Investment Climate Advisory Services T Group World Bank Success Stories: EASING BUSINESS REGISTRATION IN TONGA In 2009, IFC helped the government of the Pacific Island to worry about the information if something happens nation of Tonga cut the time business owners require to again.” register their business from one month to just one day, supporting private sector growth by allowing businesses to Company records are now searchable online, easing begin trading quickly and easily. business processes for legal firms, banks, government departments, and business owners. In 2006, civil unrest led to bloody riots in the Tongan capital of Nuku’alofa. Although devastating, the events “The new system is great because there’s a lot less paper- also presented an opportunity for modernization during work, it’s very simple, and it has really sped things up,” the subsequent clean-up. After fires had swept through the lawyer Dana Stephenson said. Stephenson regularly capital, burning down the country’s paper-based business submits business registration applications on behalf of registry, Tonga rebuilt the company registry with the help clients. of New Zealand software and IFC expertise. Bank staff members also appreciate the benefits of not Unlike the old registry, the online version is transparent having to search through paperwork, which also resulted in and easy to use—features that cut down the steps required an inspection fee under the old system. for business registration and go a long way in enabling enterprises to develop, grow, and become more competi- According to Leta Havea Kami, Deputy Managing Director tive. of Operations at Tonga Development Bank, “We’ve gone from using paper records to having nothing at all when A MODEL FOR EFFICIENCY they were lost in the fires, and now we have everything online, so it’s just a huge step and very useful.” Using the same software model as the New Zealand Compa- nies Registry, the Tonga government, with IFC’s help, The electronic registry was launched in December 2009, designed and implemented a system specifically tailored followed by a widespread awareness campaign with IFC for Tonga. Supported by the New Zealand Ministry of help to urge business owners to re-register. Economic Development, the registry’s information is hosted on servers in New Zealand. New computer equip- ment allows staff to scan paper applications and process them electronically. “Using the old system, it used to take up to two weeks for a registration certificate to be finalized because it had to be personally signed by the minister, but under the new system it can be as quick as 30 minutes, depending on the speed of the internet,” Penisimani Latu, Deputy Registrar at the Ministry of Labour, Commerce and Industries, said. “After losing both the original records and the back-ups in the 2006 fires, the new system allows us to ensure that information is secure and also gives us peace of mind not HRH Princess Pilolevu Tuita launching the business registry Easing regulatory requirements for business entry and operations is an Investment Climate Advisory Service of the World Bank Group in partnership with: Re-registered business owner Kathy Burenivalu, CFO of the The success of Tonga’s electronic business registry using money transfer company Fexco Pacific in Tonga, believed New Zealand software and servers has led to a decision by the electronic records are more efficient. “We can use the the Papua New Guinea company registry to implement a time saved in these processes for more important business similar version in Papua New Guinea, with IFC support. In matters.” addition, the Asian Development Bank is in the process of rolling out registries supported by New Zealand in the COLLABORATION BETWEEN IFC AND Solomon Islands and Vanuatu. ADB IN TONGA In order to introduce an electronic registry, changes had to be made to Tonga’s Companies Act 1995 to allow applica- tions and general reporting to be done electronically. The necessary amendments were identified through a joint project between IFC and Asian Development Bank consult- ants. “The Asian Development Bank and IFC consultants approached the work as a team,” Terry Reid, Legal Advisor to the Asian Development Bank, said. “Although there was a clear division of tasks and responsibilities, the amending bill was drafted as a team, ensuring that the bill supported the needs of the electronic registry which was being Staff entering information on the business registry designed. “The process supporting the passing of the bill was led by Results us, and the regulations were drafted by IFC with input from us. Since the act and registry were enacted, IFC and the • Number of days taken to register a busi Asian Development Bank have continued to work together ness reduced from 7 to 1 in 2010, com in answering queries from stakeholders,” Reid added. pared to 32 days in 2008 LOOKING AHEAD • Registration process streamlined to reduce paperwork and move to a compu New software will soon be introduced, further reducing the terized system number of procedures and amount of time required to register a business by allowing online applications to be made. • Total estimated cost savings/benefits to business totaling TOP $2.7 million per “We are migrating our information to a new database that year lets people apply online, giving them a choice between online or paper forms,” Latu explains. “We’re hoping to • More than 540 of the 1,366 companies on have the online application process in place before the end record have re-registered using the new of the year. system Contact: Jonathon Kirkby IFC Pacific Program Manager, Investment Climate Advisory Services Ph: +61 (2) 9235 6519 Fax: +61 (2) 9235 2533 Email: JKirkby@ifc.org