The Ministry of Economic Affairs (MoEA) yesterday launched Single Window Company Registry System, an upgraded version of electronic online registry system of companies.
This is expected to improve ease of doing business in the country.
Economic Affairs Minister Loknath Sharma said that even if Bhutan conquered Covid-19, it would be impossible for the people to save themselves if we didn’t focus on the economy. “Our working system is very rigid. There is a need to make service delivery easier by innovating first and regulating later.”
Bhutan’s rank in ease of doing business has been dropping over the years. In 2018, Bhutan’s EDB rank was 73 out of 190 countries. It dropped to 81 in 2019 and further down to 89 in 2020.
According to the World Bank’s report, to start a business formally, as Limited Liability Company (LLC), requires 12 days and eight procedures. With the system’s upgraded version, the turnaround time and cost of incorporating a company can be saved.
Registrar of Companies, Karma Yeshey, said: “This is government’s initiative to improve ease of doing business with the help of donor agencies.”
The system with API (application programming interface) level integration is established with various electronic systems of the related government agencies. The system has three modules: registry module, change module, and compliance module.
To register a new company, the system has integrated related government agencies—Census System: Ministry of Home and Culture Affairs; Security Clearance from Royal Bhutan Police; and payment getaway from Royal Monetary Authority.
Karma Yeshey said, “With the integration, the procedure has come down to four—name reservation, company incorporation, security clearance, and online free payment can be done into single registry system.”
“Tax and licence system would be added in the next upgrade,” he said.
To further simplify the registration, the requirement of the company seal has been eliminated and opening of a Bank account is now ex-post procedure for starting a business.
For the existing companies, they can now change their statutory information and avail post-registration services through the change module. Karma Yeshey said, “Companies from outside Thimphu, for example, can now no longer have to travel to change their statutory information and it will save cost and time.”
The existing companies can now submit their statutory documents: Annual report, Audit report, and Director Report… with zero cost in delivery. The regulatory authority can access companies on MoEA’s website.
Bhutan ranked 125/190 countries in 2020 in terms on protecting minority investors. The new legal reforms for “Protecting Minority Investors” began from yesterday.
Minority shareholder protection against defaulting directors is provided under section 167 through section 174 of Companies Act.
Claims for damages due to unfair prejudice by the majority shareholders are provided under sections 128-130 of Companies Act, 2016. The directive suit is as defined in section 416 (15).
Primary Responsibility to regulate and remedy the minority interest protection is established with Regulatory Authority under section 131 of Companies Act. There will be dispute settlement body to hear and dispose minority interest protection cases in the first instance.
Lyonpo Loknath Sharma said, “In the future, MoEA will be remembered for taking the initiative to ease public service delivery.”