Zvonko Obradovic, Director of APR – Regional Portal of Business Registers to be realized in mid-2017
The Business Registers Agency (APR) received all the financial reports in an electronic form for the first time in 2016, around 61,000 requests were filed to the system for issuing e-building permits, and thanks to reforms in this area, Serbia jumped from the 152th to the 36th place of 189 countries of the world on the World Bank’s Doing Business list. In cooperation with the Tax Administration, progress was also made in simplifying the procedures and reducing the time needed to register a company, the Register of Temporary Restrictions of Rights of Entities started operating, and the number of newly founded business entities in Serbia increased by 3.88%. These are all reasons for APR to view their results in the past year, which they estimated to be full of challenges at its start, in a positive light.
Satisfied with what’s been achieved, Zvonko Obradovic, Director of APR, announces new services for the commercial sector in his interview for eKapija. The Regional Portal of Business Registers should start operating in mid-2017, and the cooperation of businessmen with this state institution will be further facilitated by the implementation of electronic payment and electronic registration.
– The agreement signed by the Ministry of Economy and the UN Office in Serbia will make the procedure of starting a business even simpler and more efficient, as well as being able to be carried out online, and we are ready to make this crucial step and establish electronic registration in the next year – Obradovic says for eKapija.
In the first phase, electronic registration will apply only to founding business entities, but, starting in 2017, we will introduce electronic registration in other procedures managed by APR. This complex challenge will be preceded by migrating the data from the current registers to APR’s new information system. This way, we will move from the single-counter system of registration, started in 2009, to a systemdispensing with counters altogether and enabling our users to carry out registration procedures online. In order for this innovation to be put into practice, the entire legal framework within which APR functions will first need to be changed.
eKapija: Great expectation in 2017 are also tied to the project of establishing the Regional Portal of Business Registers, initiated in cooperation with the European Bank for Reconstruction and Development (EBRD). Connecting with business registers of Macedonia has already begun, and Slovenia, Croatia and Republika Srpska will join in the coming period. Why is it important to establish the portal at this moment?
– Within the process of accession to the European Union, establishing the Regional Portal of Business Registers of the Western Balkans should enable interoperability of business registers of the countries in the region. According to the data from the registers of the six neighboring states, more than 20,000 business entities have a registered member, a branch or an office in one of the neighboring countries in the region which used to make up Yugoslavia. Furthermore, foreign investors in Serbia were employing around 212,000 workers in Serbia in 2015, that is, more than 20% of the total number of employees in the local commercial sector. Of these, business entities from the region were employing around 40,000 persons. There are similar indicators in Macedonia as well, compared to other countries – of the 350,000 employees, 13% are employed by foreign investors from the countries of the region. These data clearly show that the markets in this region are connected and that there’s great potential for mutual growth. eKapija: What kind of information will be available and how will this regional portal function?
– The international tender for the IT company which will realize the solution for establishing the Regional Portal will last until February 2017, following which a contract will be signed. Donations of EUR 390,000 have been provided by EBRD, and APR and the Central Register of Macedonia will form a joint team for the realization of the project. Slovenia joined the signing of the Memorandum of joining the portal though the Agency for Public Legal Records and Related Services (AJPES), and Croatia sent a letter of intent of joining the said project on November 16 through the Financial Agency (FINA). The first public version of the Regional Portal of Business Registers is expected in mid-2017.
eKapija: Which benefits will this kind of register bring to businessmen in Serbia?
– The main benefit is that important business information from the region will become available to businessmen at one click, in the form of an online service. The states from the region will get a unified platform for exchanging data thanks to the connectivity between the registers of several states. In order for this to be possible, our various systems need to be harmonized. For example, APR manages registers with the biggest set of publicly available data and documents, which are published on the Agency’s official web page. In other countries, only the most basic information is published, whereas other registered data is available to users in the form of commercial services.
Therefore, we need to work with our Macedonian colleagues on defining joint commercial services to be offered through this special web portal to businessmen, taking their business needs into consideration.
eKapija: It was announced that the Agency would introduce the possibility of electronic payment in 2017. What does this entail and how will it facilitate operations for business entities?
– Seeing how everyone in the commercial sector now has a qualified electronic signature and that APR has established a system of electronic financial reports, the challenge lying before the Agency is to become, as a state institution with a business account at the Treasury, the first one to enable electronic payment, regardless of whether it’s electronic banking or paying by credit card, along with the inclusion of a POS terminal for paying for services.
eKapija: Financial reports, as you’ve mentioned, are exclusively filed electronically starting with 2016. What are the first results of this practice in the sense of improvements to the process and savings?
– The year 2016 was the first year in which all 157,000 entities submitted their financial reports in an electronic form, with a qualified electronic signature. All micro legal entities were supposed to acquire a qualified electronic signature in 2016 as well and prepare for using a special information system for preparing electronic reports and documentation, that is, to prepare for operating without paperwork. This task was obviously accomplished with success by all business entities and other legal entities and we congratulate them on that!
This is one of the most developed online services provided to the commercial sector by the state, since it doesn’t only include filling out registration forms online, but also creating a large number of electronic documents, along with mathematical calculations control of the validity of reports carried out by the system automatically. Applying an electronic signature to reports and documents was the final step in the process of preparing and filing these reports to APR.
The savings are reflected in the reduction of the time needed to send paper documentation and the abolition of postal expenses thereof, and the true benefit of this system is yet to be felt. The commercial sector did incur certain expenditures in acquiring qualified electronic signatures and adapting to the new system, but switching to e-administration will lead to long-term savings. The Agency has invested its own funds in the construction and enhancement of a special information system for electronic financial reports, which reduces the processing expenses.
eKapija: How many financial reports for 2015 were submitted to APR? In 2015, they were published with delay. To what extent were the deadlines honored in 2016?
– Around 451,000 financial reports of various type, with documentation, were received and processed, with around 122,000 of them filed in the last 2 or 3 days of February through a special information system for preparing, filing, controlling and processing electronic reports. By the end of February, when the deadline for the submission of reports for statistical needs expired, as many as 69% of entities had simultaneously submitted their regular annual financial reports as well, even though the submission deadline was the end of June.
The Agency is bound by law to publish financial reports on its website within 60 days of the reception of complete and accurate financial reports. By mid-April, correct financial reports of more than 60,000 business entities and entrepreneurs had been published. At the same time, the Agency was sending notifications of deficiencies in reports in which they had been found. On May 13, we started providing credit rating services to the commercial sector with the data from the regular annual financial reports for 2015, and 70% financial reports had been published by June 16. To conclude, the processing was carried out at a satisfactory pace in 2016, but it always depends on the accuracy of the financial reports submitted as well, that is, the agility of business entities towards removing the deficiencies noted by APR in the procedure of control and processing.
eKapija: In the past three years, APR has recorded an increase in the number of newly founded enterprises. What has led to this trend and what are the projections for the coming period?
– From January till November, 39,244 business entities were founded, of which 7,810 business associations and 31,434 entrepreneurs. In the eleven months, the number of business associations increased by 3.88%, whereas the number of entrepreneurs increased by 1.68% compared to the corresponding period of 2015.
As for deletions, 4% more business entities were deleted in the first eleven months from the register, but also 49.25% fewer entrepreneurs than in 2015.
The increase in the number of the newly founded business entities has had a positive impact on the total number of business entities in the country. At the moment, the business registry has 125,677 business entities and 228,746 entrepreneurs with the “active” status, whereas, on the date of December 31, 2015, there were 16,913 fewer. All these indicators point to a slight improvement of business conditions, as confirmed by the World Bank as well in its annual business report, by the IMF and other international organizations. According to macroeconomic indicators, the total business activity increased slightly (0.7%), the annual industrial production grew (8.2%), the total investment and credit activities, as well as the export, also grew (7.8%) and so did the positive impact of low inflation on the operations of the commercial sector (1.5%).
A slight revival of business activities influenced the operations of business entities, and APR’s analysis of the results of operations and financial resources shows that, in total, business entities were operating with profit in 2015. However, APR also clearly pointed to the fact that the problems of high debts and insolvency, as well as big accumulated losses, couldn’t have been overcome over the course of a single year with positive results. eKapija: What are the practical results of the Register of Temporary Restrictions of Rights of Entities, which was implemented in mid-2016?
– The central register of temporary restriction of rights of entities registered at APR started working on June 1, but true effects of its implementation are expected to be seen in the coming period.
This register, which is still being formed, systematically gathers the data on business entities, owners, directors, members of supervisory boards and other bodies that have had criminal, civil or administrative sanctions imposed against them, which will enhance the transparency of business information in Serbia and raise the degree of security of participants in our legal system. The data will be directly entered in the registry by authorized bodies or taken from other institutions through web services, such as have already been established with the Tax Administration and the National Bank of Serbia, whereas an expansion of the range of users, that is, submitting entities, to include courts, the Civil Appellate Court, inspection etc. is expected next year.
eKapija: Which goals has APR set for 2017?
– In addition to the Regional Portal of Business Registers of the Western Balkans, our priority will be to continue the reforms in the areas under the competence of the Agency: starting a business and running the central information system for electronic filing of applications.
In 2016, Serbia made progress in the World Bank’s Report (Doing Business). In the “Starting a Business” category, our country placed 47th, whereas the greatest progress was made in the “Dealing with Construction Permits” category, as the introduction of electronic permits brought us from the bottom of the list to the 36th place on the list of 189 countries. We will strive to once again make considerable progress in the competition with other countries.
We also aim to facilitate the founding of new companies and entrepreneurs by implementing electronic payment and electronic registration, to enable a quicker and easier carrying out of procedures for our citizens, to make APR even more efficient and thereby secure a better rating for Serbia compared to other countries.