Third party use bloats company reg costs: study

    Businesses have to incur 80 percent higher costs to complete the registration of a company through consultants or a third party in the Registrar of Companies and Companies (RJSC), according to a study published yesterday.

    The Business Initiative Leading Development (BUILD) study finds that entrepreneurs have to spend 36,000 Tk to complete the registration of a company through a third party, from 20,000 Tk when they do the work themselves.

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    Third-party payments represent 44 percent of the total cost of registering with the RJSC.

    In case of only registration in RJSC through third parties, the average cost goes up to 94% to 23,557 Tk from 12,128 Tk.

    The commitment of third parties, such as consultants, lawyers or brokers, represents 49% of the total cost, according to the study, which was conducted in collaboration with a USAID-funded project.

    The cost of obtaining commercial licenses through third parties rises 47 percent to TK 10,308, the newspaper said in a webinar hosted by BUILD, a public-private dialogue platform.

    The study was published in a webinar on “Optimizing the company registration process in Bangladesh”, organized by BUILD.

    BUILD CEO Ferdaus Ara Begum said the survey was conducted during the March-April 2021 period on companies registered in the last two years.

    He said young and inexperienced applicants spent more hours getting information about the RJSC listing, and so it took eight days to complete, and it is supposed to be completed within three days.

    Manual interference in document preparation, consultation with third parties who pay bank fees and increased travel and printing costs are responsible for additional costs, the survey shows.

    BUILD said Bangladesh was still lagging behind the South Asian average in terms of the process, time and costs associated with starting a business.

    BUILD recommends the introduction of a fully automated business registration service and the provision of one-stop-shop services.

    The cost of the services must be in accordance with the citizen’s statute and the possibility of paying fees through mobile financial services will also facilitate the process. It also recommends setting up a mobile-friendly website and implementing e-commerce licenses across the country.

    At the event, Commerce Minister Tipu Munshi said the government is committed to implementing high-impact regulatory reforms, such as streamlining the existing company registration process and reducing administrative costs to procedures.

    The RJSC of Bangladesh has undergone several reforms and digitized the registration process, but there is still room for improvement that requires cooperation from both the public and private sectors, he said.

    In an open meeting, Rizwan Rahman, President of the Dhaka Chamber of Commerce and Industry, pointed out that the cost of the company registration process at RJSC ranges from 6,000 Tk to 10,000 Tk.

    That is tolerable for medium and large industries, but a little high for small ones, he said.

    “Third-party support is recognized worldwide. We can provide this system of institutional third-party / consultants and bring them into the context of taxation,” he added.

    A significant number of reforms have been made, but more need to be done, said Tapan Kandy Goss, secretary of the Ministry of Commerce.

    Officials must work hard to reduce the number of days required for the process, he said.

    To benefit from automation, every candidate should get used to the online process, Ghosh said, adding that RJSC must ensure that third parties do not create obstacles to the smooth process.

    RJSC is seeking a full-fledged online service, said Sheikh Shoebul Alam, RJSC curator.

    Recommended training, awareness and information programs to familiarize RJSC-related stakeholders with the existing web system.

    Maleka Khayrunnessa, additional secretary at the Ministry of Commerce, echoes him.

    He said applicants should get used to the online process and there should be more training or publicity so that registration can be done without the help of a third party and without any hassle.

    If Bangladesh wants to become one of the top 50 countries in the Ease of Doing Business Index, it needs to improve in time, cost and number of company registration processes, said Igor Gutan, head of the Business Business Enabling Environment of USAID Feed team. Future Bangladesh Trade Improvement Business Opportunity Environmental Activity.

    Newsvibe24 Source