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Rwanda; a country dedicated to making it easier to do business

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19 years after the country was devastated especially in terms of human capital, infrastructure and other sectors of the economy during the 1994 Genocide against the Tutsis, Rwanda has made tremendous social and economic progress on several fronts not only on the regional level but on the international level.

The country through its government has put in place various stringent mechanisms and strategies which are aimed at making the country one of the fastest growing and stable economies in the world in terms of socio-economic growth and this is paying off as it has been shown in several surveys carried out by different internationally recognized institutions.

The 2014 World Bank report surveyed 189 nations. Analysis of the index shows that Rwanda’s position this year is 32nd from 54th an improvement of 22 places over- taking South Africa to become the second most favorable environment after Mauritius.

South Africa which is now 3rd in Africa is now 41st globally. The other 4th and 5th in Africa are Tunisia and Botswana which are 51st and 56th globally, respectively. Among countries that Rwanda has overtaken include France and Belgium. Rwanda this year also breaks record to be the most improved country over the history of DB that is since 2005. For just this year, Rwanda stands out 2nd most improved after Ukraine on the list of the top ten reformers for this year. Other African countries on this list are: Djibouti, Ivory Coast and Burundi.

Their respective global ranks are: 160, 167,  and 140.-in EAC, Kenya is 2nd with global position of 129, Uganda is 3rd with global position of 132, Burundi 4th global position of 140th globally while Tanzania is 5th with global position of 145th. This impeccable progress has been made possible due to various policies and business reforms which the Rwandan government through the Rwanda Development Board (RDB) has come up with and implemented to make doing business in the country more easier than ever.

RDB is the government agency charged with fast-tracking economic development in Rwanda, the institution is independent, influential and built with global expertise, has a private sector mindset and brings the entire investor experience and expertise under one roof.

Domestic Product (GDP) to 11.5 percent by 2020 from the current average 8.8 percent average year-on-year GDP growth since 2005 and due to the favorable and conducive business environment that has been created in the country, there is no doubt that the 11.5 GDP growth will be attained. Statistics from the 2013 World Bank Doing Business report indicate that Business regulations are now easier in Rwanda than the average economy in Eastern Europe, Asia, Middle East, Latin America and Africa.

With the recent cabinet appointment of Amb. Valentine Rugwabiza Sendanyoye as the new Chief Executive Officer (CEO) of RDB and a member of the Cabinet, RDB is expected to further perform better in as far as promoting the business sector and contributing to the country’s socio-economic growth is concerned. Speaking to the media after being sworn in at the parliament building in Kimihurura sector, Rugwabiza said that appointing her a member of the Cabinet will help her institution to operate faster since consultations with all ministers will be easier.

Jean Phillipe Prosper, the International Finance Corporation Vice President for Sub-Saharan Africa, Latin America and the Caribbean who announced the 2014 Doing Business report results to President Kagame said: “The main objective of coming to Rwanda was to deliver the 2014 World Bank DB report to President Paul Kagame and to congratulate him about his country’s incredible performance as regards to improving the ease of doing business in Rwanda which has made the country among the top business reformers in the world and this is a sign that the country is on the right track towards achieving socio-economic growth”. In his remarks at the launch of the report, Fernando Dancausa, who leads the Insolvency indicator said: “If you compare Rwanda’s performance against its self back nine years ago, you see that Rwanda is the country that has improved the most in various business reforms in the world”.

Speaking from Washington D.C during thelaunchofthe2014WorldBankDoing Business report, Jean Michel Lobet, a senior Private Sector Development Specialist at the World Bank who is also a member of the Doing Business team at the World Bank Headquarters said that the main focus of Doing Business report is to analyze the regulations that have impact and that are relevant to the life-cycle of small and medium companies around the world.

Doing Business in Rwanda  More refined, better defined

1 Starting a business

Did you know that registering a company takes one only 6hrs and a cost of 15,OOORwf but if one does it Online, it is free of charge?

Related facts

By May 21” 2013, 1895 companies had been registered through the Online process, representing a 125%increase from the 842 companies registered Online last year. Since 1st June 2012 to May 21” 2013, the total number of companies registered is now at 9956for both the Online and basic systems.
Reduction of pages for company incorporation from 10to 5. This correlates to a 50% reduction in the time taken to fill the application forms. All business registrations take a maximum of 6 hours.

Linking RDB to the National Identity Card Authority (NIDAl. This has helped in retrieving personal information in more efficient and effective way since NIDA feeds this information directly. The information that was on the extra pages can now be accessed directly from NIDA. This trickles down to saving time on company registration allowing RDB to work within 6 hours at the maximum.

2  Dealing with construction permits

Did you know that one can get their construction permit in not more than 30 days and the price has been reduced to a flat rate of between 20,000 Rwf – 60,000 Rwf? One can also apply for it online on www.kcps.gov.rw

Related facts
Reduced procedures from 12to 6
The cost for obtaining a construction permit has been reduced to a flat fee depending on the size of the project. It varies between Rwf 20,000and Rwf 60,000.

Introduction of the Management Information System (MIS) for processing construction permit applications Online. Since March, 2013, it has been mandatory for all to apply for construction permits Online. All the information related to construction permits is available at www.kcps.gov.rw
Removal of the requirement for a deed plan
Creation of a single application form merging applications for the construction permit. water and electricity and Environmental Impact Assessment (EIA). Issuance of EIA is done at One Stop Center (OSC). The sup- port work is done through the back office. RDB and EWSA designated EIA. water and electricity experts who have been working in the OSC. They were appointed in 2012. but were given the full mandate to start approving all dossiers in 2013. The work they have done is reflected in all the projects that OSC has concluded ever since they started implementing the reform on reduced procedures.
Merged inspection processes for the above 3 services.

Architects now usa standard checklist for the requirements for the construction permit application. The checklist saves time and speeds up the process since all the architects and engineers are aware of what they must submit beforehand. This makes it easy for them to prepare their project designs & drawings allowing One Stop Center to review them in a timely manner. Due to collaboration from both sides, and the reduction in time, it is much easier to obtain a construction permit in 30 days.

3     Getting electricity

Did you know that one gets connected to electricity in one day after application and costs were reduced? One will now only have to pay 18% of the quotation.
Related facts
Reduction in procedures from 4 to 3
Reduction in connectivity time by 50%. from 30 to 15 days for big clients and maximum 3 days for small clients
Reduction in EWSA cost by 2% from 20% to 18%

4        Registering property

Did you know that the Tax Clearance Certificate is no longer required during registration of property and that procedures for applying for a Title deed were also reduced from five to only two?
Related facts
Removal of the requirement for a tax     clearance certificate and the associated Rwf 5000 cost
Removal of the expertise (property valuation) document previously requested during property transfer thus reducing the number of procedures. We have seen a steady increase in the number of applications; at least 100 applications are processed each day
Electronic connection of the mortgage registration office to the National Land Center and National ID Association. In addition. all commercial banks now have user-accounts. As a result, this has created easy access to information, especially to financial institutions that are in the money-lending business.
Applicants can now quickly verity the authenticity of the property owners through the land center, and at the same time cross-check the information with the mortgage registry at RDB to make sure the property has not already been mortgaged. This can all be done simultaneously, saving time and money. Since the implementation of Online registry on May 2nd, we have been able to register 124mortgages and de register 18.

5      Getting credit

Did you know that while requesting for credit, the client no longer has to come to RDB to register their security but their Bank should do it for them?
Related facts
Amendment of The Security Interest Low on Movable Properly allowing clear description of secured obligations & collateral (Article 6, Page 23)and clear priority order of security interests(Article 10, Page 25, legal rights index)
Amendment of the Law on Insolvency allowing a 6-month grace period on stay when the debtor is in court. (Article 5, Page 49)
Increase of private and public credit registry coverage

6     Protecting investors

Did you know that laws relating to procedures in commercial courts for settling disputes have been made easier for example in cross examination?
Related facts
Amendments in the court procedure in order to allow cross examination when conducting a hearing
Amendments in the court procedure in order to allow the plaintiff to present new documents during deliberations if thought to be helpful

7     Paying taxes

Did you know that one can now file and pay their taxes Online using e-filing and e-payment systems without going to Rwanda Revenue Authority? And did you know about the flat tax regime regulating new categories of how much tax you should pay?
Related facts
ll Implementation of e-filing & e-payment. All tax payers with an annual sales turn-over of Rwf 12 Mil and above are required to file their taxes on- line. E-payment services offered by 7 commercial banks: BCR, BK, Fina Bank. Coqebonk, Access bank. equity bank and Ecobank. This has made it easier for the tax payer, eliminating the time spent in long queues at the bank and the corresponding cost of physical movement from business premises to the banks.
Tax clearance certificate issued maximum 2 days.

8    Trading across borders

Did you know that today only three documents are requested at the customs during import/export? And did you know all borders have increased operation hours to 24hrs and others to 16hrs? What about the Single window used for customs declaration at all Borders and clearing points?
Related facts
Electronic Single window now operational. Today, we have 799 clearing agents using the electronic single window, over 3 Government institutions and 7 airlines. E-Single Window became operotionol on 1st February 2012. As 0 result, e- exemptions processing for investors has reduced the time it tokes to get an exemption to 10 min. Prior to this, it took at least6 hours at the minimum because several procedures. Through a manual process, clearing agencies would fill a form and compute taxes to be exempted. Following that, they would go to the importers premises to hove a stamp before proceeding to RDB offices to apply for exemptions.
The file would then be sent to an RRA attached and then to ROB. Once approved, the clearing agent would go bock to process customs declaration.
Reduction in mandatory customs documents from 8 to 3. This has reduced time spent in filling out documents. In addition, any cost associated with the 5 documents is also saved.
Establishment of one stop borders with 24 hour operations at additional strategic border posts, reducing the transit time tremendously.

9      Enforcing contracts

Did you know that the new Kigali International Arbitration Center (KIAC) was established for one to settle commercial disputes without having to go to Court?
Related facts
Reduction in time between filing and service from20to 14days
Reduction in time for trial and judgment from 120 to 73 days, at the most

10     Resolving insolvency

Did you know that at ROB, there is an Insolvency Expert to give you advice free of charge on your struggling Company to avoid insolvency/ bankruptcy?

Related facts
11 cases on foreclosure were concluded (33 unresolved. 12inanalysisprocess).11insolvencycases. 7 concluded. .4ongoing in court of law

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