Amid unwelcoming environment, entrepreneurs dropping business ideas

Published: May 17, 2018
SHARES
Email
According to economists, Pakistan’s undocumented economy is as large as its documented economy. PHOTO: FILE

According to economists, Pakistan’s undocumented economy is as large as its documented economy. PHOTO: FILE

KARACHI: Banker Nabeel Ahmed laughed when a naive young man asked if he could help him open a bank account in a new company’s name that was supposed to provide consultancy.

The banker told the aspiring businessman that the opening of an account in a company’s name was not a piece of cake. He would have to get no-objection certificates from several government departments, a highly tedious process. Consequently, the young man dropped the idea of setting up the company.

Start-ups come up with ideas to attract financiers

Such instances are aplenty in Pakistan, and reflected in the country’s poor ranking in the World Bank’s Ease of Doing Business index that has dropped from 144th to 147th place, according to the Doing Business 2018 report.

In the index, a total of 190 global economies were taken into account. Pakistan’s ranking has consistently gone down from 105th in 2012 to 128th in 2015 and now it stands at 147th place. “Even a businessperson, who already has the National Tax Number and has been filing tax returns, has to face so many steps to start a new venture,” Federation of Pakistan Chambers of Commerce and Industry Senior Vice President Mazhar Ali Nasir told The Express Tribune. “Imagine what happens to start-ups when they start working on a new business idea.”

Pakistan’s start-up ecosystem looks promising

According to Nasir, the government has taken a good initiative by constituting a steering committee, which will ensure one-window facility for businessmen.

Already one-window operations had been established, but there were a lot of complaints. However, now the government has formed the committee to address the grievances.

The steering committee has been tasked with implementing the national single-window programme and ensuring cooperation between ministries.

Entrepreneurs look to venture into foods business through Karachi Eat

It will coordinate among different departments, set benchmarks, milestones and targets and try to achieve them. Chairperson of the committee will be the federal minister for finance whereas its secretary will be from the Customs department.

“The business community is hopeful that one-window system will be implemented. This will not only support the ease of doing business, but will also reduce the cost of doing business,” Nasir said.

Elaborating, he said a similar type of data was required to be provided to different government departments when an entrepreneur wanted to start a new business.

This initiative, if it works effectively, will allow the entrepreneur to provide data to only one department, which will then be uploaded on a centralised system where other departments will also be able to retrieve it.

“In Canada and America, an entrepreneur has to spend only around $100 for registering a company. This motivates people to come forward and start working on their idea without any hesitation that they will have to go through a hectic process,” he said.

“The ease of doing business certainly helps promote start-up culture that is certainly good for the economy.” He was of the view that if people came to know that it was easy to get their business registered, then certainly many of them would opt for documentation and become part of the tax net.

According to economists, Pakistan’s undocumented economy is as large as its documented economy.

Published in The Express Tribune, May 17th, 2018.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (1)

  • Ali
    May 17, 2018 - 8:06PM

    Absolutely incorrect to state an NOC is required to open a business bank account in PK. I base this conclusion on my own experience, and if this was the experience of a particular individual, it must be due to the type of business.Recommend

More in Business