Starting a Business

This indicator looks at all procedures, costs and time taken for a company to formally register/incorporate a business. Initially it took 8 procedures that took 14 days to complete with fees levied according to business activity. This year, the Rwanda Development Board Registrar General’s Office has limited the process to 2 procedures and issues registration certificates in 24 hours from submission of application. In addition, there is no longer the need to notarise company documents or publishing articles of association in the Official Gazette. We are happy to note that presently a flat fee of RWF 25,000 is charged regardless of business activity.

Construction permits

This indicator looks at the process of acquiring various construction permits that include deed plans, location contract, building permit, occupancy permit etc. The last Doing Business Assessment observed 14 procedures that took 210 days to complete. This year, Kigali City has formulated a client charter that puts specific time limits for the delivery of these permits. E.g. deed plan and location contract 15 days, building permit 30 days and final inspection and occupancy permit 30 days. In addition, Rwanda Development Board now has in house district officials to facilitate investors to acquire land and construction related documentation. Rwanda Development Board also has an in house Electrogaz staff member to help businesses connect to the utilities. Electrogaz has also launched a client charter that limits connections for water and electricity to 2 days upon application and payment.

RWANDA BUSINESS REFORM UPDATE

For a favourable business environment, it is imperative to have an enabling legal environment that facilitates business operations. Most importantly, laws ensure predictability and a safety net as business persons have means of seeking redress in commercial affairs. During the course of this year, four important laws have been passed and gazetted.

Company law

The new company law addresses disclosure, director liability in case of abuse of company assets, company registration, audits and establishes protection for minority shareholders while introducing new concepts such as allowing single ownership of a company replacing the previous requirement for a minimum of two.

Labour law

This law regulates employer/employee relationships creating a better working atmosphere for both parties. It enables among others a worker to carry out multiple contracts, spells out rules for disengaging workers in times of economic hardship, and addresses maternity leave and child labour.

Secured transactions in movable property

The new law allows a broader definition of what can be used as collateral in loan transactions. This can include inventories, vehicles, agricultural produce and accounts receivable. The purpose of this law is to ease access to credit in contrast to traditional loans that required security such as houses or land.

Insolvency law

This law introduces checks on poorly performing companies that can not meet their liabilities (debt) and gives them the option to reorganize or shut down. Companies have previously been operating in an environment that allows their establishment but without clear rules and procedures of how a company can close its businesses in case of bankruptcy or voluntary closure of business.

RWANDA BUSINESS REFORM UPDATE

Paying Taxes

This indicator looks at the range of procedures, number of tax payments, time taken and administrative costs for a business to be fully compliant with tax laws. The rationale behind this is that efficient tax systems have simplified tax arrangements, comprising of straight forward

Compliance Procedures and Clear Laws

Rwanda Revenue Authority (RRA) has made significant strides in easing the tax process. Among the reforms is the decentralization of tax information and payer services to bring them closer to the tax payer and the recent introduction of online applications and issuance of tax clearance certificates.

Trading Across Borders

This indicator looks at procedures, associated documents, time and costs for importing and exporting a standard shipment of goods. In addition to reforms by RRA to strengthen risk management in customs clearance, channel clearance of goods, streamlining border procedures, and introducing pre-clearance and pre-payment before goods arrive at the border, Government abolished the requirement to have import/export declaration forms (import/export licenses). Further to this, mechanisms have been put in place to address non-tariff barriers along the fow of our goods to and from the ports. Most of the reforms in this indicator require a regional approach to implement and Rwanda stands to benefit from regional integration especially under the EAC Customs Union.

We look forward to continuing our partnership with all stakeholder agencies and the business community to advance Government’s business reform agenda.

Frank Twagira
Coordinator, National Doing Business Reform Taskforce
Rwanda Development Board (RDB)
www.rwandainvest.com

Look out for the World Bank Doing Business Publication 2010 launched on 9th September 2009.

Doing Business 2010’s top reformer: For the first time since Doing Business started tracking reforms, a Sub-Saharan African economy, Rwanda, led the world in reforms. Overall, Rwanda introduced reforms in 7 out of the 10 categories, rising from 143rd to 67th place on the ease of doing business rankings. Read more...

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Press release

MINICOM & RDB Press release: Rwanda is World Bank Doing Business 2010’s Top Reformer