In case of a business, taking the first step to have a venture formally registered matters since ease at doing so may result into an easy reap into business operations for many entrepreneurs while difficulty in the other hand can result into redundancy for many initiators to begin operations or to the least continue to grow the informal sector whose contribution to the economy remains insignificant for the larger part of the population. Thus it is to the interest of every business and development-minded government to ensure that the procedures contained in business registration are seamless and easy.
For Rwanda particularly, growing the private sector in both number of ventures and in the magnitude of its contribution to national development is paramount.
Towards the above end, Rwanda chose to tackle the element through improving the use of Information and Communication Technology (ICT) based services as detailed in the nation’s blue prints to sustainable development. Details that enlighten ICT as the building pillar to lead the country to the envisioned developed are showcased in Vision2020 and the Economic Development and Poverty Reduction Strategy (EDPRS) which is a five year plan that is currently in its second phase. Hence, since 2010, the government of Rwanda through RDB has pushed forward numerous initiatives targeting to improve the business environment particularly to ease the processes involved in business registration by starting an online business registration portal.
Challenges of limited uptake from the business community, unreliable internet among others however limited the extent for the use of the portal with more registrations continuing to be done through the basic across the counter procedures. However as Louise Kanyonga, the Registrar General of businesses at the Rwanda Development Board (RDB) notes, a lot has so far been done to boost uptake of the online system and many other strategies to aid in improving the process are in pipeline. “Until the end of 2013, the number of businesses registered online accounted for only 30 per cent of all ventures entered. However we feel that the portal has not been used to capacity hence an imperative need to up efforts.”
Online registration to become compulsory for businesses registering to operate in Kigali.
One of the moves targeting to increase the number of businesses registered using the online portal is the set requirement that registration for all businesses to operate in Kigali city is to be done online come February 17th. The business registration requirement has among other benefits increasing the number of registered businesses, easing the procedures of starting a business in addition to slashing the costs of registering a business to zero.
A close look at the numbers of businesses registered over the past three years reveals that the online portal has increased registered ventures and that with extra efforts; the impacts would be stunning.
Following 2010 when online business registration was first initiated, it was recorded in 2011 that 473 businesses had opted for it over the basic procedures.
The year 2012 which followed further showcased increased uptake of the online option testifying that the development had potential to change the story for many startups with over 1153 businesses registered online. The trend continued into 2013 with 4169 businesses registered online representing about 125 per cent increase in up take. Considering 11288 registered businesses in the year, the online option was opted for to a tune of 36 per cent.
According to Kanyonga, the developments in the past two years are proof that with increased emphasis, online business registration, which is free, can enable more ventures to formalize their operations while wooing would-be entrepreneurs who were put off by fear of the procedures of registering and the costs involved in the past to enthusiastically kick off with the easy process.
Adding to the advantages posed by online business registration to businesspeople located in Rwanda, the portal presents an interesting development to the Rwandan diaspora and other investors across the world that no longer have to travel to Rwanda just to have their businesses registered.
“This, coupled with other reforms which have materialized over the years, will make doing business in Rwanda more attractive,” the registrar general of businesses underscored. With the mandatory online registration for Kigali, RDB targets to raise businesses registered online to at least 52 per cent of all businesses by the end of 2014.
Kigali prepared for the move, continued support to the business community assured
According to Kanyonga, preparations to ready all concerned parties to the success of the compulsory online registration have been put in place and she is optimistic that success is foreseeable. Included in the preparatory moves was the training of over 90 private cyber-cafes and Business Development Centres (BDCs) on how to register businesses online.
According to Kanyonga, the move which was executed in partnership with the Private Sector Federation intends to help in bridging the access to internet gap that continues to exist while at the same filling the knowledge challenge that the business community faces in the area of online business registration.
The trained personnel in the BDCs and cyber cafes will assist intending proprietors to fill the forms and submit them for analysis by the registrar’s office at RDB and subsequently have their certificates of registration issued. In addition, all BDCs across the country have been equipped with the necessary know how to support entrepreneurs to register their businesses online, in other areas outside Kigali.
To supplement the work that BDCs and cyber cafes will be doing, the Registrar General’s office has two support desks to help the business community register their businesses online. The desks will continue to exist for as long they will be demanded by the public offering the registration services freely.
On the same note, internet cafes and BDCs are warned from taking advantage of the business opportunity online registration presents, and the public alerted that the service is offered freely by RDB therefore they should not accept to be charged exorbitant fees. “The cyber cafes and BDCs should put in consideration that the service they will be offering is availed to the public freely. All they should charge for is the internet usage and maybe a small fee for helping those who are not comfortable doing it on their own.” Comparing with the basic registration procedure where a person is required to pay Rwf15,000(close to US$24) needless to mention the extra costs of transport and time involved, online business registration is freely done.
All that an individual requires is a computer with an internet connection. With that, it only takes a single sitting of a short while which is determined by the speed of the internet for a business to be registered. The rest of the process which involves verification of data, approving and issuing a certificate of registration is completed in less than six hours.
A would be business owner intending to register their venture enters into the online business registration website, www.org.rdb.rw after which they initiate a name search to ascertain whether the proposed business name is not reserved or in use by another business.
Then when the name is approved, a form is filled with details of the company address, administration, services and financial or capital information.
For Rwandans, the Registrar General’s office has connected data base systems with the National Identification Agency hence saving the applicants’ time which would be spent filling in personal details. When the applicant enters their ID number, the remaining pertaining bio data is automatically generated and filled into the form.
Once verification of all required information and accompanying documents for each application submitted and consequently approval is complete, a registration certificate is given to the applicant in less than 6 hours and the business can kick off henceforth.
Online services, the right direction to take
Following mandatory online registration for all businesses that will be operating in Kigali city, the Registrar General disclosed that the intention is to move the mandate to cover all business registrations in the near future.
“We have tasted the potential of online services in improving the business environment and we are determined to continue pursuing the same. This is the only way that our country will be able to achieve the envisioned development of a knowledge-based and private sector driven economy,” Kanyonga said.
Thus in the near future, the Registrar General’s office plans to opt for online business registration for all businesses in Rwanda, an element strongly supported by the infrastructure investments that Rwanda has made to date. Such infrastructure that will make it possible for the online business registration to kick off around the country include the broadband fibre optic that was laid across Rwanda and for which last mile connections are being undertaken. “The moment all the necessary last mile connections to cyber cafes, schools and other vital points are completed, there is no doubt that online registration will become mandatory across the country,” Kanyonga projected.
Besides online business registration, Rwanda has invested handsomely in other internet based portals to improve the business environment.
Among such portals are the declaration, filing and payment of taxes, and online application and acquisition of construction permits from the Kigali based one stop centre. All the achievements in the area represent the leading reforms that are responsible for Rwanda’s good business environment that is seen attractive globally. For instance, Rwanda as per the most recent Doing Business Report from the World Bank is ranked the world’s 32nd easiest place to do business while the country is recorded by the report as 2nd in Africa.
Starting a business is one of the 10 indicators studied in the Doing Business Report. Rwanda has scored strongly on the indicator and has gradually improved in consecutive reports. Rwanda has been very active since 2008/9.
It has been top global reformer twice before in 2010 and 2011 according to the same report. Similarly, the country was named a top reformer in the recently released 2014 Doing Business report and was recorded the first country to have advanced furthest toward the frontier in the ease of doing business since 2005, beating Georgia to this record, and other 173 economies. With eight reforms including starting a business, dealing with construction permits, registering property, getting credit – legal rights, protecting investors, paying taxes, trading across borders and resolving insolvency, Rwanda gained 20 ranks moving from 52nd in the previous report to 32nd global easiest economy to do business.
The impact is mainly coming from the reforms in registering property with a gain of 55 and in resolving insolvency where 30 ranks were gained according to the 2014 report of the World Bank. This has been possible by concerted efforts of all stakeholders in the Doing Business reform project for Rwanda.
For instance, the government consistently reformed showing its commitment towards removing regulatory burdens to business by moving beyond the DB indicators to the addressing overall investment climate issues.
Significances of online business registration are enormous
Reiterating the importance of online registration, Kanyonga said that companies using the portal reduce human errors which may occur during the registration process. “I encourage every Rwandan to register their company because operating a business without its registration is a violation of law and while registering it helps the owner to easily access loans in the banks and other micro finance institutions,” Kanyonga said.
She pointed out that registering a company is also very important as it facilitates separating a company from its proprietor. The Registrar General also emphasized how her office collaborates with different public institutions especially the Ministry of Trade and Industry (MINICOM) and the Private Sector Federation (PSF) in sensitizing the entire population around the country about the importance of registering a company.
Inasmuch as online business registration carries enormous benefits for the business community, it similarly impacts government revenue in domestic taxes by increasing the number of formal businesses.