CREATING A FAVORABLE BUSINESS ENVIRONMENT |
One of the objectives of economic development is to increase private investment, which is conducive to the creation of new jobs. Local authorities should promote this process. Efforts must be aimed both at assisting start-up businesses and at stimulating the growth of existing businesses and the attraction of external private investment.
One precondition for this is the creation of a favorable environment for the development of entrepreneurship.
Significant elements of creating a business-friendly environment will be reviewed, including:
- Simplifying the process of starting a new business.
- Transparency of the regulatory process.
- Creating public awareness of local business achievements.
In many Ukrainian cities, the procedures for the registration of new businesses still require a great deal of time and money. One way to make the registration process simpler is to establish a single office for the process.
Work on introducing single offices in Ukrainian cities has been carried out by the USAID-funded BIZPRO project. According to the BIZPRO definition, single office means assembling, in any form, government officials from various departments in a common room, to offer citizens better quality information and services in a one-stop format.
An entrepreneur starting new business activity can obtain all the necessary information at one office, complete all the administrative procedures and promptly receive an update on the current legal framework. The single office’s range of services is not limited to services related to registration of a legal entity. Single offices may also render services related to the issuance of various permits, licenses, and the like.
Single office services may include the following:
- Single-counter registration of businesses.
- Advice on matters pertaining to starting entrepreneurial activities.
- Drawing up and issuing permits and licenses.
- Approval of forms and procedures, coordination between local bodies.
- Providing information on taxation and business reporting requirements.
- Providing information on legal framework and on state bodies working with businessmen.
- Providing information on matters related to starting new business activities or changing enterprise profile.
- Hot lines and Internet portals for entrepreneurs.
- Provision of general training on business matters.
- Access to computer databases.
- Development of business plans, performance of market research.
Obviously, this list of services is neither exhaustive nor mandatory for all single offices. As a rule, single offices do not have a fixed list of services; services would depend on local conditions and available resources. Upon conducting an appropriate analysis, each city can determine which workload areas are to be focused on and which are most problematic. Several structural units may be formed to offer different ranges of services. For example, one unit would concentrate on the registration of businesses, whereas permits and licenses will be in another’s competence. After analyzing local conditions, needs, and available resources, each city will choose the optimum solution for itself.
Regulatory policies in localities have been implemented in accordance with the law “On Basic Principles of State Regulatory Policy in the Area of Economic Activities,” which sets forth procedures for the development, adoption, and implementation of regulations. The law stipulates that a series of measures must be performed before a regulatory act can be adopted. The author of any draft regulation must perform an analysis of the regulation’s likely impact on economic activities and secure feedback in the form of comments and suggestions. The draft regulation must be published in a print medium, and a public hearing may be arranged. Upon review and the integration of remarks and suggestions, local authorities publish the approved regulation officially. Basic, follow-up, and periodic monitoring of efficiency should be carried out in respect to every regulation.
As a rule, each city council manages a large number of diverse local regulations. Some of these may no longer be relevant or valid. However, an entrepreneur must be in possession of all current regulations affecting their business activities, as well as being aware of the termination of regulations. Obtaining this information should not take much time or effort. One possible solution to this problem is the creation of an electronic database of relevant documents. Such a database may be posted on a city’s Web site so that citizens may obtain such information quickly from any PC. Businesspeople may be granted an opportunity to get access to the Internet in the local single office or at another organization offering support to businesses. In addition, such databases may be distributed on electronic formats such as floppy disks or CDs.
The positive coverage of business activities is one of incentives for their efficient operation and cooperation with local authorities. This is also a significant precondition for the establishment of public-private partnerships. Holding such public events is mutually beneficial to both enterprises and local authorities. For a business, it becomes an important publicity element, and for the city, it means obtaining a partner and a potential sponsor for local initiatives.