Business to Operate on Application Basis
Before long one will be able to start in business not after receiving all kinds of authorizations but by filing an application. Ukrainian business people have been after this regulatory principle for quite some time and it is rather popular elsewhere in the world. Under the new principle a person starting in business, rather than having it licensed, will submit an application to just one registration authority and start operating practically at the same time. After receiving it, the registrar will notify all the controlling authorities and they will enter the new business in their files. People at the State Regulatory Policy and Entrepreneurship Committee (SRPEC) believe that the new principle will eliminate one of the biggest obstacles in the way of small and medium business in Ukraine. The committee drafted a presidential edict setting forth simplified business-licensing procedures.
The current licensing system, providing ideal conditions for corruption and business moving into the shadow, is regulated by 64 laws on business and three hundred cabinet resolutions. So, after the president signs the edict, SRPEC will start on the next phase in the licensing reform, envisaging thorough upgrading of the legal framework. Serhiy Tretyakov, deputy chairman of SRPEC, believes that the businessman should dictate his operating conditions and the registration authority should only determine expedient restrictions, with an eye to national security, protection of the environment, and healthcare. The state must determine all such requirements in advance, so every business entity can adjust to them.
Needless to say, the innovating approach caused no enthusiasm among the bureaucrats, as became clear even at the stage of discussing various drafts. According to Mr. Tretyakov, the committee met with “severe opposition” on the part of almost all ministries and agencies. This was to be expected, of course, considering the presence of almost 100 controlling authorities, and that all such agencies are not interested in clear cut, transparent business conditions. At present, noted Mr. Tretyakov, the cost of all those authorizations a businessman must receive, by visiting countless bureaucratic offices, reaches UAH 2-2.5 thousand.
Nevertheless, the process of adopting transparent business- licensing procedures is underway, beginning in the regions. Zenovy Bermes, coordinator of a coalition of businessmen’s associations monitoring the process, says the first license-simplifying experiment — setting up “uniform offices” — in Ivano-Frankivsk and Mykolayiv fully confirmed the validity of the new approach. He believes that upgrading the licensing system will create a more favorable business climate in Ukraine and help solve the unemployment problem and receive new budget income sources.
