19 January 2012
YEREVAN, ARMENIA – UNICON awarded Asian Development Bank contract for Institutional Modernization to Improve Business Environment in Armenia.
Rational public and private investment decisions need accurate and timely disclosure of information relating to the financial condition of institutions. As a Soviet-era legacy, such information was skewed to the needs of the state rather than to the institutions' stakeholders. In 2007-2008, the Asian Development Bank (ADB) conducted a governance, institutional, and corruption risk assessment for Armenia, which covered (i) public financial management, (ii) procurement, and (iii) combating corruption at the central government level. These were important steps in improving governance in the public sector, but their effectiveness requires concurrent measures in the private sector. Armenia recognizes the importance of good financial governance standards in improving its investment climate. Post-crisis, it will be even more important to restore investments, including foreign direct investment. From 2000 to 2010, Armenia’s net foreign direct investment was in the range of 7%-8% of gross domestic product. Increasing private sector participation and investments requires information on business opportunities. Sustaining private sector development is high on the government's reform agenda and is the main driver for sustained growth under the second poverty reduction strategy paper (2008–2021).
In its present state, the Armenian business registration system is totally manual and is characterized by outdated procedures. Since local branches are not linked to the central body, a branch cannot deal with a request for information on a legal entity outside its jurisdiction and must refer the request to head office. The system does contain the register information as prescribed by law and in line with standard European Union practices, and can therefore become the foundation for an effective and efficient online electronic registry. The existing business registration processes suffer from all the weaknesses of a manual paper-based system, including cumbersome procedures for starting a business, and weak reporting. The State Registry Agency has a website which gives useful information on laws and legal requirements. However, it does not provide services such as downloadable and online forms, register searches, etc.
The overall goal of the project is to improve the business environment and to reduce the cost of doing business. The overall goal has two objectives are (i) Full automation, so that the current procedure of manual registration is computerised according to the logical flow of activities. Full automation means that manual intervention is eliminated wherever possible; and (ii) Establishing a “one window” operation in order to facilitate business start-up. The “one window” would enable business registration applicants to submit all the required application forms and supporting documentation to a single entity / location, increasing the efficiency in terms of time and cost savings for business registration applicants in their dealings with Government.