Registration of a new company with Registrar of Joint Stock Companies and Firms (RJSC) takes eight days to complete which is supposed to be within three days.
Besides, RJSC registration requires 89 per cent of 3rd party engagement which enhances the cost up to 49.22 per cent.
These were revealed in a study conducted by the Business Initiative Leading Development (BUILD).
The study also found that in the case of obtaining a trade license, 67 per cent of the businesses engaged third parties or intermediaries which increased their registration cost by 32.33 per cent.
The findings of the survey conducted by BUILD in collaboration with USAID-funded Feed the Future Bangladesh Improving Trade & Business Enabling Environment programme during March-April, 2021 were presented at a webinar titled "Streamlining the Company Registration Process in Bangladesh".
Speakers at the programme suggested simplifying company registration process further through full automation to reduce time and cost of starting a business.
They also recommended introducing one-step services in all stages of company registration, legalising the role of intermediaries in registration process, express registration for foreign investors, simplifying payment options through integrating mobile financial services, and capacity building of new entrepreneurs.
Commerce Minister Tipu Munshi addressed the event as the chief guest while Commerce Secretary Tapan Kanti Ghosh spoke as the special guest with BUILD Chairperson Abul Kasem Khan in the chair.
Additional Secretary Sheikh Shoebul Alam, Commerce Ministry additional secretary Maleka Khayrunnessa, USAID Team Leader (Business Enabling Environment) Igor Gutan and Dhaka Chamber of Commerce & Industry (DCCI) president Rizwan Rahman also spoke on the occasion.
BUILD CEO Ferdaus Ara Begum presented the keynote.
In the presentation titled "Removing Time, Cost and Process related Bottlenecks in Company Registration in Bangladesh", Mrs Begum said after simple reforms in the RJSC, Bangladesh becomes 168th in 2020 from 176th in 2019 in the Ease of Doing Business (EoD).
She added that the post-registration process is more difficult than pre-registration as more offline interaction is required.
Highlighting the bottlenecks in company registrations, she said manual intervention in preparing documents, consulting with third parties, paying bank fees, etc are troubling the businesses.
The BUILD CEO suggested that effective and overall time for company registration can be reduced with a fully automated registration service.
She also recommended one-stop service for all stages of company registration, capacity development of applicants, embedding mobile financial services for payment, ensuring mobile-friendly website, simplification in amending the online application, express service for foreign investors, etc.
Delivering his speech, Mr Munshi said the government of Bangladesh is committed to implementing high-impact regulatory reforms like streamlining the existing company registration process and reducing administrative costs in the procedure.
Citing examples of Singapore and Malaysia that simplified company registration process in way that it takes less than one hour to register a company, he said the RJSC of Bangladesh has undergone several reforms which have already started giving positive results.
Digitisation of registration process has done but still there is room for improvement for which collaboration of both the public and private sectors is required, he said.
Referring to the cost of around Tk 6,000 to Tk 10,000 to register a company, DCCI president said the fee is very minimal for big businesses though it would be costly for small businesses.
"But when I see that 40 per cent of the cost goes unofficially to register the business, from that perspective, the cost of doing business is very high because the unofficial cost of using intermediaries," he added.
He said presence of intermediaries, brokers, or consultants in business process is not special for Bangladesh but all over the world like USA, Singapore, Japan but the problem in Bangladesh is that the intermediaries are not recognised.
"We use the term 'dalal' while others gave them an official term," he said adding: as the RJSC can't overnight remove all the intermediaries, it could be an option to bring them under the radar of the government through legalisation.
He also said, "Bangladesh has eight notches in the last EoD ranking; though there has been no ranking in past two years. I believe the country will definitely do well in the next ranking as some improvements were done."
BUILD Chairperson said RJSC has digitised the registration process along with other services which has simplified the company registration process.
He said a fully automated registration services should be introduced for registration of companies which further improve the business environment and attract investments from both local and foreign investors.
