IBC SWAZILAND - Business Licensing in Mauritius 30052012

7/31/2019 IBC SWAZILAND - Business Licensing in Mauritius 30052012

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Improving the BusinessClimate in Swaziland

Senior Expert – ARCA ConsortiumSenior Expert – ARCA Consortium

[email protected]@gmail.com

Session 4:Business Licensing: How to Overcome the Obstacle Race

Business LicensingThe Case of Mauritius

Wednesday 30 May 2012

Royal Swazi, Swaziland

mailto:[email protected]








2

FIAS Investment climate survey in2005

Manager interviews in 285 firms (2005)

Worker interviews with 927 individuals (2005)

Complemented by Investment Climate data from 31 other countries, Doing Business indicators, World Development Report, Mauritius CSO

SizeSmall 42%

Medium 22%

Large 35%

Constraints to Business

Year operationsbegan in Mauritius

1994-2004 23%

1984-1995 34%

1974-1985 15%

1964-1984 12%

Before 1964 11%

EPZYes 20%

No 59%

Ownership

Foreign 11%

Domestic 85%

Exporter

Yes 37%

No 40%



3

Managers ranked top constraints

Source: Investment Climate survey, 2005

0% 10% 20% 30% 40% 50%

TelecommunicationsCertifications (e.g. ISO) & Int'l Standards

Sanitary, Hygiene, Security, Fire regulationsEnvironmental Regulations

Electricity Transportation

Foreign Exchange regulations Tax administration

Access to landCustoms and trade regulations

Legal framework/conflict resolutionRegulatory policy uncertainty

Crime, theft and disorderPrice controls & inflations

Tax ratesLabor regulationsAccess to Finance

CorruptionAnti-competitive or informal practices

Macroeconomic instabilitySkills and education of available workersProcedures to start a new business

Business licensing and operating permitsCost of financing

Percent of managers ranking each a constraint

Improving the Business Climate in Swaziland - Session 4: Business Licensing -30/05/2012



4

Firm perspective of most importantconstraints

Top 5 perceivedconstraints:

• Finance

• “Red tape”

• Worker skills

• Macro

• Corruption

0% 10% 20% 30% 40% 50%

Access to finance

Corruption

Informal practices

Macro instability

ills and education of workers

rocedures to start a business

siness licensing and permits

Cost of finance

Percent of firms ranking each item a constraint

Improving the Business Climate in Swaziland - Session 4: Business Licensing -30/05/2012



Step 1Listing all existing businesslicenses

Step 2Mapping each business licenseprocess



Business Licensing @ 2005 inMauritius, before the reforms

Improving the Business Climate in Swaziland - Session 4: Business Licensing -30/05/2012 6



License to Kill … (business)


P ub l i c I n f ra s t ru c t ur e ,

L a n d T r a n s p o r t &S hi p p i n g , 7

T ou r i s m , L e i s u r e a n d

E xt er n a l

C o m m u n i c a t io n s , 4 5

L ab o u r, I ,

P MO , 1 1 W o m e n ’ s R i g h t s, 4

I T &

T e le c o m m u n i c a t io n ,

1 0 0

H e a l t h a n d Q u a l i t yo f

L i f e, 3 8

H ou s i n g a n d L a n d s , 2

I n d u s t ry , 1 1

F o r e i g n A f f ai r s , ,

3

F in a n c e a n d E co n o m i c

D e v e l o p m e n t ,9 0

E nv i r o n m e n t a n d

N a t io n a l D e v e l o p m e n

U n i t ,7 9

A r t s & C u l t ur e , 4

A g r o In d u s t ry &

F i sh er i es , 49

E du c a t io n a n d H u m a n

R es o u r ce s , 2 4

P ub l i c U t il i t ie s , 6

L o c a l G o v e r n m e n t ,3

S oc i a l S ec u r i t y, , 5

RegulatoryBodies: 65

- 487 licences



Step 3Setting the business licensingreform principles and agenda



Business Climate Reforms in MauritiusFundamental Principles

Eliminate incentive-based investment schemes or special regimes (eg. EPZ) – Tax and

fiscal policies reforms

Eliminate obsolete or useless permits, licences or other clearances

Repeal and abolish outdated or inadapted laws and policies

Relinquish ministerial discretionary powers as far possible: rule-based system

Immigration policies Work and Residence permits policies

Property acquisition by non-citizens policies

Building and Development permits policies

Environmental Impact permit policies

Application of the « Move data, not people » principle – Computerisation & Automation

Application of the « ex-post control » principle – Allow to start and then check for compliance

Application of the « Self-adherence to Guidelines » principle – Onus on the business operator to

comply to rules & regulations

Application of the « Silent Agreement » principle – Onus on public officers to deliver on time




Step 4Implement the

business licensingreform agenda



A New Business LicensingEnvironment


Work PermitResidence Permit Ministry of LabourPrime Minister’s Off Merged into oneOccupation Permit Passport & Immigration Officethru BOI

Building PermitDevelopment Permit

Local AuthorityLocal Authority

Merged into oneBuilding & Land UsePermit

Local Authority

Trade License Local Authority Abolished & replacedby a trade fee

Investment Certificates(23)

Board of Investment 21 abolished; investment registrationMove from an approval system to a

registration systemBusiness Visa Immigration From return ticket

date to std 2 weeksImmigration



Board of Investment – Investment PromotionAct

The BOI shall act as the single interface with all investors and liaise with

relevant authorities for the granting of permits Any registered investor or self-employed person may request the Board

of Investment to provide assistance, support, coordination andcooperation with public sector agencies to facilitate and implement hisproject or business.

The Board of Investment –

may give such directions as may be required to expedite the processing of

applications, to relevant public sector agencies in accordance with relevant

guidelines;

shall ensure that any application made for a permit or authorisation isprocessed within the time limit set by the public sector agency;

may convene committees and meetings with public sector agencies to

facilitate and coordinate the implementation of projects by registered

investors




Business LicensingBest Practices



Business Licensing Good business licensing is a means to fulfill

legimate regulatory purposes, for example: To safeguard public interest: health and safety

To protect the environment

To protect the country: National security To protect limited resources

Business licensing should not be used to managecompetition in the economy or to generate revenue

Reduce transparency and increase opportunities for

corruption




Licensing: A balancing act…

A bad licensing regime can be: a serious constraint to business and private sector

development

a severe factor undermining a country’s overall

competitiveness and attractiveness

The challenge is to strike the right balance inbusiness licensing:

What to license? Why license?

How to license?




Business Licensing ReformProcess

List all existing licences, permits, clearances

For each one: Identify the name of the license or permit

Determine the licensing agency or authority

Map the overall licensing process

Determine the requirements: inputs, frequency, time taken, cost

Test each license against the following criteria: Is the license legal? What is the corresponding legislation?

Does it advance an appropriate envvironmental, health or safety

objective? What is the « real » purpose of the license? Why does it exist?

Is this license the most efficient way to achieve the required objective orpurpose?

Can time limits be imposed for government responses?

Can the « silence is consent » rule be applied?




Reform approach …

Determine which licenses can be eliminated /cancelled / abolished at the very outset

For the remaining ones, determine whichlicenses can be amalgamated with other licenses

Finally for each remaining license: Review,

Reengineer, Simplify and Computerise (wherepossible) the licensing process




Online License Catalogs (“E-registries”)

A license catalog is a comprehensive list of all

licenses in effect. Comprehensive license catalogs include vital

information on each license, including:

The law that makes the license legal The activities the license applies to

The documents one must complete to acquire the license

The location where one may apply for the license

Costs associated with the license The maximum number of days for processing of license

applications.




Benefits of Online license catalogs: “e-registries” Increased regulatory transparency.

E-registries ensure that entrepreneurs caneasily identify thelicenses they are required to obtain, the documents they must

submit to obtain them, and the costs they must pay for them.

They also reduce opportunities for corruption, as they clearly

indicate the fees and documents that authorities may legally ask

entrepreneurs to submit. Creation of a platform for future licensing reform

The act of cataloguing licenses and licensing procedures in a single

registry exposes redundant licenses as well as sources of red tape,

such as unnecessarily burdensome demands for document

submissions.

The e-registry itself may thus serve as a point of departure for

further reforms—and a visible way to chart progress of reforms

already underway.




Legal considerations Is the purpose of the law clearly stated?

Does the law state who is subject to it (e.g., Businesses, physical

persons)? Does the law contain all necessary definitions (e.g., definitions of

license, licensing, licensing bodies, violation, etc.)?

Does the law state the objectives of licensing (e.g., a limited list of legitimate regulatory purposes)?

Does the law provide an exhaustive list of documents required for eachlicense?

Does the law specify limits for the amount of time agencies may take toprocess applications?

Does the law establish the “silence is consent” principle? Does the law clearly indicate the cost of each license?

What are the rights and duties of the licensing authorities?

What are the rights and duties of an applicant?




Legal Reforms

Do we need to make legislative changes to achieveour reform purposes, or can we achieve them viaother means? (e.g., changes to administrativeprocedures within the scope of current laws)

If legal changes are necessary, can we amendcurrent laws or do we need to create new ones?

If we must amend old laws, what specific

amendments must we make? If we will write a newlaw, what should its components be?




One-Stop Shop A “One-Stop-Shop” (OSS) is a single location —

physical or virtual — where entrepreneurs caneasily complete business formalities.

Important to consider whether to set up a one-

stop shop or not If yes, then need to determine:

the type of OSS which would be more appropriate

where to set up the OSS

Whether a specific legal framework (or legal

amendment) is required to empower the OSS




One OSS as Single ApplicationPoint This type of OSS serves as the government’s single

application point for all licenses or as the single applicationpoint for all business formalities.

Applicant submits application at OSS

OSS forwards applications to licensing bodies for review

Licensing bodies return approvals to OSS (or send directly to applicants)

OSS returns approvals to applicants.

The model makes formalities simple for entrepreneurs, but it

demands high levels of coordination among agencies. This model would be most appropriate for countries where

agencies have already shown a propensity to cooperate.




One OSS: All under one roof This type of OSS will be a physical area where all the relevant

licensing bodies are present, as well as other agencies dealingwith business formalities

The applicant can go at one address and have all thenecessary business services under roof

For this model to be successful, it demands that the officersof the various agencies present at the OSS are fullyempowered to take, process and determine all applicationssubmitted.

In certain countries, this type of OSS is located on thepremises of the national IPA. This can pose an issue of line of reporting or of lack of cooperation.




OSS Issues Many observers have noted that one-stop shops often work better in

theory than in practice. They are often plagued by struggles over bureaucratic turf, civil

servants’ resistance to change, and poor interagency coordination.

In such circumstances, the One-Stop Shop simply becomes “One MoreStop.”

Careful consideration should be given to whether the circumstances intheir countries favor the use of OSSs.

Are mechanisms for interagency coordination good, or have agency

personnel shown a willingness to make them so?

Who would be likely to oppose OSSs, and how strongly would they opposethem?

One might determine that OSSs are likely to create more costs thanbenefits in a given country’s circumstances.




Conclusion

Business licensing is a prominent barrier to doingbusiness in many countries.

The evidence is clear that over-regulation and redtape are associated with lower levels of income,lower levels of productivity, higher levels of informality, and higher levels of corruption.

As licensing is a key potential bottleneck in thebusiness start-up process, the gains from licensingreform stand to be significant.




Improving the BusinessClimate in Swaziland

[email protected]@gmail.com

THANK YOU …

Business LicensingThe Case of Mauritius







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