A GUY'S VIEW: Ease of doing business

Last week it was reported that the Minister of Commerce and Small Business Development is considering changing the law to remove the requirement for an attorney-at-law to be used in incorporating a company. According to the report, the Minister thinks that this provision has the small business sector under siege. This is apparently one step in the much talked about efforts to make it easier to do business in Barbados.

A blind man on a trotting horse could see that it is too difficult to do business in Barbados. One is not likely to have too much disagreement for stating this obvious fact. But there is some distance between reciting a fact and correcting a faulty system. Given his public statements, the Minister seems genuinely interested in righting this wrong.

Fortunately, the Minister’s campaign need not be delayed by focusing on the registration of companies. This is not a process that prevents or hinders business activity. The Corporate Affairs and Intellectual Property Office (CAIPO) is one Government department which is relatively business friendly. It has made its systems easy to navigate.

That office has erected a website which provides access to all the relevant laws that may be needed to do business there. But it goes further. The website also contains all the forms one needs to file when registering a company. More importantly, its officers are well enough trained to answer any queries which may be directed towards them.

The CAIPO requirements demand absolute precision in the registration of a company. A missing capital letter can see the rejection of an application. One may debate whether this is necessary. However, without doubt, one consequence of removing the requirement of attorney involvement in company registration will be increased intervention in the process by the officers of CAIPO, as there will be a need to render a lot of assistance to applicants. Were the Minister’s wishes to be realised, Government would be left with two considerations: employ another few members of staff to assist persons with filling out their applications and correcting errors, or further slowdown the incorporation process through long lines and waits.

As far as business registration or company incorporation is concerned, the only step missing is the ability to file applications online. If one is serious about speeding up any aspect of the application process, this is the procedure that is immediately needed. This would greatly improve the speed of incorporation, regardless of who is acting for the company.

There is no reason in 2017 why one should have to journey to Warrens in order to incorporate and register a company, especially in light of the technological advancements that have already been made by CAIPO. The relevant forms are already online. There is no reason why they could not be completed online and submitted with a mouse click. If the argument can seriously be advanced that this would be a difficult process, it should be made illegal for any person in Barbados to advertise that they are an information technology specialist.

One would not want to believe this, but if the necessary skills do not reside within the public service, Government should buy the expertise. This would be money well spent.

The importance of incorporating a business has been underlined by a number of persons who cite the separate legal personality of an incorporated entity as crucial to doing business. This can be a valuable benefit in limiting the liability of a business owner. But we should be honest with the public and explain that every important entity which receives legal advice has developed ways to remove the protection of incorporation from business persons in many instances.

For example, legislation allows Government entities to reach beyond the supposedly independent corporate entity and hold the individuals behind it liable for the activities of the company.

Further, financial institutions require small business owners to sign personal guarantees for loans, thus removing any protection that the corporate entity may have provided. Small business owners, or would be entrepreneurs, would be well advised to find the little fees they need to pay for legal advice on how they may best protect themselves. The idea of business incorporation, without more, is not a safe heaven.

There are several things that may be done to enhance the ease of doing business. Maybe the Minister can look again at occupational licencing. Certainly every significant profession and a number of other occupations require some form of licencing. Very often this is no more than a layer of regulation that adds nothing to the area of business. Instead, it is more likely to be used to limit access to these activities.

Licencing may be seen by some as a way of generating revenue for the state. One suspects, however, that this is not a major source of revenue and if a cost benefit analysis were to be done, one may decide to do without the licenses.

At times, it may be in the public interest to licence certain activities. Where this is necessary, it should be implemented in a manner that would not be a greater hindrance than help.

In small spaces like Barbados, successful professionals seem to invite jealousy and envy. This small mindedness prevents public objection to efforts that suppress these groups. As a consequence, they are sometimes regarded as low hanging fruit for policy makers who are looking for a quick fix to barely related issues or to raise revenue. Rather than being encouraged to grow and carry the country forward, efforts are made to tax away their income and discourage expansion through business-depressing regulation. None of this makes doing business easier.

If we are serious about expanding the services this country can offer the world, law firms should be given incentives to establish satellite offices in other countries, both regionally and internationally. The tax payers have spent millions of dollars to have their sons and daughters trained as attorneys-at-law. These professionals should be facilitated in spreading their wings beyond our shores without having to turn their backs on their home base.

We should not still be talking about medical tourism. Doctors should be facilitated in establishing top notched medical facilities here that would attract other practitioners from across the world as well as wealthy clients.

Why is it still necessary to give up a work day in order to pay for a drivers’ licence? Or to pay one’s land taxes? Or line up to pay Value Added Taxes?

Graft is a reality at a number of revenue collection points. Government could collect a larger percentage of the revenue it is due by moving to electronic payments. This would be a bonus on top of making it easier to do business.