Local business landscape grows in 2020, despite COVID- BIPA
The Business and Intellectual Property Authority (BIPA) has confirmed that the local business landscape grew with 12,013 new business entities being registered during 1 January and 31 December 2020.
The authority explained that of these, 72% were closed corporations, followed by defensive names at 19%, Companies at 7% and Section 21 companies at 1% and they also registered 4 foreign companies during the period.
The authority stated that despite a drastic slum in registrations during the period April-May 2020, due to the country-wide COVID-19 lockdown, the second half of the year saw a sharp increase in the registration of Close Corporations, which is evident from the 1 140 and 1 231 CC’s that were registered in September and October respectively.
“The registration of defensive names also peaked in September with 376 registrations, while Business registrations from Q1/Q2, when 4 382 entities were registered, to Q3/Q4, when 7633 entities were register, which is an increase of 74%, which could be attributed to an appetite for business ownership, which could possibly have been spurred by job-losses in the formal sector due to the effects of the COVID-19 pandemic on the country’s economy,” they explained.
However, the authority explained that 2020 also saw the de-registration of 521 CC’s and 206 companies, which is the lowest number of de-registration’s in 5 years, and a decline in business registration was observed during December 2020, when they only registered 805 entities.
“This can be attributed to a slowdown in business activities over the festive season and many businesses closing for the holiday period,” they added.
They received a total of 2026 online registration, with E-services portal of the Ministry of Industrialization and Trade off to a slow start, it nonetheless suggested a keen interest from entities to make use of the online application process, which was launched in December 2020 as a combined effort of the Ministry and key agencies, inclusive of BIPA to provide seamless and responsive client services to business owners.
“During the period, 1 January 2020 to 31 December 2020, clients requested a total of 11 583 files with an average turn around time of 3 days and our head office in the Northern Industry area serves an average of 4 500 walk in customers per month,” they emphasised.
For the period under review BIPA operations were negatively impacted by insufficient revenue collection, stemming from challenges with its outdated and manual systems and currently only 30% of their business registration documents are available in soft copy.
“Subsequently many business entities are non-compliant with their obligation to pay annual returns, increasing the our debt book and burdening our human capacity,”they concluded.