Dozens of small businesses will no longer need to wait for Civil Defense approval before applying for their commercial licenses, according to new rules announced by the Ministry of Economy and Commerce (MEC).
The new measures take effect today and apply to businesses in 55 categories, including beauty salons, car showrooms, cafes, mini-marts, clothing stores and cycle repair shops.
These companies no longer need to get pre-approval from Civil Defense before starting their paperwork to secure their Commercial Registration (CR), a document needed by all businesses before they can legally operate.
Announcing the decision in Arabic, the ministry said on Twitter: “MEC to start a class of 55 licensed businesses without a pre-condition to obtain a certificate from Civil Defense.”
وزارة الاقتصاد والتجارة تبدأ بترخيص 55 فئة من المنشأت التجارية بدون شرط الحصول المسبق على شهادة الدفاع المدني. (2/2) pic.twitter.com/CDwCKxK3Tu
— وزارة التجارة والصناعة (@MOCIQatar) May 16, 2015
According to the Ministry of Interior on Facebook, some businesses should also now be allowed to renew their CRs prior to obtaining Civil Defense approval.
Cutting red tape
The change is being billed by authorities as an “incentive” for entrepreneurs to set up small and medium sized operations, who can now be issued Civil Defense certificates up to 30 days after receiving the CR.
However, shops are still required to obtain the necessary safety approvals before beginning trading, the MEC said as it announced the joint initiative with the Ministry of Interior’s General Directorate of Civil Defense.
Previously, the requirements for start-ups applying for a CR included having a one-year lease for Civil Defense-approved office space as well as QR200,000 (US$54,921) in a bank account.
However, entrepreneurs have complained that the system produces caused unnecessary delays to the launch of their businesses, as waits particularly for Civil Defense sign-offs can be lengthy.
A businessman running a garage in the industrial area was quoted by The Peninsula last year as saying: “The unending wait to get fire and safety licenses is killing our businesses.”
He continued:
“There are instances where entrepreneurs had to wait 10 months to get a fire safety license. Waiting for such a long time to start a business means that the entrepreneur is losing big money against his establishment cost.”
Fire safety requirements in Qatar were tightened months after the 2012 Villaggio fire, in which 19 people – including 13 children – died.
New rules
The MEC said in a statement in Arabic that the new rules applied to businesses in premises of no more than 250 sq meters and aimed to “reduce the length of time to extract and renew business licenses.”
The categories of operations which the waiver applies to include: confectionary and flower stores, telecom services, calligraphers and painters, beauty salons, lawyers’ offices, travel agents, trade events, car showrooms, massage parlors, tailors, internet cafes, electricians, laundries, jewelers, cycle repair shops, supermarkets, grocery stores, tobacconists, clothing stores and opticians.
A full list is published in Arabic on the MEC’s website.
As businesses still need to get sign-off from Civil Defense before they are legally allowed to start trading, it is not clear how the new regulations would actually ease the burden on entrepreneurs.
Over the past few years, Qatar has been stepping up efforts to encourage more people to set up their own businesses and reduce the dependency on the public sector for providing jobs.
A survey conducted last year by Ooredoo found that youth in Qatar had some of the highest entrepreneurial ambitions among their GCC peers, but that regulatory requirements were stifling their enthusiasm.
Previously, experts have called for fewer regulations to help more small businesses get off the ground.
Speaking at Global Entrepreneurship Week last year, Thomas Emerson, a professor at Carnegie Mellon University Qatar, said the country needs to “lower the barriers” to starting a new business.
He specifically suggested streamlining the business application process, which he described as one of the “barriers to business creation.”
Thoughts?
