FBCCI for just 5 registration requirements to start a business

The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) has demanded that the number of registrations required for starting businesses be reduced to attract local and foreign investments in the country.

Currently, entrepreneurs need to get 33 types of permits to set up a company. To make the process easier, the FBCCI has proposed only five registrations for land, building, fire safety, environment and tax.

Besides, the apex trade body demanded repealing the requirement for renewing the registrations every year. It also wanted an expansion of the investment limit for cottage industries from the existing Tk10 lakh to Tk10 crore.

In a set of proposals to the industries ministry on 29 January, the FBCCI also called for making all government facilities available to all sectors instead of prioritising only a few.

Moreover, the traders demanded facilitating the process of land acquisition in industrial estates, and a process to settle the entrepreneurs' applications in this regard within 30 working days, an FBCCI official said.

They have also demanded abolition of taxes on businesses to encourage entrepreneurs to set up industries in the areas that are lagging behind in this respect. They further demanded subsidies and incentive packages for the businesses set up in those areas.

The organisation made the proposals earlier this week to include them in the new industrial policy, which is being formulated by the Ministry of Industries.

The ministry has already made a draft of the new policy, which was expected to be finalised in 2020, but it was delayed due to various reasons, including the Covid-19 pandemic. The previous industrial policy was formulated in 2016, which is still in force.

"Currently, entrepreneurs need six months or more to acquire 33 types of licences in some cases. This increases our cost over time," Mostafa Azad Chowdhury Babu, senior vice president of FBCCI told The Business Standard.

"Besides, the scope of corruption widens as we have to register at and acquire certificates from so many organisations. This system has been made to perpetuate corruption," he added. 

"If an investor sees a business can be set up in Vietnam with five licences, while Bangladesh needs 33, why would he invest here? If one can start a company with five licences in Vietnam, why can't we do it here?" asked the senior vice president of FBCCI.

Some of the most significant licences and certificates needed for setting up businesses are -  personal tax identification certificate (TIN) of sponsor, company registration at Office of the Registrar of Joint Stock Companies and Firms, trade licence, company TIN certificate, bank account, VAT registration certificate, membership from respective association, permission from Bangladesh Investment Development Authority, import registration licence, export registration licence, fire licence, approval for factory layout, environmental clearance certificate, certificate of Export Promotion Bureau, documents of electrical and gas connections, Bangladesh Energy Regulatory Commission's permission, and customs bond licence.

Sources related to the FBCCI said 33 types of licences or permits are not required for setting up all the industries. Most businesses require 15-20 types of licences, certificates and permits to start operation.

Economist Dr Nazneen Ahmed told TBS, "In order to make doing business easier, we must reduce the complexity of licences or permits. The parties concerned can discuss whether the number of required licences and certificates should be five or more."

The condition of such lengthy paper-based processes of older times has put Bangladesh in a weak position in the Ease of Doing Business index, which has been discussed many times in the past, said Dr Nazneen.

"A lot of things are online now, we have to take advantage of that," he said.

Bangladesh was ranked 168th out of 190 countries in the World Bank's Ease of Doing Business index 2020.