After the new Enterprise Law was enacted in 2000, 14,546 new enterprises registered (as of June 2001) – impressive, considering they made up a full quarter of all registered companies at that time. This report presents the findings of a survey of these enterprises that sought to determine how they fared in the registration process and regulatory environment under the new law.
Clearly, the new Enterprise Law made it easier and faster for companies to register by clarifying procedures, eliminating certain difficult requirements and requiring relevant agencies to process paperwork within a reasonable timeframe. Still, there were obstacles. Administrative red tape was one issue – enterprises still had to acquire a cumbersome number of official seals, invoices, licenses and vouchers. Lack of collateral made accessing bank loans impossible for many.
Taxation was still not straightforward, market information was not readily accessible, and companies still had to deal with difficult government agencies.
Recommendations made included: simplifying pre-operating administrative procedures, clarifying procedures concerning land-use rights and construction permits, implementing more regulations to control taxation, issuing formal requirements for government offices and a code of ethics for public officials; and drafting a medium-term, two-year program for enterprise development to begin in 2002. This latter program would aim to create an “enterprise-friendly” institutional environment and address many of the specific concerns expressed by entrepreneurs.
June 2001
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