‘Zim business registration procedures cumbersome’

via ‘Zim business registration procedures cumbersome’ | The Herald January 19, 2015

Zimbabwe must reform its business registration procedures to attract investment and induce business’ compliance with the country’s laws, the Zimbabwe Investment Authority has said.

In a study, carried out with the support of the USAID’s Strategic Economic Research and Analysis (Sera) Programme, ZIA said ease of doing business in the country only existed on paper.

The report says business registration is disjointed between various Government departments and local authorities, making it difficult for investors to get their business licensed, forcing them to either abandon opening new businesses in the country or operating without licenses.

Companies are required to deal with institutions such as the Registrar of Companies, Zimbabwe Revenue Authority, National Social Security Authority (NSSA), Zimbabwe Manpower Development Fund (ZimDev) and local authorities in a process that takes over 90 days to complete while costing up to over $1 500 to register.

It is such complications that have seen the country performing badly on the World Bank’s Doing Business index every year, having been ranked number 171 out of 189 countries in 2014.

The study recommends sweeping reforms in the entire process, taking advantage of new technologies to ease the process of starting a business in the country.

“Reform of its starting a business procedures provides Zimbabwe with a unique opportunity to pioneer a new, efficiency-based approach to governance that will provide multiple benefits to both business and Government,” read the report.

“A failure in the current system is that it requires several sequential registrations, which based on the evidence of stakeholders means that businesses rarely comply with all of their obligations.”

To show the extent of non-compliance, the report shows that in Harare alone, the local authority issued 8 000 licenses in 2013 but it is estimated that between 80 000 to 100 000 businesses operate in the city.

Some of the recommendations made to Government to make the country an attractive investment destination include elimination of paper certificates of incorporation, merger of registration process for institutions such as Zimra, NSSA and ZimDev and streamlining shop license procedures.

Head of Fiscal Policy and Investment Promotion in the Ministry of Finance and Economic Development, Dr Desire Sibanda said reforming the doing business environment to attract investment would ensure the country attains its development goals.

“Our major target is to build a hustle free and investor friendly environment,” he said.

“Policies and procedures should be unambiguous and simple. An improved investment climate is essential to create job opportunities and also encourage the informal sector to formalise operations,” he said. — New Ziana.

COMMENTS

WORDPRESS: 2
  • comment-avatar

    Our country will indeed benefit from a easy , transparent and online system of registering a company for locals, diaspora and foreign investors. It takes 30 min to register a company in New Zealand/Australia, within a week they would have done their name searches and issued you with soft copy certificates.
    The powers that be must endeavour to make it easy for anyone to enter into formal business and put in place mechanisms to monitor the activities of the business entities through Zimra (ird/irs),
    I see light at the end of the tunnel if the politics gets right.

  • comment-avatar

    It is important to register your company so that you meet all the guidelines that the country has for business. I think it all pays itself off in the end because you will be making money and soon enough, will be making more than the amount you spent on registration. I would much rather shop at a place that was registered, than a place that could just be eating all of my money.