THE spurred growth in businesses, both in number and size, may signal well for any developing economy such as Fiji.
This is evident with the much assistance and focus placed by Government on assisting micro, small and medium-sized enterprises (MSMEs) and youth entrepreneurship.
With businesses and the private sector seen as the engine of growth, we take a look at the several processes, procedures and costs involved in registering and starting a business in Fiji.
These procedures and processes tell how simple and friendly legislations and policies are towards the ease of doing business in Fiji.
The World Bank measures the regulations of more than 190 economies looking at quantitative indicators that enhance business activity and those that constrain it.
Fiji is ranked 101 in the ease of doing business ranking, behind Pacific neighbouring countries such as Tonga, Samoa and Vanuatu.
A high ease of doing business ranking means the regulatory environment is more conducive to the starting and operation of a local firm.
Take for instance a developed economy such as New Zealand, which is ranked at the top of the ease of doing business rankings.
According to the World Bank, it takes less than one day to apply online for registration of a business with the Companies Office in NZ.
Singapore, which is second on the ease of doing business rankings, takes two and a half days to register a business on-line including company name search and filing the company incorporation and tax number.
This includes making a company seal and signing up for employee compensation insurance at an insurance agency.
In Fiji, starting and registering a business takes at least 40 days until most processes, procedures and paperwork is finalised, the World Bank states on its website.
* Check the uniqueness of the proposed company name and reserve name
The process begins with checking the uniqueness of the proposed company name and reserve name at the companies’ registrar which may take up to four days.
Company founders must first conduct a search of the companies, business names, and trademarks register to ensure that the name applied for is not confusingly similar, which takes one to two days.
While computerised and manual search systems are both available, Government had introduced a website (www.egov.gov.fj) for all applications for name reservation to be made online in 2010.
Hard copy applications are no longer accepted by the Registrar of Companies unless an online application is made first.
Once the application fees payment is completed online, hard copies of the payment confirmation and the name reservation approval are required to be submitted to the companies registry.
The World Bank states that it is $50 for name reservation plus $10 for company name search including VAT charges.
The bank has also noted that Fiji made starting a business easier by reducing the time required to start a business and less costly by reducing fees at the business registrar.
If approved, the company name will be reserved for 30 days (with a one-time extension). Company incorporation documents must be lodged with the registrar within this time.
* Hire services of a lawyer to draft company documents
New businesses may have to hire services of a lawyer to draft company documents, depending on its type and nature.
This process may take three days with fees varying from $1000 to $2000. In most cases lawyers and/or accountants still prepare most of the documents necessary to register a company.
* Register the company with the companies registrar
Under the Companies Act 2015, the company is required to complete and lodge a Form A2 (under section 20 of the Act) together with the required fee which is $49.05 for private companies.
Form A2 requires the company to provide details of the company, governance of the company, registered office, principal place of business, officeholders’ details, details of ultimate holding company, share structure details, details of its members.
There is no longer a need for the company to have a memorandum of association under the 2015 Companies Act.
A company is only required to have articles of association. It may adopt the standard articles from the Act or vary the standard articles provided in the Act.
This process may take up to seven days with an associated cost of $45.
* Register for tax identification number (TIN) with FRCS
To finish the registration process of a new business with the registrar of companies, entrepreneurs must obtain a TIN from the Fiji Revenue and Customs Service. The person must visit the companies office and fill the necessary form.
The companies office will stamp the form and will request the person to visit FRCS to obtain TIN. At FRCS, the person must fill in the TIN registration form.
* Receive inspection by FRCS
By law, since December 2004, if VAT registration is required, the FRCS requires the inspection of the business premises. Since 2007, the inspection has been the practice as FRCS inspects that there is a physical office during business hours.
This may take one day simultaneous with previous procedure with no charges associated.
* Submit the TIN to the companies registry to obtain the final certificate of registration
New businesses must submit their TIN to Companies Registry to obtain their final incorporation certificate. This will take at least a day.
* Obtain the National Fire Authority (NFA) certificate after inspection
The entrepreneur must request the NFA for an inspection of the business premises. Once the request has been made, the NFA officials will inspect the premises during opening hours of the business.
If the NFA is satisfied with the results of the inspection, it will then issue a compliance certificate to the entrepreneur. This usually takes up to 10 days with $50 to $150 (VAT excluded) associated costs depending on the size of the business.
* Obtain the compliance letter from the Minister of Employment after inspection
Since November 2011, the OHS issues a letter of compliance to all type of businesses after an inspection of workers and non-workers in the workplace. In order to obtain this letter, the entrepreneur needs to submit:
– NFA certificate
– business registration certificate
– TIN letter
This process takes three days and has associated costs $70 to $150.
* Apply for a business license from the relevant licensing authority
The company must obtain a business license from the relevant licensing authority, for example the Suva City Council for each location it conducts business.
This licence is renewable annually. Depending on the activity, the fees range from $100 to $500 and may take up to 11 days to issue licence.
* Register as an employer with the Fiji National Provident Fund
New businesses must register as an employer with the FNPF if it intends to employ. This is usually among the final procedures.
While several processes have attracted low rankings and delays in starting a business in Fiji, similar processes also apply for foreign investors who wish to start businesses in Fiji.
This is usually done through Investment Fiji for foreign investment registration (FIRC) including the Department of Immigration for work permits and Reserve Bank of Fiji (RBF) for the issue of capital.
Efforts have been placed by Government in reducing and streamlining these processes. For example Government earlier signed an agreement with a Singaporean company to expedite the digitisation of the Office of the Registrar of Companies.
Government is also working with the World Bank through a special taskforce to address relevant areas that will help improve Fiji’s ease of doing business ranking.
