BIPA: Doing business remains difficult

A third of online features ‘offline’

04 December 2018 | Sakenuus
Jo-Maré Duddy – Online registration of defensive names, close corporations, domestic Pty-companies and external companies, including companies not for gain will only be possible during the second quarter of 2019/20.

Until then, the public will have to apply manually and this “may result in potential delays in the registration of businesses”, auditor-general Junias Kandjeke says.

Kandjeke’s follow-up performance audit report on the delays in business registration within the ministry of industrialisation, trade and SME development was tabled in parliament recently. It spans the financial years 2014/15 to 2016/17. At the time of the audit, the business registration function was under the Business and Intellectual Property Authority (BIPA).

The audit concluded that there was “significant improvement” by the ministry and BIPA on the implementation of the integrated companies’ registration system (ICRS). However, the online features of the system were not operational as the public was unable to register for close corporations (CCs) and private companies online.

“This means that 33% of the online features are not operational yet and could contribute to delays because manual applications should still be submitted during registration,” Kandjeke said.

The report quotes the accounting officer of the ministry as saying the online application for defensive names and close corporations was developed in 2015. It could, however, not become operational due “to a legal impediment relating to the recognition of electronic transactions and its admissibility in court as evidence”.

The report states that BIPA is currently working on the integrated customer service facility (ICSF) project. BIPA is “hopeful” that the electronic transactions and communications bill will be law by the second quarter of 2019/20 in order to facilitate these electronic services, it says.

Time

The audit found the ministry amended its existing standard for the approval of business applications, setting new and shorter time limits. Working on a sample of business registration files, the AG found the ministry registered 76% of applications for name reservations on private companies within seven working days in 2016/17. 68% of CCs were registered within the standard time of five working days.

However, 86% of Pty and NGO business files analysed were registered outside the standard time set times for the 2016/17 financial year, according to the report.

Regions

The audit found the ministry did not implement formal procedures to regulate the forwarding of application forms from regional offices to the head office for processing. According to the accounting officer of the ministry, there is a “standing arrangement” between regional offices and the BIPA head office that applications are send to Windhoek once a week, are processed and send back to the regions once a week, within the same week.

Auditors determined from correspondence files analysed that applications for Oshana and Erongo were sent on average four times a month, while applications for Omaheke and Hardap were sent on average twice a month.

“The auditors further noted that there are no standards/procedures for sending application forms from head office to the regions and from the regions to head office which might create inconsistencies, and as a result, the process may delay the registration of business.”

World Bank index

According to the World Bank’s 2019 Ease of Doing Business Index released recently, it takes an average of 18 days to reserve a unique company name at the Registrar of Companies.

To hire an attorney to register the company with BIPA and obtain the certificate of incorporation and the certificate of business commencement will slurp up 14 days.

Overall, it takes an average of 66 days to start a business in Namibia.

Namibia has been unable to trim the time needed to start a business since 2009. The 66 days it’s been stranded with, means it counts as one of the 18 worst countries in the world on the 2019 Ease of Doing Business Index as far as starting a 100%-domestically owned business is concerned.

Namibia is ranked 172nd out of 190 countries worldwide for starting a business on the latest World Bank index. Overall, the country is rated 107th for the ease of doing business, down from 106th on the 2018 index.

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