6.2 business registration reform (rwanda)
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1. Rwanda reformed its business registration process to improve the ease of doing business by centralizing registration at the Rwanda Development Board (RDB) in a one-stop shop model. 2. This reduced the registration procedures from 8 steps taking 14 days to just 2 steps taking 3 days. It also reduced registration costs from $433 to just $77. 3. Rwanda now ranks 11th globally in starting a business due to these reforms, which aim to not only facilitate business startups but also ensure businesses remain operational. Rwanda is working to develop online registration to further improve the process.
6.2 business registration reform (rwanda)
- 1. OFFICE OF THE REGISTRAR GENERAL CORPORATE REGISTRY FORUM MAURITIUS – 2010 Presented by: Mr. Kabera Eraste Registrar General BUSINESS REGISTRATION REFORM: THE RWANDA EXPERIENCE
- 2. OUTLINE Background/ Analysis of the situation Reforms to be conducted Implementation of the reforms Achievement and impacts Way forward
- 3. Doing Business Ranking places Rwanda No. 11 in Starting a business: Indicators Rwanda Sub- Saharan Africa OECD Average Procedures (number) 2 9.4 5.7 Time (days) 3 45.6 13.0 Cost (% in income per capita) 10.1 99.7 4.7 Minimum Capital (% of income per capita) 0.0 144.7 15.5
- 4. Background/ Analysis of the former situation: The Office of the Registrar General (ORG) was formerly known as Rwanda Commercial Registration of Services Agency. (law No. 112 of 2007) The ORG was established as a public register institution in line with international practices. (merged with RDB its now a department known as ORG/RDB) Initially business registration in Rwanda was done in courts scattered around the country. Rwanda did not have a centralized office in charge of this task. (year?)
- 5. LEGAL AND INSTITUTIONAL REFORMS AIMED AT IMPROVING BUSINESS REGISTRATION IN RWANDA:
- 6. LEGAL AND INSTITUTIONAL REFORMS AIMED AT IMPROVING BUSINESS REGISTRATION IN RWANDA: Legal reform has been done parallel to institutional reform Institutional reform The registration mandates were moved out of court and ministries then delegated to ORG now incorporated into RDB along with other institutions servicing and promoting commercial activities. (single slide diagram to explain) Legal reform Company Law has been enacted N°07/2009 of 27/04/2009
- 7. LEGAL AND INSTITUTIONAL REFORMS AIMED AT IMPROVING BUSINESS REGISTRATION IN RWANDA: Legal reform Company Law has been enacted N°07/2009 of 27/04/2009
- 8. LEGAL AND INSTITUTIONAL REFORMS AIMED AT IMPROVING BUSINESS REGISTRATION IN RWANDA: Prior to reform, the process was cumbersome with numerous procedures, multiple interactions with several agencies and thus high administrative cost to businesses The option for reform was a complete overhaul of the legal and institutional framework and cost adjustments
- 9. Past procedures Reforms Present practice 1. Check the uniqueness of the company name and pick up a company registration form (4 days) 2. Notarize the company deeds and articles of association (2 days) 3. Pay tax on capital and registration fee to Rwanda Revenue Authority 4. Registration with the Commercial Registry 5. Pay the publication fee at the Rwanda Revenue Authority and obtain receipt 6. Apply for publication of company statutes in the Official Journal with the Prime Minister’s Office 7. Registration of the Company for taxes with the Rwanda Revenue Authority (Department des Imports) and get a fiscal number (TIN & VAT) 8. Registration with the Social Security Institute Process: 8 procedures, taking 14 days 1. Centralized all business registration services at a one stop centre in Rwanda Development Board also including a payment point. These include: Checking the uniqueness of the company name and pick up a company registration form, Registration of company with RRA and Social Security Fund, payment for service and picking of certificate of incorporation. 2. The new company law abolished the requirements to notarize articles and to publish in the Official Journal with the Prime Minister’s Office. 3. A flat fee of RWF 25,000 despite the nature of business was introduced replacing varying fees based on business activity. All business registration services at a one stop centre in RDB: Single application form, registration with RRA and CSR and payment of registration fee. Requirement to notarize and publish in the Official Gazette abolished under new company law. Process: 2 procedures Taking 3 days
- 10. Starting a company (Old Way)
- 12. Impact of reforms on registering a business in Rwanda: Nature of procedure (2006) Duration (days) old system Duration (days) reformed system Cost in USD old system Cost in USD reformed system Check uniqueness of company name & pick company registration form 4 1 0 0 Notarize the company’s deeds and articles of association 2 0 167.29 0 Deposit the legally required initial capital in a bank and obtain deposit evidence 1 1 0 0 Registration with the commercial registry 2 2 0 77.31 Apply for publication of company statutes in the Official Journal at the Prime Ministers’ Office. 1 0 222.79 0 Pay publication fee at the bank and obtain a receipt 1 0 0 0 Registration of the Company for Taxes &b obtain a fiscal number TIN 1 0 9 0
- 13. Impact of reforms on registering a business in Rwanda: Nature of procedure (2006) Duration (days) old system Duration (days) reformed system Cost in USD old system Cost in USD reformed system Registration with social security Institute 2 0 4 0 Make a company seal 2 0 30 0 Totals 16 4 $433.08 77.31
- 14. Way forward Company contracted to set up on-line business registry, collateral registry and intellectual property early this year This to be carried out simultaneously with further improvements in paper based system Emphasis is to ensure that businesses don’t only start but stay We aim to have a reliable registry