19. Receive inspection from the 31,386 (w/o VAT) per m3/day; water disposal tariff: Time: 1 day City Facilities Management at Service for RUB 11,262 (w/o VAT) per m3/day. Cost: No cost City Facilities Management Procedure 6*. Obtain technical conditions Comments: Inspections are usually conducted every Time: 1 day for telephone connection and sign two months. Cost: No cost agreement at Rostelekom Procedure 12. Receive inspection during Comments: An expert visits the site and checks the Time: 30 days construction from Architecture Supervision storm drain readiness and other technical conditions Cost: No cost on amenities. A certificate of the facility readiness is Time: 1 day Comments: Application for technical conditions is issued based on the inspection outcomes. Cost: No cost lodged with a telephone company with a descrip- Procedure 20. Obtain compliance tion of the required technical characteristics. The Comments: Inspections are usually conducted every two months. certificate of the building with the organization’s incorporation documents are provided. technical conditions from the City Facilities Payment is made according to the established tariffs Procedure 13. Receive inspection during Management at Service for City Facilities at the time when the contract is concluded. construction from Architecture Supervision Management Procedure 7*. Obtain technical conditions Time: 1 day Time: 12 days from the City Facility Services at Service for Cost: No cost Cost: No cost City Facilities Management Comments: Inspections are usually conducted every Comments: Based on a report of an expert of the Time: 25 days two months. municipal maintenance service, a certificate of Cost: No cost compliance with technical conditions is prepared. Procedure 14. Receive inspection during Comments: Application is lodged for technical condi- construction from Architecture Supervision Procedure 21. Obtain a technical passport tions of storm drain, roads and passages (depending of the building at Bureau of technical on the design specifics). Time: 1 day Cost: No cost inventorization—federal or regional Procedure 8. Obtain certificate of Comments: Inspections are usually conducted every Time: 30 days compliance of the project design from the two months. Cost: RUB 45,500 water utility at Vodokanal, OJSC—water Comments: Technical and cadastral passports are utility Procedure 15. Request connection to the usually obtained at the same time, as the project is water and sewage utility at Vodokanal, Time: 30 days not complicated, and technical measurements are not OJSC—water utility Cost: No cost required during the construction. An application is Comments: According to the Urban Development Time: 1 day submitted to Rostechinventarizatsia, or the Regional Code, documentary evidence of compliance of the Cost: No cost Center for Technical Inventory, on their form, signed newly built warehouse with the technical conditions Comments: The water supplier is informed about the by the company CEO and accounting supervisor. is mandatory for obtaining an occupancy permit. The completion of construction, and a request is lodged The following documents should be enclosed with applicant submits technical conditions and design to for network acceptance. the application: land title documents, title holder’s the water supplier with a cover letter requesting to incorporation documents, document proving the review the design. CEO authority to sign the contract, a copy of the development master plan, construction permit, design documentation, company card with address,

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 119

banking information and other data, topographic DEALING WITH CONSTRUCTION PERMITS Procedure 6*. Obtain technical conditions survey, power of attorney to the name of the person Yaroslavl, Yaroslavl Oblast for connecting to the heavy shower sewage who represents the organization. They would come and sign agreement at Department of to the site, make measurements and prepare the Warehouse value: RUB 26,120,000 (US$ 844,063) Municipal Facilities of Yaroslavl City document. Data as of: November 2011 Time: 22 days Procedure 22. Obtain occupancy permit Procedure 1. Request a topographic survey Cost: No cost at Municipal Architecture and Urban of the land plot at commercial organizations Comments: BuildCo obtains the technical conditions Development Department Time: 32 days of connection to storm drain systems. Time: 45 days Cost: RUB 30,000 Procedure 7. Obtain development plan Cost: No cost Comments: BuildCo places an order for land survey at of land plot (GPZU) at Department of Comments: Application is submitted with all 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Architecture and Territorial Development documents enclosed: GPZU; construction permit; ha, over 10 ha) by a specialized organization with an of Yaroslavl City photo of the building façade; commissioning reports SRO license for geodesic operations. The applicant Time: 30 days confirming compliance with water, power supply, submits the following documents: 1) Application/ Cost: No cost landscaping specifications; land title; engineering/ contract. 2) Land plot title (cadastral plan) and land technical support network layout. A list of documents boundaries. A report is prepared as a result of the Comments: The land development plan is a manda- is attached; the documents are numbered and bound. topographic survey with a layout of buildings and tory document submitted by the developer/customer A conclusion is provided in 30 days. All observed structures; underground, surface and above-surface to obtain official design appraisal, construction permit deficiencies, if any, are mitigated and “no-comment’ communication lines; design elements; fencing, roads, and building occupation permit. Development plans reports are compiled. The procedure is governed by etc. are drawn for land plots designated for construction the Regulation of the Yakutsk Okrug Administration and renovation of permanent structures. The No. 37-P, dated 26.03.2010 “On Approval of the Procedure 2*. Request geological survey of document contains key land plot data: boundary Administrative Regulation on Provision of the the land plot at commercial organizations coordinates, authorized use and technical conditions. Municipal Service of Occupancy Permit Issuance”. Time: 42 days The following documents should be attached to the standard form application (Page 13, Annex 1 to the Cost: RUB 160,000 Procedure 23. Sign agreement with water Resolution of the Yaroslavl Mayor’s Office No. 4198 and sewage utility at Vodokanal JSC—water Comments: BuildCo places an order for engineering/ of December 4, 2009): 1) land titles, 2) cadastral utility geodesic survey of the land plot to determine the excerpt for the land plot with flip angle coordinates. soil composition and collect other data required for Time: 14 days In accordance with Clause 17 of Article 17 of the designing. The assignment should be performed by Cost: No cost UDC, it should be issued by the local self-government a specialized SRO, licensed for engineering/geodesic agencies free of charge, within 30 days. The process Comments: Application is submitted with enclosed surveys. The applicant submits the following docu- is carried out in accordance with the prescribed report of the design compliance with the technical ments: applicant, draft building design, designer’s procedure. conditions and with the technical conditions attached assignment. The tests should be performed in as well. Connection report is signed. accordance with the construction standards (SNiPs). Procedure 8. Obtain certificate of The cost depends on the estimated scope of work, in compliance of the project design from Procedure 24. Registration of the building particular, on the number of holes to be drilled in the the water utility at Yaroslavlvodokanal, at the Federal Service of State Registration, plot area. OJSC—water utility Cadastre and Cartography (Rostreestr) Time: 10 days Time: 10 days Procedure 3. Obtain technical conditions for Cost: No cost Cost: RUB 15,000 electricity connection at Yargorelektroset, OJSC Comments: The final construction design, compliant Comments: Application is lodged with Rosreestr with to the prior technical conditions, is submitted to the enclosed cadastral passport, occupancy permit, land Time: 22 days water supplier for clearance. titles, document certifying the signee’s authority and Cost: No cost passport. Comments: BuildCo applies for the techinical Procedure 9*. Obtain certificate of conditions for electricity connection. compliance of the project design from the Procedure 25. Sign agreement with the phone utility at Rostelekom, OJSC water utility at Vodokanal JSC—water Procedure 4*. Obtain technical utility conditions for connecting to water and Time: 10 days Time: 14 days sewage services and sign agreement at Cost: No cost Cost: No cost Yaroslavlvodokanal, OJSC—water utility Comments: The final construction design, compliant to the prior technical conditions, is submitted to the Comments: The following documents are lodged with Time: 26 days telephone company for clearance. Vodokanal OJSC: connection report, commissioning Cost: RUB 94,655 permit; after that the Contract Department drafts a Comments: The applicant submits a request to Procedure 10*. Obtain certificate of water supply contract. Yaroslavl Vodokanal OJSC with full information about compliance of the project design from the Procedure 26*. Sign agreement with the the facility. Connection fee is based on the Vodokanal heavy shower sewage utility at Department tariffs. phone utility at Rostelekom of Municipal Facilities of Yaroslavl City Time: 7 days Time: 7 days Procedure 5*. Obtain technical conditions Cost: No cost Cost: RUB 15,000 for telephone connection and sign agreement at Centrtelekom, OJSC Comments: The final construction design, compliant Comments: Application for connection is filed with an to the prior technical conditions, is submitted to the indication of the required quantity of numbers; techni- Time: 25 days organization for clearance. cal conditions, internal wiring layout are attached, Cost: No cost a contract is signed and an installation profession Comments: BuildCo obtains technical specification Procedure 11. Obtain construction permit at comes out to perform work on connection to the line. for landline telephone connection and concludes a Architecture Department of Yaroslavl City The connection cost is set forth in the price list for contract. Administration legal entities, posted at: http://www.telecom.sakha. Time: 10 days ru/organizations/local_tariffs. Cost: No cost Comments: The procedure is performed in accordance with the established regulations. A

* This procedure can be completed simultaneously with previous procedures. 120 DOING BUSINESS IN RUSSIA 2012

construction permit application is submitted along Procedure 18. Obtain a technical DEALING WITH CONSTRUCTION PERMITS with the following documents: 1) land title 2) passport of the building at State Unitary Yekaterinburg, Sverdlovsk Oblast land development plan 3) materials of the design Organization of Technical Inventory and documentation. Real Estate Appraisal of Yaroslavl Oblast Warehouse value: RUB 26,120,000 (US$ 844,063) Data as of: November 2011 Procedure 12. Request connection Time: 30 days to the water and sewage utility at Cost: RUB 35,000 Procedure 1. Request topographic survey at Yaroslavlvodokanal, OJSC—water utility Comments: A technical passport of a facility is any specialized organization Time: 11 days required for obtaining an occupancy permit. It Time: 22 days describes physical parameters of the built facility. Cost: RUB 41,000 [water metering station inspection Cost: RUB 3,716 The document is available from the State Unitary + network flushing and disinfection + water analysis Comments: BuildCo places an order for land survey at for composition and radiologic tests] Enterprise for Technical Inventory of Real Property in the Yaroslavl Oblast, or any bureau of technical 1:500/1:2,000/1:5000 (for areas up to 1 ha, up to 10 Procedure 13. Receive inspection from inventory. To obtain a technical passport, the ap- ha, over 10 ha) by a specialized organization with an the water utility at Yaroslavlvodokanal, plicant should submit an application and the building SRO license for geodesic operations. The applicant OJSC—water utility design, incorporation documents, construction submits the following documents: 1) Application/ contract. 2) Land plot title (cadastral plan) and land Time: 9 days permit, cadastral passport of the land and land lease agreement or title. Tariffs for issuing technical boundaries. A report is prepared as a result of the Cost: No cost passports are established by the organization itself, topographic survey with a layout of buildings and Comments: Officials of Yaroslavl Vodokanal OJSC and as a rule, they are not easily available. structures; underground, surface and above-surface check the network readiness for connection and in communication lines; design elements; fencing, roads, feed. Procedure 19. Obtain occupancy permit at etc. Department of Architecture and Territorial Procedure 14. Connect to water and sewage Development of Yaroslavl City Procedure 2. Obtain technical conditions at Yaroslavlvodokanal, OJSC—water utility for electricity connection at Yekaterinburg Time: 9 days Time: 2 days Electricity Supply Network Company (JSC Cost: No cost Cost: RUB 20,000 EESK), the Regional Energy Commission of Comments: To obtain a permit for commissioning Sverdlovsk Oblast Comments: The network connection report is signed the facility, the applicant submits, in accordance Time: 68 days upon completion of procedures related to physical with the Russian Federal Urban Development Code, Cost: No cost connection of the internal lines to the main networks. all required documents to the City Department of Architecture and Area Development. Comments: BuildCo applies for the techinical Procedure 15. Obtain compliance certificate conditions for electricity connection. of the building with the technical conditions Procedure 20. Obtain cadastral passport of from the water and sewage utility at the building at State Unitary Organization Procedure 3*. Obtain technical conditions Yaroslavlvodokanal, OJSC—water utility of Technical Inventory and Real Estate and conclude agreement for connection to Time: 3 days Appraisal of Yaroslavl Oblast water and sewage services at Municipal Unitary Organization Vodokanal—water Cost: No cost Time: 8 days utility Comments: According to the Urban Development Cost: No cost Time: 30 days Code, documentary evidence of compliance of the Comments: After an occupancy permit is obtained, Cost: No cost newly built warehouse with the technical conditions the developer may proceed with cadastral registration is mandatory for obtaining an occupancy permit. of the facility and obtaining a cadastral passport for Comments: Obtaining technical conditions of This document is issued by Yaroslavl Vodokanal it. Generally, the cadastral passport is drawn by the connection to water supply and sanitation systems. OJSC after checking the water supply and sanitation same organization that had prepared the technical The applicant submits a request to Vodokanal MUE systems. passport. The cadastral passport drafting cost is part with full information about the facility (see www. vodokanalekb.ru). Connection fee is based on the Procedure 16. Obtain compliance certificate of the technical passport drafting cost. Vodokanal tariffs and amounts to RUB 108,232.23 per of the building with the technical conditions Procedure 21. Registration of the building m3 of water supply a day, and RUB 108,232.23 per from the phone utility and sign agreement at the Federal Service of State Registration, m3 of water disposal a day. Payment for connection with the utility at Rostelekom, OJSC Cadastre and Cartography (Rostreestr) is made in accordance with a schedule attached to Time: 3 days Time: 30 days the agreement. Cost: RUB 4,000 Cost: RUB 15,000 Procedure 4*. Request technical Comments: The telephone company is notified about Comments: Titles to the property built are registered conditions for a telephone connection at completion of work, with enclosed reports, which in compliance with the Federal Law “On Real Uralsvyazinform serves as a basis for issuance of technical conditions. Property Rights Registration” by a department of Time: 30 days the Federal Service for State Registration, Cadastre Procedure 17. Obtain compliance certificate Cost: No cost and Cartography based on an applications, cadastral of the building with the technical conditions Comments: BuildCo obtains technical specification from the heavy shower sewage utility and passport, incorporation documents, occupancy permit and land titles. for landline telephone connection and concludes a sign agreement at Department of Municipal contract. Facilities of Yaroslavl City and territorial Procedure 22. Sign agreement with the administration water utility at Yaroslavlvodokanal, OJSC— Procedure 5*. Request engineering and Time: 7 days water utility geological survey at Any specialized organization Cost: RUB 1,000 Time: 14 days Time: 25 days Comments: According to the Urban Development Cost: No cost Cost: RUB 200,000 Code, documentary evidence of compliance of the Comments: Application is lodged with Yaroslavl newly built warehouse with the technical conditions Vodokanal OJSC, with enclosed receiving reports on Comments: BuildCo places an order for engineering/ is mandatory for obtaining an occupancy permit. all elements and establishing documents (contract geodesic survey of the land plot to determine the concluded by the owner). soil composition and collect other data required for designing. The assignment should be performed by a specialized SRO, licensed for engineering/geodesic sur- veys. The applicant submits the following documents: applicant, draft building design, designer’s assignment.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 121

The tests should be performed in accordance with the Cost: No cost Procedure 19. Obtain occupancy permit construction standards (SNiPs). The cost depends Comments: The Inspectorate visits the construction at Department of Architecture, Urban on the estimated scope of work, in particular, on the site twice a month to inspect the log books. Development and Land Relations number of holes to be drilled in the plot area. Regulation of Yekaterinburg City Procedure 12. Receive inspection Procedure 6. Obtain development plan during construction works at Time: 10 days of land plot (GPZU) at Department of Gosarkhstroycontrol—construction Cost: No cost Architecture, Urban Development and Land supervision Comments: To obtain a permit for commissioning Relations Regulation of Yekaterinburg City Time: 1 day the facility, the applicant submits, in accordance with the Russian Federal Urban Development Code, Time: 10 days Cost: No cost Cost: No cost all required documents to the City Department of Comments: The Inspectorate visits the construction Architecture and Area Development. Comments: The land development plan is a manda- site twice a month to inspect the log books. tory document submitted by the developer/customer Procedure 20. Obtain cadastral passport to obtain official design appraisal, construction permit Procedure 13. Receive inspection of the building at Bureau of technical and building occupation permit. Development plans during construction works at inventorization Gosarkhstroycontrol—construction are drawn for land plots designated for construction Time: 10 days and renovation of permanent structures. The supervision Cost: RUB 1,000 document contains key land plot data: boundary Time: 1 day Comments: After an occupancy permit is obtained, coordinates, authorized use and specifications. In Cost: No cost accordance with Clause 17 of Article 17 of the UDC, the developer may proceed with cadastral registration Comments: The Inspectorate visits the construction it should be issued by the local self-government of the facility and obtaining a cadastral passport for site twice a month to inspect the log books. agencies free of charge, within 30 days. it. Generally, the cadastral passport is drawn by the same organization that had prepared the technical Procedure 7. Obtain construction Procedure 14. Receive inspection during construction works at passport. The cadastral passport drafting cost is part permit at Department of Architecture, of the technical passport drafting cost. Urban Development and Land Relations Gosarkhstroycontrol—construction Regulation of Yekaterinburg City supervision Procedure 21. Registration of new building Time: 1 day at Rosreestr at Registration chamber Time: 10 days Cost: No cost Time: 30 days Cost: No cost Comments: The Inspectorate visits the construction Cost: RUB 15,000 Comments: The procedure is performed in site twice a month to inspect the log books. accordance with the established regulations. A Comments: Titles to the property built are registered construction permit application is submitted along Procedure 15. Receive inspection in compliance with the Federal Law “On Real Property Rights Registration” by a department of with the following documents: 1) land title 2) during construction works at the Federal Service for State Registration, Cadastre land development plan 3) materials of the design Gosarkhstroycontrol—construction documentation. and Cartography based on an applications, cadastral supervision passport, incorporation documents, occupancy permit Procedure 8. Notify the authorities of Time: 1 day and land titles. commencement of construction works Cost: No cost at Gosarkhstroycontrol—construction Comments: The Inspectorate visits the construction LIST OF PROCEDURES supervision site twice a month to inspect the log books. Time: 10 days Procedure 16*. Connect to water and GETTING ELECTRICITY Cost: No cost sewage at Municipal Unitary Organization Comments: The developer should send a notification Vodokanal—water utility Irkutsk, Irkutsk Oblast about the construction beginning date 10 days in ad- Time: 30 days Data as of: November 2011 vance. The following construction-related documents should be enclosed with the notification: construction Cost: RUB 190,531 Procedure 1. Submit an application for an permit, schedule, list of responsible persons. Procedure 17*. Connect to telephone electricity connection to the utility and Procedure 9. Receive inspection services at Uralsvyazinform await technical conditions and a contract during construction works at Time: 20 days for a connection Gosarkhstroycontrol—construction Cost: RUB 3,000 Time: 25 days supervision Cost: RUB 752,360 - [5,374 RUB*140 kW according Procedure 18. Obtain a technical passport Time: 1 day to the decree of Tariff Committee of Irkutsk Oblast of the building at Bureau of technical No. 4 from 04.04.2011] Cost: No cost inventorization Comments: The following documents are required for Comments: The Inspectorate visits the construction Time: 10 days a submission with an application for a connection: site twice a month to inspect the log books. Cost: RUB 4,000 1. Filled out application template for an electricity Procedure 10. Receive inspection Comments: A technical passport of a facility is connection during construction works at required for obtaining an occupancy permit. It 2. Copy of the document confirming the ownership of Gosarkhstroycontrol—construction describes physical parameters of the built facility. the construction site and land plot supervision The document is available from the Yekaterinburg 3. Map specifying location of electrical installations Time: 1 day Bureau of Technical Inventory MUE, or any bureau of 4. Table with load calculations Cost: No cost technical inventory. To obtain a technical passport, Once technical conditions are ready, the utility noti- the applicant should submit an application and the Comments: The Inspectorate visits the construction fies the customer and a connection contract is signed. building design, incorporation documents, construc- site twice a month to inspect the log books. tion permit, cadastral passport of the land and land Procedure 2. Prepare design of the Procedure 11. Receive inspection lease agreement or title. Tariffs for issuing technical connection and obtain approvals during construction works at passports are established by the organization itself, Time: 80 days Gosarkhstroycontrol—construction and as a rule, they are not easily available. supervision Cost: RUB 47,500 - Cost of the connection design Time: 1 day

* This procedure can be completed simultaneously with previous procedures. 122 DOING BUSINESS IN RUSSIA 2012

Comments: Once the technical conditions are ready Procedure 8. Receive an inspection and seal documents which specify tests and characteristics of a customer hires a design company which prepares the meter the electrical installation. design of the connection. After preparation of the Time: 8 days project the design company approves the design at Procedure 5. Receive an inspection of the Cost: RUB 8,000 - Cost of the meter inspection the utility, Department of Architecture and other completed works from the utility and obtain organizations. Comments: The utility inspects and seals the meter. compliance documents Time: 3 days Procedure 3. Obtain excavation or right of Procedure 9*. Conclude a supply contract Cost: No cost way permits to lay cables across a road and await supply of electricity Comments: The distribution utility inspects the Time: 19 days Time: 19 days completed works and issues a document certifying Cost: No cost Cost: No cost that the works were completed according to technical Comments: Since it is assumed that the connection Comments: After all inspections are completed the conditions. crosses a road ,before connection works can start it customer submits documents required for conclusion is required to obtain a permit for laying cables across of an electricity supply contract. After the contract Procedure 6. Receive an inspection of a road. is signed the supply utility sends an order to the the completed works from the Energy distribution utility to turn on the electricity. Inspectorate and obtain compliance Procedure 4. Complete connection works documents GETTING ELECTRICITY according to technical conditions Time: 30 days Time: 37 days Kaliningrad, Kaliningrad Oblast Cost: No cost Cost: RUB 951,180 - Cost of materials and labor Data as of: November 2011 Comments: Energy Inspectorate inspects completed (installation of a transformer and laying of 150 meters works and checks technical documentation prepared of medium voltage cable) Procedure 1. Submit an application for an electricity connection to the utility and by the electrical contractor. After the inspection the Comments: The customer hires an electrical await technical conditions and a contract Energy inspectorate issues a permit for operation. contractor to complete connection works accord- for a connection The following documents are required for preparation ing to technical conditions. After the works are of the operation permit: Time: 30 days completed the electrical contractor prepares technical – approved connection design documents which specify tests and characteristics of Cost: RUB 1,582,700 [11,305 RUB*140 kW according – technical documentation prepared by the electrical the electrical installation. to the decree from 28.01.2011 . No. 04-01 /11] contractor Procedure 5. Receive an inspection of the Comments: The following documents are required for – information on the customer’s plan for operation completed works from the utility and obtain a submission with an application for a connection: and maintenance of electrical installation compliance documents 1. Filled out application template for an electricity connection Time: 12 days Procedure 7. Obtain a document 2. Copy of the document confirming the ownership of describing the division of ownership and Cost: No cost the construction site and land plot responsibilities for maintenance of the Comments: The distribution utility inspects the 3. Map specifying location of electrical installations connection and await physical connection completed works and issues a document certifying 4. Table with load calculations that the works were completed according to technical Time: 30 days Once technical conditions are ready, the utility noti- conditions. Cost: No cost fies the customer and a connection contract is signed. Comments: The distribution utility prepares a Procedure 6. Receive an inspection of document describing the division of ownership and the completed works from the Energy Procedure 2. Prepare design of the responsibilities for maintenance of the connection Inspectorate and obtain compliance connection and obtain approvals and carries out activities related to the physical documents Time: 90 days connection of equipment. At this stage the customer Time: 18 days Cost: RUB 45,000 - Cost of the connection design is required to sign several technical documents. Cost: No cost Comments: Once the technical conditions are ready Procedure 8. Receive an inspection and seal Comments: Energy Inspectorate inspects completed a customer hires a design company which prepares the meter works and checks technical documentation prepared design of the connection. After preparation of the Time: 30 days by the electrical contractor. After the inspection the project the design company approves the design at Energy Inspectorate issues a permit for operation. the utility, Department of Architecture and other Cost: RUB 40,000 - Cost of the meter inspection The following documents are required for preparation organizations. Comments: The supply utility inspects and seals the meter. of the operation permit: Procedure 3. Obtain excavation or right of – approved connection design way permits to lay cables across a road Procedure 9. Conclude a supply contract – technical documentation prepared by the electrical Time: 35 days and await supply of electricity contractor Cost: No cost Time: 30 days – information on the customer’s plan for operation Cost: No cost and maintenance of electrical installation Comments: Since it is assumed that the connection crosses a road, before connection works can start it Comments: After all inspections are completed the Procedure 7. Obtain a document is required to obtain a permit for laying cables across customer submits documents required for conclusion describing the division of ownership and a road. of an electricity supply contract. After the contract responsibilities for maintenance of the is signed the supply utility sends an order to the Procedure 4. Complete connection works distribution utility to turn on the electricity. connection and await physical connection according to technical conditions Time: 17 days Time: 30 days GETTING ELECTRICITY Cost: No cost Cost: RUB 300,000 - Cost of materials and labor (the Kaluga, Kaluga Oblast Comments: The distribution utility prepares a connection involves laying 150 meters of low voltage Data as of: November 2011 document describing the division of ownership and cable) responsibilities for maintenance of the connection Comments: The customer hires an electrical Procedure 1. Submit an application for an and carries out activities related to the physical contractor to complete connection works accord- electricity connection to the utility and connection of equipment. At this stage the customer ing to technical conditions. After the works are await technical conditions and a contract is required to sign several technical documents. completed the electrical contractor prepares technical for a connection Time: 30 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 123

Cost: RUB 1,550,500 [11,075 RUB*140 kW according Procedure 7*. Receive an inspection of Procedure 2. Prepare design of the to the decree of the Ministry of Competition Policy the completed works from the Energy connection and obtain approvals and Tariffs of Kaluga region from December 25, 2010 Inspectorate and obtain compliance Time: 60 days N 362] documents Cost: RUB 62,500 - Cost of the connection design Comments: The following documents are required for Time: 7 days Comments: Once the technical conditions are ready a submission with an application for a connection: Cost: No cost a customer hires a design company which prepares 1. Filled out application template for an electricity Comments: Energy Inspectorate inspects completed design of the connection. After preparation of the connection works and checks technical documentation prepared project the design company approves the design at 2. Copy of the document confirming the ownership by the electrical contractor. After the inspection the the utility, Department of Architecture and other of the construction site and land plot Energy inspectorate issues a permit for operation. organizations. 3. Map specifying location of electrical installations The following documents are required for preparation Procedure 3. Obtain excavation or right of 4. Table with load calculations of the operation permit: way permits to lay cables across a road Once technical conditions are ready, the utility noti- – approved connection design Time: 21 days fies the customer and a connection contract is signed. – technical documentation prepared by the electrical contractor Cost: No cost Procedure 2*. External site inspection – information on the customer’s plan for operation Comments: Since it is assumed that the connection required for preparation of technical and maintenance of electrical installation crosses a road ,before connection works can start it conditions is required to obtain a permit for laying cables across Time: 7 days Procedure 8. Receive an inspection and seal a road. Cost: No cost the meter Procedure 4. Complete connection works Comments: The utility inspects the construction Time: 7 days according to technical conditions site. It is not required for a customer to be present Cost: RUB 662 - Cost of the meter inspection Time: 24 days during the inspection but in practice a customer Comments: The utility inspects and seals the meter. or his representative is usually present during the Cost: RUB 1,050,000 - Cost of materials and labor inspection. Procedure 9. Obtain a document (installation of a transformer and laying of 150 meters of medium voltage cable) describing the division of ownership and Procedure 3. Prepare design of the responsibilities for maintenance of the Comments: The customer hires an electrical connection and obtain approvals connection and await physical connection contractor to complete connection works accord- Time: 34 days ing to technical conditions. After the works are Time: 16 days Cost: RUB 32,500 - Cost of the connection design completed the electrical contractor prepares technical Cost: No cost and required approvals documents which specify tests and characteristics of Comments: The distribution utility prepares a the electrical installation. Comments: Once the technical conditions are ready document describing the division of ownership and a customer hires a design company which prepares responsibilities for maintenance of the connection Procedure 5. Receive an inspection of the design of the connection. After preparation of the and carries out activities related to the physical completed works from the utility and obtain project the design company approves the design at connection of equipment. At this stage the customer compliance documents the utility, Department of Architecture and other is required to sign several technical documents. Time: 9 days organizations. Cost: No cost Procedure 10. Conclude a supply contract Procedure 4. Obtain excavation or right of and await supply of electricity Comments: The distribution utility inspects the way permits to lay cables across a road completed works and issues a document certifying Time: 30 days Time: 5 days that the works were completed according to technical Cost: No cost Cost: No cost conditions. Comments: After all inspections are completed the Comments: Since it is assumed that the connection customer submits documents required for conclusion Procedure 6. Receive an inspection of crosses a road ,before connection works can start it of an electricity supply contract. After the contract the completed works from the Energy is required to obtain a permit for laying cables across is signed the supply utility sends an order to the Inspectorate and obtain compliance a road. distribution utility to turn on the electricity. documents Time: 7 days Procedure 5. Complete connection works GETTING ELECTRICITY according to technical conditions Cost: No cost Time: 14 days Kazan, Republic of Tatarstan Comments: Energy Inspectorate inspects completed Cost: RUB 225,000 - Cost of materials and labor (the Data as of: November 2011 works and checks technical documentation prepared connection involves laying 150 meters of low voltage by the electrical contractor. After the inspection the Procedure 1. Submit an application for an Energy inspectorate issues a permit for operation. cable) electricity connection to the utility and Comments: The customer hires an electrical The following documents are required for preparation await technical conditions and a contract of the operation permit: contractor to complete connection works accord- for a connection ing to technical conditions. After the works are – approved connection design Time: 30 days completed the electrical contractor prepares technical – technical documentation prepared by the electrical documents which specify tests and characteristics of Cost: RUB 1,736,280 [12,402 RUB*140 kW according contractor the electrical installation. to the decree of Tariff Committee of Republic of – information on the customer’s plan for operation Tatarstan No. 6-1 from 01.02.2010] and maintenance of electrical installation Procedure 6. Receive an inspection of the Comments: The following documents are required for completed works from the utility and obtain a submission with an application for a connection: Procedure 7. Obtain a document compliance documents 1. Filled out application template for an electricity describing the division of ownership and Time: 6 days connection responsibilities for maintenance of the Cost: No cost 2. Copy of the document confirming the ownership connection and await physical connection Comments: The distribution utility inspects the of the construction site and land plot Time: 18 days completed works and issues a document certifying 3. Map specifying location of electrical installations Cost: No cost that the works were completed according to technical 4. Table with load calculations Comments: The distribution utility prepares a conditions. Once technical conditions are ready, the utility noti- document describing the division of ownership and fies the customer and a connection contract is signed.

* This procedure can be completed simultaneously with previous procedures. 124 DOING BUSINESS IN RUSSIA 2012

responsibilities for maintenance of the connection connection of equipment. At this stage the customer Procedure 3. Obtain excavation or right of and carries out activities related to the physical is required to sign several technical documents. way permits to lay cables across a road connection of equipment. At this stage the customer Time: 21 days is required to sign several technical documents. Procedure 4. Receive an inspection of the completed works from the Energy Cost: No cost Procedure 8. Receive an inspection and seal Inspectorate and obtain compliance Comments: Since it is assumed that the connection the meter documents crosses a road ,before connection works can start it Time: 7 days Time: 11 days is required to obtain a permit for laying cables across a road. Cost: RUB 420 - Cost of the meter inspection Cost: No cost Comments: The utility inspects and seals the meter. Comments: Energy Inspectorate inspects completed Procedure 4. Complete connection works works and checks technical documentation prepared according to technical conditions Procedure 9. Conclude a supply contract by the utility. After the inspection the Energy Time: 53 days and await supply of electricity inspectorate issues a permit for operation. Time: 10 days Cost: RUB 250,000 - Cost of materials and labor The following documents are required for preparation (installation of a transformer and laying of 150 meters Cost: No cost of the operation permit: of medium voltage cable) Comments: After all inspections are completed the – approved connection design Comments: The customer hires an electrical customer submits documents required for conclusion – technical documentation prepared by the electrical contractor to complete connection works accord- of an electricity supply contract. After the contract contractor ing to technical conditions. After the works are is signed the supply utility sends an order to the – information on the customer’s plan for operation completed the electrical contractor prepares technical distribution utility to turn on the electricity. and maintenance of electrical installation documents which specify tests and characteristics of GETTING ELECTRICITY the electrical installation. Procedure 5. Receive an inspection and seal Kemerovo, Kemerovo Oblast the meter Procedure 5. Receive an inspection of the completed works from the utility and obtain Data as of: November 2011 Time: 7 days compliance documents Cost: No cost Procedure 1. Submit an application for an Time: 15 days electricity connection to the utility and Comments: The utility inspects and seals the meter. Cost: No cost await technical conditions and a contract Procedure 6. Conclude a supply contract for a connection Comments: The distribution utility inspects the and await supply of electricity completed works and issues a document certifying Time: 30 days Time: 7 days that the works were completed according to technical Cost: RUB 1,203,707 [8,597.91 RUB*140 kW accord- Cost: No cost conditions. ing to the decree of Regional Energy Committee of Kemerovo Region from February 7, 2011 N 5] Comments: After all inspections are completed the Procedure 6. Receive an inspection of customer submits documents required for conclusion Comments: The following documents are required for the completed works from the Energy of an electricity supply contract. After the contract a submission with an application for a connection: Inspectorate and obtain compliance is signed the supply utility sends an order to the documents 1. Filled out application template for an electricity distribution utility to turn on the electricity. connection Time: 12 days 2. Copy of the document confirming the ownership of GETTING ELECTRICITY Cost: No cost the construction site and land plot Khabarovsk, Khabarovsk Kray Comments: Energy Inspectorate inspects completed 3. Map specifying location of electrical installations works and checks technical documentation prepared Data as of: November 2011 4. Table with load calculations by the electrical contractor. After the inspection the Once technical conditions are ready, the utility noti- Procedure 1. Submit an application for an Energy inspectorate issues a permit for operation. fies the customer and a connection contract is signed. electricity connection to the utility and The following documents are required for preparation await technical conditions and a contract of the operation permit: Procedure 2. Prepare design, obtain design for a connection – approved connection design approvals and complete connection works Time: 16 days – technical documentation prepared by the electrical according to technical conditions Cost: RUB 899,284 [6,423.46 RUB*140 kW accord- contractor Time: 186 days ing to the decree 29/1 from August 24, 2011 N 29/1] – information on the customer’s plan for operation Cost: No cost Comments: The following documents are required for and maintenance of electrical installation. Comments: After the connection contract is signed, a submission with an application for a connection: Procedure 7. Obtain a document the utility prepares a design of the connection, 1. Filled out application template for an electricity describing the division of ownership and approves it at several organizations and receives connection permits (for example, for laying cables across a responsibilities for maintenance of the 2. Copy of the document confirming the ownership of connection and await physical connection road) required for connection works. Then the utility the construction site and land plot Time: 10 days completes all connection works according to the 3. Map specifying location of electrical installations technical conditions and inspects the works. After 4. Table with load calculations Cost: No cost the works are completed, the utility issues technical Once technical conditions are ready, the utility noti- Comments: The distribution utility prepares a documentation on the connection. fies the customer and a connection contract is signed. document describing the division of ownership and Procedure 3. Obtain a document responsibilities for maintenance of the connection describing the division of ownership and Procedure 2. Prepare design of the and carries out activities related to the physical responsibilities for maintenance of the connection and obtain approvals connection of equipment. At this stage the customer is required to sign several technical documents. connection and await physical connection Time: 90 days Time: 18 days Cost: RUB 50,000 - Cost of the connection design Procedure 8. Receive an inspection and seal Cost: No cost Comments: Once the technical conditions are ready the meter Comments: The distribution utility prepares a a customer hires a design company which prepares Time: 11 days document describing the division of ownership and design of the connection. After preparation of the Cost: No cost responsibilities for maintenance of the connection project the design company approves the design at Comments: The utility inspects and seals the meter. and carries out activities related to the physical the utility, Department of Architecture and other organizations.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 125

Procedure 9*. Conclude a supply contract Cost: No cost 4. Table with load calculations and await supply of electricity Comments: The distribution utility inspects the Once technical conditions are ready, the utility noti- Time: 30 days completed works and issues a document certifying fies the customer and a connection contract is signed. Cost: No cost that the works were completed according to technical conditions. Comments: After all inspections are completed the customer submits documents required for conclusion Procedure 6. Receive an inspection of Procedure 2. Prepare design of the of an electricity supply contract. After the contract the completed works from the Energy connection and obtain approvals is signed the supply utility sends an order to the Inspectorate and obtain compliance Time: 90 days distribution utility to turn on the electricity. documents Cost: RUB 240,000 - Cost of the connection design GETTING ELECTRICITY Time: 7 days Comments: Once the technical conditions are ready Kirov, Kirov Oblast Cost: No cost a customer hires a design company which prepares Comments: Energy Inspectorate inspects completed design of the connection. After preparation of the Data as of: November 2011 works and checks technical documentation prepared project the design company approves the design at Procedure 1. Submit an application for an by the electrical contractor. After the inspection the the utility, Department of Architecture and other electricity connection to the utility and Energy inspectorate issues a permit for operation. organizations. await technical conditions and a contract The following documents are required for preparation Procedure 3. Obtain excavation or right of for a connection of the operation permit: way permits to lay cables across a road – approved connection design Time: 30 days Time: 30 days – technical documentation prepared by the electrical Cost: RUB 137,957 [985.41 RUB*140 kW according Cost: No cost contractor to the decree of Regional Tariff Committee of Kirov Comments: Since it is assumed that the connection region from December 28, 2010 No. 48/5] – information on the customer’s plan for operation and maintenance of electrical installation crosses a road ,before connection works can start it Comments: The following documents are required for is required to obtain a permit for laying cables across a submission with an application for a connection: Procedure 7. Obtain a document a road. 1. Filled out application template for an electricity describing the division of ownership and connection Procedure 4. Complete connection works responsibilities for maintenance of the according to technical conditions 2. Copy of the document confirming the ownership connection and await physical connection of the construction site and land plot Time: 37 days Time: 33 days 3. Map specifying location of electrical installations Cost: RUB 3,100,000 - Cost of materials and labor Cost: No cost 4. Table with load calculations (the connection involves laying 150 meters of low Once technical conditions are ready, the utility noti- Comments: The distribution utility prepares a voltage cable or installation of a transformer and fies the customer and a connection contract is signed. document describing the division of ownership and laying of 150 meters of medium voltage cable) responsibilities for maintenance of the connection Comments: The customer hires an electrical Procedure 2. Prepare design of the and carries out activities related to the physical contractor to complete connection works accord- connection and obtain approvals connection of equipment. At this stage the customer ing to technical conditions. After the works are is required to sign several technical documents. completed the electrical contractor prepares technical Time: 91 days Procedure 8. Receive an inspection and seal documents which specify tests and characteristics of Cost: RUB 60,000 - Cost of the connection design the electrical installation. Comments: Once the technical conditions are ready the meter a customer hires a design company which prepares Time: 3 days Procedure 5. Receive an inspection of the design of the connection. After preparation of the Cost: No cost completed works from the utility and obtain project the design company approves the design at Comments: The utility inspects and seals the meter. compliance documents the utility, Department of Architecture and other Time: 14 days organizations. Procedure 9. Conclude a supply contract Cost: No cost and await supply of electricity Procedure 3. Obtain excavation or right of Comments: The distribution utility inspects the way permits to lay cables across a road Time: 10 days completed works and issues a document certifying Cost: No cost that the works were completed according to technical Time: 9 days Comments: After all inspections are completed the conditions. Cost: No cost customer submits documents required for conclusion Procedure 6. Receive an inspection and seal Comments: Since it is assumed that the connection of an electricity supply contract. After the contract crosses a road ,before connection works can start it is signed the supply utility sends an order to the the meter is required to obtain a permit for laying cables across distribution utility to turn on the electricity. Time: 12 days a road. Cost: RUB 10,000 - Cost of the meter inspection GETTING ELECTRICITY Procedure 4. Complete connection works Comments: Energosbyt inspects and seals the meter. Moscow according to technical conditions Procedure 7. Receive a customer profile Data as of: November 2011 Time: 30 days from the distribution utility Cost: RUB 1,000,000 - Cost of materials and labor Procedure 1. Submit an application for an Time: 3 days (installation of a transformer and laying of 150 meters electricity connection to the utility and Cost: No cost of medium voltage cable) await technical conditions and a contract Comments: To obtain a customer profile form the Comments: The customer hires an electrical for a connection customer visits the distribution utility. This profile is contractor to complete connection works accord- Time: 30 days required for the preparation of a document describing ing to technical conditions. After the works are Cost: RUB 2,330,832 the division of ownership and responsibilities for completed the electrical contractor prepares technical maintenance of the connection. documents which specify tests and characteristics of Comments: The following documents are required for the electrical installation. a submission with an application for a connection: Procedure 8. Receive an inspection of 1. Filled out application template for an electricity the completed works from the Energy Procedure 5. Receive an inspection of the connection Inspectorate and obtain compliance completed works from the utility and obtain 2. Copy of the document confirming the ownership documents compliance documents of the construction site and land plot Time: 30 days Time: 7 days 3. Map specifying location of electrical installations Cost: No cost

* This procedure can be completed simultaneously with previous procedures. 126 DOING BUSINESS IN RUSSIA 2012

Comments: Energy Inspectorate inspects completed Comments: The utility inspects the construction Procedure 8. Obtain a document works and checks technical documentation prepared site. It is not required for a customer to be present describing the division of ownership and by the electrical contractor. After the inspection the during the inspection but in practice a customer responsibilities for maintenance of the Energy inspectorate issues a permit for operation. or his representative is usually present during the connection and await physical connection The following documents are required for preparation inspection. Time: 25 days of the operation permit: Procedure 3. Prepare design of the Cost: No cost – approved connection design connection and obtain approvals Comments: The distribution utility prepares a – technical documentation prepared by the electrical Time: 120 days document describing the division of ownership and contractor Cost: RUB 255,000 - Cost of the connection design responsibilities for maintenance of the connection – information on the customer’s plan for operation and carries out activities related to the physical Comments: Once the technical conditions are ready and maintenance of electrical installation connection of equipment. At this stage the customer a customer hires a design company which prepares is required to sign several technical documents. Procedure 9. Obtain a document design of the connection. After preparation of the describing the division of ownership and project the design company approves the design at Procedure 9. Receive an inspection and seal responsibilities for maintenance of the the utility, Department of Architecture and Planning the meter connection and await physical connection of Murmansk, Committee on the Development of Time: 30 days City Property and other organizations. Time: 14 days Cost: RUB 1,237 - Cost of the meter inspection Cost: No cost Procedure 4. Obtain excavation or right of Comments: The utility inspects and seals the meter. way permits to lay cables across a road Comments: The distribution utility prepares a Procedure 10*. Conclude a supply contract document describing the division of ownership and Time: 30 days and await supply of electricity responsibilities for maintenance of the connection Cost: No cost Time: 30 days and carries out activities related to the physical Comments: Since it is assumed that the connection connection of equipment. At this stage the customer crosses a road ,before connection works can start it Cost: No cost is required to sign several technical documents. is required to obtain a permit for laying cables across Comments: After all inspections are completed the Procedure 10. Conclude a supply contract a road. customer submits documents required for conclusion of an electricity supply contract. After the contract and await supply of electricity Procedure 5. Complete connection works is signed the supply utility sends an order to the Time: 21 days according to technical conditions distribution utility to turn on the electricity. Cost: No cost Time: 30 days GETTING ELECTRICITY Comments: After all inspections are completed the Cost: RUB 325,000 - Cost of materials and labor (the customer submits documents required for conclusion connection involves laying 150 meters of low voltage Novosibirsk, Novosibirsk Oblast of an electricity supply contract. After the contract cable) Data as of: November 2011 is signed the supply utility sends an order to the Comments: The customer hires an electrical Procedure 1. Submit an application for an distribution utility to turn on the electricity. contractor to complete connection works accord- electricity connection to the utility and GETTING ELECTRICITY ing to technical conditions. After the works are completed the electrical contractor prepares technical await technical conditions and a contract Murmansk, Murmansk Oblast documents which specify tests and characteristics of for a connection Data as of: November 2011 the electrical installation. Time: 15 days Cost: RUB 1,302,000 [ 9,300 RUB*140 kW according Procedure 1. Submit an application for an Procedure 6. Receive an inspection of the to the decree of the Tariff Department of Novosibirsk electricity connection to the utility and completed works from the utility and obtain region from April 20, 2011 No. 44] await an approved estimate of connection compliance documents Comments: The following documents are required for costs, technical conditions and a contract Time: 12 days a submission with an application for a connection: for a connection Cost: No cost 1. Filled out application template for an electricity Time: 45 days Comments: The distribution utility inspects the connection Cost: RUB 570,500 - Average cost of an electricity completed works and issues a document certifying 2. Copy of the document confirming the ownership of connection for the assumed connection that the works were completed according to technical the construction site and land plot Comments: The following documents are required for conditions. 3. Map specifying location of electrical installations a submission with an application for a connection: Procedure 7. Receive an inspection of 4. Table with load calculations 1. Filled out application template for an electricity the completed works from the Energy Once technical conditions are ready, the utility noti- connection Inspectorate and obtain compliance fies the customer and a connection contract is signed. 2. Copy of the document confirming the ownership of documents the construction site and land plot Time: 35 days Procedure 2. Prepare design of the 3. Map specifying location of electrical installations connection and obtain approvals Cost: No cost 4. Table with load calculations Time: 82 days Comments: Energy Inspectorate inspects completed For the assumed load (140 kW) the cost of connec- works and checks technical documentation prepared Cost: RUB 200,000 - Cost of the connection design tion is calculated on a case by case basis and ap- and required approvals proved at the Regional Energy Commission. Once the by the electrical contractor. After the inspection the cost is approved and technical conditions are ready, Energy inspectorate issues a permit for operation. Comments: Once the technical conditions are ready the utility notifies the customer and a connection The following documents are required for preparation a customer hires a design company which prepares contract is signed. of the operation permit: design of the connection. After preparation of the – approved connection design project the design company approves the design at the utility, Department of Architecture, electricity Procedure 2*. External site inspection – technical documentation prepared by the electrical supply company and other organizations. required for preparation of technical contractor conditions – information on the customer’s plan for operation Procedure 3. Obtain excavation or right of Time: 1 day and maintenance of electrical installation way permits to lay cables across a road Cost: No cost Time: 6 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 127

Cost: No cost connection of equipment. At this stage the customer Comments: The customer hires an electrical Comments: Since it is assumed that the connection is required to sign several technical documents. contractor to complete connection works accord- crosses a road ,before connection works can start it ing to technical conditions. After the works are Procedure 9. Receive an inspection and seal completed the electrical contractor prepares technical is required to obtain a permit for laying cables across the meter a road. documents which specify tests and characteristics of Time: 8 days the electrical installation. Procedure 4. Complete connection works Cost: No cost according to technical conditions Procedure 5. Receive an inspection of the Comments: The utility inspects and seals the meter. completed works from the utility and obtain Time: 75 days compliance documents Cost: RUB 950,000 - Cost of materials and labor Procedure 10*. Conclude a supply contract (installation of a transformer and laying of 150 meters and await supply of electricity Time: 18 days of medium voltage cable) Time: 17 days Cost: No cost Comments: The customer hires an electrical Cost: No cost Comments: The distribution utility inspects the contractor to complete connection works accord- Comments: After all inspections are completed the completed works and issues a document certifying ing to technical conditions. After the works are customer submits documents required for conclusion that the works were completed according to technical completed the electrical contractor prepares technical of an electricity supply contract. After the contract conditions. documents which specify tests and characteristics of is signed the supply utility sends an order to the Procedure 6. Receive an inspection of the electrical installation. distribution utility to turn on the electricity. the completed works from the Energy Procedure 5. Receive an inspection of the GETTING ELECTRICITY Inspectorate and obtain compliance documents completed works from the utility and obtain Omsk, Omsk Oblast compliance documents Time: 21 days Data as of: November 2011 Time: 7 days Cost: RUB 18,250 - Cost of the inspection and permit Cost: No cost Procedure 1. Submit an application for an for operation Comments: The distribution utility inspects the electricity connection to the utility and Comments: Energy Inspectorate inspects completed completed works and issues a document certifying await technical conditions and a contract works and checks technical documentation prepared that the works were completed according to technical for a connection by the electrical contractor. After the inspection the conditions. Time: 30 days Energy inspectorate issues a permit for operation. The following documents are required for preparation Procedure 6*. Receive an inspection of Cost: RUB 14,288 [102.06 RUB*140 kW according to the decree from April 26, 2011 N 79/20] of the operation permit: the completed works from the Energy – approved connection design Inspectorate and obtain compliance Comments: The following documents are required for documents a submission with an application for a connection: – technical documentation prepared by the electrical contractor Time: 30 days 1. Filled out application template for an electricity connection – information on the customer’s plan for operation Cost: RUB 50,000 - Cost of the inspection and and maintenance of electrical installation permit for operation 2. Copy of the document confirming the ownership of the construction site and land plot Comments: Energy Inspectorate inspects completed Procedure 7. Obtain a document 3. Map specifying location of electrical installations works and checks technical documentation prepared describing the division of ownership and by the electrical contractor. After the inspection the 4. Table with load calculations responsibilities for maintenance of the Energy inspectorate issues a permit for operation. Once technical conditions are ready, the utility noti- connection and await physical connection fies the customer and a connection contract is signed. The following documents are required for preparation Time: 22 days of the operation permit: Cost: No cost – approved connection design Procedure 2. Prepare design of the connection and obtain approvals Comments: The distribution utility prepares a – technical documentation prepared by the electrical document describing the division of ownership and Time: 90 days contractor responsibilities for maintenance of the connection – information on the customer’s plan for operation Cost: RUB 41,625 - Cost of the connection design and carries out activities related to the physical and maintenance of electrical installation Comments: Once the technical conditions are ready connection of equipment. At this stage the customer a customer hires a design company which prepares is required to sign several technical documents. Procedure 7. Receive a customer profile design of the connection. After preparation of the from the distribution utility project the design company approves the design at Procedure 8. Receive an inspection and seal Time: 3 days the utility, Department of Architecture and other the meter Cost: No cost organizations. Time: 14 days Comments: To obtain a customer profile form the Procedure 3. Obtain excavation or right of Cost: RUB 1,400 - Cost of the meter inspection customer visits the distribution utility. This profile is way permits to lay cables across a road Comments: The utility inspects and seals the meter. required for the preparation of a document describing the division of ownership and responsibilities for Time: 7 days Procedure 9. Conclude a supply contract maintenance of the connection. Cost: No cost and await supply of electricity Comments: Since it is assumed that the connection Procedure 8. Obtain a document Time: 9 days crosses a road ,before connection works can start it Cost: No cost describing the division of ownership and is required to obtain a permit for laying cables across Comments: After all inspections are completed the responsibilities for maintenance of the a road. connection and await physical connection customer submits documents required for conclusion Time: 35 days Procedure 4. Complete connection works of an electricity supply contract. After the contract according to technical conditions is signed the supply utility sends an order to the Cost: No cost distribution utility to turn on the electricity. Comments: The distribution utility prepares a Time: 11 days document describing the division of ownership and Cost: RUB 258,000 - Cost of materials and labor (the responsibilities for maintenance of the connection connection involves laying 150 meters of low voltage and carries out activities related to the physical cable)

* This procedure can be completed simultaneously with previous procedures. 128 DOING BUSINESS IN RUSSIA 2012

Procedure 10*. Inspection of the electricity by the utility. After the inspection the Energy Procedure 4. Complete connection works connection by the Audit and Technical inspectorate issues a permit for operation. according to technical conditions Department The following documents are required for preparation Time: 15 days of the operation permit: Time: 1 day Cost: RUB 250,000 - Cost of materials and labor (the Cost: RUB 10,600 - Cost of the inspection – approved connection design connection involves laying 150 meters of low voltage Comments: In order to conclude a supply contract it – technical documentation prepared by the electrical cable) is required to receive an inspection from the Audit and contractor Comments: The customer hires an electrical Technical Department. The inspector checks whether – information on the customer’s plan for operation contractor to complete connection works accord- the electrical equipment is ready for a turn on. and maintenance of electrical installation ing to technical conditions. After the works are completed the electrical contractor prepares technical GETTING ELECTRICITY Procedure 5. Receive an inspection and seal documents which specify tests and characteristics of Perm, Perm Kray the meter the electrical installation. Time: 2 days Data as of: November 2011 Procedure 5. Receive an inspection of the Cost: No cost completed works from the utility and obtain Procedure 1. Submit an application for an Comments: The utility inspects and seals the meter. electricity connection to the utility and compliance documents await technical conditions and a contract Procedure 6. Conclude a supply contract Time: 10 days for a connection and await supply of electricity Cost: No cost Time: 30 days Time: 18 days Comments: The distribution utility inspects the Cost: RUB 1,895,989 [10,338 RUB*140 kW*1.31 Cost: No cost completed works and issues a document certifying that the works were completed according to technical according to the decree of the Regional Energy Comments: After all inspections are completed the conditions. Committee of Perm region from 28.12.2010 N 97] customer submits documents required for conclusion Comments: The following documents are required for of an electricity supply contract. After the contract Procedure 6. Receive an inspection of a submission with an application for a connection: is signed the supply utility sends an order to the the completed works from the Energy 1. Filled out application template for an electricity distribution utility to turn on the electricity. Inspectorate and obtain compliance connection GETTING ELECTRICITY documents 2. Copy of the document confirming the ownership of Time: 3 days the construction site and land plot Petrozavodsk, Republic of Karelia Cost: No cost 3. Map specifying location of electrical installations Data as of: November 2011 Comments: Energy Inspectorate inspects completed 4. Table with load calculations Procedure 1. Submit an application for an works and checks technical documentation prepared Once technical conditions are ready, the utility noti- electricity connection to the utility and by the electrical contractor. After the inspection the fies the customer and a connection contract is signed. await technical conditions and a contract Energy inspectorate issues a permit for operation. for a connection The following documents are required for preparation Procedure 2. Prepare design, obtain design of the operation permit: approvals and complete connection works Time: 15 days – approved connection design according to technical conditions Cost: RUB 1,206,940 [8,621 RUB*140 kW according to the decree of the Regional Energy Committee of – technical documentation prepared by the electrical Time: 215 days the Republic of Karelia from 05.05.2006 N 34] contractor Cost: No cost Comments: The following documents are required for – information on the customer’s plan for operation Comments: After the connection contract is signed, a submission with an application for a connection: and maintenance of electrical installation. the utility prepares a design of the connection, 1. Filled out application template for an electricity approves it at several organizations and receives connection Procedure 7. Obtain a document permits (for example, for laying cables across a describing the division of ownership and road) required for connection works. Then the utility 2. Copy of the document confirming the ownership of responsibilities for maintenance of the the construction site and land plot completes all connection works according to the connection and await physical connection 3. Map specifying location of electrical installations technical conditions and inspects the works. After Time: 20 days the works are completed, the utility issues technical 4. Table with load calculations Cost: No cost documentation on the connection. Once technical conditions are ready, the utility noti- fies the customer and a connection contract is signed. Comments: The distribution utility prepares a Procedure 3. Obtain a document document describing the division of ownership and describing the division of ownership and Procedure 2. Prepare design of the responsibilities for maintenance of the connection responsibilities for maintenance of the connection and obtain approvals and carries out activities related to the physical connection and await physical connection connection of equipment. At this stage the customer Time: 120 days Time: 10 days is required to sign several technical documents. Cost: RUB 275,000 - Cost of the connection design Cost: No cost Comments: Once the technical conditions are ready Procedure 8. Receive an inspection and seal Comments: The distribution utility prepares a a customer hires a design company which prepares the meter document describing the division of ownership and design of the connection. After preparation of the Time: 15 days responsibilities for maintenance of the connection project the design company approves the design at Cost: RUB 552 - Cost of the meter inspection and carries out activities related to the physical the utility, Department of Architecture and other Comments: The supply utility inspects and seals the connection of equipment. At this stage the customer organizations. is required to sign several technical documents. meter. Procedure 4. Receive an inspection of the Procedure 3. Obtain excavation or right of Procedure 9. Conclude a supply contract completed works from the Energy Inspec- way permits to lay cables across a road and await supply of electricity torate and obtain compliance documents Time: 23 days Time: 5 days Time: 30 days Cost: No cost Cost: No cost Cost: No cost Comments: Since it is assumed that the connection Comments: After all inspections are completed the crosses a road ,before connection works can start it Comments: Energy Inspectorate inspects completed customer submits documents required for conclusion is required to obtain a permit for laying cables across works and checks technical documentation prepared of an electricity supply contract. After the contract a road.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 129

is signed the supply utility sends an order to the and carries out activities related to the physical project the design company approves the design at distribution utility to turn on the electricity. connection of equipment. At this stage the customer the utility, Department of Architecture , electricity is required to sign several technical documents. supply company and other organizations. Procedure 10*. Inspection of the electricity connection by the Audit and Technical Procedure 4. Receive an inspection of Procedure 3. Obtain excavation or right of Department the completed works from the Energy way permits to lay cables across a road Time: 2 days Inspectorate and obtain compliance Time: 33 days Cost: No cost documents Cost: No cost Comments: In order to conclude a supply contract it Time: 15 days Comments: Since it is assumed that the connection is required to receive an inspection from the Audit and Cost: No cost crosses a road ,before connection works can start it Technical Department. The inspector checks whether Comments: Energy Inspectorate inspects completed is required to obtain a permit for laying cables across the electrical equipment is ready for a turn on. works and checks technical documentation prepared a road. by the utility. After the inspection the Energy GETTING ELECTRICITY inspectorate issues a permit for operation. Procedure 4. Complete connection works according to technical conditions Rostov-on-Don, Rostov Oblast The following documents are required for preparation Time: 30 days Data as of: November 2011 of the operation permit: – approved connection design Cost: RUB 400,000 - Cost of materials and labor (the Procedure 1. Submit an application for an – technical documentation prepared by the electrical connection involves laying 150 meters of low voltage electricity connection to the utility and contractor cable) await technical conditions and a contract – information on the customer’s plan for operation Comments: The customer hires an electrical for a connection and maintenance of electrical installation contractor to complete connection works accord- Time: 30 days ing to technical conditions. After the works are Cost: RUB 351,398 [Average of option 1 - low voltage Procedure 5. Receive an inspection and seal completed the electrical contractor prepares technical connection - 1.25 (location coefficient)* 397 248. the meter documents which specify tests and characteristics of the electrical installation. 86 RUB (item C1)*0.140 MW + 291,225* 0.150 km Time: 5 days (item C3) + 50,000-100,000 RUB (average design Cost: RUB 1,500 - Cost of the meter inspection Procedure 5. Receive an inspection of the cost) and option 2 - medium voltage connection with Comments: The supply utility inspects and seals the completed works from the utility and obtain installation/reconstruction of a transformer - 1.25 compliance documents (location coefficient)*397,248.86 RUB (item meter. Time: 7 days C1)*0.140 MW + 291 225* 0.150 km (item C3) + Procedure 6. Conclude a supply contract 163,640 RUB (item C4)) + 150,000-200,000 RUB and await supply of electricity Cost: No cost (average cost of the design including installation/ Comments: The distribution utility inspects the Time: 13 days reconstruction of a transformer) according to the completed works and issues a document certifying decree of Regional Tariff Committee from 28.12.2010 Cost: No cost that the works were completed according to technical No. 20/13 and 20/12] Comments: After all inspections are completed the conditions. Comments: The following documents are required for customer submits documents required for conclusion Procedure 6*. Receive an inspection of a submission with an application for a connection: of an electricity supply contract. After the contract the completed works from the Energy 1. Filled out application template for an electricity is signed the supply utility sends an order to the distribution utility to turn on the electricity. Inspectorate and obtain compliance connection documents 2. Copy of the document confirming the ownership of GETTING ELECTRICITY the construction site and land plot Time: 23 days 3. Map specifying location of electrical installations Saint-Petersburg Cost: No cost 4. Table with load calculations Data as of: November 2011 Comments: Energy Inspectorate inspects completed works and checks technical documentation prepared Once technical conditions are ready, the utility noti- Procedure 1. Submit an application for an by the electrical contractor. After the inspection the fies the customer and a connection contract is signed. electricity connection to the utility and Energy inspectorate issues a permit for operation. await technical conditions and a contract The following documents are required for preparation Procedure 2. Prepare design, obtain design for a connection approvals and complete connection works of the operation permit: according to technical conditions Time: 30 days – approved connection design Cost: RUB 2,644,180 [18,887 RUB*140 kW according Time: 145 days – technical documentation prepared by the electrical to the decree of the Committee on Tariffs of Saint- contractor Cost: No cost Petersburg No. 384 from 29.12.2010] – information on the customer’s plan for operation Comments: After the connection contract is signed, Comments: The following documents are required for and maintenance of electrical installation the utility prepares a design of the connection, a submission with an application for a connection: approves it at several organizations and receives 1. Filled out application template for an electricity Procedure 7. Obtain a document permits (for example, for laying cables across a connection describing the division of ownership and road) required for connection works. Then the utility 2. Copy of the document confirming the ownership of responsibilities for maintenance of the completes all connection works according to the connection and await physical connection technical conditions and inspects the works. After the construction site and land plot the works are completed, the utility issues technical 3. Map specifying location of electrical installations Time: 30 days documentation on the connection. 4. Table with load calculations Cost: No cost Once technical conditions are ready, the utility noti- Comments: The distribution utility prepares a Procedure 3. Obtain a document fies the customer and a connection contract is signed. document describing the division of ownership and describing the division of ownership and responsibilities for maintenance of the connection responsibilities for maintenance of the Procedure 2. Prepare design of the and carries out activities related to the physical connection and await physical connection connection and obtain approvals connection of equipment. At this stage the customer Time: 15 days Time: 60 days is required to sign several technical documents. Cost: No cost Cost: RUB 262,500 - Cost of the connection design Procedure 8. Receive an inspection and seal Comments: The distribution utility prepares a Comments: Once the technical conditions are ready the meter document describing the division of ownership and a customer hires a design company which prepares Time: 21 days responsibilities for maintenance of the connection design of the connection. After preparation of the

* This procedure can be completed simultaneously with previous procedures. 130 DOING BUSINESS IN RUSSIA 2012

Cost: RUB 5,500 - Cost of the meter inspection Cost: No cost is required to obtain a permit for laying cables across Comments: The supply utility inspects and seals the Comments: Energy Inspectorate inspects completed a road. meter. works and checks technical documentation prepared Procedure 4. Complete connection works by the utility. After the inspection the Energy according to technical conditions Procedure 9*. Conclude a supply contract inspectorate issues a permit for operation. and await supply of electricity Time: 30 days The following documents are required for preparation Time: 30 days of the operation permit: Cost: RUB 740,000 - Cost of materials and labor Cost: No cost – approved connection design (installation of a transformer and laying of 150 meters of medium voltage cable) Comments: After all inspections are completed the – technical documentation prepared by the electrical customer submits documents required for conclusion contractor Comments: The customer hires an electrical contractor to complete connection works accord- of an electricity supply contract. After the contract – information on the customer’s plan for operation is signed the supply utility sends an order to the and maintenance of electrical installation ing to technical conditions. After the works are distribution utility to turn on the electricity. completed the electrical contractor prepares technical documents which specify tests and characteristics of GETTING ELECTRICITY Procedure 5. Receive an inspection and seal the meter the electrical installation. Samara, Samara Oblast Time: 30 days Procedure 5. Receive an inspection of the Data as of: November 2011 Cost: RUB 940 - Cost of the meter inspection completed works from the utility and obtain compliance documents Procedure 1. Submit an application for an Comments: The supply utility inspects and seals the electricity connection to the utility and meter. Time: 10 days Cost: No cost await technical conditions and a contract Procedure 6. Conclude a supply contract for a connection and await supply of electricity Comments: The distribution utility inspects the Time: 30 days completed works and issues a document certifying Time: 10 days that the works were completed according to technical Cost: RUB 3,534,860 [25,249 RUB*140 kW Cost: No cost conditions. according to the decree of Department of Regulation Comments: After all inspections are completed the and Oversight of Electricity Sector of Samara Region Procedure 6. Receive an inspection of from 28.01.2011 No. 6] customer submits documents required for conclusion of an electricity supply contract. After the contract the completed works from the Energy Comments: The following documents are required for is signed the supply utility sends an order to the Inspectorate and obtain compliance a submission with an application for a connection: distribution utility to turn on the electricity. documents 1. Filled out application template for an electricity Time: 7 days connection GETTING ELECTRICITY Cost: No cost 2. Copy of the document confirming the ownership of Saransk, Republic of Mordovia Comments: Energy Inspectorate inspects completed the construction site and land plot Data as of: November 2011 works and checks technical documentation prepared 3. Map specifying location of electrical installations by the electrical contractor. After the inspection the 4. Table with load calculations Procedure 1. Submit an application for an Energy inspectorate issues a permit for operation. Once technical conditions are ready, the utility noti- electricity connection to the utility and The following documents are required for preparation fies the customer and a connection contract is signed. await technical conditions and a contract of the operation permit: for a connection – approved connection design Procedure 2. Prepare design, obtain design Time: 15 days – technical documentation prepared by the electrical approvals and complete connection works Cost: RUB 22,932 [70.2 RUB*140 kW + 93.6 RUB contractor according to technical conditions *140 kW according to the decree No. 71 from – information on the customer’s plan for operation Time: 170 days 28.12.10] and maintenance of electrical installation Cost: No cost Comments: The following documents are required for Comments: After the connection contract is signed, a submission with an application for a connection: Procedure 7. Obtain a document the utility prepares a design of the connection, 1. Filled out application template for an electricity describing the division of ownership and approves it at several organizations and receives connection responsibilities for maintenance of the permits (for example, for laying cables across a 2. Copy of the document confirming the ownership of connection and await physical connection road) required for connection works. Then the utility the construction site and land plot Time: 9 days completes all connection works according to the 3. Map specifying location of electrical installations Cost: No cost technical conditions and inspects the works. After 4. Table with load calculations the works are completed, the utility issues technical Comments: The distribution utility prepares a Once technical conditions are ready, the utility noti- documentation on the connection. document describing the division of ownership and fies the customer and a connection contract is signed. responsibilities for maintenance of the connection Procedure 3. Obtain a document and carries out activities related to the physical describing the division of ownership and Procedure 2. Prepare design of the connection of equipment. At this stage the customer responsibilities for maintenance of the connection and obtain approvals is required to sign several technical documents. connection and await physical connection Time: 35 days Procedure 8. Conclude a supply contract Time: 40 days Cost: RUB 62,500 - Cost of the connection design Time: 7 days Cost: No cost Comments: Once the technical conditions are ready Cost: No cost Comments: The distribution utility prepares a a customer hires a design company which prepares Comments: The customer submits the following document describing the division of ownership and design of the connection. After preparation of the documents to conclude a contract for supply of responsibilities for maintenance of the connection project the design company approves the design at electricity: and carries out activities related to the physical the utility, Department of Architecture and other connection of equipment. At this stage the customer organizations. 1. Application for conclusion of a supply contract is required to sign several technical documents. 2. Document certifying that the connection works Procedure 3. Obtain excavation or right of were completed according to technical conditions way permits to lay cables across a road Procedure 4. Receive an inspection of 3. Document describing the division of ownership and the completed works from the Energy Time: 7 days responsibilities for maintenance of the connection Inspectorate and obtain compliance Cost: No cost 4. Copy of technical conditions documents Comments: Since it is assumed that the connection 5. Permission to operate the installed electrical Time: 10 days crosses a road ,before connection works can start it equipment

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 131

6. Copy of a document certifying ownership of the works are completed, the utility issues technical 3. Map specifying location of electrical installations property documentation on the connection. 4. Table with load calculations 7. Copy of legal entity registration certificate Procedure 4. Receive an inspection and seal For the assumed load (140 kW) the cost of connec- 8. Copy of a document certifying registration at the the meter tion is calculated on a case by case basis and ap- Tax Authority proved at the Regional Energy Commission. Once the Time: 7 days 9. Copy of a document with statistical/classification cost is approved and technical conditions are ready, codes assigned to the legal entity Cost: RUB 1,482 - Cost of the meter inspection the utility notifies the customer and a connection 10. If using a bank account for electricity payments, Comments: The utility inspects and seals the meter. contract is signed. copy of a document with details of the account Procedure 5. Obtain a document Procedure 2. External site inspection 11. Copy of a passport describing the division of ownership and required for preparation of technical 12. Information on the planned electricity consump- responsibilities for maintenance of the conditions tion (monthly for every user) on a provided form. connection and await physical connection Time: 10 days Time: 10 days Procedure 9. Receive an inspection, seal the Cost: No cost meter and electricity starts flowing Cost: No cost Comments: The utility inspects the construction Time: 3 days Comments: The distribution utility prepares a site. It is not required for a customer to be present document describing the division of ownership and Cost: No cost during the inspection but in practice a customer responsibilities for maintenance of the connection or his representative is usually present during the Comments: After the supply contract is signed, the and carries out activities related to the physical inspection. supply utility sends a request to the distribution utility connection of equipment. At this stage the customer to turn on electricity. The installed meter is inspected is required to sign several technical documents. Procedure 3. Prepare design of the and sealed and electricity starts flowing. connection and obtain approvals Procedure 6. Receive an inspection of Time: 30 days GETTING ELECTRICITY the completed works from the Energy Stavropol, Stavropol Kray Inspectorate and obtain compliance Cost: RUB 82,500 - Cost of the connection design documents Comments: Once the technical conditions are ready Data as of: November 2011 a customer hires a design company which prepares Time: 11 days design of the connection. After preparation of the Procedure 1. Submit an application for an Cost: No cost electricity connection to the utility and project the design company approves the design at Comments: Energy Inspectorate inspects completed await technical conditions and a contract the utility, Department of Architecture and other works and checks technical documentation prepared for a connection organizations. by the utility. After the inspection the Energy Time: 20 days inspectorate issues a permit for operation. Procedure 4. Obtain excavation or right of Cost: RUB 1,358,473 [9,703 RUB*140kW according The following documents are required for preparation way permits to lay cables across a road to the decree of the Regional Tariff Committee of of the operation permit: Time: 14 days Stavropol Region from April 28, 2011 N 28/3] – approved connection design Cost: No cost Comments: The following documents are required for – technical documentation prepared by the electrical Comments: Since it is assumed that the connection a submission with an application for a connection: contractor crosses a road, before connection works can start it 1. Filled out application template for an electricity – information on the customer’s plan for operation is required to obtain a permit for laying cables across connection and maintenance of electrical installation a road. 2. Copy of the document confirming the ownership of the construction site and land plot Procedure 7. Conclude a supply contract Procedure 5. Complete connection works according to technical conditions 3. Map specifying location of electrical installations and await supply of electricity Time: 30 days 4. Table with load calculations Time: 30 days Cost: RUB 1,150,000 - Cost of materials and labor Once technical conditions are ready, the utility noti- Cost: No cost fies the customer and a connection contract is signed. (installation of a transformer and laying of 150 meters Comments: After all inspections are completed the of medium voltage cable) customer submits documents required for conclusion Comments: The customer hires an electrical Procedure 2. External site inspection of an electricity supply contract. After the contract contractor to complete connection works accord- required for preparation of technical is signed the supply utility sends an order to the ing to technical conditions. After the works are conditions distribution utility to turn on the electricity. completed the electrical contractor prepares technical Time: 10 days GETTING ELECTRICITY documents which specify tests and characteristics of Cost: No cost the electrical installation. Comments: The utility inspects the construction Surgut, Khanty-Mansiisk Autonomous site. It is not required for a customer to be present Okrug – Yugra Procedure 6. Receive an inspection of the during the inspection but in practice a customer Data as of: November 2011 completed works from the utility and obtain or his representative is usually present during the compliance documents inspection. Procedure 1. Submit an application for an Time: 15 days electricity connection to the utility and Cost: No cost Procedure 3. Prepare design, obtain design await an approved estimate of connection approvals and complete connection works costs, technical conditions and a contract Comments: The distribution utility inspects the according to technical conditions for a connection completed works and issues a document certifying that the works were completed according to technical Time: 150 days Time: 22 days conditions. Cost: No cost Cost: RUB 1,055,600 - Average cost of an electricity Comments: After the connection contract is signed, connection for the assumed connection Procedure 7. Receive an inspection of the utility prepares a design of the connection, Comments: The following documents are required for the completed works from the Energy approves it at several organizations and receives a submission with an application for a connection: Inspectorate and obtain compliance permits (for example, for laying cables across a documents 1. Filled out application template for an electricity road) required for connection works. Then the utility connection Time: 30 days completes all connection works according to the 2. Copy of the document confirming the ownership Cost: No cost technical conditions and inspects the works. After of the construction site and land plot

* This procedure can be completed simultaneously with previous procedures. 132 DOING BUSINESS IN RUSSIA 2012

Comments: Energy Inspectorate inspects completed Comments: Once the technical conditions are ready Procedure 8. Receive an inspection and seal works and checks technical documentation prepared a customer hires a design company which prepares the meter by the electrical contractor. After the inspection the design of the connection. After preparation of the Time: 30 days Energy inspectorate issues a permit for operation. project the design company approves the design at Cost: RUB 1,059 - Cost of the meter inspection The following documents are required for preparation the utility, Department of City Property, electricity of the operation permit: supply company and other organizations. Comments: The supply utility inspects and seals the meter. – approved connection design Procedure 3. Obtain excavation or right of – technical documentation prepared by the electrical way permits to lay cables across a road Procedure 9*. Conclude a supply contract contractor and await supply of electricity Time: 30 days – information on the customer’s plan for operation Time: 7 days Cost: No cost and maintenance of electrical installation Cost: No cost Comments: Since it is assumed that the connection Procedure 8. Obtain a document crosses a road ,before connection works can start it Comments: After all inspections are completed the describing the division of ownership and is required to obtain a permit for laying cables across customer submits documents required for conclusion responsibilities for maintenance of the a road. of an electricity supply contract. After the contract connection and await physical connection is signed the supply utility sends an order to the Procedure 4. Complete connection works Time: 8 days distribution utility to turn on the electricity. according to technical conditions Cost: No cost GETTING ELECTRICITY Time: 40 days Comments: The distribution utility prepares a Cost: RUB 1,000,000 - Cost of materials and labor Tver, Tver Oblast document describing the division of ownership and (installation of a transformer and laying of 150 meters Data as of: November 2011 responsibilities for maintenance of the connection of medium voltage cable) and carries out activities related to the physical Procedure 1. Submit an application for an Comments: The customer hires an electrical connection of equipment. At this stage the customer electricity connection to the utility and contractor to complete connection works accord- is required to sign several technical documents. await technical conditions and a contract ing to technical conditions. After the works are for a connection Procedure 9. Receive an inspection and seal completed the electrical contractor prepares technical the meter documents which specify tests and characteristics of Time: 30 days Time: 5 days the electrical installation. Cost: RUB 1,851,500 [13,225 RUB*140 kW according Cost: No cost to the decree of the Regional Energy Committee of Procedure 5. Receive an inspection of the Tver Region No. 565 of October 24, 2011] Comments: The utility inspects and seals the meter. completed works from the utility and obtain compliance documents Comments: The following documents are required for Procedure 10. Conclude a supply contract a submission with an application for a connection: and await supply of electricity Time: 15 days 1. Filled out application template for an electricity Time: 7 days Cost: No cost connection Cost: No cost Comments: The distribution utility inspects the 2. Copy of the document confirming the ownership of completed works and issues a document certifying the construction site and land plot Comments: After all inspections are completed the that the works were completed according to technical customer submits documents required for conclusion 3. Map specifying location of electrical installations conditions. of an electricity supply contract. After the contract 4. Table with load calculations is signed the supply utility sends an order to the Procedure 6. Receive an inspection of Once technical conditions are ready, the utility noti- distribution utility to turn on the electricity. the completed works from the Energy fies the customer and a connection contract is signed. GETTING ELECTRICITY Inspectorate and obtain compliance documents Procedure 2. Prepare design of the Tomsk, Tomsk Oblast Time: 23 days connection and obtain approvals Data as of: November 2011 Cost: No cost Time: 38 days Cost: RUB 112,500 - Cost of the connection design Procedure 1. Submit an application for an Comments: Energy Inspectorate inspects completed electricity connection to the utility and works and checks technical documentation prepared Comments: Once the technical conditions are ready await technical conditions and a contract by the electrical contractor. After the inspection the a customer hires a design company which prepares for a connection Energy inspectorate issues a permit for operation. design of the connection. After preparation of the project the design company approves the design at Time: 15 days The following documents are required for preparation of the operation permit: the utility, Department of Architecture and other Cost: RUB 74,340 [531 RUB*140 kW according to the – approved connection design organizations. decree of the Tariff Regulation Department of Tomsk Oblast from March 4, 2011 N 11/49] – technical documentation prepared by the electrical Procedure 3. Obtain excavation or right of contractor Comments: The following documents are required for way permits to lay cables across a road a submission with an application for a connection: – information on the customer’s plan for operation Time: 14 days and maintenance of electrical installation 1. Filled out application template for an electricity Cost: No cost connection Procedure 7. Obtain a document Comments: Since it is assumed that the connection 2. Copy of the document confirming the ownership of describing the division of ownership and crosses a road ,before connection works can start it the construction site and land plot responsibilities for maintenance of the is required to obtain a permit for laying cables across 3. Map specifying location of electrical installations connection and await physical connection a road. 4. Table with load calculations Time: 26 days Procedure 4. Complete connection works Once technical conditions are ready, the utility Cost: No cost according to technical conditions notifies the customer and a connection contract Time: 14 days is signed. Comments: The distribution utility prepares a document describing the division of ownership and Cost: RUB 700,000 - Cost of materials and labor Procedure 2. Prepare design of the responsibilities for maintenance of the connection (installation of a transformer and laying of 150 meters connection and obtain approvals and carries out activities related to the physical of medium voltage cable) connection of equipment. At this stage the customer Time: 85 days Comments: The customer hires an electrical is required to sign several technical documents. contractor to complete connection works accord- Cost: RUB 125,000 - Cost of the connection design ing to technical conditions. After the works are

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 133

completed the electrical contractor prepares technical GETTING ELECTRICITY Procedure 6. Receive an inspection of documents which specify tests and characteristics of Ulyanovsk, Ulyanovsk Oblast the completed works from the Energy the electrical installation. Inspectorate and obtain compliance Data as of: November 2011 documents Procedure 5. Receive an inspection of the completed works from the utility and obtain Procedure 1. Submit an application for an Time: 5 days compliance documents electricity connection to the utility and Cost: No cost Time: 3 days await technical conditions and a contract Comments: Energy Inspectorate inspects completed for a connection Cost: No cost works and checks technical documentation prepared Time: 15 days by the electrical contractor. After the inspection the Comments: The distribution utility inspects the Energy inspectorate issues a permit for operation. completed works and issues a document certifying Cost: RUB 995,960 [- 7,114 RUB*/140 kW according that the works were completed according to technical to tariff schedule of Ulyanovsk Electrical Network The following documents are required for preparation of the operation permit: conditions. Company] Comments: The following documents are required for – approved connection design Procedure 6*. Receive an inspection of a submission with an application for a connection: – technical documentation prepared by the electrical the completed works from the Energy 1. Filled out application template for an electricity contractor Inspectorate and obtain compliance connection – information on the customer’s plan for operation documents 2. Copy of the document confirming the ownership and maintenance of electrical installation Time: 30 days of the construction site and land plot Cost: No cost 3. Map specifying location of electrical installations Procedure 7. Obtain a document Comments: Energy Inspectorate inspects completed 4. Table with load calculations describing the division of ownership and responsibilities for maintenance of the works and checks technical documentation prepared Once technical conditions are ready, the utility noti- by the electrical contractor. After the inspection the fies the customer and a connection contract is signed. connection and await physical connection Energy inspectorate issues a permit for operation. Time: 30 days The following documents are required for preparation Procedure 2. Prepare design of the Cost: No cost of the operation permit: connection and obtain approvals Comments: The distribution utility prepares a - approved connection design Time: 45 days document describing the division of ownership and - technical documentation prepared by the electrical Cost: RUB 62,500 - Cost of the connection design responsibilities for maintenance of the connection contractor and carries out activities related to the physical Comments: Once the technical conditions are ready connection of equipment. At this stage the customer - information on the customer’s plan for operation a customer hires a design company which prepares is required to sign several technical documents. and maintenance of electrical installation design of the connection. After preparation of the project the design company approves the design at Procedure 8. Receive an inspection and seal Procedure 7. Obtain a document the utility, Department of Architecture and other the meter describing the division of ownership and organizations. responsibilities for maintenance of the Time: 7 days connection and await physical connection Procedure 3. Obtain excavation or right of Cost: No cost Time: 16 days way permits to lay cables across a road Comments: The utility inspects and seals the meter. Time: 18 days Cost: No cost Procedure 9. Conclude a supply contract Comments: The distribution utility prepares a Cost: No cost and await supply of electricity Comments: Since it is assumed that the connection document describing the division of ownership and Time: 10 days responsibilities for maintenance of the connection crosses a road ,before connection works can start it Cost: No cost and carries out activities related to the physical is required to obtain a permit for laying cables across connection of equipment. At this stage the customer a road. Comments: After all inspections are completed the is required to sign several technical documents. customer submits documents required for conclusion Procedure 4. Complete connection works of an electricity supply contract. After the contract Procedure 8. Receive an inspection and seal according to technical conditions is signed the supply utility sends an order to the the meter Time: 24 days distribution utility to turn on the electricity.

Time: 30 days Cost: RUB 950,000 - Cost of materials and labor GETTING ELECTRICITY Cost: RUB 1,500 - Cost of the meter inspection (installation of a transformer and laying of 150 meters Vladikavkaz, Republic of North Ossetia – Alania Comments: The supply utility inspects and seals the of medium voltage cable) meter. Comments: The customer hires an electrical Data as of: November 2011 contractor to complete connection works accord- Procedure 9. Conclude a supply contract ing to technical conditions. After the works are Procedure 1. Submit an application for an and await supply of electricity completed the electrical contractor prepares technical electricity connection to the utility and Time: 10 days documents which specify tests and characteristics of await technical conditions and a contract for a connection Cost: No cost the electrical installation. Time: 23 days Comments: After all inspections are completed the Procedure 5. Receive an inspection of the customer submits documents required for conclusion Cost: RUB 567,832 [4,055.94 RUB*140kW according completed works from the utility and obtain to the decree from March 24, 2008 N 272] of an electricity supply contract. After the contract compliance documents is signed the supply utility sends an order to the Comments: The following documents are required for Time: 10 days distribution utility to turn on the electricity. a submission with an application for a connection: Cost: No cost 1. Filled out application template for an electricity Comments: The distribution utility inspects the connection completed works and issues a document certifying 2. Copy of the document confirming the ownership that the works were completed according to technical of the construction site and land plot conditions. 3. Map specifying location of electrical installations 4. Table with load calculations Once technical conditions are ready, the utility noti- fies the customer and a connection contract is signed.

* This procedure can be completed simultaneously with previous procedures. 134 DOING BUSINESS IN RUSSIA 2012

Procedure 2. Prepare design of the responsibilities for maintenance of the connection Procedure 4. Complete connection works connection and obtain approvals and carries out activities related to the physical according to technical conditions Time: 37 days connection of equipment. At this stage the customer Time: 60 days is required to sign several technical documents. Cost: RUB 35,000 - Cost of the connection design Cost: RUB 1,848,000 - Cost of materials and labor Comments: Once the technical conditions are ready Procedure 8. Receive an inspection and seal (installation of a transformer and laying of 150 meters a customer hires a design company which prepares the meter of medium voltage cable) design of the connection. After preparation of the Time: 3 days Comments: The customer hires an electrical project the design company approves the design at Cost: RUB 300 - Cost of the meter inspection contractor to complete connection works accord- the utility, Department of Architecture and other ing to technical conditions. After the works are Comments: The utility inspects and seals the meter. organizations. completed the electrical contractor prepares technical Procedure 9*. Conclude a supply contract documents which specify tests and characteristics of Procedure 3. Obtain excavation or right of the electrical installation. way permits to lay cables across a road and await supply of electricity Time: 7 days Time: 3 days Procedure 5. Receive an inspection of the Cost: No cost completed works from the utility and obtain Cost: No cost Comments: After all inspections are completed the compliance documents Comments: Since it is assumed that the connection customer submits documents required for conclusion crosses a road ,before connection works can start it Time: 6 days of an electricity supply contract. After the contract is required to obtain a permit for laying cables across Cost: No cost is signed the supply utility sends an order to the a road. Comments: The distribution utility inspects the distribution utility to turn on the electricity. completed works and issues a document certifying Procedure 4. Complete connection works GETTING ELECTRICITY that the works were completed according to technical according to technical conditions conditions. Time: 30 days Vladivostok, Primorsky Krai Procedure 6. Receive an inspection of Cost: RUB 750,000 - Cost of materials and labor Data as of: November 2011 (installation of a transformer and laying of 150 meters the completed works from the Energy Procedure 1. Submit an application for an of medium voltage cable) Inspectorate and obtain compliance electricity connection to the utility and documents Comments: The customer hires an electrical await an approved estimate of connection Time: 8 days contractor to complete connection works accord- costs, technical conditions and a contract Cost: No cost ing to technical conditions. After the works are for a connection completed the electrical contractor prepares technical Comments: Energy Inspectorate inspects completed Time: 30 days documents which specify tests and characteristics of works and checks technical documentation prepared the electrical installation. Cost: RUB 541,128 - Average cost of an electricity by the electrical contractor. After the inspection the connection for the assumed connection Energy inspectorate issues a permit for operation. Procedure 5. Receive an inspection of the Comments: The following documents are required for completed works from the utility and obtain The following documents are required for preparation a submission with an application for a connection: of the operation permit: compliance documents 1. Filled out application template for an electricity – approved connection design Time: 7 days connection – technical documentation prepared by the electrical Cost: No cost 2. Copy of the document confirming the ownership of contractor Comments: The distribution utility inspects the the construction site and land plot – information on the customer’s plan for operation completed works and issues a document certifying 3. Map specifying location of electrical installations and maintenance of electrical installation that the works were completed according to technical 4. Table with load calculations conditions. For the assumed load (140 kW) the cost of connec- Procedure 7. Receive an inspection and seal Procedure 6*. Receive an inspection of tion is calculated on a case by case basis and ap- the meter the completed works from the Energy proved at the Regional Energy Commission. Once the Time: 6 days cost is approved and technical conditions are ready, Inspectorate and obtain compliance Cost: No cost documents the utility notifies the customer and a connection contract is signed. Comments: The supply utility inspects and seals the Time: 7 days meter. Cost: No cost Procedure 2. Prepare design of the Procedure 8. Obtain a document Comments: Energy Inspectorate inspects completed connection and obtain approvals describing the division of ownership and works and checks technical documentation prepared Time: 110 days responsibilities for maintenance of the by the electrical contractor. After the inspection the Cost: RUB 225,000 - Cost of the connection design connection and await physical connection Energy inspectorate issues a permit for operation. Comments: Once the technical conditions are ready Time: 17 days The following documents are required for preparation a customer hires a design company which prepares of the operation permit: Cost: No cost design of the connection. After preparation of the – approved connection design Comments: The distribution utility prepares a project the design company approves the design at document describing the division of ownership and – technical documentation prepared by the electrical the utility, Department of Architecture and other responsibilities for maintenance of the connection contractor organizations. and carries out activities related to the physical – information on the customer’s plan for operation connection of equipment. At this stage the customer and maintenance of electrical installation Procedure 3. Obtain excavation or right of way permits to lay cables across a road is required to sign several technical documents. Procedure 7. Obtain a document Time: 7 days Procedure 9. Conclude a supply contract describing the division of ownership and Cost: No cost and await supply of electricity responsibilities for maintenance of the Comments: Since it is assumed that the connection Time: 16 days connection and await physical connection crosses a road ,before connection works can start it Cost: No cost Time: 11 days is required to obtain a permit for laying cables across Comments: After all inspections are completed the Cost: No cost a road. customer submits documents required for conclusion Comments: The distribution utility prepares a of an electricity supply contract. After the contract document describing the division of ownership and

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 135

is signed the supply utility sends an order to the Procedure 6. Receive an inspection of the *This procedure can be completed simultaenously distribution utility to turn on the electricity. completed works from the utility and obtain with previous procedures. compliance documents Comments: The following documents are required for GETTING ELECTRICITY Time: 10 days a submission with an application for a connection: Volgograd, Volgograd Oblast Cost: No cost 1. Filled out application template for an electricity connection Data as of: November 2011 Comments: The distribution utility inspects the 2. Copy of the document confirming the ownership of Procedure 1. Submit an application for an completed works and issues a document certifying that the works were completed according to technical the construction site and land plot electricity connection to the utility and conditions. 3. Map specifying location of electrical installations await technical conditions and a contract 4. Table with load calculations for a connection Procedure 7. Receive an inspection of Once technical conditions are ready, the utility noti- Time: 30 days the completed works from the Energy fies the customer and a connection contract is signed. Cost: RUB 888,462 [6,346.16 RUB*140 kW accord- Inspectorate and obtain compliance ing to the Decree of Volgograd Region No 34/5 from documents Procedure 2. Prepare design of the December 17, 2010 No. 34/3] Time: 10 days connection and obtain approvals Comments: The following documents are required for Cost: No cost Time: 50 days a submission with an application for a connection: Comments: Energy Inspectorate inspects completed Cost: RUB 72,500 - Cost of the connection design 1. Filled out application template for an electricity works and checks technical documentation prepared Comments: Once the technical conditions are ready connection by the electrical contractor. After the inspection the a customer hires a design company which prepares Energy inspectorate issues a permit for operation. 2. Copy of the document confirming the ownership of design of the connection. After preparation of the the construction site and land plot The following documents are required for preparation project the design company approves the design at 3. Map specifying location of electrical installations of the operation permit: the utility, Department of Architecture and other 4. Table with load calculations – approved connection design organizations. Once technical conditions are ready, the utility noti- – technical documentation prepared by the electrical fies the customer and a connection contract is signed. contractor Procedure 3. Obtain excavation or right of – information on the customer’s plan for operation way permits to lay cables across a road Procedure 2*. External site inspection and maintenance of electrical installation Time: 19 days required for preparation of technical Cost: No cost conditions Procedure 8. Obtain a document Comments: Since it is assumed that the connection Time: 14 days describing the division of ownership and crosses a road ,before connection works can start it Cost: No cost responsibilities for maintenance of the is required to obtain a permit for laying cables across connection and await physical connection a road. Comments: The utility inspects the construction Time: 10 days site. It is not required for a customer to be present Procedure 4. Complete connection works during the inspection but in practice a customer Cost: No cost according to technical conditions or his representative is usually present during the Comments: The distribution utility prepares a Time: 30 days inspection. document describing the division of ownership and responsibilities for maintenance of the connection Cost: RUB 900,000 - Cost of materials and labor Procedure 3. Prepare design of the and carries out activities related to the physical (installation of a transformer and laying of 150 meters connection and obtain approvals connection of equipment. At this stage the customer of medium voltage cable) Time: 76 days is required to sign several technical documents. Comments: The customer hires an electrical Cost: RUB 225,000 - Cost of the connection design contractor to complete connection works accord- Procedure 9. Receive an inspection and seal ing to technical conditions. After the works are Comments: Once the technical conditions are ready the meter completed the electrical contractor prepares technical a customer hires a design company which prepares documents which specify tests and characteristics of design of the connection. After preparation of the Time: 7 days the electrical installation. project the design company approves the design at Cost: RUB 3,000 - Cost of the meter inspection the utility, Department of Architecture and other Comments: The utility inspects and seals the meter. Procedure 5. Receive an inspection of the organizations. completed works from the utility and obtain Procedure 10. Conclude a supply contract compliance documents Procedure 4. Obtain excavation or right of and await supply of electricity Time: 7 days way permits to lay cables across a road Time: 10 days Cost: No cost Time: 7 days Cost: No cost Comments: The distribution utility inspects the Cost: No cost Comments: After all inspections are completed the completed works and issues a document certifying Comments: Since it is assumed that the connection customer submits documents required for conclusion that the works were completed according to technical crosses a road ,before connection works can start it of an electricity supply contract. After the contract conditions. is required to obtain a permit for laying cables across is signed the supply utility sends an order to the a road. distribution utility to turn on the electricity. Procedure 6. Receive an inspection of Procedure 5. Complete connection works GETTING ELECTRICITY the completed works from the Energy according to technical conditions Inspectorate and obtain compliance Voronezh, Voronezh Oblast documents Time: 45 days Data as of: November 2011 Time: 30 days Cost: RUB 1,350,000 - Cost of materials and labor (installation of a transformer and laying of 150 meters Procedure 1. Submit an application for an Cost: No cost of medium voltage cable) electricity connection to the utility and Comments: Energy Inspectorate inspects completed Comments: The customer hires an electrical await technical conditions and a contract works and checks technical documentation prepared contractor to complete connection works accord- for a connection by the electrical contractor. After the inspection the Energy inspectorate issues a permit for operation. ing to technical conditions. After the works are Time: 18 days The following documents are required for preparation completed the electrical contractor prepares technical Cost: RUB 1,596,140 [11,401 RUB*140 kW according of the operation permit: documents which specify tests and characteristics of to the decree of the Department of Tariff Regulation the electrical installation. of Voronezh region from March 18, 2011 N 10/6] – approved connection design

* This procedure can be completed simultaneously with previous procedures. 136 DOING BUSINESS IN RUSSIA 2012

– technical documentation prepared by the electrical Procedure 3. Obtain excavation or right of Procedure 9*. Conclude a supply contract contractor way permits to lay cables across a road and await supply of electricity – information on the customer’s plan for operation Time: 30 days Time: 21 days and maintenance of electrical installation Cost: No cost Cost: No cost Procedure 7. Obtain a document Comments: Since it is assumed that the connection Comments: After all inspections are completed the describing the division of ownership and crosses a road ,before connection works can start it customer submits documents required for conclusion responsibilities for maintenance of the is required to obtain a permit for laying cables across of an electricity supply contract. After the contract connection and await physical connection a road. is signed the supply utility sends an order to the distribution utility to turn on the electricity. Time: 28 days Procedure 4. Complete connection works Cost: No cost according to technical conditions GETTING ELECTRICITY Comments: The distribution utility prepares a Time: 20 days Yakutsk, Republic of Sakha – Yakutia document describing the division of ownership and Cost: RUB 250,000 - Cost of materials and labor (the Data as of: November 2011 responsibilities for maintenance of the connection connection involves laying 150 meters of low voltage and carries out activities related to the physical cable) Procedure 1. Submit an application for an connection of equipment. At this stage the customer Comments: The customer hires an electrical electricity connection to the utility and is required to sign several technical documents. contractor to complete connection works accord- await technical conditions and a contract for a connection Procedure 8. Receive an inspection and seal ing to technical conditions. After the works are the meter completed the electrical contractor prepares technical Time: 30 days documents which specify tests and characteristics of Cost: RUB 3,104,024 [22,171.6 RUB*140 kW accord- Time: 19 days the electrical installation. ing to the decree of the Regional Energy Committee Cost: RUB 2,500 - Cost of the meter inspection of Republic of Sakha (Yakutia) from August 16, 2011 Comments: The utility inspects and seals the meter. N 78] Procedure 5. Receive an inspection of the Procedure 9. Conclude a supply contract completed works from the utility and obtain Comments: The following documents are required for and await supply of electricity compliance documents a submission with an application for a connection: Filled out application template for an electricity Time: 14 days Time: 7 days connection Cost: No cost Cost: No cost Copy of the document confirming the ownership of Comments: After all inspections are completed the Comments: The distribution utility inspects the the construction site and land plot customer submits documents required for conclusion completed works and issues a document certifying Map specifying location of electrical installations of an electricity supply contract. After the contract that the works were completed according to technical is signed the supply utility sends an order to the conditions. Table with load calculations distribution utility to turn on the electricity. Once technical conditions are ready, the utility Procedure 6*. Receive an inspection of notifies the customer and a connection contract is GETTING ELECTRICITY the completed works from the Energy signed. Vyborg, Leningrad Oblast Inspectorate and obtain compliance documents Procedure 2. Prepare design, obtain design Data as of: November 2011 Time: 10 days approvals and complete connection works according to technical conditions Procedure 1. Submit an application for an Cost: No cost Time: 211 days electricity connection to the utility and Comments: Energy Inspectorate inspects completed await technical conditions and a contract works and checks technical documentation prepared Cost: No cost for a connection by the electrical contractor. After the inspection the Comments: After the connection contract is signed, Time: 30 days Energy inspectorate issues a permit for operation. the utility prepares a design of the connection, Cost: RUB 2,069,760 [14,784 RUB*140 kW The following documents are required for preparation approves it at several organizations and receives according to the decree of the Tariff Committee from of the operation permit: permits (for example, for laying cables across a February 25, 2011 No. 21] – approved connection design road) required for connection works. Then the utility completes all connection works according to the Comments: The following documents are required for – technical documentation prepared by the electrical technical conditions and inspects the works. After a submission with an application for a connection: contractor the works are completed, the utility issues technical 1. Filled out application template for an electricity – information on the customer’s plan for operation documentation on the connection. connection and maintenance of electrical installation 2. Copy of the document confirming the ownership of Procedure 3. Obtain a document the construction site and land plot Procedure 7. Obtain a document describing the division of ownership and describing the division of ownership and 3. Map specifying location of electrical installations responsibilities for maintenance of the responsibilities for maintenance of the connection and await physical connection 4. Table with load calculations connection and await physical connection Once technical conditions are ready, the utility noti- Time: 18 days Time: 19 days fies the customer and a connection contract is signed. Cost: No cost Cost: No cost Comments: The distribution utility prepares a Procedure 2. Prepare design of the Comments: The distribution utility prepares a document describing the division of ownership and connection and obtain approvals document describing the division of ownership and responsibilities for maintenance of the connection Time: 70 days responsibilities for maintenance of the connection and carries out activities related to the physical and carries out activities related to the physical Cost: RUB 40,000 - Cost of the connection design connection of equipment. At this stage the customer connection of equipment. At this stage the customer is required to sign several technical documents. Comments: Once the technical conditions are ready is required to sign several technical documents. a customer hires a design company which prepares Procedure 4. Receive an inspection of design of the connection. After preparation of the Procedure 8. Receive an inspection and seal the completed works from the Energy project the design company approves the design the meter Inspectorate and obtain compliance at the utility, electricity supply company and other Time: 5 days documents organizations. Cost: RUB 10,000 - Cost of the meter inspection Time: 10 days Comments: The supply utility inspects and seals the Cost: No cost meter.

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 137

Comments: Energy Inspectorate inspects completed Comments: Since it is assumed that the connection Cost: No cost works and checks technical documentation prepared crosses a road ,before connection works can start it Comments: After all inspections are completed the by the utility. After the inspection the Energy is required to obtain a permit for laying cables across customer submits documents required for conclusion inspectorate issues a permit for operation. a road. of an electricity supply contract. After the contract The following documents are required for preparation Procedure 4. Complete connection works is signed the supply utility sends an order to the of the operation permit: according to technical conditions distribution utility to turn on the electricity. – approved connection design Time: 20 days GETTING ELECTRICITY – technical documentation prepared by the electrical Cost: RUB 435,000 - Cost of materials and labor (the contractor Yekaterinburg, Sverdlovsk Oblast connection involves laying 150 meters of low voltage Data as of: November 2011 – information on the customer’s plan for operation cable) and maintenance of electrical installation Comments: The customer hires an electrical Procedure 1. Submit an application for an Procedure 5. Receive an inspection and seal contractor to complete connection works accord- electricity connection to the utility and ing to technical conditions. After the works are the meter await an approved estimate of connection completed the electrical contractor prepares technical costs, technical conditions and a contract Time: 5 days documents which specify tests and characteristics of for a connection Cost: No cost the electrical installation. Time: 68 days Comments: The supply utility inspects and seals the Procedure 5. Receive an inspection of the Cost: RUB 570,000 - Average cost of an electricity meter. completed works from the utility and obtain connection for the assumed connection Procedure 6. Conclude a supply contract compliance documents Comments: The following documents are required for and await supply of electricity Time: 10 days a submission with an application for a connection: Time: 5 days Cost: No cost 1. Filled out application template for an electricity connection Cost: No cost Comments: The distribution utility inspects the 2. Copy of the document confirming the ownership Comments: After all inspections are completed the completed works and issues a document certifying of the construction site and land plot customer submits documents required for conclusion that the works were completed according to technical 3. Map specifying location of electrical installations of an electricity supply contract. After the contract conditions. 4. Table with load calculations is signed the supply utility sends an order to the Procedure 6. Receive an inspection of distribution utility to turn on the electricity. the completed works from the Energy For the assumed load (140 kW) the cost of connec- tion is calculated on a case by case basis and ap- Inspectorate and obtain compliance GETTING ELECTRICITY proved at the Regional Energy Commission. Once the documents Yaroslavl, Yaroslavl Oblast cost is approved and technical conditions are ready, Time: 9 days the utility notifies the customer and a connection Data as of: November 2011 Cost: No cost contract is signed. Procedure 1. Submit an application for an Comments: Energy Inspectorate inspects completed electricity connection to the utility and works and checks technical documentation prepared Procedure 2. Prepare design of the await technical conditions and a contract by the electrical contractor. After the inspection the connection and obtain approvals for a connection Energy inspectorate issues a permit for operation. Time: 134 days Time: 22 days The following documents are required for preparation Cost: RUB 145,000 - Cost of the connection design of the operation permit: Cost: RUB 1,610,000 [140 kW * 11,500 RUB Comments: Once the technical conditions are ready – approved connection design according to the decree of the Department of Fuels, a customer hires a design company which prepares Energy and Regulation of Tariffs of Yaroslavl Oblast –t echnical documentation prepared by the electrical design of the connection. After preparation of the contractor from 14.02.2011 No. 7] project the design company approves the design at – information on the customer’s plan for operation the utility, Department of Architecture and other Comments: The following documents are required for and maintenance of electrical installation organizations. a submission with an application for a connection: 1. Filled out application template for an electricity Procedure 7. Obtain a document Procedure 3. Obtain excavation or right of connection describing the division of ownership and way permits to lay cables across a road 2. Copy of the document confirming the ownership responsibilities for maintenance of the Time: 30 days of the construction site and land plot connection and await physical connection Cost: No cost 3. Map specifying location of electrical installations Time: 6 days Comments: Since it is assumed that the connection 4. Table with load calculations Cost: No cost crosses a road ,before connection works can start it Once technical conditions are ready, the utility noti- Comments: The distribution utility prepares a is required to obtain a permit for laying cables across fies the customer and a connection contract is signed. document describing the division of ownership and a road. responsibilities for maintenance of the connection Procedure 2. Prepare design of the Procedure 4. Complete connection works and carries out activities related to the physical according to technical conditions connection and obtain approvals connection of equipment. At this stage the customer Time: 90 days Time: 58 days is required to sign several technical documents. Cost: RUB 689,444 - Cost of materials and labor Cost: RUB 80,000 - Cost of the connection design Procedure 8. Receive an inspection and seal (installation of a transformer and laying of 150 meters Comments: Once the technical conditions are ready the meter of medium voltage cable) a customer hires a design company which prepares Time: 2 days Comments: The customer hires an electrical design of the connection. After preparation of the contractor to complete connection works accord- project the design company approves the design at Cost: RUB 11,872 - Cost of the meter inspection ing to technical conditions. After the works are the utility, Department of Architecture and other Comments: The utility inspects and seals the meter. completed the electrical contractor prepares technical organizations. * This procedure can be completed simultaneously documents which specify tests and characteristics of with previous procedures. Procedure 3. Obtain excavation or right of the electrical installation. way permits to lay cables across a road Procedure 9. Conclude a supply contract Procedure 5. Receive an inspection of the Time: 7 days and await supply of electricity completed works from the utility and obtain Cost: No cost Time: 12 days compliance documents

* This procedure can be completed simultaneously with previous procedures. 138 DOING BUSINESS IN RUSSIA 2012

Time: 4 days Comments: The excerpt is used by the buyer to Cost: RUB 600 Cost: No cost confirm rights and encumbrances for a real estate Comments: Since March 1, 2010 (No. 122-FZ, article Comments: The distribution utility inspects the object. 19, p. 1) a request to submit a cadastral passport completed works and issues a document certifying Procedure 2*. Obtain excerpts from the of the land plot was abolished in case if a cadastral that the works were completed according to technical Unified State Register of Legal Entities with passport of the land plot has been filed in Rosreestr, conditions. information about seller and buyer at the but it is still done in practice. Procedure 6*. Receive an inspection of Federal Tax Service Procedure 3*. Seller obtains excerpts for the completed works from the Energy Time: 1 day the building and land plot from the Unified Inspectorate and obtain compliance Cost: RUB 800 - RUB 400 for each excerpt State Register of Real Estate Rights and documents (expedited rate) Transactions Time: 15 days Comments: Excerpts confirm the right of parties to Time: 4 days Cost: No cost sign the deal and are obtained from the Federal Tax Cost: RUB 400 - RUB 200 for each excerpt (land and Comments: Energy Inspectorate inspects completed Service which manages the Unified State Register of building) works and checks technical documentation prepared Legal Entities. Comments: The excerpt is used by the buyer to by the electrical contractor. After the inspection the Procedure 3. Register the transfer of confirm rights and encumbrances for a real estate Energy inspectorate issues a permit for operation. rights for the building and the land plot at object. The following documents are required for preparation the Federal Service of State Registration, Procedure 4*. Obtain excerpts from the of the operation permit: Cadastre and Cartography Unified State Register of Legal Entities with – approved connection design Time: 30 days information about seller and buyer at the – technical documentation prepared by the electrical Cost: RUB 45,000 - RUB 15,000 for a building, and Federal Tax Service contractor RUB 15,000 for a land plot, and RUB 15,000 for a real Time: 1 day – information on the customer’s plan for operation estate agreement Cost: RUB 800 - RUB 400 for each excerpt and maintenance of electrical installation Comments: The Rosreestr has been in operation since (expedited rate) March 2009. To register the transfer of rights for a Procedure 7. Obtain a document Comments: Excerpts confirm the right of parties to building and a land plot the following documents sign the deal and are obtained from the Federal Tax describing the division of ownership and must be provided: responsibilities for maintenance of the Service which manages the Unified State Register of a) Purchase agreement. connection and await physical connection Legal Entities. b) Cadastral passport of the building (if necessary). Time: 10 days Procedure 5. Register the transfer of c) Cadastral passport of the land plot (if necessary). Cost: No cost rights for the building and the land plot at d) Documents confirming the authority of the ap- Comments: The distribution utility prepares a the Federal Service of State Registration, plicant to act on behalf of the legal entities without Cadastre and Cartography document describing the division of ownership and power of attorney. Time: 12 days responsibilities for maintenance of the connection e) Document confirming the identity of the applicant. and carries out activities related to the physical Cost: RUB 30,000 - RUB 15,000 for a building and f) Corporate documents of the legal entity. connection of equipment. At this stage the customer RUB 15,000 for a land plot is required to sign several technical documents. g) Documents confirming the state registration of the legal entity. Comments: The Rosreestr has been in operation since March 2009. To register the transfer of rights for a Procedure 8. Receive an inspection and seal h) Application from the legal entity on the state reg- building and a land plot the following documents the meter istration of real estate rights and transactions must be provided: Time: 2 days i) Seller’s title for the real estate. a) Purchase agreement. Cost: No cost j) Document confirming payment of state duties. b) Cadastral passport of the building (if necessary). In practice, in addition to registration fees for the Comments: The utility inspects and seals the meter. c) Cadastral passport of the land plot (if necessary). building and the land plot, the agreement is also Procedure 9. Conclude a supply contract registered with a cost of 15,000 rubles. d) Documents confirming the authority of the ap- and await supply of electricity plicant to act on behalf of the legal entities without REGISTERING PROPERTY power of attorney. Time: 10 days e) Document confirming the identity of the applicant. Cost: No cost Kaliningrad, Kaliningrad Oblast f) Corporate documents of the legal entity. Comments: After all inspections are completed the Property value: RUB 15,333,527 (US$ 495,500) g) Documents confirming the state registration of the customer submits documents required for conclusion Data as of: November 2011 of an electricity supply contract. After the contract legal entity. is signed the supply utility sends an order to the Procedure 1. Seller obtains a cadastral h) Application from the legal entity on the state reg- distribution utility to turn on the electricity. passport for a building in the Bureau of istration of real estate rights and transactions. Technical Inventory i) Seller’s title for the real estate. Time: 15 days j) Document confirming payment of state duties. LIST OF PROCEDURES Cost: RUB 49,500 REGISTERING PROPERTY REGISTERING PROPERTY Comments: Since March 2010 (No. 122-FZ, article Kaluga, Kaluga Oblast 33, p. 10) the requirement to submit a cadastral Irkutsk, Irkutsk Oblast passport of the building was abolished if documents Property value: RUB 15,333,527 (US$ 495,500) describing the real estate (such as technical passport Data as of: November 2011 Property value: RUB 15,333,527 (US$ 495,500) for the building) were filed in Rosreestr. To get a new Data as of: November 2011 cadastral passport it is sometimes necessary to have Procedure 1. Seller obtains excerpts for the building and land plot from the Unified Procedure 1. Seller obtains excerpts for technical inventorization. In practice, a cadastral passport for a building is obtained. State Register of Real Estate Rights and the building and land plot from the Unified Transactions State Register of Real Estate Rights and Procedure 2*. Seller obtains a cadastral Time: 5 days Transactions passport for the land plot at the Federal Cost: RUB 400 - RUB 200 for each excerpt (land and Time: 4 days Service of State Registration, Cadastre and Rosreestr building) Cost: RUB 400 - RUB 200 for each excerpt (land and Cartography ( ) building) Time: 5 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 139

Comments: The excerpt is used by the buyer to Procedure 3. Register the transfer of Procedure 5. Register the transfer of confirm rights and encumbrances for a real estate rights for the building and the land plot at rights for the building and the land plot at object. the Federal Service of State Registration, the Federal Service of State Registration, Cadastre and Cartography Cadastre and Cartography Procedure 2*. Obtain excerpts from the Unified State Register of Legal Entities with Time: 30 days Time: 30 days information about seller and buyer at the Cost: RUB 30,000 - RUB 15,000 for a building and Cost: RUB 30,000 - RUB 15,000 for a building and Federal Tax Service RUB 15,000 for a land plot RUB 15,000 for a land plot Time: 2 days Comments: The Rosreestr has been in operation since Comments: The Rosreestr has been in operation since Cost: RUB 800 - RUB 400 for each excerpt March 2009. To register the transfer of rights for a March 2009. To register the transfer of rights for a (expedited rate) building and a land plot the following documents building and a land plot the following documents must be provided: must be provided: Comments: Excerpts confirm the right of parties to sign the deal and are obtained from the Federal Tax a) Purchase agreement. a) Purchase agreement. Service which manages the Unified State Register of b) Cadastral passport of the building (if necessary). b) Cadastral passport of the building (if necessary). Legal Entities. c) Cadastral passport of the land plot (if necessary). c) Cadastral passport of the land plot (if necessary). d) Documents confirming the authority of the ap- d) Documents confirming the authority of the ap- Procedure 3. Register the transfer of plicant to act on behalf of the legal entities without plicant to act on behalf of the legal entities without rights for the building and the land plot at power of attorney. power of attorney. the Federal Service of State Registration, e) Document confirming the identity of the applicant. e) Document confirming the identity of the applicant. Cadastre and Cartography f) Corporate documents of the legal entity. f) Corporate documents of the legal entity. Time: 14 days g) Documents confirming the state registration of the g) Documents confirming the state registration of the Cost: RUB 30,000 - RUB 15,000 for a building and legal entity. legal entity. RUB 15,000 for a land plot h) Application from the legal entity on the state reg- h) Application from the legal entity on the state reg- Comments: The Rosreestr has been in operation since istration of real estate rights and transactions. istration of real estate rights and transactions. March 2009. To register the transfer of rights for a i) Seller’s title for the real estate. i) Seller’s title for the real estate. building and a land plot the following documents j) Document confirming payment of state duties. j) Document confirming payment of state duties. must be provided: a) Purchase agreement. REGISTERING PROPERTY REGISTERING PROPERTY b) Cadastral passport of the building (if necessary). Kemerovo, Kemerovo Oblast Khabarovsk, Khabarovsk Kray c) Cadastral passport of the land plot (if necessary). Property value: RUB 15,333,527 (US$ 495,500) Property value: RUB 15,333,527 (US$ 495,500) d) Documents confirming the authority of the ap- Data as of: November 2011 Data as of: November 2011 plicant to act on behalf of the legal entities without power of attorney. Procedure 1. Seller obtains a cadastral Procedure 1. Seller obtains excerpts for e) Document confirming the identity of the applicant. passport for a building in the Bureau of the building and land plot from the Unified f) Corporate documents of the legal entity. Technical Inventory State Register of Real Estate Rights and g) Documents confirming the state registration of the Time: 14 days Transactions legal entity. Cost: RUB 900 Time: 3 days h) Application from the legal entity on the state reg- Cost: RUB 400 - RUB 200 for each excerpt (land and istration of real estate rights and transactions. Procedure 2*. Seller obtains a cadastral building) i) Seller’s title for the real estate. passport for the land plot at the Federal Service of State Registration, Cadastre and Comments: The excerpt is used by the buyer to j) Document confirming payment of state duties. Cartography (Rosreestr) confirm rights and encumbrances for a real estate object. REGISTERING PROPERTY Time: 14 days Kazan, Republic of Tatarstan Cost: RUB 600 Procedure 2*. Obtain excerpts from the Unified State Register of Legal Entities with Property value: RUB 15,333,527 (US$ 495,500) Procedure 3*. Seller obtains excerpts for information about seller and buyer at the Data as of: November 2011 the building and land plot from the Unified Federal Tax Service State Register of Real Estate Rights and Time: 1 day Procedure 1. Seller obtains excerpts for Transactions the building and land plot from the Unified Cost: RUB 800 - RUB 400 for each excerpt State Register of Real Estate Rights and Time: 1 day (expedited rate) Transactions Cost: RUB 400 - RUB 200 for each excerpt (land and Comments: Excerpts confirm the right of parties to building) Time: 3 days sign the deal and are obtained from the Federal Tax Comments: The excerpt is used by the buyer to Cost: RUB 400 - RUB 200 for each excerpt (land and Service which manages the Unified State Register of confirm rights and encumbrances for a real estate building) Legal Entities. object. Comments: The excerpt is used by the buyer to Procedure 3. Register the transfer of confirm rights and encumbrances for a real estate Procedure 4*. Obtain excerpts from the rights for the building and the land plot at object. Unified State Register of Legal Entities with the Federal Service of State Registration, information about seller and buyer at the Cadastre and Cartography Procedure 2*. Obtain excerpts from the Federal Tax Service Unified State Register of Legal Entities with Time: 10 days information about seller and buyer at the Time: 2 days Cost: RUB 45,000 - RUB 15,000 for a building, and Federal Tax Service Cost: RUB 800 - RUB 400 for each excerpt RUB 15,000 for a land plot, and RUB 15,000 for a real (expedited rate) Time: 2 days estate agreement Comments: Excerpts confirm the right of parties to Cost: RUB 800 - RUB 400 for each excerpt Comments: The Rosreestr has been in operation since sign the deal and are obtained from the Federal Tax (expedited rate) March 2009. To register the transfer of rights for a Service which manages the Unified State Register of building and a land plot the following documents Comments: Excerpts confirm the right of parties to Legal Entities. must be provided: sign the deal and are obtained from the Federal Tax Service which manages the Unified State Register of a) Purchase agreement. Legal Entities. b) Cadastral passport of the building (if necessary).

* This procedure can be completed simultaneously with previous procedures. 140 DOING BUSINESS IN RUSSIA 2012

c) Cadastral passport of the land plot (if necessary). d) Documents confirming the authority of the ap- The FAS must be notified about the purchase of real d) Documents confirming the authority of the ap- plicant to act on behalf of the legal entities without estate property by the buyer if the aggregate assets plicant to act on behalf of the legal entities without power of attorney. value, according to the latest financial statements of power of attorney. e) Document confirming the identity of the applicant. the buyer and the seller, or their aggregate proceeds e) Document confirming the identity of the applicant. f) Corporate documents of the legal entity. from the sale of products (works, services) for the f) Corporate documents of the legal entity. g) Documents confirming the state registration of the calendar year preceding the year of acquisition of real estate property or other actions, exceeds two hundred g) Documents confirming the state registration of the legal entity. million rubles (currently approximately US$5.6 mln); legal entity. h) Application from the legal entity on the state reg- and, at the same time, the aggregate assets’ value istration of real estate rights and transactions. h) Application from the legal entity on the state reg- according to the latest financial statements of the istration of real estate rights and transactions. i) Seller’s title for the real estate. seller (group of the seller) exceeds thirty million i) Seller’s title for the real estate. j) Document confirming payment of state duties. rubles (currently approximately US$0.8 mln) j) Document confirming payment of state duties. REGISTERING PROPERTY The antimonopoly permission is not necessary for k) In practice, in addition to registration fees for the the state registration of the transfer of title to the building and the land plot, the agreement is also Moscow property in Procedure 6, but its absence may lead to registered with a cost of 15,000 rubles. Property value: RUB 15,333,527 (US$ 495,500) recognizing the transaction as void. REGISTERING PROPERTY Data as of: November 2011 NOTE: Due to the recent changes in the Russian antimonopoly legislation, such would normally apply Kirov, Kirov Oblast Procedure 1 Seller obtains the cadastral to major transactions and would not be necessary Property value: RUB 15,333,527 (US$ 495,500) passport at the Bureau of Technical for small and medium transactions such as the one Inventory (BTI) Data as of: November 2011 described in this case study. It would take about one Time: 11 days month and cost the equivalent of 100 Procedure 1. Seller obtains excerpts for Cost: RUB 1,000 minimum wages. the building and land plot from the Unified Comments: The seller should obtain technical The documentation shall include: State Register of Real Estate Rights and inventory document for the building –the cadastral a) Application (standard form) Transactions passport – from the local bureau of technical b) Other documents specified in the Time: 5 days inventory. As of May 13, 2008 per the changes in the governmental regulations Cost: RUB 400 - RUB 200 for each excerpt (land and Federal Law No. 66-FZ, inventory documents and building) cadastral maps were replaced by cadastral passports. Procedure 2: Seller obtains the extracts Comments: The excerpt is used by the buyer to The only technical inventory document obtained from the Unified State Register of Real confirm rights and encumbrances for a real estate from the bureau of technical inventory is a cadastral Estate Property passport. This document replaces the previously object. Time: 7 days required three documents: extract from the technical Procedure 2*. Obtain excerpts from the passport, floor plan and explanation of the floor plan. Cost: RUB 600 Unified State Register of Legal Entities with The documentation shall include: Comments: A non-encumbrance certificate on the information about seller and buyer at the k) Application (standard form). property must be obtained from the Unified State Federal Tax Service Register of Real Estate Property maintained by the l) The document certifying rights of the seller Time: 2 days State Registration Department of Rights to the Real m) to the property (must be in possession of Estate Property. The cost of the extract is RUB 100 for Cost: RUB 800 - RUB 400 for each excerpt n) the seller). individuals and RUB 300 for legal entities. (expedited rate) o) A letter of guarantee (with respect to Comments: Excerpts confirm the right of parties to p) payments for BTI services). Procedure 3: Obtain an extract from the sign the deal and are obtained from the Federal Tax q) An official documentonfirming c applicant’s Unified State Register of Legal Entities Service which manages the Unified State Register of containing the information about the seller Legal Entities. r) authority to act on behalf of a legal entity s) (i.e. power of attorney and passport of Time: 7 days Procedure 3*. Seller and buyer notarize t) the applicant). Cost: RUB 400 their corporate documents u) A document showing the legal boundaries Comments: Legal entities must obtain extracts from Time: 1 day v) of the property (i.e. to ensure that there are the Unified State Register of Legal Entities. Although Cost: RUB 1,000 - RUB 500 for each charter Russian legislation does not establish the term w) no unauthorized alterations or modifications). Comments: In accordance with federal law (N122-FZ, of validity for the extracts, in practice most state Under Clause 28 of the New Competition Law (dated article 16) for state registration of real estate rights, authorities accept the extracts issued not earlier than 26 July 2006) the buyer must obtain preliminary originals of corporate documents or notarized copies 30 days before their submission to the respective approval of the Federal Antimonopoly Service (the must be submitted. In practice applicants sometimes state authority FAS) for an acquisition of real estate property if provide originals or sometimes notarized copies of the book value of the real estate property being Procedure 4: Notarization of corporate corporate documents. acquired exceeds 20% of the book value of fixed and documents by seller and buyer Procedure 4. Register the transfer of intangible assets of the seller, provided that (i) the Time: 2 days rights for the building and the land plot at aggregate value of assets of the buyer, according to Cost: RUB 500 its latest financial statements and the seller (group the Federal Service of State Registration, Comments: The seller should obtain notarized copies of the seller) exceeds three billion rubles (currently Cadastre and Cartography of the certificate on state registration of ownership approximately US$83 mln); or (ii) their aggregate Time: 30 days title on the building as well as the certificate of own- proceeds from the sale of products (works, services) ership. The buyer and seller should obtain notarized Cost: RUB 30,000 - RUB 15,000 for a building and for the last calendar year exceeds six billion rubles copies of the certificate of LLC state registration, the RUB 15,000 for a land plot (currently approximately US$167 mln) and, at the charter, the foundation agreement, the certificate on Comments: The Rosreestr has been in operation since same time, the value of assets as per the latest individual taxpayer numbers, and the informational March 2009. To register the transfer of rights for a financial statements of the seller exceeds one letter of State Committee on Statistics. Notarization building and a land plot the following documents hundred fifty million rubles (currently approximately costs about 500 RUR for each document (RUB 10 must be provided: US$4.2 mln); or (iii) either the buyer or the seller is per page) with a state notary, whatever rates are a) Purchase agreement. included in the register of business entities as having established by a private notary. b) Cadastral passport of the building (if necessary). a market share of a particular product (work or The documentation shall include: c) Cadastral passport of the land plot (if necessary). service) of more than 35%. a) Certificate on state registration of ownership

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 141

title to the building and certificate on state REGISTERING PROPERTY f) Corporate documents of the legal entity. registration of ownership title to the land plot Murmansk, Murmansk Oblast g) Documents confirming the state registration of the legal entity. (Obtained in Procedure 3). Property value: RUB 15,333,527 (US$ 495,500) h) Application from the legal entity on the state reg- b) Certificate of LLC state registration, the Data as of: November 2011 istration of real estate rights and transactions. charter, the foundation agreement, the Procedure 1. Seller obtains a cadastral i) Seller’s title for the real estate. certificate on individual number of a taxpayer, passport for the land plot at the Federal j) Document confirming payment of state duties.

and the informational letter of state commi Service of State Registration, Cadastre and REGISTERING PROPERTY Cartography (Rosreestr) tee on statistics (must be in possession of the Time: 5 days Novosibirsk, Novosibirsk Oblast buyer and seller). Cost: RUB 600 Property value: RUB 15,333,527 (US$ 495,500) Procedure 5: Apply for state registration of Comments: Since March 1, 2010 (No. 122-FZ, article Data as of: November 2011 19, p. 1) a request to submit a cadastral passport title transfer in the Unified State Register Procedure 1. Seller obtains a cadastral of Rights to Real Estate of the land plot was abolished in case if a cadastral passport of the land plot has been filed in Rosreestr, passport for a building in the Bureau of Time: 30 days but it is still done in practice. Technical Inventory Cost: RUB 30,000 Time: 3 days Procedure 2*. Seller obtains excerpts for Cost: RUB 600 Comments: Starting from 30 December 2008, state the building and land plot from the Unified registration is carried out by the Federal Service State Register of Real Estate Rights and Comments: Since March 2010 (No. 122-FZ, article of State Registration, Cadastre and Cartography Transactions 33, p. 10) the requirement to submit a cadastral passport of the building was abolished if documents (Rosreestr) and its departments in the constituent Time: 1 day describing the real estate (such as technical passport territories of the Russian Federation where the Cost: RUB 400 - RUB 200 for each excerpt (land and for the building) were filed in Rosreestr. To get a new respective real estate property is located. building) cadastral passport it is sometimes necessary to have In addition to the documents obtained in accordance Comments: The excerpt is used by the buyer to technical inventorization. In practice, a cadastral with procedures 1-3, duly authorized representatives confirm rights and encumbrances for a real estate passport for a building is obtained. object. of the seller and the buyer must submit to the Procedure 2*. Seller obtains a cadastral Moscow department of Rosreestr: Procedure 3*. Obtain excerpts from the passport for the land plot at the Federal a) Applications (standard form); Unified State Register of Legal Entities with Service of State Registration, Cadastre and Rostreestr b) Payment order(s) confirming payment of the state information about seller and buyer at the Cartography ( ) Federal Tax Service registration duty by the buyer; Time: 3 days Time: 2 days c) Title documents and ownership certificates of the Cost: RUB 600 Cost: RUB 800 - RUB 400 for each excerpt seller in respect of each property; Comments: Since March 1, 2010 (No. 122-FZ, article (expedited rate) d) Corporate approvals of the sale and purchase 19, p. 1) a request to submit a cadastral passport Comments: Excerpts confirm the right of parties to of the land plot was abolished in case if a cadastral transaction (if necessary in accordance with the sign the deal and are obtained from the Federal Tax passport of the land plot has been filed in Rosreestr, Russian law and corporate documents of the Service which manages the Unified State Register of but it is still done in practice. parties); Legal Entities. e) 3 originals of the executed sale and purchase Procedure 3*. Seller obtains excerpts for Procedure 4*. Seller and buyer notarize agreement. the building and land plot from the Unified their corporate documents State Register of Real Estate Rights and State registration of the title transfer will include the Time: 1 day Transactions following actions of Rosreestr: Cost: RUB 1,000 - RUB 500 for each charter Time: 5 days a) Receipt of the documents from the parties; Comments: In accordance with federal law (N122-FZ, Cost: RUB 400 - RUB 200 for each excerpt (land and b) Legal due diligence of the documents and of the article 16) for state registration of real estate rights, building) validity of the transaction; originals of corporate documents or notarized copies Comments: The excerpt is used by the buyer to c) Determination of absence of contradictions must be submitted. In practice applicants sometimes confirm rights and encumbrances for a real estate between rights to be state registered and rights provide originals or sometimes notarized copies of object. corporate documents. that have already been registered well as any Procedure 4*. Obtain excerpts from the other grounds for refusal or suspension of state Procedure 5. Register the transfer of Unified State Register of Legal Entities with registration; rights for the building and the land plot at information about seller and buyer at the d) Making of entries in the Unified State Register of the Federal Service of State Registration, Federal Tax Service Cadastre and Cartography Rights to Real Estate and Transactions Therewith; Time: 1 day and Time: 30 days Cost: RUB 800 - RUB 400 for each excerpt Cost: RUB 30,000 - RUB 15,000 for a building and e) Placing of registration stamps on the sale and (expedited rate) RUB 15,000 for a land plot purchase agreement and issue of ownership Comments: Excerpts confirm the right of parties to Comments: The Rosreestr has been in operation since certificates. sign the deal and are obtained from the Federal Tax March 2009. To register the transfer of rights for a Service which manages the Unified State Register of The statutory term of state registration of any right building and a land plot the following documents Legal Entities. and transaction is one month from date of the must be provided: application and documents submission to Rosreestr. a) Purchase agreement. Procedure 5. Register the transfer of Departments of Rosreestr in different regions may b) Cadastral passport of the building (if necessary). rights for the building and the land plot at issue orders establishing shorter terms of state c) Cadastral passport of the land plot (if necessary). the Federal Service of State Registration, registration of rights and transactions with certain d) Documents confirming the authority of the ap- Cadastre and Cartography property. In Moscow the term of state registration of plicant to act on behalf of the legal entities without Time: 30 days title transfer is one month for non-residential property power of attorney. Cost: RUB 30,000 - RUB 15,000 for a building and and 12 days for residential property. e) Document confirming the identity of the applicant. RUB 15,000 for a land plot

* This procedure can be completed simultaneously with previous procedures. 142 DOING BUSINESS IN RUSSIA 2012

Comments: The Rosreestr has been in operation since istration of real estate rights and transactions. Procedure 1. Seller obtains excerpts for March 2009. To register the transfer of rights for a i) Seller’s title for the real estate. the building and land plot from the Unified building and a land plot the following documents j) Document confirming payment of state duties. State Register of Real Estate Rights and must be provided: Transactions REGISTERING PROPERTY a) Purchase agreement. Time: 5 days b) Cadastral passport of the building (if necessary). Perm, Perm Kray Cost: RUB 400 - RUB 200 for each excerpt (land and c) Cadastral passport of the land plot (if necessary). Property value: RUB 15,333,527 (US$ 495,500) building) d) Documents confirming the authority of the ap- Data as of: November 2011 Comments: The excerpt is used by the buyer to confirm plicant to act on behalf of the legal entities without rights and encumbrances for a real estate object. power of attorney. Procedure 1. Seller obtains a cadastral e) Document confirming the identity of the applicant. passport for a building in the Bureau of Procedure 2*. Obtain excerpts from the f) Corporate documents of the legal entity. Technical Inventory Unified State Register of Legal Entities with Time: 14 days information about seller and buyer at the g) Documents confirming the state registration of the Federal Tax Service legal entity. Cost: RUB 6,500 h) Application from the legal entity on the state reg- Time: 2 days istration of real estate rights and transactions. Procedure 2. Seller obtains excerpts for Cost: RUB 800 - RUB 400 for each excerpt the building and land plot from the Unified i) Seller’s title for the real estate. (expedited rate) State Register of Real Estate Rights and j) Document confirming payment of state duties. Comments: Excerpts confirm the right of parties to Transactions sign the deal and are obtained from the Federal Tax REGISTERING PROPERTY Time: 3 days Service which manages the Unified State Register of Omsk, Omsk Oblast Cost: RUB 400 - RUB 200 for each excerpt (land and Legal Entities. building) Property value: RUB 15,333,527 (US$ 495,500) Procedure 3. Register the transfer of Comments: The excerpt is used by the buyer to Data as of: November 2011 rights for the building and the land plot at confirm rights and encumbrances for a real estate the Federal Service of State Registration, Procedure 1. Seller obtains excerpts for object. Cadastre and Cartography the building and land plot from the Unified Procedure 3*. Obtain excerpts from the Time: 30 days State Register of Real Estate Rights and Unified State Register of Legal Entities with Transactions Cost: RUB 30,000 - RUB 15,000 for a building and information about seller and buyer at the RUB 15,000 for a land plot Time: 3 days Federal Tax Service Comments: The Rosreestr has been in operation since Cost: RUB 400 - RUB 200 for each excerpt (land and Time: 1 day March 2009. To register the transfer of rights for a building) Cost: RUB 800 - RUB 400 for each excerpt building and a land plot the following documents Comments: The excerpt is used by the buyer to (expedited rate) must be provided: confirm rights and encumbrances for a real estate Comments: Excerpts confirm the right of parties to a) Purchase agreement. object. sign the deal and are obtained from the Federal Tax b) Cadastral passport of the building (if necessary). Procedure 2*. Obtain excerpts from the Service which manages the Unified State Register of c) Cadastral passport of the land plot (if necessary). Unified State Register of Legal Entities with Legal Entities. d) Documents confirming the authority of the ap- information about seller and buyer at the Procedure 4. Register the transfer of plicant to act on behalf of the legal entities without Federal Tax Service rights for the building and the land plot at power of attorney. Time: 2 days the Federal Service of State Registration, e) Document confirming the identity of the applicant. Cost: RUB 800 - RUB 400 for each excerpt Cadastre and Cartography f) Corporate documents of the legal entity. (expedited rate) Time: 30 days g) Documents confirming the state registration of the legal entity. Comments: Excerpts confirm the right of parties to Cost: RUB 30,000 - RUB 15,000 for a building and sign the deal and are obtained from the Federal Tax RUB 15,000 for a land plot h) Application from the legal entity on the state reg- istration of real estate rights and transactions. Service which manages the Unified State Register of Comments: The Rosreestr has been in operation since i) Seller’s title for the real estate. Legal Entities. March 2009. To register the transfer of rights for a j) Document confirming payment of state duties. Procedure 3. Register the transfer of building and a land plot the following documents rights for the building and the land plot at must be provided: REGISTERING PROPERTY a) Purchase agreement. the Federal Service of State Registration, Rostov-on-Don, Rostov Oblast Cadastre and Cartography b) Cadastral passport of the building (if necessary). Property value: RUB 15,333,527 (US$ 495,500) Time: 30 days c) Cadastral passport of the land plot (if necessary). Cost: RUB 30,000 - RUB 15,000 for a building and d) Documents confirming the authority of the ap- Data as of: November 2011 RUB 15,000 for a land plot plicant to act on behalf of the legal entities without Procedure 1. Seller obtains excerpts for power of attorney. Comments: The Rosreestr has been in operation since the building and land plot from the Unified March 2009. To register the transfer of rights for a e) Document confirming the identity of the applicant. State Register of Real Estate Rights and building and a land plot the following documents f) Corporate documents of the legal entity. Transactions must be provided: g) Documents confirming the state registration of the Time: 2 days a) Purchase agreement. legal entity. Cost: RUB 400 - RUB 200 for each excerpt (land and b) Cadastral passport of the building (if necessary). h) Application from the legal entity on the state reg- building) istration of real estate rights and transactions. c) Cadastral passport of the land plot (if necessary). Comments: The excerpt is used by the buyer to i) Seller’s title for the real estate. d) Documents confirming the authority of the ap- confirm rights and encumbrances for a real estate plicant to act on behalf of the legal entities without j) Document confirming payment of state duties. object. power of attorney. REGISTERING PROPERTY e) Document confirming the identity of the applicant. Procedure 2*. Obtain excerpts from the f) Corporate documents of the legal entity. Petrozavodsk, Republic of Karelia Unified State Register of Legal Entities with Property value: RUB 15,333,527 (US$ 495,500) information about seller and buyer at the g) Documents confirming the state registration of the Federal Tax Service legal entity. Data as of: November 2011 h) Application from the legal entity on the state reg- Time: 2 days

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 143

Cost: RUB 800 - RUB 400 for each excerpt Comments: Excerpts confirm the right of parties to Procedure 3. Register the transfer of (expedited rate) sign the deal and are obtained from the Federal Tax rights for the building and the land plot at Comments: Excerpts confirm the right of parties to Service which manages the Unified State Register of the Federal Service of State Registration, sign the deal and are obtained from the Federal Tax Legal Entities. Cadastre and Cartography Service which manages the Unified State Register of Procedure 4*. Seller and buyer notarize Time: 30 days Legal Entities. their corporate documents Cost: RUB 30,000 - RUB 15,000 for a building and Procedure 3. Register the transfer of Time: 1 day RUB 15,000 for a land plot rights for the building and the land plot at Cost: RUB 1,000 - RUB 500 for each charter Comments: The Rosreestr has been in operation since March 2009. To register the transfer of rights for a the Federal Service of State Registration, Comments: In accordance with federal law (N122-FZ, building and a land plot the following documents Cadastre and Cartography article 16) for state registration of real estate rights, must be provided: Time: 30 days originals of corporate documents or notarized copies Cost: RUB 30,000 - RUB 15,000 for a building and must be submitted. In practice applicants sometimes a) Purchase agreement. RUB 15,000 for a land plot provide originals or sometimes notarized copies of b) Cadastral passport of the building (if necessary). Comments: The Rosreestr has been in operation since corporate documents. c) Cadastral passport of the land plot (if necessary). d) Documents confirming the authority of the ap- March 2009. To register the transfer of rights for a Procedure 5. Register the transfer of building and a land plot the following documents plicant to act on behalf of the legal entities without rights for the building and the land plot at power of attorney. must be provided: the Federal Service of State Registration, e) Document confirming the identity of the applicant. a) Purchase agreement. Cadastre and Cartography f) Corporate documents of the legal entity. b) Cadastral passport of the building (if necessary). Time: 30 days c) Cadastral passport of the land plot (if necessary). g) Documents confirming the state registration of the Cost: RUB 30,000 - RUB 15,000 for a building and legal entity. d) Documents confirming the authority of the ap- RUB 15,000 for a land plot plicant to act on behalf of the legal entities without h) Application from the legal entity on the state reg- Comments: The Rosreestr has been in operation since power of attorney. istration of real estate rights and transactions. March 2009. To register the transfer of rights for a i) Seller’s title for the real estate. e) Document confirming the identity of the applicant. building and a land plot the following documents j) Document confirming payment of state duties. f) Corporate documents of the legal entity. must be provided: g) Documents confirming the state registration of the a) Purchase agreement. REGISTERING PROPERTY legal entity. b) Cadastral passport of the building (if necessary). Saransk, Republic of Mordovia h) Application from the legal entity on the state reg- c) Cadastral passport of the land plot (if necessary). istration of real estate rights and transactions. Property value: RUB 15,333,527 (US$ 495,500) d) Documents confirming the authority of the ap- i) Seller’s title for the real estate. Data as of: November 2011 plicant to act on behalf of the legal entities without j) Document confirming payment of state duties. power of attorney. Procedure 1. Seller obtains excerpts for REGISTERING PROPERTY e) Document confirming the identity of the applicant. the building and land plot from the Unified Saint-Petersburg f) Corporate documents of the legal entity. State Register of Real Estate Rights and g) Documents confirming the state registration of the Transactions Property value: RUB 15,333,527 (US$ 495,500) legal entity. Time: 5 days Data as of: November 2011 h) Application from the legal entity on the state reg- Cost: RUB 400 - RUB 200 for each excerpt (land and Procedure 1. Seller obtains a cadastral istration of real estate rights and transactions. building) passport for the land plot at the Federal i) Seller’s title for the real estate. Comments: The excerpt is used by the buyer to Service of State Registration, Cadastre and j) Document confirming payment of state duties. confirm rights and encumbrances for a real estate Rosreestr Cartography ( ) REGISTERING PROPERTY object. Time: 14 days Samara, Samara Oblast Procedure 2*. Obtain excerpts from the Cost: RUB 600 Unified State Register of Legal Entities with Property value: RUB 15,333,527 (US$ 495,500) Comments: Since March 1, 2010 (No. 122-FZ, article information about seller and buyer at the 19, p. 1) a request to submit a cadastral passport Data as of: November 2011 Federal Tax Service of the land plot was abolished in case if a cadastral Procedure 1. Seller obtains excerpts for Time: 2 days passport of the land plot has been filed in Rosreestr, the building and land plot from the Unified Cost: RUB 800 - RUB 400 for each excerpt but it is still done in practice. State Register of Real Estate Rights and (expedited rate) Procedure 2*. Seller obtains excerpts for Transactions Comments: Excerpts confirm the right of parties to the building and land plot from the Unified Time: 5 days sign the deal and are obtained from the Federal Tax State Register of Real Estate Rights and Cost: RUB 400 - RUB 200 for each excerpt (land and Service which manages the Unified State Register of Transactions building) Legal Entities. Time: 1 day Comments: The excerpt is used by the buyer to Procedure 3. Register the transfer of Cost: RUB 400 - RUB 200 for each excerpt (land and confirm rights and encumbrances for a real estate rights for the building and the land plot at building) object. the Federal Service of State Registration, Comments: The excerpt is used by the buyer to Procedure 2*. Obtain excerpts from the Cadastre and Cartography confirm rights and encumbrances for a real estate Unified State Register of Legal Entities with Time: 30 days object. information about seller and buyer at the Cost: RUB 30,000 - RUB 15,000 for a building and Procedure 3*. Obtain excerpts from the Federal Tax Service RUB 15,000 for a land plot Unified State Register of Legal Entities with Time: 2 days Comments: The Rosreestr has been in operation since information about seller and buyer at the Cost: RUB 800 - RUB 400 for each excerpt March 2009. To register the transfer of rights for a Federal Tax Service (expedited rate) building and a land plot the following documents must be provided: Time: 1 day Comments: Excerpts confirm the right of parties to Cost: RUB 800 - RUB 400 for each excerpt sign the deal and are obtained from the Federal Tax a) Purchase agreement. (expedited rate; regular cost RUB 200 and 5 days) Service which manages the Unified State Register of b) Cadastral passport of the building (if necessary). Legal Entities. c) Cadastral passport of the land plot (if necessary).

* This procedure can be completed simultaneously with previous procedures. 144 DOING BUSINESS IN RUSSIA 2012

d) Documents confirming the authority of the ap- istration of real estate rights and transactions. Procedure 1. Seller obtains a cadastral plicant to act on behalf of the legal entities without i) Seller’s title for the real estate. passport for the land plot at the Federal power of attorney. j) Document confirming payment of state duties. Service of State Registration, Cadastre and e) Document confirming the identity of the applicant. Cartography (Rosreestr) REGISTERING PROPERTY f) Corporate documents of the legal entity. Time: 3 days g) Documents confirming the state registration of the Surgut, Khanty-Mansiisk Autonomous Cost: RUB 600 legal entity. Okrug – Yugra Comments: Since March 1, 2010 (No. 122-FZ, article h) Application from the legal entity on the state reg- Property value: RUB 15,333,527 (US$ 495,500) 19, p. 1) a request to submit a cadastral passport istration of real estate rights and transactions. Data as of: November 2011 of the land plot was abolished in case if a cadastral i) Seller’s title for the real estate. passport of the land plot has been filed in Rosreestr, j) Document confirming payment of state duties. Procedure 1. Seller obtains excerpts for but it is still done in practice. the building and land plot from the Unified REGISTERING PROPERTY State Register of Real Estate Rights and Procedure 2*. Seller obtains excerpts for Stavropol, Stavropol Kray Transactions the building and land plot from the Unified State Register of Real Estate Rights and Property value: RUB 15,333,527 (US$ 495,500) Time: 5 days Transactions Cost: RUB 400 - RUB 200 for each excerpt (land and Data as of: November 2011 Time: 5 days building) Procedure 1. Seller obtains a cadastral Cost: RUB 400 - RUB 200 for each excerpt (land and Comments: The excerpt is used by the buyer to building) passport for the land plot at the Federal confirm rights and encumbrances for a real estate Service of State Registration, Cadastre and object. Comments: The excerpt is used by the buyer to Cartography (Rosreestr) confirm rights and encumbrances for a real estate Time: 1 day Procedure 2*. Obtain excerpts from the object. Cost: RUB 400 Unified State Register of Legal Entities with information about seller and buyer at the Procedure 3*. Obtain excerpts from the Procedure 2*. Seller obtains excerpts for Federal Tax Service Unified State Register of Legal Entities with the building and land plot from the Unified information about seller and buyer at the Time: 1 day Federal Tax Service State Register of Real Estate Rights and Cost: RUB 800 - RUB 400 for each excerpt Time: 5 days Transactions (expedited rate) Cost: RUB 800 - RUB 400 for each excerpt Time: 14 days Comments: Excerpts confirm the right of parties to (expedited rate) Cost: RUB 600 sign the deal and are obtained from the Federal Tax Comments: Excerpts confirm the right of parties to Comments: The excerpt is used by the buyer to Service which manages the Unified State Register of sign the deal and are obtained from the Federal Tax confirm rights and encumbrances for a real estate Legal Entities. Service which manages the Unified State Register of object. Procedure 3. Register the transfer of Legal Entities. Procedure 3*. Obtain excerpts from the rights for the building and the land plot at Unified State Register of Legal Entities with the Federal Service of State Registration, Procedure 4*. Seller and buyer notarize information about seller and buyer at the Cadastre and Cartography their corporate documents Federal Tax Service Time: 30 days Time: 1 day Time: 2 days Cost: RUB 30,000 - RUB 15,000 for a building and Cost: RUB 1,000 - RUB 500 for each charter Cost: RUB 800 - RUB 400 for each excerpt RUB 15,000 for a land plot Comments: In accordance with federal law (N122-FZ, (expedited rate) Comments: The Rosreestr has been in operation since article 16) for state registration of real estate rights, originals of corporate documents or notarized copies Comments: Excerpts confirm the right of parties to March 2009. To register the transfer of rights for a must be submitted. In practice applicants sometimes sign the deal and are obtained from the Federal Tax building and a land plot the following documents provide originals or sometimes notarized copies of Service which manages the Unified State Register of must be provided: corporate documents. Legal Entities. a) Purchase agreement. Procedure 5. Register the transfer of Procedure 4. Register the transfer of b) Cadastral passport of the building (if necessary). rights for the building and the land plot at rights for the building and the land plot at c) Cadastral passport of the land plot (if necessary). the Federal Service of State Registration, the Federal Service of State Registration, d) Documents confirming the authority of the ap- Cadastre and Cartography Cadastre and Cartography plicant to act on behalf of the legal entities without power of attorney. Time: 30 days Time: 14 days e) Document confirming the identity of the applicant. Cost: RUB 30,000 - RUB 15,000 for a building and Cost: RUB 30,000 - RUB 15,000 for a building and RUB 15,000 for a land plot RUB 15,000 for a land plot f) Corporate documents of the legal entity. Comments: The Rosreestr has been in operation since Comments: The Rosreestr has been in operation since g) Documents confirming the state registration of the legal entity. March 2009. To register the transfer of rights for a March 2009. To register the transfer of rights for a building and a land plot the following documents building and a land plot the following documents h) Application from the legal entity on the state reg- must be provided: must be provided: istration of real estate rights and transactions. a) Purchase agreement. a) Purchase agreement. i) Seller’s title for the real estate. b) Cadastral passport of the building (if necessary). b) Cadastral passport of the building (if necessary). j) Document confirming payment of state duties. c) Cadastral passport of the land plot (if necessary). c) Cadastral passport of the land plot (if necessary). REGISTERING PROPERTY d) Documents confirming the authority of the ap- d) Documents confirming the authority of the ap- Tomsk, Tomsk Oblast plicant to act on behalf of the legal entities without plicant to act on behalf of the legal entities without power of attorney. power of attorney. Property value: RUB 15,333,527 (US$ 495,500) e) Document confirming the identity of the applicant. e) Document confirming the identity of the applicant. Data as of: November 2011 f) Corporate documents of the legal entity. f) Corporate documents of the legal entity. g) Documents confirming the state registration of the g) Documents confirming the state registration of the legal entity. legal entity. h) Application from the legal entity on the state reg- h) Application from the legal entity on the state reg-

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 145

istration of real estate rights and transactions. Cost: RUB 400 - RUB 200 for each excerpt (land and Comments: Excerpts confirm the right of parties to i) Seller’s title for the real estate. building) sign the deal and are obtained from the Federal Tax j) Document confirming payment of state duties. Comments: The excerpt is used by the buyer to Service which manages the Unified State Register of confirm rights and encumbrances for a real estate Legal Entities. REGISTERING PROPERTY object. Procedure 3. Register the transfer of Tver, Tver Oblast Procedure 2*. Obtain excerpts from the rights for the building and the land plot at Property value: RUB 15,333,527 (US$ 495,500) Unified State Register of Legal Entities with the Federal Service of State Registration, Data as of: November 2011 information about seller and buyer at the Cadastre and Cartography Federal Tax Service Time: 22 days Procedure 1. Seller obtains excerpts for the building and land plot from the Unified Time: 2 days Cost: RUB 30,000 - RUB 15,000 for a building and State Register of Real Estate Rights and Cost: RUB 800 - RUB 400 for each excerpt RUB 15,000 for a land plot Transactions (expedited rate) Comments: The Rosreestr has been in operation since March 2009. To register the transfer of rights for a Time: 5 days Comments: Excerpts confirm the right of parties to sign the deal and are obtained from the Federal Tax building and a land plot the following documents Cost: RUB 400 - RUB 200 for each excerpt (land and Service which manages the Unified State Register of must be provided: building) Legal Entities. a) Purchase agreement. Comments: The excerpt is used by the buyer to b) Cadastral passport of the building (if necessary). confirm rights and encumbrances for a real estate Procedure 3. Register the transfer of c) Cadastral passport of the land plot (if necessary). object. rights for the building and the land plot at the Federal Service of State Registration, d) Documents confirming the authority of the ap- Procedure 2*. Obtain excerpts from the Cadastre and Cartography plicant to act on behalf of the legal entities without Unified State Register of Legal Entities with power of attorney. Time: 30 days information about seller and buyer at the e) Document confirming the identity of the applicant. Cost: RUB 30,000 - RUB 15,000 for a building and Federal Tax Service f) Corporate documents of the legal entity. RUB 15,000 for a land plot Time: 3 days g) Documents confirming the state registration of the Comments: The Rosreestr has been in operation since Cost: RUB 800 - RUB 400 for each excerpt legal entity. March 2009. To register the transfer of rights for a (expedited rate) h) Application from the legal entity on the state reg- building and a land plot the following documents istration of real estate rights and transactions. Comments: Excerpts confirm the right of parties to must be provided: i) Seller’s title for the real estate. sign the deal and are obtained from the Federal Tax a) Purchase agreement. Service which manages the Unified State Register of j) Document confirming payment of state duties. b) Cadastral passport of the building (if necessary). Legal Entities. Registration is usually completed within 14-30 days. c) Cadastral passport of the land plot (if necessary). Procedure 3. Register the transfer of d) Documents confirming the authority of the ap- REGISTERING PROPERTY rights for the building and the land plot at plicant to act on behalf of the legal entities without Vladivostok, Primorsky Krai the Federal Service of State Registration, power of attorney. Cadastre and Cartography e) Document confirming the identity of the applicant. Property value: RUB 15,333,527 (US$ 495,500) Time: 30 days f) Corporate documents of the legal entity. Data as of: November 2011 Cost: RUB 30,000 - RUB 15,000 for a building and g) Documents confirming the state registration of the Procedure 1. Seller obtains excerpts for RUB 15,000 for a land plot legal entity. the building and land plot from the Unified Comments: The Rosreestr has been in operation since h) Application from the legal entity on the state reg- State Register of Real Estate Rights and March 2009. To register the transfer of rights for a istration of real estate rights and transactions. Transactions building and a land plot the following documents i) Seller’s title for the real estate. Time: 1 day must be provided: j) Document confirming payment of state duties. Cost: RUB 400 - RUB 200 for each excerpt (land and a) Purchase agreement. REGISTERING PROPERTY building) b) Cadastral passport of the building (if necessary). Comments: The excerpt is used by the buyer to c) Cadastral passport of the land plot (if necessary). Vladikavkaz, Republic of confirm rights and encumbrances for a real estate d) Documents confirming the authority of the ap- North Ossetia – Alania object. plicant to act on behalf of the legal entities without Property value: RUB 15,333,527 (US$ 495,500) power of attorney. Procedure 2*. Obtain excerpts from the Data as of: November 2011 e) Document confirming the identity of the applicant. Unified State Register of Legal Entities with f) Corporate documents of the legal entity. Procedure 1. Seller obtains excerpts for information about seller and buyer at the g) Documents confirming the state registration of the the building and land plot from the Unified Federal Tax Service legal entity. State Register of Real Estate Rights and Time: 1 day h) Application from the legal entity on the state reg- Transactions Cost: RUB 800 - RUB 400 for each excerpt istration of real estate rights and transactions. Time: 3 days (expedited rate) i) Seller’s title for the real estate. Cost: RUB 400 - RUB 200 for each excerpt (land and Comments: Excerpts confirm the right of parties to j) Document confirming payment of state duties. building) sign the deal and are obtained from the Federal Tax Comments: The excerpt is used by the buyer to Service which manages the Unified State Register of REGISTERING PROPERTY confirm rights and encumbrances for a real estate Legal Entities. Ulyanovsk, Ulyanovsk Oblast object. Procedure 3. Register the transfer of Property value: RUB 15,333,527 (US$ 495,500) Procedure 2*. Obtain excerpts from the rights for the building and the land plot at Data as of: November 2011 Unified State Register of Legal Entities with the Federal Service of State Registration, information about seller and buyer at the Cadastre and Cartography Procedure 1. Seller obtains excerpts for Federal Tax Service the building and land plot from the Unified Time: 30 days State Register of Real Estate Rights and Time: 3 days Cost: RUB 30,000 - RUB 15,000 for a building and Transactions Cost: RUB 800 - RUB 400 for each excerpt RUB 15,000 for a land plot Time: 5 days (expedited rate) Comments: The Rosreestr has been in operation since March 2009. To register the transfer of rights for a

* This procedure can be completed simultaneously with previous procedures. 146 DOING BUSINESS IN RUSSIA 2012

building and a land plot the following documents i) Seller’s title for the real estate. Comments: The excerpt is used by the buyer to must be provided: j) Document confirming payment of state duties. confirm rights and encumbrances for a real estate a) Purchase agreement. object. REGISTERING PROPERTY b) Cadastral passport of the building (if necessary). Procedure 2*. Obtain excerpts from the Voronezh, Voronezh Oblast c) Cadastral passport of the land plot (if necessary). Unified State Register of Legal Entities with d) Documents confirming the authority of the ap- Property value: RUB 15,333,527 (US$ 495,500) information about seller and buyer at the plicant to act on behalf of the legal entities without Data as of: November 2011 Federal Tax Service power of attorney. Time: 2 days e) Document confirming the identity of the applicant. Procedure 1. Seller obtains excerpts for Cost: RUB 800 - RUB 400 for each excerpt f) Corporate documents of the legal entity. the building and land plot from the Unified State Register of Real Estate Rights and (expedited rate) g) Documents confirming the state registration of the Transactions Comments: Excerpts confirm the right of parties to legal entity. Time: 5 days sign the deal and are obtained from the Federal Tax h) Application from the legal entity on the state reg- Service which manages the Unified State Register of istration of real estate rights and transactions. Cost: RUB 400 - RUB 200 for each excerpt (land and Legal Entities. i) Seller’s title for the real estate. building) j) Document confirming payment of state duties. Comments: The excerpt is used by the buyer to Procedure 3. Register the transfer of confirm rights and encumbrances for a real estate rights for the building and the land plot at REGISTERING PROPERTY object. the Federal Service of State Registration, Cadastre and Cartography Volgograd, Volgograd Oblast Procedure 2*. Obtain excerpts from the Time: 30 days Property value: RUB 15,333,527 (US$ 495,500) Unified State Register of Legal Entities with Cost: RUB 30,000 - RUB 15,000 for a building and Data as of: November 2011 information about seller and buyer at the Federal Tax Service RUB 15,000 for a land plot Procedure 1. Seller obtains excerpts for Time: 2 days Comments: The Rosreestr has been in operation since the building and land plot from the Unified March 2009. To register the transfer of rights for a State Register of Real Estate Rights and Cost: RUB 800 - RUB 400 for each excerpt building and a land plot the following documents Transactions (expedited rate) must be provided: Comments: Excerpts confirm the right of parties to Time: 3 days a) Purchase agreement. sign the deal and are obtained from the Federal Tax b) Cadastral passport of the building (if necessary). Cost: RUB 400 - RUB 200 for each excerpt (land and Service which manages the Unified State Register of building) Legal Entities. c) Cadastral passport of the land plot (if necessary). Comments: The excerpt is used by the buyer to d) Documents confirming the authority of the ap- confirm rights and encumbrances for a real estate Procedure 3. Register the transfer of plicant to act on behalf of the legal entities without object. rights for the building and the land plot at power of attorney. the Federal Service of State Registration, e) Document confirming the identity of the applicant. Procedure 2*. Obtain excerpts from the Cadastre and Cartography f) Corporate documents of the legal entity. Unified State Register of Legal Entities with Time: 30 days information about seller and buyer at the g) Documents confirming the state registration of the Federal Tax Service Cost: RUB 30,000 - RUB 15,000 for a building and legal entity. RUB 15,000 for a land plot h) Application from the legal entity on the state reg- Time: 2 days Comments: The Rosreestr has been in operation since istration of real estate rights and transactions. Cost: RUB 800 - RUB 400 for each excerpt March 2009. To register the transfer of rights for a i) Seller’s title for the real estate. (expedited rate) building and a land plot the following documents j) Document confirming payment of state duties. Comments: Excerpts confirm the right of parties to must be provided: sign the deal and are obtained from the Federal Tax a) Purchase agreement. REGISTERING PROPERTY Service which manages the Unified State Register of b) Cadastral passport of the building (if necessary). Yakutsk, Republic of Sakha – Yakutia Legal Entities. c) Cadastral passport of the land plot (if necessary). Property value: RUB 15,333,527 (US$ 495,500) Procedure 3. Register the transfer of d) Documents confirming the authority of the ap- Data as of: November 2011 rights for the building and the land plot at plicant to act on behalf of the legal entities without the Federal Service of State Registration, power of attorney. Procedure 1. Seller obtains a cadastral Cadastre and Cartography e) Document confirming the identity of the applicant. passport for a building in the Bureau of Time: 30 days f) Corporate documents of the legal entity. Technical Inventory Cost: RUB 30,000 - RUB 15,000 for a building and g) Documents confirming the state registration of the Time: 30 days RUB 15,000 for a land plot legal entity. Cost: RUB 30,000 Comments: The Rosreestr has been in operation since h) Application from the legal entity on the state reg- Comments: Since March 2010 (No. 122-FZ, article March 2009. To register the transfer of rights for a istration of real estate rights and transactions. 33, p. 10) the requirement to submit a cadastral building and a land plot the following documents i) Seller’s title for the real estate. passport of the building was abolished if documents must be provided: j) Document confirming payment of state duties. describing the real estate (such as technical passport a) Purchase agreement. for the building) were filed in Rosreestr. To get a new REGISTERING PROPERTY b) Cadastral passport of the building (if necessary). cadastral passport it is sometimes necessary to have technical inventorization. In practice, a cadastral c) Cadastral passport of the land plot (if necessary). Vyborg, Leningrad Oblast passport for a building is obtained. d) Documents confirming the authority of the ap- Property value: RUB 15,333,527 (US$ 495,500) plicant to act on behalf of the legal entities without Data as of: November 2011 Procedure 2*. Seller obtains excerpts for power of attorney. the building and land plot from the Unified e) Document confirming the identity of the applicant. Procedure 1. Seller obtains excerpts for State Register of Real Estate Rights and f) Corporate documents of the legal entity. the building and land plot from the Unified Transactions State Register of Real Estate Rights and Time: 1 day g) Documents confirming the state registration of the Transactions legal entity. Cost: RUB 400 - RUB 200 for each excerpt (land and h) Application from the legal entity on the state reg- Time: 5 days building) istration of real estate rights and transactions. Cost: RUB 400 - RUB 200 for each excerpt (land and building)

* This procedure can be completed simultaneously with previous procedures. LIST OF PROCEDURES 147

Comments: The excerpt is used by the buyer to Procedure 2*. Obtain excerpts from the Comments: The excerpt is used by the buyer to confirm rights and encumbrances for a real estate Unified State Register of Legal Entities with confirm rights and encumbrances for a real estate object. information about seller and buyer at the object. Federal Tax Service Procedure 3*. Obtain excerpts from the Procedure 2*. Obtain excerpts from the Unified State Register of Legal Entities with Time: 7 days Unified State Register of Legal Entities with information about seller and buyer at the Cost: No cost (free for legal entities) information about seller and buyer at the Federal Tax Service Comments: Excerpts confirm the right of parties to Federal Tax Service Time: 1 day sign the deal and are obtained from the Federal Tax Time: 2 days Cost: RUB 800 - RUB 400 for each excerpt Service which manages the Unified State Register of Cost: RUB 800 - RUB 400 for each excerpt (expedited rate) Legal Entities. (expedited rate) Comments: Excerpts confirm the right of parties to Procedure 3. Register the transfer of Comments: Excerpts confirm the right of parties to sign the deal and are obtained from the Federal Tax rights for the building and the land plot at sign the deal and are obtained from the Federal Tax Service which manages the Unified State Register of the Federal Service of State Registration, Service which manages the Unified State Register of Legal Entities. Cadastre and Cartography Legal Entities. Procedure 4. Register the transfer of Time: 30 days Procedure 3*. Seller and buyer notarize rights for the building and the land plot at Cost: RUB 30,000 - 15,000 for a building and RUB their corporate documents the Federal Service of State Registration, 15,000 for a land plot Time: 1 day Cadastre and Cartography Comments: The Rosreestr has been in operation since Cost: RUB 1,000 - RUB 500 for each charter March 2009. To register the transfer of rights for a Time: 30 days Comments: In accordance with federal law (N122-FZ, building and a land plot the following documents Cost: RUB 30,000 - RUB 15,000 for a building and article 16) for state registration of real estate rights, must be provided: RUB 15,000 for a land plot originals of corporate documents or notarized copies a) Purchase agreement. Comments: The Rosreestr has been in operation since must be submitted. In practice applicants sometimes March 2009. To register the transfer of rights for a b) Cadastral passport of the building (if necessary). provide originals or sometimes notarized copies of building and a land plot the following documents c) Cadastral passport of the land plot (if necessary). corporate documents. must be provided: d) Documents confirming the authority of the ap- Procedure 4. Register the transfer of a) Purchase agreement. plicant to act on behalf of the legal entities without power of attorney. rights for the building and the land plot at b) Cadastral passport of the building (if necessary). the Federal Service of State Registration, e) Document confirming the identity of the applicant. c) Cadastral passport of the land plot (if necessary). Cadastre and Cartography f) Corporate documents of the legal entity. d) Documents confirming the authority of the ap- Time: 30 days plicant to act on behalf of the legal entities without g) Documents confirming the state registration of the Cost: RUB 30,000 - RUB 15,000 for a building and power of attorney. legal entity. RUB 15,000 for a land plot e) Document confirming the identity of the applicant. h) Application from the legal entity on the state reg- Comments: The Rosreestr has been in operation since f) Corporate documents of the legal entity. istration of real estate rights and transactions. i) Seller’s title for the real estate. March 2009. To register the transfer of rights for a g) Documents confirming the state registration of the building and a land plot the following documents j) Document confirming payment of state duties. legal entity. must be provided: In Yaroslavl excerpts from the Unified State Register h) Application from the legal entity on the state reg- a) Purchase agreement. istration of real estate rights and transactions. of Legal Entities can be submitted to Rosreestr after b) Cadastral passport of the building (if necessary). i) Seller’s title for the real estate. the application has been submitted. Therefore c) Cadastral passport of the land plot (if necessary). j) Document confirming payment of state duties. applicants in Yaroslval obtain the excerpts from the Unified State Register of Legal Entities free of charge d) Documents confirming the authority of the ap- REGISTERING PROPERTY during 5 work days. plicant to act on behalf of the legal entities without power of attorney. Yaroslavl, Yaroslavl Oblast REGISTERING PROPERTY e) Document confirming the identity of the applicant. Property value: RUB 15,333,527 (US$ 495,500) Yekaterinburg, Sverdlovsk Oblast f) Corporate documents of the legal entity. Data as of: November 2011 Property value: none (US$ 0) g) Documents confirming the state registration of the Procedure 1. Seller obtains excerpts for Data as of: November 2011 legal entity. the building and land plot from the Unified h) Application from the legal entity on the state reg- State Register of Real Estate Rights and Procedure 1. Seller obtains excerpts for istration of real estate rights and transactions. Transactions the building and land plot from the Unified i) Seller’s title for the real estate. State Register of Real Estate Rights and j) Document confirming payment of state duties. Time: 5 days Transactions Cost: RUB 400 - RUB 200 for each excerpt (land and building) Time: 5 days Comments: The excerpt is used by the buyer to Cost: RUB 400 - RUB 200 for each excerpt (land and confirm rights and encumbrances for a real estate building) object.

* This procedure can be completed simultaneously with previous procedures. Acknowledgments

Contact details for local partners are available on the Doing Business website at http://www.doingbusiness.org

Doing Business in Russia was produced by the Global The dissemination and media campaign were led Indicators and Analysis Department of the World and coordinated by Nadine Shamounki Ghannam, Bank Group and the World Bank Moscow Office in Sushmitha Malini Narsiah, Marina Vasilieva, and collaboration with the Higher School of Economics Nezhdana Bukova. The English version of the report (HSE) and the Institute of Urban Economics (IUE). was edited by Paul Holtz and designed by Corporate The team was led by Iva Hamel and Frederic Bustelo Vision. The report was translated from English to under the general direction of Mierta Capaul and Russian by Sergei Ragachewski. The Russian version Sylvie Bossoutrot. The team comprised Yanina of the report was edited by Olga Osadchaya. The Ermakova, Cemile Hacibeyoglu, Deanna Despodova typesetting of the Russian version and the printing Pajkovski, Tatyana Ponomareva and Marina Turlakova. was done by Alex Publishers. The HSE team was led by Andrei Yakovlev and Irina Golubeva and the IUE team by Andrei Tumanov. The The project was funded by the Ministry of Economic HSE and IUE teams comprised Alan Abaev, Tatyana Development of the Russian Federation, 26 par- Alimova, Elena Aslanian, Alexey Borisov, Vladimir ticipating regions and 1 municipality, as well as by Buyev, Guzel Garifullina, Alexander Hodachek, the European Union, represented by the European Victor Kichev, Alexander Kopeikin, Vladimir Ladygin, Commission. Special thanks go to Minister of Elena Lee, Elvira Leontieva, Vladimir Markin, Elena Economic Development Elvira Nabiullina and her Myakisheva, Tatyana Prokhorova, Vladislav Prokofiev, staff, Elena Kiseleva, Nadezhda Lubentsova, Mikhail Natalia Rogozhina, Ludmila Ruzhanskaya, Timur Oseevsky, Marina Gorokhova, Yulia Lavrinenko, Alexei Shakirov, Alexey Shekhovtsov, Elena Shkoda, Vladimir Likhachev, Alexander Pirozhenko, as well as to Etienne Snegirev, Maria Sorokina, Dmitry Tolmachev, Andrei Claeye and Alexander Kopasov of the European Union Vereschaka, Tatyana Vukolova, Alexey Zhikharev, and for their support and leadership. Alexander Zimin. Doing Business in Russia 2012 would not be possible The team is grateful for valuable comments provided without the expertise and generous input of 600 lo- by colleagues across the World Bank Group. Peer cal contributors and government officials, including review comments were received from Svetlana 400 private contributors - accountants, architects, Bagaudinova, Hester Marie de Caster, Alejandro business consultants, engineers, lawyers, property Espinosa-Wang, Katharina Gassner, Alvaro Gonzalez, experts, utility providers and other professionals rou- Anna Georgieva, Lawrence Bernard Kay, Gregory tinely administering or advising on the relevant legal Kisunko, Andrei Mikhnev, Thomas Moullier, Nuria de and regulatory requirements in Russia. Doing Business Oca, and Susanne Szymanski. Karim Belayachi, Dariga in Russia 2012 benefited from the support of more Chukmaitova, Julio Fuster, Farah Hussein, Madalina than 200 municipal and regional government officials Papahagy, Anastasia Shegay, Alessio Zanelli provided and representatives from national government agen- valuable assistance at various stages of the project. cies. The names of those wishing to be acknowledged The website (http://www.doingbusiness.org/Russia) individually are listed in the report and in the website. was developed by Preeti Endlaw, Graeme Littler, Hashim Zia, Kunal Patel, and Vinod Thottikkatu. ACKNOWLEDGMENTS 149

Oleg Popov Nikolay Lezhnev Ekaterina Poludnenko Irina Putintseva ADVOKOM, LLC GORVODOKANAL REGIONAL DEVELOPMENT AGENCY OF VOSTOKSTORYSERVIS, LLC KALUGA OBLAST Alexander Akimov Alexander Serdyukov Andrei Shumeev AKMIAL, LLC GRAND, JSC REKON, LLC YUIT-DON

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