Top

6. Appropriate Regulation
6.1 Fair Tax Regime
6.2 Professional Services
6.3 Capital Markets

6. Appropriate Regulation

Goal – A comprehensive regulatory regime that is transparent, efficient, simple in its implementation and that leads to accurate reporting of property values and prudent protection from market risks

  

6.1 Fair Tax Regime (Strong)

Core Question: Do market participants feel the overall tax rate is fair and participate in formal transactions?

Strong

Transfer Tax (Strong)

6.1.1   What is the total property transfer tax including all duties and payments?

3.4% of property value – Ranking – 52 out of 189, Strong

Overall Tax (Strong)

6.1.2   What is the overall tax rate on entrepreneurs(as a percentage of profits)?

Ranking – 62 out of 189, Total taxation one of best in Latin America. Corporate income tax 19%. Employer SS 29.7%. Strong

Source:
Doing Business 2014 – Paying Taxes & Registering Property, World Bank
www.doingbusiness.org

6.1.3 Divestment (Strong)

Survey Question

SQ 24  What is the tax on profits for foreign investors when divesting property?

No capital gain tax–corporate rate 10% to 30% scale–49% restriction on concession property – Strong

Source:
USAID Land Tenure and Property Rights Portal www.usaidlandtenure.net/albania

back to top

6.2 Professional Services (Weak)

Core Question:  Are the professional services necessary for efficient and transparent property markets available and appropriately regulated and supervised?

No – Weak

6.2.1 Asset Valuers (Weak)

Survey Questions

SQ 25  Are property valuers licensed and/or certified by the government?

No – Weak, Primarily architects and engineers applying only cost approach.

SQ 26   How effective are mechanisms in place to discipline valuers who engage in misconduct?

6.2.2 Brokers & Agents (Very Weak)

Survey Questions

SQ 27  Are real estate brokers and agents licensed and/or certified by the government?

No – Very Weak, no required licensing although Chamber of Commerce pushing for license; no continuing education.

SQ 28  How effective are mechanisms in place to discipline brokers or agents who engage in misconduct?

No – Very Weak

Source
http://www.cvea.org.kh/

6.2.3 Mortgage Professionals (Weak)

Weak, very few brokers; public banks don’t loans to foreigners; private banks are more open.

Survey Questions

SQ 29  Are mortgage professionals licensed and/or certified by the government?

No — Weak

SQ 30  How effective are mechanisms in place to discipline mortgage professionals who engage in misconduct?

back to top

6.3 Capital Markets (Strong)

Core Question: Are capital markets well-regulated and diversified enough to provide financial resources to private-sector entrepreneurs and innovators?

Yes – Strong

Capital Flows (Strong)

6.3.1  How restricted is the flow of capital into and out of the country?

Strong – Ranking 44 out of 140; Score 4.9 out of 7.

Source:
The Global Competitiveness Report 2015-2016, World Economic Forum
http://reports.weforum.org/global-competitiveness-report-2015-2016/

Security Exchanges (Strong)

6.3.2  Is the regulation of securities exchanges transparent, effective and free of influence from government and industry?

Yes – Strong, Ranking 42 out of 140; Score 4.8 out of 7

Source:
The Global Competitiveness Report 2015-2016, World Economic Forum
http://www.weforum.org/issues/global-competitiveness

Securitization (Weak)

6.3.3   What is the depth of asset-backed securities, mortgage-backed securities, high-yield bonds and highly leveraged loans?

Weak, limited securitization of infrastructure projects.

back to top