Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Fiji. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business |
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No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Check the uniqueness of the proposed company name and reserve name The entrepreneur must first conduct a search of the Companies, Business Names, and Trade Marks Register to ensure that the name applied for is not confusingly similar (1–2 days). Computerized (basic) and manual search systems are both available. The Government of Fiji has introduced a website (www.egov.gov.fj) for all applications for name reservation to be made online. Hard copy applications are no longer accepted by the Registrar of Companies unless an online application is made first. The application is processed once the hard copy of the application together with supporting documents is submitted to the Companies office. The processing time of the application is approximately 5 working days. Application fees for name reservation however still have to be paid in person at the Registrar of Companies' Office. The application will take a week to process, and if it is successful, the company name will be reserved for 30 days (with a one-time extension). Company incorporation documents must be lodged with the Registrar within this time. It costs FJD 5.63 for reservation of the name and FJD 1.13 for company name search. | 8 days | FJD 5.65 |
| 2 | Obtain declaration of due compliance sworn by lawyer Fees may vary from FJD 1,000 to FJD 2,000. The Declaration of Due Compliance can be sworn by a lawyer engaged in the formation of the company or by a director or secretary who is named in the Articles of Association of the company as a director or secretary. The Cost of FJD1200.00 outlined above for a lawyer is not limited to he or she swearing the Declaration of Due Compliance. The Cost includes searches of the various registers to check for similar names, submission of the name reservation application, preparation of the company's memorandum of association, articles of association, particulars of directors and secretary, notice of situation of registered office and declaration of due compliance Where a company director or secretary swears the Declaration of Due Compliance, the Cost is not substantially (if at all) reduced because in practice and in most cases lawyers and/or accountants still prepare most of the documents necessary to register a company. | 3 days | FJD 1200 |
| 3 | Register the company with the Companies Registrar Under the Fiji Companies Act 1985, companies must submit the following company documents to the Companies Registrar along with the following company incorporation documents in order to register the company and obtain a certificate of incorporation: • Current reservation of company name • Memorandum of Association and Articles of Association • Form 201, Notice of situation of registered office. • Form 203, Particulars of directors and secretary. • Form 208, Declaration of compliance with the requirements of the Companies Act (sworn by a lawyer or a director or secretary named in the Articles of Association of the company as such who was engaged in the formation of the company) The Registrar of Companies now requires a Tax Identification Number (TIN) from Fiji Revenue & Customs Authority before issuing the Certificate of Incorporation of the company. This was communicated by the Registrar of Companies by a circular dated 13 August 2010. Accordingly, the practice now is as follows: (a) After the documents are lodged at the Companies Office, the Registrar of Companies will release a stamped version of the Memorandum and Articles of Association to the applicant. (b) The applicant then needs to fill in an “Application for New or Changes to Registration of Companies, Partnerships, Trust or Estates” form. The form is available from the FRCA website. (c) After the application form has been completed, the signed original version of the application form together with the stamped version of the Memorandum and Articles of Association (and any other documents that may be required by FRCA) needs to be submitted to the Fiji Revenue & Customs Authority (FRCA) for issue of a TIN (Tax Identification Number) to the company. This requirement is consistent with the circular dated 13 August 2010 issued by the Registrar of Companies and results in a situation which seems FRCA issue a TIN for a legal entity that has yet to come into existence. (d) FRCA will process the application and assuming the application is in order, will issue a letter to the company confirming its TIN . As a result, the process of business incorporation takes longer than before (about 20 calendar days - 15 working days) since the entrepreneur needs to wait until the TIN number is issued ir order to incorporate the company at the Companies Registry . The registration fees vary depending on the authorised capital of the company. For example, for a company with an authorised capital of FJD 65,470.00, the registraton fee would be approximately FJD163.13 and stamp duty of FJD10.00 for the stamping of the Memorandum of Association and Articles of Association. | 21 days | Registration fee FJD 133 + stamp duty FJD 20 for the stamping of the memorandum and articles of association ($FIJD 10 each) + FJD 12 (Forms 201, 203, 208 -$FIJD 4 each) |
| * 4 | Register for Tax Identification Number (TIN) with Fiji Revenue and Customs Authority (FCA) As of August 15th, 2010, a nw requirement is in place at the Company registry. Before a company can be registered, it is mandatory to obtain the TIN number from Fiji Islands Revenue and Customs Authority (FIRCA). The TIN nubmer will be required for all other procedures as well. As a result, this has complicated the process of of registration. | 1-2 weeks, (simultaneous with previous procedure) | no charge |
| * 5 | Receive inspection by FRCA By law, since December 2004, if VAT registration is required, the Fiji Islands Revenue and Customs Authority (FIRCA) requires the inspection of the business premises. Since 2007, the inspection has been the practice as FIRCA inspects that there is a physical office during business hours. | 1 day, (simultaneous with previous procedure) | no charge |
| 6 | Submit TIN number to Companies Registry to obtain final incorporation certificate | 1 day | no charge |
| 7 | Register with Training and Productivity Authority of Fiji for statutory training tax Statutory training tax is 1% of payroll. The submission of these documents is done by mail. The Training and Productivity Authority will send the form by mail to the office of the new business. Once completed, the form is mailed back to the agency. | 3 days | no charge |
| * 8 | Obtain the National Fire Authority Certificate (NFA) after inspection The compliance requirement is a new requirement of the Suva City Council. The training is for 3 days. The entrepreneur must request NFA for an inspection of the business premises. Once the request has been made, the NFA officials will inspect the premises during opening hours of the business. If NFA is satisfied with the results of the inspection, it will then issue a compliance certificate to the entrepreneur. Upon receipt of a compliance certificate from NFA, the entrepreneur must conduct fire safety training for its staff. NFA officers can, for a fee, teach fire safety preventative and protection measures. The employees are trained to respond to a fire incident and how to use the fire safety equipment installed in the workplace. Quite a number of organizations in Fiji have undertaken this fire warden training. | 1 to 2 weeks, (simultaneous with previous procedure) | FJD 50-150 (VAT excluded) depending on the size of the business |
| 9 | Obtain the compliance letter from the Minister of Labour after inspection Since November 2011, the OHS issues a letter of compliance to all type of businesses after an inspection of workers and non workers in the workplace. In order to obtain this letter, the entrepreneur needs to submit: • NFA certificate • business registration certificate • TIN letter After 3 days of submitting the documents, the OHS inspects the business and if all the compliance requirements are met, the compliance letter is issued in situ. The compliance letter needs then to be submitted to the Suva City Council in order to obtain the business license. | 3 days | FJD 90 |
| 10 | Apply for a business license from the relevant licensing authority ( Suva City Council) The company must obtain a business license from the relevant licensing authority for each place it carries out business. This license is renewable annually. Depending on the activity, the fees range from FJD 100 to FJD 500. The list of industries is comprehensive. | 1-2 weeks | FJD 300 |
| * 11 | Register as an employer with the Fiji National Provident Fund | 1-2 weeks, (simultaneous with previous procedure) | no charge |