Making it Easier to get on with Business
In Solomon Islands, an expanded online business registry allows foreign investors and business names to be registered and searched online
In a computer training room in Honiara in November, groups of business owners, bank officers, lawyers, accountants, and government employees were discovering the regulatory requirements of their work were about to get a lot easier.
The various professionals were learning how to use Solomon Islands’ expanded online business registry, which now accepts applications for foreign investment licenses and business name registrations and has a searchable database of all registered business entities.
For Baoro Koraua, an accountant and business advisor specializing in foreign investment, the reforms meant the process for establishing partnerships with overseas businesses would now be less complex and more transparent.
“It is now easy to determine whether a foreign business is still registered, which is a good thing, as local businesses considering linking or dealing with these foreign businesses can see for themselves their status,” he said.
Other participants noted how the business names that individuals and companies trade under could now easily be officially recorded.
Long-term partnership results in all-in-one service
The expanded registry, which was launched on 22 November, is the culmination of extensive support PSDI has provided to make it easier for women and men in Solomon Islands to join the formal economy as entrepreneurs.
The original online companies registry was created with PSDI support in 2010. It made it possible to incorporate a business online, thereby eliminating the need for travel to the capital and reducing processing times from 3-4 weeks to 1-2 days. More than 2150 companies have since been registered online.
The legislative reforms to establish the online registry—encompassed in the Companies Act 2009—also made it possible to form community companies, which allow a large group of people, such as a village or farmers’ collective, to pool their resources and share profits. More than 30 community companies have since been registered. The act also established single shareholder companies, which allow an individual to form a company, thereby removing the need for women to co-register with a spouse.
Now, through the expanded registry, foreigners looking to invest in or partner with Solomon Islands businesses can apply for a Foreign Investment Approval online.
“Would-be foreign investors previously had to engage the services of an agent, or apply in-person in our office in Honiara, a process that could take around 10 days,” said Invest Solomons Director Derick Aihari “Using the online registry applications can now be done anywhere and a Certificate for Foreign Investment could be issued within 24 hours.”
Business names registrations, which are the principle business license held by more than 12,000 mostly small businesses, can now also be lodged through the online registry and processed within a day. Along with assigning name rights, these licenses bring businesses into the formal sector, allowing them to open a bank account and apply for financing.
“Previously, these also had to be applied for in-person and took around a week to process, after which the certificate had to be collected in person,” said Veronica Manedika, Assistant Registrar with Invest Solomons. “This reform will particularly benefit the almost-two-thousand applicants, many of who travel from other islands each year to register their business names in the capital.”
With the two additional services it is now possible for a business person to register as a foreign investor, incorporate a company, and register multiple business names all in one sitting. Only one other Pacific island country— Papua New Guinea—has an online registry that can do likewise.
“Shifting the companies registry online in 2010 has been of great benefit to the local economy in terms of time and cost savings as well as encouraging business formalization and regulatory compliance,” said Aaron Levine, PSDI’s International Business Law Reform Expert, who led the implementation of the reform. “The new, expanded registry will double-down on these benefits: business names, the mostly commonly used business entity, are now quick and easy to register, while applications for foreign investment licenses, a key requirement for engaging international firms, are now similarly straightforward.”
The reforms have been guided by how they will contribute to Solomon Islands’ economic aspirations.
“Attracting more and better quality foreign investment is a long term goal of the Government of Solomon Islands,” said Riley Mesepitu, Under Secretary of the Ministry of Commerce, Industries, Labour and Immigration. “The expanded online registry will help us achieve this by making Solomon Islands an easier and safer place to invest, and by encouraging and increasing transparency.”
Making data available for business and government
As the registry is searchable, key details of all companies, businesses, and foreign investors can now be verified by anyone anytime, for free.
Through a simple online search, local firms can verify the legitimacy of a foreign investor to do business in the country. Previously, such searches had to be done in person and for a fee at the registry office.
New businesses owners can also use the search function to find out immediately if the name they want to use for their business is available or has already taken by somebody else.
From a regulatory standpoint, the search functions bring the transparency and accountability of Solomon Islands’ business registration system in-line with global best practice and discourage illegitimate foreign investment.
The online system will also better collect data on applicants’ gender, business sectors, and locations, which will assist government policy formulation. For example, data on the number of women operating agriculture businesses in a particular province could guide policies on increasing womens’ engagement in primary industries. Along with automatic collection of key data from online forms, foreign investors will be asked to complete a short online survey—followed up annually by email—on the expected outcomes of their investment activity. This will help the government provide critical economic data, used by the Central Bank and the government, on the growth and impact of foreign investments on the economy.
The updated registry can be accessed at www.solomonbusinessregistry.gov.sb
A notice published in the Island Sun newspaper highlights the benefits of the expanded online registry.