Originally posted in The Business Standard on 11 January 2023
Company reg fees likely to rise
New amount likely to be Tk 10,000 to Tk 30,000
Digitising the Registrar of Joint Stock Companies and Firms (RJSC) services involves growing cost that its clientele will have to share as a move is underway to raise company-registration fees.
Sources said the regulatory body is now reviewing a proposal for an increase in the registration fees. The proposal has, meanwhile, been sent to the Ministry of Commerce (MoC).
The RJSC last enhanced its fees and charges in 2016 through a gazette notification.
According to an initial plan, the RJSC is considering a threefold increase in its fees to be paid by companies willing to obtain registration under the Societies Registration Act.
A proposal is being tossed to increase the registration fees ten times to Tk 10,000 from the existing amount of Tk 1,000 for the startups to get registered as per the Partnership Act 1932.
However, a high-powered body of the MoC has found the proposed raise too high.
And the RJSC may propose to hike the company-registration cost threefold to Tk 30,000 under the Society Registration Act.
Under the initial plan, the regulatory body had proposed to increase the fees in 17 areas as per the Societies and Partnership Act.
The committee, however, has found other proposals on fee hike logical.
A senior RJSC official said the plan for fee hike is under review and yet to be placed finally with the ministry.
“The regulatory body would conduct stakeholder consultations to increase its fees in a rational way,” he added.
Another official says the RJSC needs logistics and manpower to run its activity smoothly and deliver services to people. The regulator is allowed to spend one-tenth of its income for meeting its own expenditures.
Distinguished fellow of the Center for Policy Dialogue (CPD) Prof Mustafizur Rahman finds the fee-hike move of the entity logical as it has been six years since it increased fees last.
“The RJSC should make its services hassle-free and paperless to minimize physical visit,” he says, as reports have it that middlemen, in many cases, play the go-between in company-registration process for slow-paced automation of service delivery.
Former lead economist of the World Bank (WB) Dr Zahid Hussain also emphasises that the entity ought to improve its service delivery with the increase in fees.
“Fees hike may discourage entrepreneurs from registering their companies without visible improvement in its service delivery,” he says.
In Bangladesh, entrepreneurs have to pass through difficult path for starting and continuing businesses, he added.
The economist notes that the concept of One-Person Company (OPC) was to add at least 250,000 new entrepreneurs but that remained poor due to high paid-up capital requirement.
As per the Companies Act, minimum paid-up capital requirement for OPC is Tk 2.5 million to maximum Tk 50 million.
Until November 2022, some 191 OPCs had registered under the RJSC out of 277,442 companies.
He felt that RJSC-reform initiatives are required to deliver all services through the One -Stop Service (OSS) portal of Bangladesh Investment Development Authority (BIDA).
A meeting of NCMID, held in October last with the Cabinet Secretary presiding, decided to interlink the RJSC directors’ list amendment, increase in authorized capital and paid-up capital, and return-filing services with the OSS of BIDA in six months.
Former president of Dhaka Chamber of Commerce and Industry (DCCI) Rizwan Rahman said the businesses are ready to pay higher service charges or premium fees if RJSC can offer express services.
Citing example of the Department of Immigration and Passports, he said time for getting services should be cut down with the increase in fees.
A study conducted by the Business Initiative Leading Development (BUILD) in collaboration with USAID-funded Feed the Future Bangladesh Improving Trade and Business Enabling Environment programme, showed registration of a new company with RJSC takes eight days to complete, which is supposed to be three days.
Earlier, Commerce Minister Tipu Munshi reaffirmed Bangladesh’s commitment to carry out regulatory reform to streamline the exiting company- registration process and reducing administrative costs charged by the RJSC.
In July 2022, Mobile Financial Service (MFS) company Nagad signed an agreement with the RJSC to launch an easy fee-payment app.
Zahidul Islam Sajal, head of communications at Nagad, said the service remained suspended for technical reason after running one and a half months. “We have a plan to resume it within this month,” he added.