06 November 2013

East Timor Business Registration Reforms

ETLJB 06 November 2013 - DILI, 28 June 2012— Over the past twelve months, the government has made improvements to the system of business registration and commercial licensing by introducing faster, clearer, and simpler procedures. Timor’s private sector has welcomed the government’s efforts. “This demonstrates the government is willing to partner with the business community. The private sector, more so than the government, is here to create jobs for the Timorese,” said Carmen Araujo, the CEO of Invest People, a Timorese human resources consultancy firm.

The change is long overdue, says Kathleen Gonçalves, the vice president of Timor-Leste’s Chamber of Commerce and Industry of Timor-Leste (CCI-TL). “We should actually have done these reforms ten years ago,” she said. “Business registration is the first step for people to start-up their business in Timor-Leste. In the past, we faced many difficulties.”

In 2011, the Ministry of Justice, in partnership with IFC, the member of the World Bank Group focused exclusively on private sector development, began conducting surveys at the registry office, known as the National Directorate Registration and Notary. The survey sought to find out why applications for business registration took on average 65 days to process, and where the holdups were in the system.

“It took a long time – two, three, and even six months – to register a business. In the business community, a few companies started up without a registration. This can be very dangerous, but because they could not wait, they just started,” she added.

Results of the surveys showed overly complicated procedures as the main source of delays. Government, with IFC’s support, quickly took steps to combat the problem. Simple measures were adopted, such as establishing a checklist of documents business owners need to submit with their applications and reorganizing the registry office by defining roles and responsibilities. Staff also were given extensive training in the new procedures.

So far, the reforms have yielded very promising results with the number of days to register a company falling from an average of 65 days to 19 days.

“These reforms will enable the business community to become part of the process, unlike in the past when it took a long time to process a business registration application. It will only take five days and that will save time, save on expenses and also curb manipulations in the community,” said Maria Fatima de Araújo, the director of the National Directorate Registration and Notary,.

To simplify business registration even more, the Ministry is planning to establish the Business Registration and Verification Services (SERVE) One-Stop-Shop by mid-2012. It will create one office where business owners can obtain their business registration, apply for a commercial license (if they need one), and get their Tax Identification Number (TIN).

Through the SERVE Shop, it is expected the business start-up process will be done much quicker. This is a major development for business operators, who now have to visit three different government ministries on average 17 times during the 65 days it takes to finalize their registration documentation.

When the shop is open, it is envisaged it will take only five days for a new business to complete the start-up process.

“IFC remains committed to working closely with the government of Timor-Leste to ensure the reforms and the establishment of the SERVE One-Stop-Shop will make it faster and easier for entrepreneurs to start a business which will allow them to run and grow their operations. More registered and legalized companies means a stronger private sector, resulting in more jobs being created,” said Milissa Day, IFC Resident Representative in Timor-Leste.

For further information and to download the checklist and business registration forms, entrepreneurs may visit www.mj.gov.tl/dnrn or go to the National Directorate Registration and Notary (DNRN) of the Ministry of Justice located next to the Dili District court in Mandarin, Dili, Timor-Leste. Source: The Dili Weekly 29 June 2012


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