Despite a drastic slump in local business registrations between April and May last year due to the country-wide Covid-lockdown, the second half of the year actually witnessed a sharp increase in the registration of close corporations (CCs). This is evident from the 1140 and 1231 CCs, respectively registered in September and October 2020.
The latest figures from the Business and Intellectual Property Authority (BIPA) indicate that notwithstanding challenges posed by Covid-related restrictions in 2020, the Namibian business landscape last year grew with 12 013 new business entities registered. Of these, 72% were CCs, followed by defensive names at 19%, companies at 7% and section 21 companies at 1%. The authority only registered four foreign companies during the period.
According to a statement issued by BIPA spokesperson Ockert Jansen, the registration of defensive names also peaked in September 2020 with 376 registrations. Business registrations from Q1 and Q2 (when 4382 entities were registered) to Q3 and Q4 (when 7633 entities were registered) increased by 74%.
“The growth 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,” Jansen stated.
Furthermore, Jansen noted that 2020 also saw the de-registration of 521 CCs and 206 companies, which is the lowest number of de-registrations in five years.
“A decline in business registration was observed during December 2020 when the authority 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,” Jansen explained.
Meanwhile, online registrations for 2020 totalled 2026, with the E-services portal of the Ministry of Industrialisation and Trade (MIT) off to a slow start, it nonetheless suggested a keen interest from entities to make use of the online application process. The portal was launched in December 2020 as a combined effort of MIT and key agencies, inclusive of BIPA, to provide seamless and responsive client services to business owners.
Also, between 1 January 2020 and 31 December 2020, clients requested a total of 11 583 files with an average turnaround time of three days, while BIPA’s head office in Windhoek’s Northern Industrial area serves an average of 4 500 walk-in customers per month.
Said Jansen: “For the period under review, BIPA’s operations were negatively impacted by insufficient revenue collection, stemming from challenges with its outdated and manual systems. Currently, only 30% of BIPA’s business registration documents are available in soft copy. Subsequently, many business entities are non-compliant with their obligation to pay annual returns, increasing the authority’s debt book and burdening its human capacity. Lack of sufficient capital budgets further aggravates the situation, as funding is not available to improve its online registrations systems, nor its automation and decentralisation endeavours”.
Jansen continued that despite challenges, the time it took to register a business with BIPA, according to the World Bank’s Ease of Doing Business Index, improved from 33 days in 2019 to 21 days in 2020.
“The improvement can be attributed to the authority improving its turnaround time on name reservation approvals from 18 days in 2019 to six days in 2020. BIPA achieved the reduction in the number of days it took to approve a name reservation by 12 days in 2020. This achievement is significant, given that BIPA suffered numerous challenges posed by the impact of the Covid-19 pandemic in 2020, such as personnel shortages and reduced income,” Jansen added.
BIPA now foresees a further improvement in the ‘Starting a business’ indicator of the Ease of Doing Business Index, as the authority’s latest statistics show name reservations can be processed within three days.