Just over a year since its launch, Chile's online platform which allows entrepreneurs to register a business in just one day at no cost is beginning to show progress.
A report released in May by Chile's Minister of Economy shows that since the launch of the platform in May 2013, an additional 35,432 businesses have been registered, of which about a third had started generating sales (Chile continues to run its manual registration system alongside the new platform).
In all the online platform has helped drive up registrations by over 50%. In the month of May last year 1,729 registrations were facilitated through the new online platform. By May this year registrations via the platform had more than doubled - to 3,795, this during a time when registrations through the old system had remained fairly constant (7,846 compared to 7,549 in May last year).
The platform is significant because studies cited by the World Bank reveal that making it easier for businesses to register leads to a five to 17% increase in the number of newly registered firms. The figures from Chile therefore already surpass these estimates.
All in a day
Simply by filling out an online form and signing using an electronic signature (with a device called a token - similar to a USB stick), entrepreneurs can incorporate a business in just one day and receive a tax number.
Those who don't have such a token can go to a notary using a “service number” assigned by the portal and sign their signatures notarised in manuscript form. Later the notary must sign their electronic form too.
Previously, if an entrepreneur wanted to start a business in Chile, he or she would have to hire a lawyer, who would draft the necessary paperwork, and go to a notary to certify it.
A notice would then have to be published in the government gazette and the firm registered in the national commerce registry. Only after this could the company commence operations and obtain a taxpayer ID Number. This would all take about eight days and cost between $500 and $700.
The initiative to set up the online platform has been driven by Chile's government which is on a drive to actively improve entrepreneurship, through introducing innovative programmes like Start-Up Chile in 2010 and getting it's state agency Corfo to focus more on small firms and high-growth start-ups.
According to Chile's 2013 Global Entrepreneurship Monitor (Gem) , the country scores high points for the perception that government policies and regulation favour small businesses. Compared with other OECD countries ranked by the report it is behind only Switzerland and Finland.
The online platform is then part of several measures in recent years introduced by the government in recent years to make it easier to register a business in Chile (including the introduction in 2010 by of an online system for company registration).
This has seen the time taken to register a business fall from 27 days in 2009 to 5.5 in 2013, in World Bank ratings. This should fall to just one day when the organisation's next Doing Business report is released - in the coming weeks.
Globally since 2009 the average time to start a business has fallen by about 13 days, according to the latest, 2014 Doing Business report. Yet it appears that only in two countries (New Zealand and Chile) is it possible to register a business in one day.
Even in the US and Canada, known for their entrepreneurship, it takes five days. In many cases European countries are in a hurry to register company. In the UK it takes 12 days - still it's a lot better than the worst performer - Venezuela (144 days). Brazil isn't too good either - it takes 107 days to register a firm there.
In all the figures seem to suggest that it's usually smaller countries, hungry for foreign investment, that lead the way.
How Brics shape up
Russia - 15 days
South Africa - 19 days
India - 27 days
China - 33 days
Brazil - 107 days
Reforms for SA, Brazil
Things however are looking up for emerging countries. Brazil too aims to introduce a new online registration system later this year to make it possible to register a business within five days. But the system will be rolled out state-by-state, meaning it could take years before it's adopted countrywide.
South Africa, a far better performer with registrations, has been pushing ahead, since the launch of a new registrations agency, the Companies and Intellectual Property Commission (CIPC), in 2011.
The CIPC this month launched a new website which will enable businesses to register online in three days - far quicker than the 25 days it currently takes to complete a manual registration.
The offer isn't exactly that new. The CIPC has for some time offered an online registration service. As of late last year about 88% of all company registrations are conducted online.
South African innovation
South Africa has also pioneered another interesting way to register a business. Since August last year those that open a business bank account at First National Bank have also been able to file for a company registration, an offering that the commission is now seeking to extend to other major banks.
Sanjeev Orie, head of products at FNB Business Banking, says applicants have “literally” had their bank accounts opened and their new business registered within a few hours. In January CIPC commissioner Astrid Ludin said the commission was in negotiations with several other banks on similar offerings.
Meanwhile the country's revenue service (Sars) is working on a single form for registration of all tax types is on track to be implemented in the current 2013/14 financial year.
The internet has radically cut the time it takes to register a firm and those set to benefit the most in the near future will be ordinary business owners in emerging nations hungry to get started.
Are you from an emerging economy? How has your experience been in registering a business? Please leave a comment below and let us know.
Stephen Timm is a