Business Climate : Fading Bureaucracy?

Entrepreneurs have for long complained that tedious bureaucratic procedures stifle investment, raise costs and negatively impact on productivity. The authorities have always declared war on excessive bureaucracy in order to not only improve the business climate and foster entrepreneurship, but also to make life easier for citizens dealing with day-to-day public administration. The year 2018 has seen a lot of changes in various administrative systems. Is bureaucracy fading at last?

Mauritius has spectacularly regained its place in the top 20 of the Doing Business Survey of the World Bank. The goal now is to be among the top 10. But to get there, the authorities have to wage a real war on bureaucracy. Indeed, successive governments have time and again come up with initiatives to keep improving the business climate. If the last decade has seen significant changes, we can say that the cruising speed has been reached in the last two years, especially with the advent of the National E-Licensing system.

The Companies Act was completely revamped in 2001, making company incorporation simpler, especially without the need to have a constitution or memorandum.  The Business Registration Act, introduced in 2002, provides for the registration of persons carrying on business in Mauritius and of their business names, the allocation of a single business registration number and the issue of a business registration card to those persons. 

A few years later, in 2006, the introduction of the Business Facilitation Act heralded another turning point in the overall investment and entrepreneurship environment, mainly with the abolition of several 'Schemes' such as the EPZ (Export Processing Zone), Pioneer Status Scheme, etc, the consolidation of business related laws, the introduction of new types of work or residence permits for foreigners, the streamlining of various procedures, the re-engineering of processes, the introduction of user-friendly guidelines, among others. The Development Permit and the Building Permit were also condensed into a single Building and Land Use Permit, the application for which became a simple ‘tick box exercise’ and it paved the way for a growing construction sector.  It was also the first time in Mauritius when the ‘Silent Agreement Principle’ was introduced, whereby, is an applicant does not hear about the outcome of his application from the authorities, then his application was deemed to have been approved! 

Nearly a decade later, a second Business Facilitation Act mended the shortcomings of the first one and further improved the business climate. This time, the emphasis was more on online services, given the high rate of computerisation in Mauritius. One of the most important projects is the introduction of the National E-Licensing System (NELS), funded by the European Union to the tune of Rs 420 million. This project involves establishing a digital platform to link all government services, so that the public can make any application for any permit, licence, authorisation or clearance online, submit documents and make payments of fees online and even receive approval letters online.

Company formation

Today, it is possible to incorporate a company in less than 24 hours, and this is done online. In addition to creating a company, it is possible to carry out all transactions relating to a company online itself: Submission of annual returns, application for change of name of a company, registering the resignation or the appointment of a director or secretary, paying the annual company licence, among others. One can also search the database of the Companies Division online to obtain details of any company incorporated in Mauritius.  It should be noted that the Mauritius Network Services company based in Ebène manages the online services of the Companies Division. A fee is charged for most online services.

Trade Licence: Rules not being followed?

The procedures for obtaining Trade License have been simplified. To obtain a Trade Licence, previously one had to first apply for a Building and Land Use Permit (BLP). But in 2015, new regulations were promulgated to exempt a long list of economic activities from the requirement of a BLP, provided those activities meet certain conditions: For example, an activity that does result in adverse external nuisance such as noise pollution, that does not involve loading and unloading causing major disruption to the neighbourhood or that does not results in road congestion is exempted. Mostly, activities that can be carried out from a residential building by a small entrepreneur, a small printing business not involving heavy machinery, a catering activity, florist, estate agencies, etc are included.  This type of request is approved quickly and there is no need to put notices in newspapers. In 2017, new regulations have extended the same facilities, until then granted to individuals, to companies. The reason is that a lot of small entrepreneurs prefer to operate under a company. Unfortunately, some local councils seem to ignore the provisions of the law and mistakenly request documents that are not required and they even force applicants to go through the whole BLP process in order to obtain a trade licence for an exempt activity, thus wasting their time and money, but also delaying their business set up.

Building and Land Use Permit

The Building and Land Use Permit (BLP) application can be made online and the processing time of a complete application is 14 days. A BLP is required for the construction of a building, modification or addition, or to change the use of an existing building and to apply for a Trade Licence in the case of a non-exempt activity, among others. Applicants have to follow the Planning Policy Guidelines (PPG) of the Ministry of Housing and Lands. 

Work and Live: faster system

Foreign nationals wishing to obtain an 'Occupation Permit' as an investor, a professional, a self-employed or a residence permit as a retired person, can submit their application online on the new National E-Licensing System (NELS) before even coming to Mauritius. A complete application is processed online between 8 and 23 days. If the application is approved, the Economic Development Board will schedule an appointment for the applicant to come to the EDB office with his original documents for proper verification. If all is well, he gets his residence permit on the same day!

Paying road tax online: Not for everyone

The National Transport Authority recently launched its online portal for the payment of Road Tax by motorists. Until then, the public had to either queue up at the NTA counters or at the post office to pay their Motor Vehicle Licence. However, contrary to expectations, the online portal is limited to only customers of six insurance companies, namely SICOM, Mauritius Union Insurance, Jubilee, GFA, SWAN General and Quantum. This because not all insurance companies are linked to the NTA server. Until their databases are accessible by the NTA, their clients would not be able to effect online payment of MVL and will have to continue queuing up at counters. Furthermore, those who have effected their last payment at the post office cannot pay online as the portal indicates the following message: “Your Last MVL was effected at the Post-Office. NTA has not yet received the data from Post, kindly call at the NTA Office for necessary update. You will then be able to proceed with online payment for period onwards.” 

Registration

The registration of documents and title deeds in the Registrar General Department is now done faster thanks to the complete computerisation of the system through the e-registry project. In fact, this is one of the reasons why Mauritius won 5 places in the latest Doing Business report of the World Bank.

When the CSU becomes a watchdog

Launched as a citizens’ platform to gather all the grievances of the general public concerning their administrative hurdles with the various public departments, the Citizen Support Unit (CSU) has today become a real watchdog to which aggrieved citizens have recourse to as a last resort to find solutions to their problems. Citizens can log their complaints on the official website (www.csu.mu) or complain directly to their nearest ‘Citizens’ Advice Bureau’. The CSU officials then intervene to find out why there are bottlenecks in their applications. The CSU has been able to solve thousand of issues where citizens were victims of bureaucracy.  It should be noted that the CSU recently won a bronze medal at the award ceremony of the African Association for Public Administration and Management held last November in Botswana. The CSU operates under the aegis of the Prime Minister’s office.