Success in Speeding Business Registration Reforms

In recent years, the Belarusian government has implemented essential reforms related to registration and permits, and was named among the top 10 reformers on the World Bank’s Doing Business report in 2009 and again in 2010. According to the results of the Doing Business 2010 survey, Belarus ranked seventh on ease of starting a business. Overall in the report Doing Business 2010, Belarus ranks 58th on the ease of doing business out of the 183 economies reviewed.

When IFC started work on improving the business climate in 2004, business registration was a difficult administrative procedure in Belarus, significantly more expensive and time-consuming than in most CIS countries. According to the IFC SME Survey conducted then, on average an entrepreneur spent two months and over $700 registering a business. Entrepreneurs who didn't complete the complex registration procedures within a certain timeframe were charged a hefty “non-compliance” fine.

IFC Belarus' Advisory Services project helped address these issues and streamline the business registration process. First, the project cooperated with the Justice Ministry to host two international conferences and organize a study trip to Sweden allowing state officials to learn about international experiences of business registration. The project also provided advice to the government to ensure the implementation of reforms, supporting the Belarusian government as it enacted a series of decrees to streamline the business registration process.

In 2006, the President of Belarus signed two decrees that simplified business registration. The first reduced the time it took to register a business from 30 to 20 days; the second, signed in December 2007, reduced that time to just five days. The estimated cost savings for small and medium enterprises from the introduction of these decrees was $21.8 million, but the process was still too complex and time-consuming.

IFC continued to support the Justice Ministry to make further improvements including amendments that reduced the number of reasons for which an application can be rejected, cancelled the minimum capital requirement for most forms of business, and eliminated requirements for excessive notarization of registration documents.

Another decree, adopted in January 2009, reflected IFC's recommendations and:

  • Introduced the declarative principle of registration
  • Reduced to just one day the time it takes to register a business
  • Eliminated start-up capital requirements for most businesses
  • Reduced the list of required documents needed for registration by 50 percent
  • Eliminated mandatory document notarization (which previously added about 80 percent to registration costs for entrepreneurs)
  • Abolished the requirement of listing all activities in which the company intends to be engaged
  • Simplified the procedure for closing a business.

The total cost savings for SMEs from the three decrees is estimated at $41 million, and the average cost of registration dropped from $736 to $77.