77099 JULY 2012 INVESTMENT CLIMATE Innovative Solutions for Business Entry Reforms: A Global Analysis Investment Climate Advisory Services of the World Bank Group In partnership with and Innovative Solutions for Business Entry Reforms: A Global Analysis © 2012 The World Bank Group 1818 H Street, N.W., Washington D.C., 20433 Telephone: 202-473-1000 Internet: www.worldbank.org All rights reserved This information, while based on sources that the World Bank Group considers to be reliable, is not guaranteed as to accuracy and does not purport to be complete. The �ndings, interpretations, and conclusions expressed in this work are those of the authors and do not necessarily reflect the views of the Board of Executive Directors of the World Bank or the governments of the countries which they represent. The information in this work is not intended to serve as legal advice. 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For additional information about FIAS, the Facility for Investment Climate Advisory Services, please visit http://www.wbginvestmentclimate.org, telephone: 202-473-7228. Acknowledgements This publication was made possible due to generous support from Norad — Norwegian Agency for Development Cooperation. It was prepared by Håkon Olderbakk and Dörthe Koerner, with contribu- tions from Trine Blix, Lars Eliassen, Henning Andersson, and Edvard Pedersen from the Brønnøysund Register Centre (Norway), under general supervision of Andrei Mikhnev from the World Bank Group. Vito Gianella (Italy), Branko Georgievski (Former Yugoslav Republic of Macedonia), and Le Quang Manh (Vietnam) contributed to the case studies. The �nal version bene�ted from the comments received from John Wille, Numa F. De Magalhaes, Aminur Rahman, and Dobromir Christow, all from the World Bank Group. Edited by Susan Boulanger. Contents INTRODUCTION .........................................................................................................................................................5 EXECUTIVE SUMMARY ..............................................................................................................................................6 1. TYPICAL FUNCTIONS IN BUSINESS REGISTRIES ....................................................................................................8 2. ICT SUPPORT FOR BUSINESS REGISTRATION FUNCTIONS ..................................................................................11 3. SUSTAINABILITY OF REGISTRY OPERATION........................................................................................................17 4. BENEFITS REALIZATION .....................................................................................................................................19 5. BUSINESS REGISTRIES AND THE eGOVERNMENT FRAMEWORK ........................................................................20 6. STAGES OF ICT IMPLEMENTATION IN COUNTRY-SPECIFIC CONDITIONS ............................................................25 7. RECOMMENDATIONS FOR REFORMERS ............................................................................................................28 8. CASE STUDIES ..................................................................................................................................................29 Vietnam............................................................................................................................................................29 Former Yugoslav Republic of Macedonia ...........................................................................................................30 Italy ..................................................................................................................................................................31 ANNEXES Appendix I: Recommendations for a Common Business ID Number ..........................................................................32 Appendix II: Contact Information .............................................................................................................................33 Appendix III: Selected Results from the WBG Survey on Innovative Solutions for Business Entry Reforms ...................35 Chapter Title Contents 3 Acronyms ABN Australian Business Number ACN Australian Company Number ATO Australian Tax Organization BRO business registration of�ce CD-ROM compact disc–read only memory DPI Provincial Department of Planning and Investment in Vietnam EBR European Business Register FTP �le transfer protocol HCMC Ho Chi Minh City ICT information and communications technology ID identi�er IFC International Finance Corporation KYC know your customer NBIN National Business Information Network (Vietnam) NOSS National Of�ce for Social Security (Belgium) OCR optical character recognition OHADA Organisation pour l’Harmonisation en Afrique du Droit des Affaires PKI public key infrastructure SME small and medium enterprise SMS short message service SPA Società per Azioni SRL Società a Responsabilità Limitata UNIDO United Nations Industrial Development Organization VAT value-added tax WBG World Bank Group XML extensible markup language 4 Document Title Acronyms Introduction Regardless of their economic starting point, many coun- This analysis is based on data from the following sources: tries around the world focus on enhancing public-sector A 2011 survey of 41 business registers conducted by ef�ciencies to support sustainable economic development. the Brønnøysund Register Centre in cooperation with Whether a country must implement austerity budgets due the World Bank Group; case studies undertaken in to a shrinking economy or has low income due to other 2011 in the Former Yugoslav Republic of Macedonia, factors, governments want to spend less on the public Italy, Vietnam, and Norway; the 2011 World Bank and sector while at the same time improving public services. IFC Doing Business Report; the 2011 World Bank Group study of ICT solutions in 34 company registers; the 2011 In addition, sustainable economic growth is often ham- European Commerce Registers’ Forum Report; and the pered by red tape. Administrative burdens raise the cost of CIA Factbook. doing business, thus acting as an implicit tax on investing in many countries. Simpli�cation, cutting red tape, and This report uses the following terminology: providing user-friendly services constitute central means of lifting this tax and boosting economic growth. • The term business covers both companies and indi- vidual businesses. Business registers play an increasingly important role in this • Business registers include on their records both process by using innovative technology solutions both to companies and individual businesses. enhance public-sector ef�ciencies and user-friendly services and to reduce administrative burdens. • Business registration aims at new registration of businesses, regardless of the authority. This report shows how business registers employ informa- tion and communication technology (ICT) to perform their • The terms permit and license are used as synonyms functions more ef�ciently while at the same time providing and constitute regulatory approval for a speci�c businesses with more user-friendly services. Particular at- business activity. tention is paid to achieving innovative solutions, that is, • The term annual account represents an annual solutions using ICT as a catalyst for re-engineering the report on a business’s activities during the pre- registration process to improve users’ experiences and to ceding �nancial year and accounts covering this provide useful services and high-quality information for period. both the private and the public sectors. In addition, this analysis demonstrates that business registers play an in- • Financial statement represents a report of the �nan- cial condition of a business. creasingly important part in eGovernment solutions. Aimed at integrating services, eGovernment solutions build on • An annual return is a yearly statement providing es- information sharing. This underscores the importance of sential information about a business that must be business registers as master data sources. �led with the business register. Introduction 5 Executive Summary Business registration is crucial for entrepreneurs on a number socioeconomic value of a registration reform project to the of counts: formal registration may pave the way for shared bene�t of both the public and the private sectors. capital raising and for access to public tenders as well as to government services; registration assures business partners EGovernment solutions aim to ensure innovative ICT use that the information provided about the business can be in the public sector. Business registries can serve as master trusted; and access to current, trustworthy information is a data sources for information on businesses. As discussed in key factor in creating a safe business environment. chapter 5, they may thus play an important role in eGov- ernment solutions. Business registers face various challenges. First, as a rule, they have limited funding. Second, businesses expect By sharing information rather than asking businesses for it user-friendly delivery of services. Third, due to the growing directly, public authorities can reduce a considerable part demand for transparency in the business sector, business of the red tape that often burdens businesses. A common registration efforts have shifted focus and now seek to pro- business ID number, used to link information to the correct vide more than just incorporation: they register, examine, business, is a prerequisite for effective, accurate informa- and store business information, including the business’s tion sharing. Best practices and various approaches for legal form, address, capital, legal representatives, and this are presented in the �rst section of chapter 5. How annual accounts, and they make this information available business registers share registered information with other to the public. To ful�ll these roles and respond to these public authorities is discussed in the second section. demands, business registers must rely on information and communications technology (ICT). Businesses often must register with various authorities, in- cluding those responsible for taxes, social security insurance, This report presents an overview of the functions and roles employment, and statistics. Merging these registrations into of business registers and of ways in which they can be one procedure can make them less cumbersome. The third supported and reformed as necessary. Chapter 1 presents section of chapter 5 describes solutions for integrating the a general introduction to register functions, followed by registration functions of several authorities. more detailed examinations of these functions during busi- ness entry and throughout the business life cycle. To serve as master data sources, business registers must offer high-quality information. The analysis in the last sec- The second step of this analysis, addressed in chapter 2, tion of chapter 5 indicates various means business registers demonstrates how ICT can support business register func- can use to ensure the high quality of registered information. tions, including applications, fee payment, application processing, dissemination of registry information, registry The process of implementing ICT-based solutions to busi- amendments, deregistration, and rules enforcement. ness registry problems varies considerably depending on country-speci�c conditions and on the extent to which How can registers best provide user-friendly services while the registers already use ICT. Chapter 6 outlines the vari- at the same time ensuring sustainable registry operation? ous stages of implementation and ways of assessing the This central question for business registers, another focus suitability of the various approaches employed in speci�c of this document, is treated in chapter 3. Business registers country conditions. must be �nancially sustainable. Their main options to this end are government funding and revenues from registra- A separate chapter of the analysis focuses on the underlying tion fees, information product fees, and �nes. Registry qualities and standards that should inform implementation operation over the long term also demands suitable in- of ICT-based improvements in the business registration pro- stitutional arrangements and political commitment. This cess. Issues common to these efforts, regardless of the spe- document presents the best-practice approaches used by ci�c stage of implementation, are highlighted in chapter 7. business registers to guarantee their sustainability. The �nal chapter, chapter 8, presents case studies for Bene�ts realization from these efforts are discussed in Vietnam, the Former Yugoslav Republic of Macedonia, and chapter 4. These include the techniques, disciplines, Italy that illustrate speci�c features of ICT-based registry and mind-sets governments can apply to maximize the solutions. 6 Innovative Solutions for Business Entry Reforms: A Global Analysis Best Practices as a mandatory separate procedure, for example, is less bur- densome for businesses when performed online and free of Applications charge. A mandatory separate procedure for name reserva- The most user-friendly and cost-ef�cient means of conduct- tion, on the other hand, even when conducted electronically, ing registrations allow businesses to complete forms online. may appear cumbersome to those same businesses, while These internet-based applications offer built-in error checks an optional name reservation procedure may be welcomed. and allow attachment of documents. Where internet access is insuf�cient, however, software downloading may be an One particular advantage of electronic approaches lies in option. Intermediaries assisting businesses, such as notaries their potential to serve both the registers’ and the users’ or attorneys, can help compensate for weak infrastructure. needs. Built-in error checks help applicants during form �ll- Online guidelines, legal frameworks, and name searches ing and help case of�cers during processing. On the other and reservations provide meaningful support to registrants. hand, electronic solutions are not always user-friendly and A pragmatic level of requirements for secure electronic �ling do not always ful�ll their promise. Even when the registry should be incorporated into the process as well. information is shared between agencies, public authorities may nonetheless ask businesses several times for the same Fee Payment information. Where electronic registration is available, an online pay- Deploying ICT in business registries has in itself bene�cial ment system provides the most ef�cient and user-friendly effects on private-sector growth. ICT support for business method for paying any fees required at the time of �ling. registers may create business opportunities for develop- Using such systems, fees can be paid immediately, during ing value-added information products based on registry the registration process. information. It boosts demand for ICT infrastructure and new electronic services. Mobile technology has yet to play Application Processing a prominent role in ICT-based registry solutions, but rapid By using online registration, businesses can ef�ciently proliferation of this technology might help developing transform their information into structured data useful to countries, in particular, to implement innovative solutions. data users. Streamlined, simple rules for completing forms help support the registration process by permitting auto- ICT support for business registration provides a particular mated legal checks. bene�t by helping to prevent corruption. Electronic �ling reduces physical contact between case of�cers and ap- Registry Information Distribution plicants. Automated calculation of fees and noncash Direct access to information available from registries is es- payments increase transparency in the flow of money. sential to avoid unnecessary, redundant information storage. Automated process steps, with no manual intervention, User-friendly information services can notify businesses of a such as built-in checks for legal requirements or automated potential hijacking. Cross-border access to business informa- assignment of cases to case of�cers, reduce the risk of ma- tion represents another user-friendly service. nipulation. These features contribute at the same time to transparent, predictable, and correct law enforcement and Amendments and Annual Returns thus boost businesses’ trust in the register. Electronic �ling and automated checks help reduce process- The need for simplicity in the legal framework becomes ing time. System-to-system integration between account- especially visible when considering electronic solutions. The ing software and the register database reduces redundant simpler the rules, the more easily they can be translated information, both for the register and for businesses. into automated solutions. Discretionary power and excep- tions should be avoided. Deregistration, Follow-up, and Enforcement Automated solutions help monitor and target businesses. ICT solutions require not only removal of legal constraints They support the register by triggering communication but also a legal framework that facilitates electronic solution with other registers and agencies, and they foster predict- implementation. At the initial stages, recognizing electronic able application of rules to businesses. solutions (for example, signatures or documents) is vital. A legal obligation to use electronic solutions, however, conceiv- able for both public agencies and businesses, should not be Lessons Learned considered before the various players are prepared to comply. If business registers are to take on the role of master data sources in eGovernment solutions, they must provide Another imperative for modern registry solutions is the ability high-quality information, not only at start-up but also of the legal framework to adapt quickly to a changing envi- throughout the business life cycle. ronment. Flexibility is vital in a �eld marked by rapid techno- logical evolution. The form of law should therefore stipulate ICT can lighten the burden of procedural steps, but electronic guiding principles, but more detailed provisions should be facilities alone will not assure registry success. Name search made through inferior, more easily amended legislation. Executive Summary 7 1. Typical Functions in Business Registries Entrepreneurs in most countries perform similar steps when form �lling by offering printed guidelines, telephone help- starting a business, and business registers, too, perform desks, or, for electronic forms, built-in help. generic functions during the registration process. As a rule, the entrepreneur pays a registration fee before The following macrolevel descriptions of these general registration is completed. steps and the corresponding business registry functions de�ne the scope of most ICT-based business-entry reforms. Once a business is registered, entrepreneurs must disclose the registered information. For this purpose, business reg- isters often make announcements in the National Gazette Generic Registration Process or similar publication. Making information available online The �rst step for the entrepreneur is deciding on the busi- and issuing registration certi�cates serve the same purpose. ness’s legal form. Business registers usually do not provide any support for this step apart from referring the entrepre- Entrepreneurs are often required to register with other neur to relevant legal frameworks. Entrepreneurs needing authorities, such as tax authorities, social security agencies, more assistance often seek help from intermediaries. or pension funds. Business registers support this step by informing entrepreneurs of the requirements and referring Entrepreneurs must also decide on a name for their business, them to the relevant agencies. Various forms of one-stop ensuring that the name is unique. Business registries support shop may also be used to support registration with other this step through a separate procedure (optional or manda- authorities. tory) or by providing name search as an information service. Depending on the line of business they engage in, en- Once a business name is chosen, the entrepreneur must trepreneurs often must apply for licenses. Some business prevent others from using the name for other businesses. registers provide information on this process and refer the Business registries may offer name reservation as a sepa- entrepreneur to the relevant agency, while others offer rate procedure (optional or mandatory) or may integrate it licensing in through a one-stop shop. into the registration procedure. Table 1.1 summarizes actions required of entrepreneurs To prepare the registration application, entrepreneurs must and the corresponding support offered by common busi- produce the necessary documents, such as memoranda ness registers. and articles of association, and attach them to the registra- tion application. Registry Functions During Business Once the necessary documentation is collected, the regis- Entry tration application is prepared. Business registers provide When the register receives an application for registration, forms (paper or electronic) and support businesses during a series of controls are performed. First and foremost, Table 1.1 The Generic Registration Process Action Required of Entrepreneur Support Provided by Business Registry Decide on the legal form for the business. Not supported; some registers refer entrepreneurs to the relevant legal framework. Decide on a name for the business. Provided in a separate procedure (optional or mandatory) or through a name search undertaken as an information service. Exclude others from using the chosen name for the business. Covered by a separate procedure (optional or mandatory) or integrated into registration procedure. Prepare necessary documents. Afforded through available templates or examples. Prepare application for registration. Forms provided, with additional support for completion. Pay registration fee. Various payment methods supported. Disclose registered information. Provided by announcement in National Gazette or similar publication, by online information, or by registration certi�cate. Perform business registration with other authorities. Supported by information provided and referrals made to relevant agencies or by various forms of one-stop shop. Get necessary permits or licenses. Supported by information provided and referrals to relevant agencies or by various forms of one-stop shop. Source: The Brønnøysund Register Centre. 8 Innovative Solutions for Business Entry Reforms: A Global Analysis a cursory veri�cation of the application and its attachments is department of employment. These authorities often require the made to ensure that the required information has been provided same information gathered by the business register. Businesses and documented. already registered can more easily transmit the required informa- tion to these other government agencies, thus simplifying the In addition, a number of legal requirements may be veri�ed; for procedural steps required of businesses at start-up. In addition, example, the entrepreneur must not be disquali�ed from operat- the business register may collect and store information about the ing the business, the board of directors must meet requirement business from other government agencies. regarding number and gender representation, and so on. Figure 1.1 illustrates the generic functions of business registers Usually the registry veri�es the chosen business name. The throughout the process. number of requirements for this depend on the particular coun- try’s legislation. Some countries only require the business register to verify that no identical name is already registered, while other Registry Functions During the Business Life countries require more thorough veri�cation, such as ensuring Cycle the name does not violate the rights of businesses with similar Register functions support businesses not only during entry but names or trademarks. also throughout their life cycles. In performing these controls, business registers ensure that busi- nesses comply with their legal obligations. Businesses are legally Amendments obligated to �le correct information and to update registered During the lifetime of a business, changes may occur in its board information. The registers are responsible for entering �led infor- of directors, its business address or telephone number, or other mation correctly. aspects recorded by the register. Because business registers repre- sent important sources of information for business transactions, Archiving the application and its attachments may occur before it is vital that businesses notify the register of any changes in the or after the registration process is complete. information registered. When the business register has completed the registration, it A number of measures help to ensure that businesses update issues a certi�cate of registration. This certi�cate con�rms the registered information as soon as changes occur. Businesses may registration and contains information about the business. Some have a legal obligation to �le amendments as soon as possible, business registers also provide announcements of the registra- for example. Information exchange between business registers tion in the National Gazette, in a newspaper, or on their website. and other government agencies helps keep information current The registration is thus brought to the attention of creditors or as well. Low registration fees also encourage businesses to �le other interested parties. Some registers offer subscriptions to any necessary amendments. announcements of certain kinds of registration, such as all new limited liability companies, or to all announcements made refer- For a number of reasons, business registers often register and ring to a single company. publish annual accounts or �nancial statements. Investors, clients, and potential creditors may want to assess the �nancial situation of future business partners, encompassing both their current Public Disclosure standing and their development over time. Other information Business registers make registered information available to consumers, such as the media or other government agencies, the public. This includes not only basic information about the may also be interested in �nancial information on businesses. business, such as its telephone number and address, but also Finally, information on businesses is also important for statistical information such as who is authorized to sign on the com- purposes. pany’s behalf or who serves as the company’s legal representa- tive. Although this information can be found in a number of other sources, business registers are considered trustworthy Deregistration sources of information on a business’s legal situation at any Businesses may cease to operate for various reasons. When this given time. Registered information is distinguished by its legal is due to a temporary status change, the business may remain validity, and by virtue of registration everyone dealing with a on the register. If it becomes evident, however, that a busi- business is deemed to have notice of the business’s registered ness will not resume operation, it must be removed from the information. register in a process termed deregistration. Deregistration may also follow a merger or forced liquidation due to bankruptcy. In this case, deregistration is often triggered by information Interagency Information Sharing made available through insolvency registers or registers of Businesses are usually assigned registration numbers during bankruptcy. registration. When those numbers represent a unique identi- �er, that ID can be used in the business’s interactions with other Deregistration procedures must address the needs of the busi- government agencies, with other businesses, and with banks. ness’s creditors, the business itself, and the business register. Each Usually a new business will be required to register with several of these actors has different interests: creditors want time to other government agencies, such as the tax administration and pursue payment before the business ceases to exist, but owners Chapter Typical Functions in Business Title Registries 9 Figure 1.1 Generic Stages of Business Registration Business entry Pre-registration Application Registration Dissemination pre-approvaI intermediaries disqualified population certified auditors helpdesk license register persons permit forms credit bureaus guidelines and financial information institutions trading cross-check counterparts competitors respository name search register name reservation registration annual accounts amendments registration public agencies de-registration unique ID Integrated registration services archives land register collateral licensing agencies statistics customs welfare register payment of fees tax Source: The Brønnøysund Register Centre. may want to use business assets for other purposes and therefore certain length of time during which to put forward their claims. favor swift deregistration. After that period has passed, the business is removed from the register. This deliberate procedure ensures that businesses do not Removing a business from the register is often a two-step pro- cease to exist before creditors have had the opportunity to put cess. After receiving noti�cation of dissolution, the business reg- forward their claims. ister may provide an announcement stating that creditors have a 10 Innovative Solutions for Business Entry Reforms: A Global Analysis 2. ICT Support for Business Registration Functions Paper-based business registration requires physical docu- Downloading speci�c software to complete forms and ments that are sent by mail or delivered by hand to the submit applications does not require stable Internet access. register for manual processing, with the resulting risk of Forms may be �lled out off-line and submission delayed error, and then stored as space-consuming hard copies. In until an Internet connection becomes available. addition, any copies of the documents required must also be provided on paper. These processes are time consuming The information entered may be submitted electronically and expensive both for the registers and for users. either as a completed form or as a string of values for the form’s speci�c �elds, with or without attached documents. A major trend among business registers is therefore to The form can be stored locally and submitted when the deploy ICT to perform registration functions, both to im- user decides to do so, using e-mail, �le transfer protocols prove ef�ciency and to provide user-friendly services. (FTP), or a customized transfer function. ICT-supported solutions have the potential to save registers Users, however, seem to �nd it cumbersome to download and businesses time and resources. Although ICT carries speci�c software to �ll out and submit forms. Most recent inherent risks of errors or bugs, ICT systems generally do ICT implementations, therefore, use an Internet browser, more to reduce the risk of error by providing automated making software downloads superfluous. error checks on both register functions and entry of busi- ness information. Moreover, ICT solutions reduce the need Internet-based solutions require Internet access, but de- for manual document processing and physical contact pending on the design, a high-speed connection may not between agency and business employees, reducing the be necessary, although frequent loss of connection can risk of corruption. ICT systems bene�t the environment, as create dif�culties. The data entered is immediately stored well, by eliminating or reducing the need for paper and its on a central server and is relayed to the register upon sub- transport to registers. mission. If Internet access is available, this approach con- stitutes the most time- and cost-effective solution for the Both paper-based and electronic registries are at risk from register. Registration can be implemented at any time from accidental or natural disaster such as �res, floods, and any PC with Internet access, without the need to distribute earthquakes. To prevent losses, copies of registered infor- software. Comprehensive checks of the information with mation must be kept at a separate location, a far more ex- the business register and other information sources may pensive undertaking for paper than for electronic records. be performed online during the form-�lling process, thus enhancing the quality of the entered data. Any changes in Applications requirements for the functionality of the service or the data in the form can be easily implemented without the need to A number of electronic services help businesses prepare distribute or download new software and forms. In prin- and �le registration applications. ciple, the same controls available to register of�cers could be made available to clients, including crosschecks with Forms lists of disquali�ed directors, authorizations, bankruptcy Innovative use of ICT enables business registers to produce proceedings, and so on. forms that are easier to understand and therefore easier to �ll in correctly. Where the necessary legislation is in place and the service is available, forms ready for transfer may be signed using an The basic method for introducing ICT solutions is to provide electronic certi�cate. Where an electronic signature cannot registration software to be downloaded by users. One of be applied, a physically signed transcript of the submission two kinds is typically used: may be sent by mail or delivered to the register. In these cases, practices for handling �nal registration vary. The • Downloaded forms based on standard form-�lling soft- register may await the physically signed documents before ware without built-in checks; or starting to process the application, or the application may • Downloaded forms based on standard form-�lling soft- be processed up to the point of �nal approval. The latter ware with built-in checks or customized applications, approach would be reasonable at least for regular profes- including options for attaching documents. sional clients. Chapter ICT Support for Business Registration Title Functions 11 Many ICT solutions allow submission of application forms and Many registers provide online name search, for example. Registers documents by e-mail. When forms and documents from trusted that require name search as a separate registration procedure clients arrive via e-mail, the registry often begins processing the usually do not charge a fee for the service. When name search information, although �nal registration will not be made until as a separate procedure can be performed online and free of the client signs the documents in the registration of�ce and pays charge, it does not appear especially burdensome for businesses. the fees. In fact, many businesses want to check their proposed names before they produce the memorandum and articles of association By providing support for completing forms, registers ensure and registration application. In this form, name search will be they are completed correctly, resulting in higher-quality applica- viewed as a service rather than a burdensome procedural step. tions, which bene�ts both the entrepreneur and the register. The registers may be able to outsource part of their task of verify- Based on the applicant’s initial choices, the form presents only ing business names to the businesses themselves. relevant questions or options. This ensures that all required information — and no irrelevant information — will be collected Many registers require name reservation as a separate proce- and submitted. Further checks may be performed on the entered dure when businesses register. The WBG survey on Innovative data, with a level of sophistication ranging from internal formal Solutions for Business Entry Reforms revealed that, apart from checks to advanced look-up services in relevant registries. Some Sweden, Serbia, and Malawi, all registers requiring name reserva- forms offer context-sensitive help to guide clients in entering the tion as a separate procedure provide the service electronically. correct information.1 Businesses do not csonsider mandatory separate procedures for name reservation and name search, with corresponding fees, to be user-friendly. Mandatory name reservation often adds another Of 26 registries that responded to the WBG survey on Innovative procedural step and extra costs to the registration process. As Solutions for Business Entry Reforms, one-third had introduced an option, however, name reservation appears to businesses in a mandatory electronic �ling for certain legal forms of businesses. different light. In some situations, name reservation as a separate Bangladesh is one of these countries, which is striking given procedure responds to a need felt by businesses, especially large Bangladesh’s low Internet penetration (0.4 percent, according to enterprises, which might want to prepare printed material with Economy Watch, October 2011). The system used in Bangladesh the business name. Businesses investing in a domain name before requires that electronic �lers download special software. While the registration will want to protect their use of the name by applying use of intermediaries is not mandatory in Bangladesh, its registra- for a name reservation. Name reservation as an option, preferably tion system is likely to create a market for intermediaries with the free of charge, meets this need. necessary knowledge and tools. This approach allows automation of many internal processes, thus enhancing ef�ciency. Overall, busi- nesses will experience higher costs, but they will gain access to more Secure Electronic Filing ef�cient registration procedures. Electronic �ling as a replacement for paper-based registration carries with it some risks. These are among the most common Data collected using electronically �led applications should be risk issues: con�gured for the registry in a computable (preferably standard) format to facilitate data processing. • Authentication: con�rming the identity of a person or entity. • Integrity: preventing conscious or unconscious alteration of Even if registries decide against introducing mandatory electronic information during transmission. �ling, a majority of them apply incentives to promote the practice, including reduced fees and processing time and free information • Nonrepudiation: ensuring that sending and receiving parties services. cannot later deny having sent or received the transferred message. ICT Support for Registrants • Con�dentiality: preventing the disclosure of information to unauthorized individuals or systems. Entrepreneurs need general support with business registration, including, for example, with regulatory questions, business Various techniques can help ensure security, among them user- names, or the documents to prepare. names and passwords; biometric veri�cation, such as �ngerprint recognition; and signatures using an “electronic� pen or digital A number of business registers (for example, those in Italy) signatures based on electronic keys and certi�cates (known as cooperate with intermediaries (such as lawyers, notaries, and public key infrastructure or PKI). accountants) to provide this support. Where intermediaries do not play a major role and entrepreneurs depend for support Business registers that implement electronic services must address mainly on the business registers themselves, ICT may be used to the need for security and determine the level of security neces- develop user-centric solutions tailored to meet this need. sary. When selecting its level of security, business registers must align the risk attached to a speci�c interaction with the costs and 1 administration required to secure that interaction. Low security Norway has standard guidelines in place for the development of electronic forms. These guidelines help ensure consistent electronic forms with a com- may deter parties from using electronic services, but costly and mon appearance: http://www.brreg.no/elmer/elmer2-english.pdf. cumbersome high-security measures may have the same effect. 12 Innovative Solutions for Business Entry Reforms: A Global Analysis It is worth noting, however, that electronic registration solutions Electronic solutions also allow case workers to see payment infor- often provide higher-level security than do the handwritten signa- mation along with the application. tures of paper-based systems. (Filing using electronic signatures is discussed above in the section on forms.) Fee payment before registration constitutes a separate proce- dural step. Online payment may improve the user experience, but unless procedures are streamlined, the bene�ts may be limited. Of the registers offering electronic registration services, 41 percent require an electronic signature. Colorado does not require any au- thentication at all, and the rest accept username and password or Application Processing an electronic certi�cate, if implemented. Business registers using digitized records can deploy ICT to pro- The legal framework for allowing the use of digital signatures is in cess cases, including journaling �led applications. ICT can also place in 70 percent of the countries and has been implemented as improve communication about incomplete applications. part of the ICT solution by half of the respondents. Electronic solutions allow application �ling with automated time- New Zealand, Estonia, Canada, Singapore, Italy, South Africa, the stamping, which can have legal implications (such as protecting Netherlands, Jersey, Lithuania, and Austria provide registry tran- business names). Registers receiving both paper and electronic scripts of electronically signed documents to the public. In Italy, applications will need to establish special rules to determine the recipients need special software and access to the Internet to verify order of priority between them. this signature, but the software is free and publicly available, thus boosting use of electronic signatures. Paper applications must be digitized by scanning or otherwise storing them in an electronic archive for later documentation and dissemination. Electronic processing requires structured data, and information from paper applications must be transformed into Fee Payment data that can be processed. Often case workers enter the infor- Most business registers collect fees for their services. User-friendly mation into the back-of�ce system. Scanning with OCR support ICT solutions for the payment of fees depend largely on the may partially automate this step, but even the most advanced country’s available modes of payment. The regulatory framework systems struggle with handwriting. In such cases, either the reg- may also determine the modes of payment public authorities can ister must impose strict requirements for handwriting on paper accept. applications or it must employ extra staff to check that the record made by the scan correctly represents the application. This step Among the business registers that participated in the WBG survey reduces signi�cantly the bene�ts of OCR or similar support. on Innovative Solutions for Business Entry Reforms, most (69 per- cent) accepted online payment, followed by credit or debit cards Whichever system is used, electronic storage has the advantage (54 percent) and cash payment (50 percent). Cash payments require of making applications easily available for case processing and considerable resources to administer on the register’s side and in- registration and for later use by the business register or anyone crease the risk of corruption. Limited Internet access may in some with an interest in the underlying documents and information. cases explain the unavailability of online payment. A particularly Most registers have mixed solutions, whether a combination of user-friendly solution provided in FYR Macedonia allows payment submission and receipt of both electronic and paper documents through text message (SMS). Entrepreneurs bene�t from having or of electronic and manual processes during case handling. many options for payment, but this increases the registers’ costs. In Maintaining two parallel systems is costly for the register, as Ukraine and Serbia, payment can only be made through a bank and the different approaches require different procedures and tools. before registration, which is cumbersome for businesses. Electronic receipt of applications and documentation allows au- tomation of initial processing, such as data entry, and of archiving Most registers require fees, payable before or upon registration, the received application. effectively ensuring that registration does not take place without payment. Norway, by contrast, to save resources, takes payment With the application logged and the documents stored, process- following registration. The register is freed from checking that ing can start. Back-of�ce systems that run automated checks payment has been made before approving the registration, and on information entered by case workers improve processing payments are not held for pending cases. Norway’s experience time and quality. Support offered ranges from simple checks with this system indicates that the savings from this simpli�cation that a telephone number has the correct number of digits to compensate for fees lost from businesses that fail to pay the fee more advanced checks that information conforms to regulatory after registration. requirements. Advanced support for case processing demands a well-�tted regulatory framework. Provisions requiring the in- The most ef�cient and user-friendly payment option seems to be terpretation of several documents and the collection of several combining electronic application �ling and online fee payment pieces of information are dif�cult to adapt to automated support. into one step. Such systems may include error checks to ensure The same applies to discretionary power and complex structures applications are not submitted before payments are completed. of rules and exceptions. Chapter ICT Support for Business Registration Title Functions 13 Even if parts of the legal framework are too complex to be Individual information is typically distributed in one of the fol- checked automatically and must be addressed by a case worker, lowing ways: other parts may lend themselves to automatic checking. The automated system might check if the share capital stated meets • Telephone services provide information on registered busi- the minimum requirements, for example, while the case worker nesses and product ordering. checks whether the share capital reported accords with that in • Internet browsers allow name search and access to selected the documentation. information about a business. Where applications are incomplete, the back-of�ce system may • Subscription services inform subscribers about events pertain- provide support for case workers by indicating errors businesses ing to speci�ed businesses. should be informed about. Even if the automated report of errors • Ordering services enable access to various products using an is incomplete, it will still improve processing, as the back-of�ce Internet browser. system might not detect errors of this type without it. In addition, • Delivery services convey various products, such as transcripts some ICT-based back-of�ce systems provide standard texts, easily of registered information on a business, paper lists, or elec- understandable by businesses that case handlers can use in com- tronic �les with selected data. municating with them. • Delivery services supply electronic �les with all data about all As a rule, the systems provide support for fee calculation and businesses and all succeeding updates. meet archiving and accounting requirements. Documents (physi- cal or electronic) are required to amend register content, and Some registers use ICT to offer particularly user-friendly infor- these are coupled to the registered information on the business. mation services that help businesses prevent company hijack- The most advanced systems handle documents stored electroni- ing. These systems supply authorized persons in a business cally either as scanned images of physical documents or from with warnings whenever the business register receives a �ling electronic applications. application that implies a risk the company might be hijacked, for example, an application to register a completely new board Business ID assignment, performed either by the register or by of directors. another authority, is normally integrated into the application process. In some recent implementations, collaboration with tax Electronic solutions make information easier to �nd, at least authorities has been established to facilitate this step. compared to paper-based systems that register only a minimum of information. Using ICT ef�ciently to distribute registered in- formation requires data stored in electronic formats that can be Distribution of Registry Information easily imported into other systems. Data should not be stored An updated electronic registry is a prerequisite for an ef�cient in the form of copies of applications, therefore, but as hard information service. Outdated information is of no interest to data that can be easily transferred and accepted. In a standard customers. An information service in this context means a service format, data can be transferred to both private and public users to distribute the information content held by the registry. This at minimal cost. service is in addition to the register website communicating infor- Making registered data available electronically can also reduce mation about the registry, the obligation to register, the registra- or altogether remove the cost to consumers of accessing the tion procedures and fees, registration forms, and so on. The use information. In a paper-based system, information is most often of ICT plays a major part in ef�cient and user-friendly solutions sent to the customer on paper after a case worker has located for the distribution of registered information. the information and prepared it to be sent. Using an electronic Distribution of registered information covers both bulk and in- solution, on the other hand, customers can often access the in- dividual information for consumers in both the public and the formation themselves, without contact with registry personnel. private sectors. This is both easier for the customer and cheaper for the regis- ter. An additional advantage of electronic solutions is that the Distribution of bulk information varies according to the needs and information is always up to date when the customer receives it; capabilities of the receiving organization. One common service information sent out on paper can sometimes be outdated by the is electronic transfer of selected data on all registered entities, time it reaches the customer. combined with a service transferring data about all new registra- tions, amendments, and deregistration during a speci�ed period. Products and services to distribute registered information boost These services are useful for stakeholders dealing with all or many the private sector if they are in tune with market maturity and �t businesses and performing frequent data processing on them. well with available and applied technology. In addition, distribu- tion of registered information creates business opportunities if Web-based or similar services for system-to-system integration the private sector develops value-added information products. provide both direct access to selected data on speci�c entities Moreover, the availability of useful services enhances the demand and name search. Direct access avoids unnecessary redundant for infrastructure for accessing them, thus creating a market for storage of information by the receiving organization. Internet service providers. This can position business registers 14 Innovative Solutions for Business Entry Reforms: A Global Analysis among the drivers of demand for ICT infrastructure. Potential Annual returns and annual accounts or �nancial statements are target groups for new distribution services are the business com- special instruments aimed at updating registered information. munity as a whole, the �nancial sector, the media, and credit The annual return is a report submitted annually to the business information providers. register, mostly updating or con�rming basic registered data. Annual accounts and �nancial statements, on the other hand, present a company’s �nancial state and performance during the Advanced distribution of registered information is provided by the accounting year. European Business Register (www.ebr.org). EBR is a network of national business registers and information providers from 26 Legal requirements to �le annual returns and/or annual ac- European countries. The EBR provides online access to company counts help business registers ensure that only existing busi- information, making it possible to access records in all member nesses and up-to-date information is included. If a business countries using a single search. Name search is free of charge, while does not submit an annual return, the register will conclude access to other information products may require a fee. This service the business no longer exists; it may then begin proceedings to is particularly valuable in fostering cross-border business activities. deregister the business. Mandatory �ling of annual returns and/or annual accounts has a downside, in that the �lings fall within a delineated period, Amendments and Annual Returns causing a workload peak at the register. ICT systems help com- As a rule, businesses are under a legal obligation to notify the pensate for this, and electronic �ling and automated checks help business register of changes in registered information. Updated reduce processing time. In Norway, system-to-system integration records are increasingly important for business registers. between accounting software and the register database reduces Figure 2.1 An Example of Register Enforcement from Norway register of business enterprises: enforcement mechanisms if the auditor is no longer certified auditor notification company appointment notification of a new auditor notification notification yes filing the register of business application: no certified notification new auditor auditor enterprises notification registered notification within time limit registration no company registration: registration: auditor no struck of new auditor compulsory liquidation certified the records supervisory financial authority financial supervisory authority: auditor no longer certified notification probate and bankruptcy court compulsory company liquidation dissolved Source: The Brønnøysund Register Centre. Chapter ICT Support for Business Registration Title Functions 15 redundant information punching, leading to a signi�cant work- streamlining processes and adapting the regulatory framework in load reduction. In addition, although mandatory �ling of annual user-friendly and productive ways. returns and/or annual accounts represents a burden on busi- nesses, it can be mitigated through user-friendly electronic �ling Follow-Up and Enforcement and repopulated forms. Business registers have various procedures for following up with A perhaps more serious drawback of annual returns is that busi- businesses that fail to comply with legal registration require- nesses may delay �ling changes in registered data as they occur, ments. ICT plays a vital role in reducing the time spent on the waiting to include them in the next annual return. manual processing of these efforts. This example from Norway, illustrated in �gure 2.1, shows Deregistration how ICT may support business registers with enforcement Business registers use ICT systems to target businesses subject to procedures. The back-of�ce system monitors businesses on the forced deregistration. records and detects, for example, if an auditor for a business has resigned. The system identi�es cases in which this implies Deregistration often requires an of�cial announcement to the that a business is failing to comply with statutory require- business community that a business will be deregistered. ICT ments. A notice informing the business of this circumstance allow automation of these announcements, from initiating the is produced automatically. The business is given two chances process to producing a standard notice. In addition, ICT helps to �x the situation. If the business does not remedy the situ- business registers ensure that businesses are not deregistered ation within the statutory time limit, the system starts a new before the creditors’ time limit has elapsed. Another advantage procedure to forward the case to the district court, where the of ICT-based solutions for deregistration is reduced processing decision on compulsory liquidation may be taken. Upon termi- time, allowing business owners to close the business and perhaps nation of compulsory liquidation, the district court noti�es the use its assets for different purposes. business register, and the business is deleted from the records. ICT cannot help with lengthy and unnecessarily cumbersome If it is easy and cheap for authorities to impose sanctions on busi- procedures, such as requirements that numerous banks must nesses that do not comply with their legal obligations, enforce- con�rm the business has no current bank account. This may deter ment will be more effective and businesses will be more likely businesses from �ling for deregistration, thus keeping many to meet their obligations. Predictable and correct enforcement defunct businesses on the business registry. Such requirements mechanisms are essential for businesses. Well-functioning infor- do not become less burdensome by being transformed into mation exchanges based on a unique ID help authorities target electronic procedures, but ICT systems may become catalysts for the businesses that require follow-up. 16 Innovative Solutions for Business Entry Reforms: A Global Analysis 3. Sustainability of Registry Operation The term sustainability is used in a broad sense in this chap- context, it is interesting to note that a number of registers ter to cover prerequisites to maintain and further develop use �nes as a source for funding.4 Registers depending business register solutions on a long-term basis. on penalty fees for funding lose funding if compliance improves. This provides weak incentive for registers to Revenue Generation improve businesses’ compliance, as the registers have no economic interest in amelioration. Most business registers depend on government budgets to cover their operational costs. The majority of contributors Revenues from distribution of information constitute a to the WBG survey on Innovative Solutions for Business major source of funding for many registers. This type of Entry Reforms indicated registration fees as a source of revenue generation motivates registers to provide valuable funding. Stable funding is central to ensuring sustainable information and information services for stakeholders in the registry operation. public and private sectors. Name search should be free of charge, but fees may be charged for other products. Fees for There are basically three types of fees: registration fees, information products may also influence consumers’ choice �nes, and fees for information products. In addition to of products. Fees for ef�ciently distributed information generating revenues, however, fees have direct or indirect products (for example, direct downloading) should there- effects on whether businesses comply with registration fore be low enough to make their use attractive. Otherwise, obligations, which should be taken into consideration. consumers may use channels more costly for the registry (for Fees for new registration, for example, may discourage en- example, ordering printed versions by telephone). trepreneurs from registering a new business, thus keeping them in the informal sector. Sharing registered information as a means of cutting red tape should be considered apart from revenue generation. If public authorities must pay for such information, they As up-to-date registered information becomes increasingly will be less likely to turn to the register for it, preferring to important, registers take a substantial interest in businesses’ save the fee by going directly to the businesses. amendment �lings and annual accounts or �nancial state- ments. In that respect, it is striking that not less than 88 Striking a balance between the various effects of fees is percent of the respondents to the WBG survey on Innovative essential. Registration fees should cover costs, but they Solutions for Business Entry Reforms charge fees for register- should not discourage businesses from formalization or ing amendments, and 42 percent impose fees for registering from updating the registry. Fees for late �ling should spur annual accounts. businesses to comply with registration obligations, but they should not reduce register funding when compliance Annual fees to keep a company in the register go even fur- improves. Fees for information products should motivate ther, as they are not related to particular registration activities. the register to provide user-friendly products, but they As such, they can hardly inspire businesses to maintain their should not discourage businesses from creating value-add- registered status. Despite this, as many as 31 percent of the ed information products based on registered information. registers contributing to the WBG survey charge such fees. Among these are top performers in the WBG Doing Business The majority of business registers apply the cost-covering ranking, such as Australia and Singapore.2 principle when determining fees. Still, this leaves consider- able room for variations. Determination of the costs to be In contrast to registration fees, �nes charged for late �ling covered is central in this context. Norway, for example, cal- constitute a direct incentive for businesses to comply culates fees for new registrations based on costs incurred with registration obligations. See, for example, recently by an average business for registration activities over the published case studies on Ireland and on Norway.3 In this business life cycle. Potential amendments, apart from those requiring of�cial announcements, are thus already 2 Low rates may have a mitigating effect here. Set-up costs, which in- covered by the fee companies pay for new registration. This clude registration fees, are very low in Australia and Singapore accord- is bene�cial in several respects. First, most amendments ing to the Doing Business Report (2011). The Doing Business Report will then be free of charge, which encourages compliance does not cover fees charged after new registration, however, such as annual fees and registration fees for amendment or annual accounts. among registered businesses. Second, both the register 3 and the businesses save resources related to fee payment Christow, Dobromir, and Olaisen, Ireland (Business Reform Case Stud- ies, World Bank Group and International Finance Corporation, 2009); World Bank Group and International Finance Corporation, Norway 4 (Business Registration Reform Case Studies, 2011). For example, FYR Macedonia, Serbia, Italy, Jersey, and Colorado (USA). Chapter Sustainability of Registry Title Operation 17 for amendments. Third, as part of the cost for processing amend- termediaries. Using an intermediary implies additional costs, but ments will be generated later, the temporary surplus produced it also has bene�ts. Intermediaries may be necessary or even pref- can be used to improve register operations and functions. erable from the entrepreneur’s point of view. They may provide professional help in preparing documents and applications as In this context, it is also worth noting that a number of registers well as ful�lling general business management functions. In ad- charge fees below their actual costs. Among these are Vietnam, dition, they may offer otherwise unavailable electronic �ling that Ukraine, South Africa, Malawi, and Colorado. These reduced fees allows businesses to bene�t from reduced registration fees and may inspire businesses to improve compliance. processing time. Some of the many entrepreneurs who consider it cumbersome and time consuming to deal with formalities such as Institutional and Political Sustainability registration may prefer to pay an intermediary to take care of these tasks, freeing the business to concentrate on its core activities. For Sustainable register solutions require appropriate institutional business registers, intermediaries may reduce the workload. They arrangements and political commitment. Political commitment represent a homogeneous, limited group of users that can be easier often motivates reforms, but it is just as important after reforms to manage as the primary users of electronic �ling applications. have been implemented. As the registration process is used, on- However, use of intermediaries in this way may also raise questions going evaluation might reveal the need to adjust policy aspects related to the risks of technological lock-in and corruption. ranging from the regulatory framework to additional funding. Mandatory use of intermediaries should be carefully considered Establishing trust and cooperation between the business register as well because it may have negative effects on the cost of busi- and other stakeholders in the public sector is vital for institutional ness registration. The same applies to arrangements in general sustainability. Integrated services and cross-sector approaches, that require businesses or registers to use intermediaries for legal, especially, require continued focus on trust and cooperation. In technical, or economic reasons. Con�rmation of documents by Norway, permanent cooperation groups or forums meet regu- intermediaries should result in a reduction of tasks at the business larly, providing opportunities to exchange views, experiences, register. and knowledge. Access to suf�cient skills is crucial to ensure registry sustainability. Because business registers provide services for the private sector, This goes beyond the skills needed to translate the legal frame- they need a dialogue with these stakeholders. Regular meetings work into technical requirements. Once a technical solution is with business organizations and user groups constitute an impor- implemented, registry personnel must run it and update it when tant means of collecting feedback to inform service development. the legal framework changes or adjustments must be made for A well-functioning business sector is in constant change. Serving other reasons. Available expertise to address reengineering of this sector requires that business registers adapt to changing business processes, both technically and legally, is just as im- needs. Institutional arrangements should be flexible enough to portant. The importance of training case workers and ensuring adapt to changing conditions, such as changes in legislation, and they can use the back-of�ce system ef�ciently should not be yet stable enough to remain independent of political fluctuations. underestimated. Further development of the technical solution, process reengineering, legal amendments, and required training Institutional sustainability also requires adequate answers to of case workers constitute an on-going process, one that should questions of sourcing.5 Among these is the role assigned to in- not stop with the implementation of a reform. Reduction of staff in response to improved ef�ciencies should therefore be con- 5 sidered carefully. Until a certain level of automation is reached, For details, see World Bank, Outsourcing of Business Registration Activities (2010). registry cost reductions cannot be assumed. 18 Innovative Solutions for Business Entry Reforms: A Global Analysis 4. Bene�ts Realization The main purpose of business entry reform should be to measures for bene�ts realization, country-speci�c condi- extract bene�ts for society. Some of those bene�ts may be tions should thus be borne in mind. generic, while others may be country-speci�c. A bene�ts realization approach to a business-entry reform To maximize these effects, it is important to do system- process should always be linked to the country’s visions, atic bene�ts realization work. Bene�ts realization in this objectives, and strategies regarding business development. context refers to the techniques, disciplines, and mind-set Anchored in these, the following deliverables and tech- governments must apply to maximize the socioeconomic niques should be considered: value of a reform project. It ranges from planning based on value to execution with value in mind to harvesting • Establish the business case for the reform using a clear value post-implementation. Although systems imple- statement of its rationale, including expected bene�ts mented without this effort may meet with chance success, and costs and estimates of the uncertainty (+/–) for reforms undertaken without a value-oriented process risk both. The business case should include all main reform a high probability of signi�cant lost potential for social stakeholders and should deal primarily with risks re- and economic bene�ts. lated to maximizing effects and secondarily with imple- mentation risks. The business case should also include The objectives indicated in the WBG survey include extrac- political consequences as well as other impacts. tion of bene�ts for both the public and the private sectors, • Clarify the ownership and responsibility for the various and most of the responding countries consider the effects effects of the reform. of reform to be substantial in both. Only Sweden, however, • Conduct post-implementation reviews following proj- identi�ed the approximate post-reform cost savings for the ect completion to determine whether the project has private sector. established a platform for bene�ts. This indicates generally weak follow-up and monitoring of • Harvest reviews conducted periodically both during effects post-implementation and therefore represents a po- and after the project period to con�rm that bene�ts tential for improvement in bene�ts realization. International are arriving on schedule; act remedially or opportunisti- monitoring of best practice, such as Doing Business, per- cally based on bene�ts status and reform results. These formed by the International Finance Corporation and the reviews should include both public- and private-sector World Bank, provides valuable indicators of the effects on representatives. the business community of registration reforms. Similarly, • Adjust management to ensure that proposed changes growth in the number of new registrations and amend- are implemented. ment �lings indicate bene�ts. • Establish appropriate incentives to encourage good Systematic bene�ts realization is, in many aspects, a cultural behavior, employing both carrots and sticks. issue. Where reform is not culturally internalized, changes • Institute a communication strategy and plan that will will demand effort, patience, and time. When considering reach all main stakeholders. Chapter Bene�ts Title Realization 19 5. Business Registries and the eGovernment Framework The aim of eGovernment solutions is to promote ICT in- Most authorities assign registration numbers to the busi- novations in the public sector. As master data sources nesses they register,6 but often its use and uniqueness is for information on businesses, business registers play an restricted to the authority assigning it. If information about important role in such solutions. Many authorities depend registered entities is to be shared within the public or pri- on the trustworthy and easily shared electronic business vate sector or between the sectors, the business ID number information that eGovernment solutions can provide. must be unique in all contexts, that is, across agencies. In this chapter, the term unique business ID number refers to The approach has two prerequisites. First, business regis- this cross-agency uniqueness.7 Without such a unique ID ters cannot focus exclusively on business start-ups. Only number, sharing information about an entity may be a dif- business registers containing correct information at any �cult task, as it may require manual mapping of the entity’s given point in a business’s life cycle can be considered various business IDs. master data sources for business information. In addition, business registration bene�ts are very limited if formaliza- tion traps businesses in cumbersome reporting obligations. Various Implementations Sustainable growth within the business sector requires For the reasons outlined above, innovative business entry ef�cient procedures, particularly following start-up. solutions often employ a nationwide unique business ID number. Implementation may take one of two approaches. Second, the concept of a master data source for business information requires cooperation among the authorities In the �rst approach, business registration is the initial involved. Master data means that information on busi- step and includes allocation of a unique ID. The ID and nesses is used across systems, applications, and processes. identifying information is made available to and reused This requires continuing coordination and clear de�nitions by other authorities involved in business registration, such of roles and responsibilities. All authorities must therefore as tax and social security agencies. Belgium uses this ap- cooperate on an ongoing basis. proach. (See http://business.belgium.be/en/managing _your_business/setting_up_your_business/main_steps/ Improving ef�ciency within the public sector while also articles_of_incorporation/.) providing less cumbersome procedures for businesses seem to be the main reasons given by survey respondents In the second approach, allocation of a unique ID number for transforming business registers into master data represents the initial step. Identi�er and identifying in- sources. This chapter outlines a selection of reform steps formation is made available and reused by all authorities in this direction, including the unique business ID number, involved in business registration, including the business information sharing, integration of registration services, register. This approach is applied in Norway. (See http:// and measures to ensure the high quality of registered www.brreg.no/english/registers/entities/entities.html.) information. Unique identi�ers are most often allocated to businesses by the business register, by a facility shared by public agen- Common Business ID Number cies, or by tax authorities. Any of these can follow either A unique business ID number ties information to the correct of the two approaches mentioned above. In Australia, for entity and is therefore fundamental for sharing information example, business registration with the business register is on that business. the initial step and results in allocation of the Australian A unique business ID number or unique identi�er is a set 6 Registration of businesses here means registration with any authority of characters used to distinguish registered entities, that is, that registers businesses. the businesses in a business registry. An identi�er is unique 7 A unique identi�er allowing the unequivocal identi�cation of com- if it is allocated only once (mostly upon establishment), to panies not only at the national level but also at the European level is only one entity, and if it will not change during the entity’s the aim of the European Commission’s proposal for a directive of the existence. Often the identi�er does not convey any infor- European Parliament and of the Council amending Directives 89/666/ EEC, 2005/56/EC and 2009/101/EC as regards the interconnection of mation. A unique business ID number precisely identi�es a central, commercial, and company registers. See http://eur-lex.europa particular registered entity. .eu/LexUriServ/LexUriServ.do?uri=COM:2011:0079:FIN:EN:PDF. 20 Innovative Solutions for Business Entry Reforms: A Global Analysis Company Number (ACN). In the second step, the Australian Tax In a number of countries, different organizations allocate identi- Organization (ATO) allocates a unique ID (Australian Business �ers to individual businesses and to companies. They face the Number, or ABN). (See http://www.asic.gov.au/asic/ASIC.NSF/ additional challenge of de�ning between them the limits of these byHeadline/Starting%20a%20company%20or%20business.) legal forms. It may not always be evident that a certain business represents an individual business and not a company with only Other countries apply similar models. Moreover, the business one owner. This may affect the uniqueness of the ID. To maintain register need not be the site of the initial business registration; the uniqueness of an ID it is important to avoid having several this may be undertaken by tax authorities, for example. An ID’s IDs allocated to one business or several businesses allocated the uniqueness, again, may be restricted to the scope of its use. In same ID. If the same business is identi�ed as a limited liability Belgium, for example, businesses must still register with the social company and at the same time as an individual business, the security administration, which allocates its own identi�er, the uniqueness of the identi�er is lost. A common regime for the NOSS. (See https://www.socialsecurity.be/foreign/en/employer_ identi�cation of all types of legal entities represents a safeguard limosa/infos/registration/gegevens.html.) against this form of duplication. Existing Identi�ers and the Introduction Bene�ts for the Public and Private Sectors of a Unique Identi�er Introducing a unique ID for businesses represents a considerable Introducing a new identi�er requires mapping and conversion of operation with signi�cant costs, raising the question of whether existing identi�ers. Records at tax authorities often cover most the bene�ts will justify the effort. types of businesses and are often the most up to date. This may explain why the tax identi�er often serves as the starting point The bene�ts may not always be particularly prominent. In fact, when a new identi�er is designed. It is important to keep in mind even if the authorities involved in business entry use the same that introducing a new identi�er will require adaptation both by unique ID number and exchange information related to it, the public authorities in processing and �ling information and by number of procedural steps for business registration may remain businesses in communicating with public authorities or other the same. Integrated registration services are provided by a businesses. number of registers without nationwide unique IDs for busi- nesses in place. Moreover, business registers do not necessarily This adaptation can be handled in a number of ways. In Belgium, exchange information with other authorities more often when for example, a decision was made to refrain from introducing unique IDs are used, and electronic means of exchanging regis- a completely new number to minimize administrative changes tered information are not used more often if unique IDs are avail- for existing businesses. Instead, the old VAT ID number was able. Furthermore, no evidence indicates that the implementation retained as an enterprise number. (See http://business.belgium of a nationwide unique ID for businesses boosts crosschecks and .be/en/managing_your_business/setting_up_your_business/ monitoring of business-related information from other sources. main_steps/company_number/.) Registers may not see the introduction of unique ID numbers for businesses as having positive impact on compliance or trust in In Norway, on the other hand, different business registers had to government. be merged into a single new register of legal entities. Statistics Norway was made responsible for that activity, as it already In spite of these �ndings, a growing number of registers do decide had several sets of business information. Using this informa- to introduce a unique business ID number for businesses. The tion, Statistics Norway allocated to each business a nine-digit most recent examples are Australia, Belgium, Vietnam, Croatia, organization number using the generator from the legal entities Malawi, and Mauritius. New Zealand is exploring the adoption register, which calculates the numbers in chronological order. The of a single business number, allocated by the New Zealand businesses were then required to verify the related identifying Companies Of�ce, to replace the current collection of numbers. information, including name, address, and type of activity. (See https://www.wbginvestmentclimate.org/uploads/Business%20 This is because unique business ID numbers provide undeniable Registration%20Case%20Study%20Norway.pdf.) bene�ts. They fall into two main areas: improved ef�ciency within the public sector and reduced administrative burdens for busi- nesses. As part of public-sector innovation, a unique identi�er is Individual Businesses vital to solutions based on information sharing. Public authorities Individual businesses do not possess any legal existence separate exchanging information can con�rm they are referring to the from their owners. This poses various questions related to the same entity by using the same unique identi�er. This leads to identi�cation of the owner and the business. Because tax au- a better quality of registered information and ultimately boosts thorities focus on the taxpayer, that is, the individual liable for trust within the business sector. In addition, statistical �gures on taxation, they will probably want to relate to the owner of an in- the business sector improve as a consequence. This in turn helps dividual business. They might therefore prefer to use the owner’s regulators to target measures for businesses more effectively, and identi�er, possibly as a natural person, rather than the identi�er it is useful for economies in search of �nancial support for invest- for the business. For tax purposes, it will not matter if this person ment climate measures. The uniqueness of the identi�er ensures owned several individual businesses. that information is linked to the correct entity even if identifying Chapter Business Registries and the eGovernment Title Framework 21 attributes (such as name, address, and line of business) change. It is important to note that although a unique identi�er is a neces- It prevents the intentional or unintentional duplication of entities sary building block in public-sector innovation, it is not suf�cient within the scope of its use. Prevention of duplication is especially for improving ef�ciency within the public sector or for reducing important where �nancial bene�ts are granted to legal entities or administrative burdens on businesses. The mere existence of a where liability to third parties is concerned. unique identi�er does not represent a safeguard against public authorities asking a business for information already collected by In addition, the downsides of lacking a unique business ID other authorities. Measures aimed at enhancing use of the ID and number should not be underestimated. Information exchange the information related to it are vital for its successful introduc- without a unique ID requires mapping between the different tion. Political commitment beyond the mere introduction of the IDs applied by the various authorities. Electronic solutions may unique ID is essential in this context. facilitate the necessary mapping, but they cannot exclude the duplication of entities. Moreover, some cases will always require The introduction of a unique ID should start with a clear and manual intervention, necessitating increased resources. On a so- common understanding about the objectives of such a reform. cioeconomic level, the costs of these efforts are not negotiable, If businesses are to bene�t from it, the necessary measures must as every authority will need to perform mapping to exchange be included. business information. When based on ID mapping, solutions requiring exchange of information lose the bene�t of the general With digitized records and electronic communication between cost reduction that comes from use of shared tools. public authorities, use of unique business ID numbers facilitates full electronic solutions without manual intervention. Electronic Businesses bene�t from a unique ID because they do not need to solutions are not a mandatory prerequisite for introducing these handle various IDs from various authorities. Moreover, they bene- numbers, however. Unique identi�cation of businesses is impor- �t from improved quality of registered information, as duplication tant in paper-based solutions as well. may lead to considerable disadvantages for businesses. Businesses will experience bene�ts from a unique business ID number during their entire life span. Information sharing allows authorities to Information Sharing collect information about the business from other authorities, The previous section showed how a unique business ID number rather than requiring it of the business itself. Because the actual facilitates information sharing. Information sharing requires number of procedural steps for registration is not necessarily more than a unique business ID number, however. An important reduced by the mere introduction of a unique ID, effects on start- prerequisite is a solution that �ts the existing technological in- ups may be more limited. Indeed, trying to introduce a require- frastructure, responds to data protection and privacy needs, and ment for obtaining a single ID risks adding a further step in the ensures common understanding of the shared information. registration process: “Apply for business ID.� This is so especially in the Norwegian approach, in which identi�cation of businesses takes place �rst. The number of procedural steps will only be cut Technical Approach if the authorities involved agree to do so by increased coopera- Depending on network capacity and the availability of a network tion. Introducing a consolidated form that businesses may use to and systems, electronic exchange of data may involve various report information to all authorities involved represents a good principles. �rst step in that direction. A common technique is to create a copy, known as a mirror, of the data from other master sources. The copy could be estab- Prerequisites lished using �le transfer protocols (FTP) of a total copy of relevant Prerequisites for the introduction of a unique ID number for busi- information from another source, with an initial total dump being nesses are trust and collaboration within the public sector and updated with changes made over time. The frequency of updates between the public and the business sectors. may vary depending on the need and costs. Alternatively, a copy of the data may be created incrementally as information on a As a �rst step towards information sharing and integration of speci�c instance is required. The copy is then updated when any registration services, the introduction of a unique ID requires trust change regarding the instances in the copy are received from the between the collaborating agencies. Potential partners in this source. An internal copy has the advantage that its use can be process include the business register, the tax authority, the statis- independent of the availability and response time of the external tics of�ce, the social security agency, the pension fund, and any network and sources. This is important if the data are frequently collateral registries. If agreement among all of these is elusive, at used in time-critical processes. The internal copy may have the least the business register and tax authority should be involved. disadvantage as well, however, that redundant data storage may result in discrepancies over time due to erroneous updates that in A clear picture of the identi�ers in use at the various authorities some cases could be dif�cult to detect. and within the business sector is another prerequisite for reforms aimed at introducing unique business ID numbers. A compre- In countries where network and source availability is stable, requests hensive assessment should also identify the needs of the public for information increasingly go directly to the source. Several tech- authorities concerned as well as those of the business sector. niques and protocols have been employed over time, but the most 22 Innovative Solutions for Business Entry Reforms: A Global Analysis recent implementations use Web services and XML messages. This employment regulation, and statistics. Businesses �nd the ex- approach avoids redundant data storage. The principle requires si- perience less cumbersome if these various registrations can be multaneous access to networks and systems, however, and if many merged into one procedure. systems are involved the total availability may be too low. From the businesses’ point of view, much is already achieved if The choice of approach will depend on transaction volumes, criti- the authorities involved join forces to provide information, guide- cality of access, and availability of involved components. lines, and forms in the same location. This is the case, for example, in Australia, which provides the site http://www.business.gov Innovative solutions offer a variety of channels for delivering in- .au/Pages/default.aspx. Such a step requires that the authorities formation to other authorities: online access, as �le transfers, on involved agree on responsibilities for updating and uploading CD-ROM, or by e-mail, the latter being easy to implement and information as well as for maintaining the site. Regular contact recommended where the technical infrastructure is weak. among agencies is thus necessary. Integration may also lead to a single form for registration with all Data Protection and Privacy authorities involved. Businesses bene�t from such procedures, as Data protection and privacy standards are often embedded in they need only one form instead of several. Moreover, use of a national legislation. In some countries, registered information re- single form prevents authorities from asking several times for the lated to businesses is considered private and is therefore not pub- same information. In Norway, the authorities have developed a licly available. A major trend is towards increased transparency, consolidated form that, in electronic format, can be repopulated however. This is partly motivated by international efforts to �ght with information from cooperating authorities. (See http://www money laundering and terrorist activity and partly by an interest .brreg.no/english/forms/.) Sharing a common form requires in enabling a more open domestic and international economy in agreement on updating routines, production, and distribution. which knowing your customers (KYC) and your business partners is vital when entering into new business relations. Advanced integration of registration functions may be based on a common database.8 Sharing information, as described in the As regards privacy standards for individuals, it seems that reforms previous section, is a prerequisite for this. In Norway, for example, aimed at information sharing do not present any particular chal- registration authorities9 share a database containing basic infor- lenges as long as privacy is considered and addressed. mation about legal entities. (See http://www.brreg.no/english/ registers/entities/entities.html.) Some of these authorities use daily Interoperability Requirements �le transfers to update the common database as well as their own When providing public services based on information sharing, records. The Central Coordinating Register for Legal Entities, the different authorities must interact within the same context. The Register of Business Enterprises, and Statistics Norway all have lack of semantic interoperability appears to be a key obstacle to direct access to the database and use the same back-of�ce system the exchange of information within the public sector as well as to update it. Integration among these three authorities is particu- between the public and private sectors. larly close. Of�cers at the Register of Business Enterprises, for ex- ample, verify information registered by the Central Coordinating Different interpretations of the information to be exchanged can Register for Legal Entities. A regulatory provision stipulating that hamper fully electronic solutions. Semantic interoperability en- the Central Coordinating Register for Legal Entities may collect ables organizations to process information from external sources and register information from other authorities serves as the legal in a meaningful manner and ensures that the precise meaning of basis for this cooperation. Necessary funding is allocated by the exchanged information is understood and preserved throughout national budget. In general, data sharing requires �nely tuned the exchanges between parties. To ensure information sharing on cooperation on the technical, legal, and organizational levels a large scale, semantic descriptions should be easily accessible for regarding a number of aspects: functionality, processing systems, all parties involved. interfaces, maintenance, access, quality of information, updating routines, roles, responsibilities, and funding. Measures to achieve interoperability relate not only to the devel- opment of appropriate tools and applications, they also serve the Quality of Registration Information social process required to reach agreements on common repre- High-quality information is imperative if business registers are to sentations and de�nitions, technology standards, and formats. serve as master data sources. Low-quality master data will affect Dialogue, preferably established on a permanent basis, is crucial, the quality of services for all players sharing the data. This ap- as it helps ensure mutual understanding of the legal foundation, plies to information regarding business start-ups and even more responsibilities, and procedures involved. Trust between cooper- so to changes occurring later in the business life cycle: registered ating authorities is an important ingredient here as well. Integration of Registration Functions 8 IFC, “How Many Stops at the One-Stop Shop?� (January 2010), p. 4, https:// The effects of leveraging ICT in public-sector innovation become www.wbginvestmentclimate.org/uploads/Howmanystopsinaonestopshop.pdf. especially visible when authorities integrate registration func- 9 The Norwegian Central Coordinating Register for Legal Entities, the Register of tions. Businesses must often register with different authorities for Employers, the Register of Business Enterprises, the Register of Foundations, the VAT Register, Statistics Norway’s Central Register of Establishments and various purposes, among them taxes, social security insurance, Enterprises, and the Corporate Taxation Data Register. Chapter Business Registries and the eGovernment Title Framework 23 information must be updated. High-quality information here means samples of businesses with few or no amendments over a certain correct information providing legal certainty for third parties. period of time. The latter method does not cover all registered entities, but it puts less strain on the register in terms of work- The quality of data is closely linked to information sharing. The load. Modern technology may help to target these entities. more information is used, the more often it will be updated. Updated information will in turn be used more frequently, lead- ing to a positive circle as more public authorities �nd this up-to- Reporting Procedures with Consumers of Bulk date data attractive to use. Information Consumers of information from business registries represent Registers apply a number of ICT-based mechanisms to ensure the an important source for its veri�cation. Cooperating agencies high quality of their registered information. often use information in bulk, as do banks and credit bureaus from the private sector. Without electronic solutions, however, Initial Crosschecks reporting procedures may be dif�cult to implement. Bulk infor- Many registers use ICT to crosscheck with other sources when mation sharing provides the bene�t of consistency checks: even verifying applications. These are not necessarily top perform- if a business seems to be active according to the annual account ers, according to the Doing Business ranking. Singapore, a top �led with the business register, tax authorities may have differ- reformer, for example, does not have initial crosschecks. Mostly ent information. When a discrepancy is signaled, appropriate registers check whether persons involved in start-ups are barred measures may be taken to determine which is correct. due to disquali�cation. Many registers check other sources for information related to persons, such as names and addresses. Useful Information Services for the Public If unique identi�ers are in place, crosschecks can be performed Public use of information can constitute a valuable means of without manual intervention. Crosschecks should be limited to veri�cation. A person who looks up information on a potential legal requirements. Only if businesses are required by law to have business partner only to �nd incorrect registered information a certi�ed auditor registered, for example, should registers check will advise the register, thus helping to update information. (See against another database to ascertain if a business’s auditor is Figure 5.1) certi�ed. Crosschecking information on businesses just because it is technically feasible should be prohibited. Given the public’s central role in verifying registered information, it is important that the process of looking up information be a Monitoring positive one. Making registered information available electroni- cally, at low cost, and with legal certainty will encourage its use Monitoring other sources, along the same lines as performing by the public. crosschecks, ensures that registered information is correct not only at start-up but also throughout the life cycle of a business. Legally valid registered information possesses particular value for Automated look-up without manual intervention is ef�cient for the public as it has increased reliability. Legal validity provides registers and keeps businesses’ administrative burdens at a mini- legal protection for those relying on registered information that mum. In Norway, for example, the processing system monitors turns out to be incorrect. relevant sources in system-to-system applications. The system picks up changes automatically and produces warning letters Publication in the National Gazette plays a minor role in this accompanied by information on the legal implications of the context. In fact, the trend seems to be moving in the opposite change. Very effective solutions may detect changes before the direction, with a number of registers no longer publishing business does. For these businesses, warnings from the register announcements in such gazettes. constitute a service. Periodic Checks Using Other Sources As an alternative to continuous monitoring, registers perform- ing periodic checks receive data from other sources and check it Figure 5.1: The Positive Circle of Data Use and Improvement against registered records.10 Periodic checks increase the work- load at the register during certain periods, with potential nega- information is used tive effects on regular case processing. This is a general drawback more often of any register activity carried out at �xed intervals. the information is information gets Periodic Checks with Businesses on the Record more attractive to use updated more often Many registers check with the businesses themselves about whether registered information is correct. The obligation to �le annual returns serves this purpose. Registers may also check quality of information is improved 10 For practical details, see the section “Information Sharing� above in this chapter. Source: The Brønnøysund Register Centre. 24 Innovative Solutions for Business Entry Reforms: A Global Analysis 6. Stages of ICT Implementation in Country-Speci�c Conditions Business registration offers no “one size �ts all� solution, • Roles and responsibilities of business registration and using ICT in business registration reforms does not players. change this principle. The implementation of ICT in busi- • Existing relations among central players in business ness register solutions varies considerably across countries, registration. depending on country-speci�c conditions and the extent to which ICT is already used by business registers. • Sources (public and private) and quality of business information. Typically, ICT implementation in business register solutions • Role of consumers (public and private) of business occurs as a gradual process, with each stage stabilizing information. before the next is attempted. Each reform step should be considered carefully for bene�ts in ef�ciency and cost. • Business licensing as a condition for business Sometimes a very ef�cient and well-functioning paper- registration. based solution may be preferable to an unstable, slow, expensive electronic solution. In addition, any solution Purpose of Registration in the Business based on ICT will make the registry more dependent on Register power supply. Lack of a suf�cient and stable power supply The aim of this reform step is to de�ne the purpose of reg- creates considerable risks for both the registry and its users. istration in the business register as opposed to registration Exclusively electronic solutions, moreover, may strain busi- for other purposes, including the following: nesses’ capacity in terms of computer- and web-skilled employees and necessary equipment. • for tax purposes, The following description of the stages of ICT implementa- • for social security purposes, tion in business register solutions starts from an entirely • for statistical purposes, paper-based system and highlights speci�c country condi- • for licensing purposes. tions within the various stages they may affect. The purpose behind having a business register with the Among the country conditions or issues that may affect business register, social security agency, statistics bureau, the implementation of ICT in business register solutions are and licensing authority should be analyzed separately. the following: All authorities registering businesses should participate in • Availability of Internet, mobile technology, electricity, this step and should agree on the purpose of registration and postal services. with the business register. To this end they should establish • Availability and technological capabilities of a working group serving as a permanent meeting place intermediaries. for discussion of business registration reforms. This is an important �rst step toward integration of business services. • Structure of the business sector, including percentage Institutional commitment should be ensured. The purpose of SMEs, capital-requiring activities, estimated size of of registration in the business register should be included the informal business sector, and geographic diversity. in the legal framework. • Public policy and management, including funding prin- ciples, decision making, public-private dialogue, use of De�nition of the purpose of registration with the business cost-bene�t analysis, and recruitment of skills. register should take place at an early stage of business entry reforms because it affects a number of other steps. • Presence of international unions and other associations The reason for registration with the business register deter- influencing the legal framework (for example, EU, mines central properties of the register: which entities to OHADA). include, what type of information to register, how to verify • Historical background (for example, a colonial or com- information, requirements for updates, and what informa- munist past). tion to disseminate, just to mention a few. • Language issues. A country’s legal system may affect the approach taken • Literacy levels. for business registration. In civil law systems, written codes Stages of ICT Implementation in Country-Speci�c Conditions 25 determine whether an event is legal or illegal before it takes established and on which database should possess legal valid- place (ex ante). Business registration in countries based on such ity. Some countries use local databases integrated by a common systems often involves veri�cation of legal requirements and au- nationwide system for information services. Such systems may thorizations before business start-up. Common law systems, by be implemented either by technical integration into virtually one comparison, are based on judge-declared law, customs, and legal database (as in Switzerland) or by providing one of the various precedents and provide for veri�cation of an event’s legal status solutions for transferring data from local databases to a central after it has taken place (ex post). Countries with codes influenced database. by common law often provide for declaratory business registra- tion, with no approval needed before start-up. Common-law Electronic Processing countries tend to require fewer procedures for business start-up than do civil-law countries. Digitized records represent an advantage when back-of�ce systems for electronic processing are introduced. If digitized In countries with large informal economies, a narrowly focused records are not available as structured information, introduction approach to reform in its initial phases may be more effective of electronic processing must also include the transformation than a broader one, which can be introduced at a later stage. of unstructured digital records into structured data that may In countries with a high percentage of unregistered SMEs, often be processed. The back-of�ce system chosen should be easily individual businesses operating at a local level, a decision must adaptable to changing legal and organizational requirements. be made on whether this type of business should be included on It might be bene�cial at �rst to limit electronic processing to the business register. A more effective choice might be to register certain categories, for example, new registrations. Focusing these businesses for tax purposes only and to focus instead on on a certain type of business, preferably one large in number registering companies in the business register. and without complex requirements, helps ensure a smooth transition at the register and quick wins for the business sector. Digitizing Records Automated checks performed by the system may help case workers considerably. (For details, see the section “Application Digitizing records, already undertaken by many registers, is Processing� in chapter 2.) They also increase transparency for expensive and time consuming. The �rst step is creation of an the business sector and reduce the risk of corruption. Legislation electronic index catalogue. Next, the approach to take in digitiz- may have to be adapted and rules simpli�ed to allow automated ing the paper-based records must be determined. Where these checks to run. contains signi�cant numbers of inactive businesses, bulk digitiza- tion may not be the best option. A more effective choice might be to digitize a business’s records when a speci�c event occurs, Introduction of a Unique ID for Businesses such as its annual return or amendment �ling. Businesses might The working group on business registry reforms mentioned also be asked to �le transfer to the new register, with incentives above should agree on a regimen for allocating unique business including reduced fees and extended deadlines for �ling their IDs. (For details, see the section “Common Business ID Number� annual returns. If this option is offered, a transition period should in chapter 5.) be de�ned, for example, two years, after which �le transfers may still be made, but at higher fees. These methods ensure that only Costs related to the use of a unique ID play a central role. Making active businesses are digitized. access to the ID and related information free of charge may have a positive effect on its use. It is important to note that access Digitization should be combined with name searches made avail- means not only making information available, it also involves the able for use by both businesses and the public. A name search speci�c form or format of that information. Electronic access will catalogue may use any of various database systems, Excel spread- not ease communication if the receiving authorities must make sheets, or even tables in Word documents. It should contain considerable investments in technology to use the information. extracts of frequently used information on enterprises and would This affects not only receiving authorities operating in a paper- function similarly to an index card in a manual archive. based environment but also, and perhaps especially, those already using technology that must be adapted to meet the register’s This approach is easy and cheap to implement and will produce more sophisticated electronic solution. immediate bene�ts enabling ef�cient name search and reserva- tion, as well as a reference to the archive. Nevertheless, it implies A unique ID system has bene�ts that do not depend on elec- minimal support for case processing, fee calculation, or archiving, tronic processes, but electronic solutions will not reveal their full and the potential for electronic name search and reservation for range of bene�cial effects without use of unique IDs. Mapping businesses is restricted. Intended or unintended modi�cation of individual agency IDs will always require manual effort even in the content constitutes a risk, and the ability to track changes is an otherwise fully electronic process, and the inevitable duplica- limited. tion of entities will limit the quality of registered information. Before introducing a unique ID, the technological capabilities In countries where business registers are part of a federal struc- of all players involved should be considered. Introduction of ture divided into federal, provincial, or local levels, a decision is unique IDs into an entirely paper-based system may be pre- necessary on whether a centralized or a local database should be mature, but it should not be delayed until many players have 26 Innovative Solutions for Business Entry Reforms: A Global Analysis already invested in the technology required to communicate • Computer availability. electronically with the others. • Technical skills in using computers. • Network access (Internet penetration rate). Automated Fee Calculation and Payment • Access to mobile technology. Principles for fee calculation must be set before payment is auto- mated. Automated fee calculation and payment reduces the risk • High-quality, user-friendly electronic registration services. of corruption. Discretionary power to impose fees should therefore Where Internet coverage is very limited, use of downloaded forms be avoided. Simplicity is essential — rates should be few in number. with software for form �lling is recommended. Business registers Administrative costs related to fee payment both for businesses in countries with suf�cient stable Internet access may prefer a and for the register should be considered: it is preferable to charge browser-based form-�lling service running on a central server. for fewer operations but at higher rates. Simple, equal, and ef�- cient fee calculation and payment boost the registry’s predictability In countries with low Internet penetration rates, professional and build trust between businesses and the register. service providers, such as lawyers, notaries, and similar players, are often among the �rst to gain Internet access. They may pro- Distribution of Registered Information vide registration support in areas where Internet access is not widely available, submitting applications when and where access Where dissemination of registered information is not introduced, becomes available. it is important to state that, by law, the information is public. In countries where the business register is not centralized, it is Earlier introduction of automated checks integrated into the important to consider consumers’ need for information access at back-of�ce system may pay off at this stage, as the same checks a national level. The type of information distributed depends on may be made available for businesses using the electronic ap- the purpose of registration with the business register. plication. This makes services more user-friendly, as businesses will prefer to conduct error checks on their own applications. It may be advisable to introduce electronic ordering services for paper products even before electronic products are available. Electronic ordering services are easier and cheaper to implement Integration of Registration Services for paper products than for electronic products, and they provide A recommended �rst step for integrating services is having immediate bene�ts to information consumers. the registration reform working group agree to a consolidated registration form. The working group plays a key role in map- Electronic Filing and Other Client Services ping out registration processes for businesses, intermediaries, The introduction of electronic �ling may have considerable and other authorities involved. Principles regarding communi- consequences both for the register and for the business sector. cation of new, amended, and closed businesses must also be Among the prerequisites are the following: determined. Stages of ICT Implementation in Country-Speci�Chapter Title c Conditions 27 7. Recommendations for Reformers The following recommendations focus on business register may divert consumers’ attention from new and improved reforms. They are arranged thematically in a non-exhaustive products. In this case, awareness building might usefully list of issues of general importance in the business register focus on the legally valid and of�cial nature of the regis- reform process. (Speci�c reform experiences are described tered information. in the case studies in chapter 8.) The bene�ts of business registration should be clearly and speci�cally identi�ed and de�ned. It is essential to manage Trust expectations when working toward a common under- Trust is a key factor in business registry reform and use. standing of the bene�ts of a business registration reform. Businesses must trust the business register, and the author- ities involved in integrating business registration must trust Reformers should consider and communicate that re- one another. An environment of cooperation in the work- forms aimed at formalization will, if successful, lead to ing groups, composed of representatives from the business an increased number of new registrations and a conse- sector and from the authorities involved in business regis- quent increase in the workload at the registry. Electronic tration, should be the starting point of any reform. These solutions may help keep the workload manageable, by al- groups not only facilitate reform activities, however; they lowing electronic name search, for example, but ultimately also provide valuable input regarding monitoring, evalua- the bene�t of a formalized business sector will have the tion, operation, and further development of the business effect of increased costs at the business register. On a so- register, and so should continue on a permanent basis. cioeconomic level, however, these may be compensated by increased tax revenues. Roles and Responsibilities Perhaps an even more important task is to communicate The targeted roles and responsibilities of the central play- what will not follow from reforms focused exclusively on ers concerned with business registration (the business improving formal registration. Measures aimed at stream- register, tax authorities, statistical bureaus, and social lining business entry, for example, will not necessarily have security agencies) should be clearly de�ned for all aspects positive effects on the quality of registered information of business registration: preregistration, registration, regarding existing businesses or lead to increased public allocation of unique IDs, integrated registration services, access to registered information. For these bene�ts, the and dissemination of registered information. Business reform process must continue into those areas, focusing licensing and protection of intellectual property rights on improved transparency throughout the business sector. should not be concerns of the business register. Funding Building Awareness Reforms are best funded directly by the country govern- Building awareness is vital for business registration reforms. ments. Economies with low income might need additional Reform steps should therefore be accompanied by an in- funding from development supporters. formation strategy. Courses, workshops, and presentations Estimates of the proceeds to be gained from fees for for target groups may be useful. disseminating registered information should be prudent. In countries where public access to registered information Sales of information products depend on the market is a new concept, demand for information products may for those products. Activities to prepare for the sale of develop slowly. Building awareness among the public will information products should therefore start early. In be a key factor in this phase. The reform process should the interim, the business register may be completely include research into the needs of information consumers dependent for funding on registration fees, with the and their sources. risk that high registration fees discourage businesses from registering. To avoid this, direct public funding may In countries with easy public access to registered infor- be the preferred option. In addition, where formalization mation and the sale of information, registers may face a of businesses is the objective, an increase in the number different challenge. An overflow of information products of registrations may compensate for low registration fees. 28 Innovative Solutions for Business Entry Reforms: A Global Analysis 8. Case Studies Vietnam With funding from Norway, Switzerland, UNIDO’s own resources, and the One UN Fund, a UNIDO initiative sup- Introducing a National Business Registration ported business registration reform in Vietnam as part of a wider program to strengthen the country’s economic policy System formulation and implementation to improve the business Vietnam is a developing country that has shown signi�cant environment for the private sector, particularly for SMEs. economic growth over the last two decades and is among Business registration reform was among the priorities set the world’s fastest-growing economies. Its small and by the Government of Vietnam for improving the country’s medium enterprises (SMEs) are considered key factors in business environment. Vietnam’s socioeconomic development. The business registration reforms addressed obstacles Business registration is performed at the province level, and faced by entrepreneurs in completing multiple registration each of the 63 provinces has its own Business Registration requirements. One consolidated application form was in- Of�ce of DPI (Provincial Department of Planning and troduced for business, tax, statistics, and seal registration, Investment). The Business Registration Division in the and enterprises now receive a national unique ID, also used Ministry of Planning and Investment undertakes the tasks for tax purposes, upon registration. involved in state management of business registration at the central level and serves as the regulatory body, govern- The reform required amendments in existing laws, decrees, ing the registration process through decrees and circulars. and circulars. In addition, new decrees, circulars, and government resolutions were issued to form the legal basis Before the reform, the legal system prescribed a “certi�cate of the reform steps. In this process emphasis was placed on regime,� implying that the only legally valid original con- simplifying procedures and reducing the requirements for �rmation of business registration was the certi�cate kept minimum capital. by the enterprise. Information obtained from the business registers was not considered of�cial and could not serve as The reforms are currently in the second phase: upgrading proof of an enterprise’s proper representation. Two com- the system to include information dissemination facilities. puterized systems were in operation relating to business The ultimate goal is to allow electronic submission of registration: the National Business Information Network registration applications, using e-signature and e-payment (NBIN), launched in 2001 and owned by the Ministry of functionalities. Planning and Investment, and a system, based in Ho Chi Minh City (HCMC), launched in 1997 and managed by the The Agency for Business Registration was instituted as Provincial (city) Department of Planning and Investment a separate agency under the Ministry of Planning and (DPI). Investment and is responsible for the management and operation of business registration in Vietnam. At present, The NBIN system was in use by 10 registration of�ces, while 66 BROs across the country (one in each of the 63 prov- Ho Chi Minh City used its own system, implying that prov- inces and three in Hanoi) are guided by Agency for Business inces performed registrations manually. Information from Registration, a central agency based in Hanoi. the business registration of�ces (BROs) was transferred to the Ministry of Planning and Investment, which served as Single-point registration services are performed across a national source of information on registered businesses. the country, and a computerized national business reg- The transfer of data was slow and cumbersome and caused istration system ensures that the same level of service is substantial delays in updates of information at the national delivered to all enterprises, regardless of business location. level. As of December 31, 2010, and due to interministerial cooperation in designing and implementing the system — involving, in particular, the Ministry of Planning and Investment, the Ministry of Finance (General Department Table 8.1 Basic Information on Vietnam of Taxation), the Ministry of Public Security, and the Region East Asia and Paci�c General Statistics Of�ce — the registration system is Income Category Lower middle income operational in all 63 provinces of Vietnam. Information Population 88,361,983 from the previous registration systems has been transferred GNI per Capita (US$) 1,100.00 to the national system database as part of the transition Source: Doing Business 2012. process. Case Studies 29 The consolidated business registration reform will improve trans- in the following years, as the time required to establish a new parency in the business environment, reducing transaction costs business dropped to 15 days in 2008 and 9 days in 2009. This and risks in business activities, including duplication of business positive trend has continued, and the 2012 Doing Business rank- names. The web-based information services will be open to en- ings indicate FYR Macedonia’s time for starting a new business is terprises, the authorities, and the general public, providing access now only 3 days. to reliable and legally binding information about registered enterprises. Reducing Processing Time The main challenge of the new system is building and keeping One of the main goals of the business registration reform was suf�cient capacity at the Agency for Business Registration. The to reduce the processing time for new registrations. This set an agency receives numerous inquiries from the provincial BROs, easily quanti�able goal, making the improvements achieved by varying from questions on system operations to the interpreta- reform that much more visible. The long processing times had tion of circulars. The agency hosts and maintains the National been a major drawback of the old system, and resolving the Database of Enterprise Registration, including the hardware problem brought great bene�t to the business community. system. Future emphasis for the reform effort is therefore on the organizational structure needed to sustain further development Improving Customer Service and operations. Reducing the processing time needed to establish a new busi- ness was not the only bene�t to the business community from Lessons Learned business registration reform. As the processing times make clear, Lessons learned by the registry reformers in Vietnam include the the court system could not make running the business register a following: priority. For this and other reasons, many countries have found that centralizing and specializing the task of running the business • High-level commitment and support is an imperative. register achieves great improvement. For the Macedonian busi- ness community, the centralized register represented improved • The reform process takes time and is complex. customer service, in terms of both accessibility and guidance. • Interinstitutional cooperation is essential. The register now helps customers with a wide variety of issues • A nation-wide approach is highly recommended. through telephone, e-mail, and direct contact. Former Yugoslav Republic of Macedonia Centralizing Registration Functions FYR Macedonia’s centralized registration functions made regis- Introducing One Central Agency tering much easier for businesses. Reliance on a central system meant the same system handled both new registrations and At the start of 2000, the Former Yugoslav Republic of Macedonia later changes. Businesses moving from one part of the coun- had a business registration system, run by the courts, that required try to another no longer had to reregister and were already long processing times for new registrations and for changes of familiar with the registration and amendment processes. The existing information. In addition, the registered information was Macedonian system established several regional and local of- not easily accessible, making the register a poor source of infor- �ces to improve accessibility for businesses unable to submit mation for investors and businesses. With the introduction of a registrations by mail or electronically and to provide customer new company law in 2005 and a centralized register in 2006, FYR support on a local level. Macedonia instituted major reforms in its business registration system. Processing time was cut drastically, and access to and use of registered information on businesses was greatly improved. On Financing the Business Register the World Bank Doing Business ranking for 2006, FYR Macedonia According to the law regulating the central register in FYR had a reported time for starting a new business of 48 days. The Macedonia, the register cannot run a pro�t. This has made it following year, this time had been cut by almost two-thirds to dif�cult to allocate to the register the funds necessary to make 18 days. The effects of the reform became even more evident improvements or add new functions. This situation was not made any better when the government decided to halve registration fees to encourage new businesses to register. Although the cen- Table 8.2 Average Time to Establish a Business in Vietnam tral register has made do within its current �nancial constraints, Years Duration and has even made several improvements, a less strict limit on 1991–1999 6–12 months pro�ts might have permitted additional improvements. The lack 2000–2005 50 days of funds for new functions may be due to the �nancial situa- 2006 22 days tion in FYR Macedonia, but it also illustrates the need to allocate 2007 15 days funds for improving and not just running the register. This could 2008 5–10 days be achieved through increased allocations from the government 2009–to date Max. 5 days but also by allowing the register to keep part of the pro�ts from Source: Ministry of Planning and Investment. registration fees and other income. 30 Innovative Solutions for Business Entry Reforms: A Global Analysis Italy Notaries, especially, were targets of this information campaign. In Italy, use of notaries is mandatory for all business registration Depending on Intermediaries other than sole proprietorships. To get the highest possible use Business registration in Italy is performed by 105 different busi- from the electronic business registration solution, the notaries ness registers, termed chambers of commerce, throughout the had to be on board. country. Historically, business registration was carried out, using paper, by both the courts and the business registers. In 1974, Incentives were used to promote wide use of electronic registra- some of the business registers started using an electronic solu- tion. First, the registration fee was set lower for electronic regis- tion, developed by the business register in Padova. This proved tration than for paper registration. Second, processing time was successful, and gradually all the business registers joined in. It reduced for electronic registrations. was decided in 1995 that the courts would no longer perform The business registers do not receive government funding, and business registration, and since then this activity has been per- the costs associated with the reform were signi�cant. Not only formed solely by the business registers. did the business registers bear the cost of developing and imple- menting the electronic solution, they also incurred some of the The Reform: From Paper to Fully Electronic Business costs of implementing the digital signature. InfoCamere issued or sold these at a reduced price. This was seen as an investment Registration in register quality. If the process was easy for the public to use, A law implemented in 1997 made paper and electronic docu- the information would be improved, thus improving the overall ments equal in all matters, and made electronic signatures and quality and usefulness of the register. ordinary signatures equally valid as well. This was the starting point for the transition to fully electronic business registration. After a test period during which some business registers used The implementation of the law initiated discussion among the the electronic system, a law was introduced in 2003 making business registers on whether and how they could bene�t from electronic business registration mandatory for all limited liability use of electronic documents and signatures. They came to the companies (SrL and SpA). Starting in April 2010, Italy has had conclusion that use of electronic documents and signatures could fully electronic business registration, using a public web portal be bene�cial in business registration by making the process more called ComUnica. This has reduced the time and costs related to ef�cient and that it should be implemented. business registration. Ten years ago, processing time for annual accounts was several months. After implementation of the elec- This brought new challenges. Because the public was not at tronic solution, this processing took a few days. In 2004 it took the time familiar with electronic solutions, the registers an- 23 days to start a business; it now takes only 6 days (for further ticipated hesitation and even reluctance in using them. To details http://www.doingbusiness.org/Custom-Query/italy). In combat this, a large-scale information campaign was started addition, staff time spent on registrations has decreased. to provide information and knowledge suf�cient to assure the public that it could place con�dence in the electronic solution, thus facilitating a smooth transition from paper to electronic Intermediaries as Prerequisites for Fully Electronic registration. Business Registration Italy is one of �ve respondents in the WBG survey with fully elec- tronic business registration. Italy has a strong tradition of using InfoCamere intermediaries, and this tradition played a considerable role in how the country achieved fully electronic �ling. Internet penetra- InfoCamere, the shareholding consortium of the Italian Chambers tion in Italy is only about 50 percent (CIA Factbook). Introducing of Commerce, ensures the implementation and management of mandatory electronic �ling under these circumstances, without the applications required for the chamber system to function and the possibility of employing intermediaries to �ll the gap, would communicate with government, businesses, and citizens. It has be futile. Given their key position in the business registration pro- developed and continues to operate the electronic system linking cess, notaries were, of course, main targets of the information their 105 chambers of commerce and 300 branch of�ces. campaign that introduced Italian businesses and the public to the electronic solution. Chapter Title Case Studies 31 Annexes APPENDIX I: RECOMMENDATIONS FOR A COMMON BUSINESS ID NUMBER The following are some important criteria to be considered when establishing a unique business ID: • The ID should belong to the entity during its entire lifespan. • Once assigned to an entity, the ID should never be reused at any time, even after the entity is deregistered. • The ID should not contain any information subject to change. • Numeric IDs are the most common, but IDs may contain letters, as well, if required. • A control digit should be ussed to prevent errors when manually entering the ID. • The ID should be assigned at the time of registration. It is a signi�cant advantage if the ID is unique nationally, across all agencies and applied in all contexts, including both the public and the business sectors. Therefore measures strengthening the use of the unique ID are central. Various means can be used to enhance the role of a unique business ID. Public authorities might be legally required to use businesses’ unique ID and their registered information. Likewise, businesses might be obligated to put the ID on business documents. Indirect measures can be taken as well. The high quality of information linked to the unique ID makes it more attractive to use both the ID and the information linked to it. Thus, general measures to raise the quality of registered information enhance the use of a unique business ID, and vice versa. Moreover, efforts to increase the use of the unique ID should not be restricted to the public sector. In fact, the use of the unique ID by the private sector, especially banks when asked to open an account for a business, may boost its use by the public sector. Close cooperation with the private sector and communication of the unique ID’s advantages may provide the motivation needed for businesses to obtain and use IDs. The legal framework for the unique business ID should cover the following issues: • Identi�cation of the authority charged with allocating the unique ID. • Allocation of the unique ID before or immediately after registration with authorities involved in business entry. • Listing of the information elements (for example, name, address, and type of business) that the identi�cation will be based on. • Legal requirements for public authorities to use the ID and related information, together with corresponding restrictions against asking businesses for this information. • Access to registered information by public authorities and the private sector. • Communication of registrations and amendments among public authorities involved. • Communication of deregistration of closed businesses. 32 Innovative Solutions for Business Entry Reforms: A Global Analysis APPENDIX II: CONTACT INFORMATION Key Reformer Contacts Roseanne Bell, Australian Securities and Investments Commission, Australia www.asic.gov.au/asic/asic.nsf Dr. Peter Hubalek, Austrian Federal Ministry of Justice, Austria www.justiz.gv.at/internet/html/default/home-en.html Ahmedur Rahim, Registrar of Joint Stock Companies and Firms, Bangladesh www.roc.gov.bd:7781/ Adriaan Rosseel, FPS Economy - Crossroads Bank for Enterprises, Belgium www.economie.fgov.be/en/ A. Keith Whitelaw III, Business and Licensing Division, Department of State, State of Colorado, USA www.sos.state.co.us/pubs/BusinessAndLicensing/main.html Andrea August, Financial Agency, Croatia www.hitro.hr/ Ingmar Cali, Centre of Registers and Information Systems, Estonia www.rik.ee/ Vito Gianella, InfoCamere, Italy www.infocamere.it/ Julian Lamb, Jersey Financial Services Commission, Jersey http://www.jerseyfsc.org/ Nasser Hawamdeh, Ministry of industry and Trade, Jordan www.mit.gov.jo/tabid/36/default.aspx Atif Hamdan, Companies Control Department, Jordan ccd.gov.jo/english/index.php . Ieva Tarailiene, State Enterprise Centre of Registers, Lithuania www.registrucentras.lt/index_en.php Branko Georgievski, The Central Registry of the Former Yugoslav Republic of Macedonia, FYR Macedonia www.crm.com.mk/ Chifwayi M.K. Chirambo, Department of the Registrar General, Malawi www.sdnp.org.mw/ruleoflaw/justice/legaldepts.html Prabha Chinien, Companies Division, Mauritius www.gov.mu/portal/site/compdivsite Batsukh Batchimeg, General Authority for State Registration, Mongolia http://www.registrationmongolia.com/ Justin Hygate, Ministry of Economic Development, New Zealand www.med.govt.nz/ Øyvind Vågan, The Brønnøysund Register Centre, Norway www.brreg.no Annexes 33 António Figueiredo, Institute of Registries and Notary, Portugal www.portaldaempresa.pt, www.portugal.gov.pt/en/the-ministries/ministry-of-justice.aspx Snezana Tosic, Serbian Business Registers Agency, Serbia www.apr.gov.rs/eng/Home.aspx Latha Kunjappa, The Accounting and Corporate Regulatory Authority, Singapore www.acra.gov.sg Mr. Joey Mathekga, Companies and Intellectual Property Commission, South Africa www.cipc.co.za/ Glory Moumakwe, Companies and Intellectual Property Commission, South Africa www.cipc.co.za/ Maria Fanqvist, Bolagsverket, Sweden www.bolagsverket.se Yanina Zdovbytska, State Committee of Ukraine for Regulatory Policy and Entrepreneurship, Ukraine www.dkrp.gov.ua/control/en/index Lê Quang Minh, Agency for Business Registration, Vietnam http://www.mpi.gov.vn/ Case Study Contacts Vietnam Le Quang Manh, Agency for Business Registration, Ministry of Planning and Investment Nguyen Thi Thuan, Deputy to Director General, General Department of Tax Gunnar Koren, Chief Technical Adviser, United Nations Industrial Development Organization Former Yugoslav Republic of Macedonia Branko Georgievski, Chief of Cabinet, Central Register of the Former Yugoslav Republic of Macedonia Irena Lazaroca, Central Register of the Former Yugoslav Republic of Macedonia Vladimir Naumovski, Head of IT Sector, Central Register of the Former Yugoslav Republic of Macedonia Italy Paolo Ghezzi, Deputy Director General, InfoCamere Vito Gianella, InfoCamere Dr. Pierluigi Sodini, UnionCamere 34 Innovative Solutions for Business Entry Reforms: A Global Analysis APPENDIX III: SELECTED RESULTS FROM THE WBG SURVEY ON INNOVATIVE SOLUTIONS FOR BUSINESS ENTRY REFORMS All illustrations in this section were produced for the World Bank Group survey of ICT solutions in 34 company registers (2011). Q2 How would you classify your Q3 How is business registration organized in your organization? country? 4% 23% 0% 8% 0% 4% 88% 73% one centralized regionally independent governmental court of justice national registry registries (state-owned) locally combination of the chamber other independent approaches above of commerce registries Q6 Use of intermediaries documents to be confirmed is the use mandatory? by intermediaries? 12% 23% 77% 88% yes no yes no Annexes 35 Q8 Exchange of information between registry of�ces 4% 11% 85% online registration using one shared national database online access to regional/local databases offline transfers using other means Q15A Do you deliver business register information to other authorities? 11% 13% 35% 13% 28% yes no deliver by online deliver by electronic file access transfer deliver on CD-rom deliver on paper other 36 Innovative Solutions for Business Entry Reforms: A Global Analysis Q15B Do you receive business register information from other authorities? 9% 38% 40% 24% 60% 0% 29% yes no receive by receive by electronic online acess file transfer receive on receive on paper other CD-rom Q10 The information delivery of business register data is provided by 22% 3% 6% 56% 13% the government chamber of commerce privately owned public-private other company partnership Annexes 37 Q12 Are the following separate procedures required when registering a new business? name search rquired as name reservation required as separate procedure separate procedure 42% 58% 62% 38% yes no yes no Q14 Which other authorities, in addition to the busi- ness register, register new businesses? 14% 26% 31% 14% 10% 5% 0% 0% tax authorities social security agency pension fund collateral registries statistics office credit-reporting agency no other authority other 38 Innovative Solutions for Business Entry Reforms: A Global Analysis Q19 Main objective(s) of the business entry reform (please select three to �ve of the most important objectives) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ie es ity r sin al s sin al ki ng ts en ic un o se m st en es rn es rn cl vic m es f s g g ng ts an oi es st e nt oc te oc te m ve om sr d or ser sin om ur pr in pr in st es nk bu in e d s c ed ve nt se of se of sin Ba in ie es oc at or ca cy ca ity f fic bu ld sin pr gn iv sf n al or ef pr ie rie bu of st qu W fic co e ew fo e r or ef ed th be e d ov tn m ew ce nc n m ed pr ac s i nu du ha tn nc im tr re en ha ac ie ed at tr en c du at nt re cl Q20 Main scope(s) of the business entry reform (please select three to �ve of the most important scopes) 2% 1% 17% 19% 10% 16% 9% 16% 6% legal reform on business entry computerization of internal case handling integrating internal case handling procedures introduction of nationwide unique ID-code integrating business registration services with other gov. bodies electronic information delivery electronic registration services for clients adjustments of fees other Annexes 39 Q22 Post-reform environment electronic signature online payment of fees 23% 23% 23% 27% 50% 54% allowed but not implemented allowed but not implemented implemented in ICT application implemented in ICT application neither neither Q23 Have the following areas been emphasized during the reform process? user friendliness of services of clients universal design 0% 8% 12% 46% 46% 88% yes, quite a lot yes, quite a lot yes, to some extent yes, to some extent no, not at all no, not at all 40 Innovative Solutions for Business Entry Reforms: A Global Analysis Q26 Are �nes and/or penalty fees Q27 What fees and charges do you collect? part of the funding of the operation? 3% 2% 23% 10% 17% 6% 17% 77% 9% 18% 18% yes no name search name reservation company formation/incorporation registration of new businesses amendments in the business register registration of annual/company account annual fees to keep a company in the reg. information delivery other Q30 What payment method(s) do you accept? bank draft/checks cash deposit accounts invoice major credit/debit cards money orders online payments postal/money orders direct debit other 0% 10% 20% 30% 40% 50% 60% 70% 80% accepted modes of payment Annexes 41 Q34 ICT Infrastructure approach source code is technology platform is is the business registration application owned by managed by a custom-developed or off-the-shelf package solution? 20% 27% 8% 49% 50% 51% 72% 23% government government it staff off-the-shelf package solution private company private contractor(s) custom solution % other other Q42 Do you have a nationwide unique ID for businesses? 15% 85% yes no 42 Innovative Solutions for Business Entry Reforms: A Global Analysis Q44 Crosscheck respondents that crosscheck cross-check by using information from other sources 13% 21% 44% 22% 56% 22% 22% disqualified directors bankruptcies yes no authorizations of persons or businesses information on persons other Q45 Monitoring Respondents that monitor Monitoring businesses by using information from other sources 17% 19% 19% 21% 26% 81% 17% disqualified directors bankruptcies yes no authorizations of persons or businesses information on persons other Annexes 43 Q50 Electronic information delivery announcements of new registrations, amendments and terminations person appoinments person search notifications of newly submitted documents notifications of late filing (of annual returns/accounts) company share capital insolvency related information business history list of business units/sites figures in annual accounts (financial statements) downloading annual accounts (financial statements) information on business (profile) business name search not applicable against a fee free of charge Q52 Do you offer delivery of Q66 Do you know the approxi- electronically signed documents to mate cost savings for the private clients? sector as a result of the reform? 5% 35% 65% 95% yes no yes no 44 Innovative Solutions for Business Entry Reforms: A Global Analysis