Govt plans to cut business-startup process to 14 days with a single ID

Highlights:

• Government plans unique Business IDs for entrepreneurs
• BanglaBiz aims to reduce startup time to 14 days
• Current licensing and approval processes can take 355 days
• One digital platform will link documents and approvals
• Reforms could simplify or eliminate some licensing requirements
• Full system implementation is expected within roughly one year

The government is planning to issue entrepreneurs unique business IDs, allowing them to apply for various licences, clearances and approvals through a single digital platform, and cutting the time required to start a business to 14 days.

The commerce ministry and Invest Bangladesh are jointly working on the reform. Currently, it takes an average of 355 days for a company to obtain the licences, clearances and approvals needed to start operations after registration.

A 14-day Business Readiness Package is being developed for BanglaBiz, the single-window platform for business and investment services.

At present, after registering a company, an entrepreneur has to obtain multiple licences, clearances and approvals before starting a business. Besides obtaining a trade licence, Tax Identification Number (TIN) and bank account, entrepreneurs must fulfil various requirements depending on the nature of their business, including fire and environmental approvals.

Infograph: TBS

Many of these are also prerequisites for obtaining an Import Registration Certificate (IRC). As a result, it can take a long time before businesses are able to open letters of credit to import necessary machinery or raw materials. According to businesspeople, the process from company registration to opening an LC can take anywhere between 180 and 355 days in some cases.

Invest Bangladesh member Nahian Rahman Rochi told TBS that the entire process of starting a business is prolonged because the existing prerequisites are dependent on one another.

"The key to reducing the process to 14 days is not to eliminate compliance. Rather, some prerequisites that are currently mandatory for starting a business or opening an LC will be reduced, made post-facto or completed in parallel," he said.

Under the proposed system, entrepreneurs will no longer need to submit the same documents separately for company registration, fire, environmental and other services. Once submitted, the information will remain linked to the Business ID and can be accessed by the relevant agencies as needed.

Besides, a dashboard will show when each approval was obtained, which ones remain pending and at what stage an application is held up.

Invest Bangladesh has already completed a mapping of the steps required to start a business and the changes needed at different stages. Work to amend regulations has also begun in some areas.

At the same time, efforts are underway to fully digitise the company registration process, bring relevant agencies – including fire and environmental authorities – onto the digital platform, and simplify licensing procedures.

Speaking to TBS, Business Initiative Leading Development (BUILD) Chairperson and former DCCI president Abul Kasem Khan welcomed the government's initiative to reduce the business-startup process to 14 days.

"We welcome the government's initiative to reduce the business-startup process to 14 days. But what is important is that the initiative should not remain limited to policies or plans; it must be implemented effectively in practice," he said.

In 2021, the Ministry of Commerce sent a recommendation to the Cabinet Division to bring all types of business entities in the country under a Unique Business Identification system. However, there has been no progress on the matter since then.

However, in 2022, the then government introduced the Digital Business Identification Number (DBID) for businesses operating in the e-commerce sector.

Abul Kasem Khan said, "Such systems are already in place in various countries around the world. Bangladesh does not need to conduct any new research; it can be implemented quickly by drawing on the experiences of countries such as Vietnam and Thailand."

He said that, alongside simplifying the procedures for obtaining various licences and approvals, the government must ensure the capacity and reliability of the digital system.

Questions over the trade licence system

Abul Kasem Khan said that rather than just simplifying the trade licence process, the government should consider abolishing such a separate licensing system altogether and introducing a single business identification number where necessary.

"Trade licence is a licence; it is a number. What we proposed is very simple – a Business Identification Number should be introduced, which I can use to conduct online business, import and export, open a bank account, and open bKash or Nagad accounts," he said.

According to Abul Kasem, the circumstances under which the trade licence system was introduced are different from today's reality. Online-based businesses have expanded significantly, he said, adding that many licences and regulations introduced decades ago need to be reassessed to determine whether they remain necessary.

"You can sit in Bangladesh and open a company in Singapore or Dubai. But why can't you start a business in your own country?" he said.

Invest Bangladesh said that after the first phase of business-startup reforms, work will begin on simplifying sector-specific licensing procedures. A committee led by the commerce ministry has already identified several priority sectors.

Officials said they aim to deliver some initial results from the reforms within the next month. A substantial part of the reforms is expected to be implemented within the next six to seven months, with plans to make the entire system operational within roughly a year.