Delegation of public services to a private entity the colombian experience - luz rincon

Delegation of Public Service to a Private Entity - The Colombian Experience

Mrs. Luz Marina Rincón MartínezCRF 11th edition | Rio de Janeiro | Brazil March 2014

Colombian Case:

More than an outsourcing a delegation by law. Registration with chambers of commerce

“Most Business Registers are run by The Government and are centralized”

- European Commerce Registers’ FORUM Report 2013

*European Commerce Registers’ FORUM Report 2013 - Figure 3

Who Operates the Business Registry

The court – based system of registration was in place before

• Faced several problems and was ineffective

• Was necessary to remove responsibility for funding registration from the state budget

• Since 1890 the law gave the chambers of commerce the status of trade and consulting bodies in trade and industry issues, to represent the general interest of the commercial activity before the government

The Colombian Constitution provides that individual may carry out administrative functions and also determine the legal regime applicable to individuals who performs public functions and regulates the exercise of their functions

Law 28 of 1931 transfer responsibility of the mercantile register to the Chambers of Commerce

They have the ultimate administrative responsibility for: • Delivery of the registration services• Including administrative procedures associated with

starting a business • Contact with customer • Full authority to run the Mercantile

Registry

Nature of Chamber of Commerce in Colombia

• Private, associative nature and nonprofit created by law

• Legal institutions with juridical capacity, with statutory functions an entrusted with official functions including registries

Nature of Chamber of Commerce in Colombia

• Integrated by traders registered in the commercial register

• Apart from the public service performed, their organization, management, nature of their employees and the existence of statutes governingthem show their corporate, associative and private nature

• 57 chambers throughout the country each one has its own jurisdiction, responsible for the maintenance of the Mercantile Register (MR)

• Since 2005 a national data base called RUES (Unique Business and Social Registry - Registro Único Empresarial y Social) was set in place joining the 57 chambers

• This private network provides free basic level Colombian companies information online via RUES Website – www.rues.org.co

Decentralized but centralized

Decentralized but centralized

• The RUES allows users of any jurisdiction to approach any chamber in the country to

acquire a certificate,

register a new business

perform registry changes

• The operating cost of RUES is funded by all the Chambers

• Compensation costs system remunerates services rendered between Chambers

• Mandatory registration is determined by law

- Diversity of business cases subject to register

- 80/103 are related only to corporations

• Registry operation and compliance standards are regulated

• Types of business association are defined by law

Legal framework

• Fees charged for registry services are regulated by Goverment

Legal framework

• Surveillance and control is exercised through the Superintendence of Industry and Commerce (SIC)

• The scope of examination includes to do legal checks in all of business cases

• Claims may be filed firstly before the Chamber and appealed before the SIC

• Further more Chambers of Commerce shall attest to the legality of the acts proposed for registration, if law requirements are not met the registrar can deny registration

Registry

• Public by law and open to all potential agents in the market

• Interested persons may access the data base and consult all the information supporting a registry (bylaws, acts, historic information, etc.)

• The legislation allows to market the information only when value is added

• Basic Information available trough RUES website

Measures taken to prevent corporate identity theft via the registry

A new regulation was recently establish

1. For companies who decide to enroll in the Fraud Preventive System (SIPREF), no acts or changes can be registered, without previously verifying that it comes from the right holder

2. For all companies:a. Identity of the acting person is validated online through

biometric matching fingerprint, against the database of the National Civil Registry

b. ID check against the National Civil Registryc. E-monitor services that notify register user about

changes (email, sms, etc.)

Doing Business 2014

4th in Latin America

Doing Business Report 2014

Starting a Business

3. Post-registration• Bank certificate• Tax Payer ID• Family compensation fund, Governmental

learning service, Colombian family institute• Health coverage• Pension fund• Administrator of professional risk• Private pension fund• Severance fund

1. Pre-registration activities• Public Deed (Notary public - few)

2. Registration• Name verification• Pre-taxpayer ID• Registry of commerce

Starting a Business

15 days

Registry of Commerce + "pre-taxpayer ID"

Open a bank account

Final tax payer ID number

Family compensation fund, Governmental learning service, Colombian family institute

Health coverage

Pension fund

Administrator of professional risk

1+2

1

1

10

6

1 - 3

1

Private pension fund1

Severance fund1

9 procedures

Registers managed

Mercantile

Bidders for Government Contracts

Non-profit Institutions

Foreign NGOs

National Tourism

Solidarity Economy - Cooperatives

Gamming and Gambling Activities

Oversight and Social Accountability Committees

9

Security Interest

20

A look at the Bogota Chamber of Commerce

21

The Bogota Chamber of Commerce was established on October 6, 1878, as an entity representing

the interests of businessmen and advisory body and government consultant

135 years old

Jurisdiction

Bogota and 59 municipalities in Cundinamarca

Main financial figuresMillion US Dollars

Equity

2011 2012 2013

360409

480

Main financial figuresMillion US Dollars

Revenues

2011 2012 2013

69

72

80

Higher Purpose

25

"We are allies to make your business dream

come true, be sustainable, create shared

value and have a prosperous Bogotá – Region

with more and better businesses"

13 Registry service offices 4 Entrepreneur centers

5 Community Attention Centers1 Bogota Export program office

Our Infrastructure

9

Documents are scanned

File the documents in any branch

Certificate attests mercantile information

OK?

Legal check by CCB lawyer

Deny or changes are required

Business case is Register or/and

Identification number is assigned

Registry Process

Start

Processing time for incorporations and changes

15 days 8 labor hours

vs

Business Service Center

Characteristics

• Promotes the creation and establishment of companies

• Supports entrepreneurs, foreign investors and users

• Simplify procedures

Advantages• The process of companies formation

was reduced to a single step

Coverage • 21 Chambers of Commerce in Colombia

¿Why CAEs?

• Procedures decrease • Costs reduction• Risk minimization• Quick and Formal activities start

Register

Corpora-tion; 40%

Other Business;

60%

Large; 2.17% Medium; 6.06%

Small; 21.37%

Microenter-prise; 70.40%

Micro97,77%

CompaniesOne man company 27.416Regular general partnership 1.263Limited partnership 13.655Joint-stock limited companies 1.407Limited liability companies 225.453Corporation 18.768Simplified Stock Corporation 114.362

Other businessPersons holding professional trade 515.649Commercial establishment and branches 436.704

Number and types of companies in CCB mercantile registry

It is a for profit legal entity by shares, the nature of which will always be commercial• May be formed by one or more persons or legal entities• Shareholders will only be responsible for providing the

capital contribution promised to the SSC• Shareholders will not be held liable for any obligations

incurred by the SSC• Upon the filling of the formation documents before the

mercantile registry, de SSC will form a legal entity separate and distinct form its shareholders

Simplified Stock Corporation – SSC

• Shares issue by the SSC shall not be register by the stocking exchange

2007 2008 2009 2010 2011 2012 2013

4,947

14,092

32,129

56,447

80,656

106,034

114,632

Simplified Stock Corporation – SSC

96%Of total

companies incorporated

Mercantile registry volume transaction perform 2013

Registry services # of activities Participation

Mercantile 5.709.416 94,9% New business 72.761 1,2% Commercial establishments 41.785 0,7% Renewal of corporation 253.633 4,2% Renewal of other business 160.462 2,7% Renewal of commercial establishments 229.524 3,8% Changes of information 318.424 5,3% Certificates 4.632.827 77,0% Bidders for Government Contracts 20.458 0,3% Non-profit entities 284.662 4,7%Total 6.014.536 100,0%

• Registry renewal• Online certificates• Registry of – Mercantile– Bidders for Government

Contracts– Non-profit Entities– National Tourism– Foreign, private, non-profit

entities– Solidarity Economy– Natural and legal persons

engaged in the activity of gaming and gambling

• Public registration of citizens oversight organizations

• Contact us• FAQ • Chat • Virtual Call • Comments, complaints and

compliments • Virtual Assistants• Tutorials

• Names of companies active in the commercial register (homonymy)

• Sorter goods and services • Economic Activities (ISIC Code

and Treasury) • Make before Superintendence

of Industry and Commerce • Registry Information• Databases and business

information online • Procedures and formalities

before the CCB• Corporate Law Library and

Registry

E-services

Transactions Consultation Information

E-SignatureDocuments signed online with legally compliant e-signature software are as valid and binding as traditional pen-and-paper documents.

• We accept all kind of online payments credit cards, debit cards, direct transfer (PSE)

• When the customer does not want to pay online the system can generates electronic bills to be printed and pay either in a bank, or any CCB offices

• Agreements with the financial system allows us to collect payments in 1,041 bank offices and 137 non-banking correspondents

• During 2013 64% of the registry income was collected through different channels than the CCB offices.

Payments

* Ranking according to Alexa.com

Our Main tool for contact and interaction with our users

https://www.ccb.org.co

WEBsite

Global Ranking: 62,725*Colombian Ranking: 261*

Global Chamber of Commerce Ranking: 3*

16 millions unique hits on 2013

• Chat• FAQ´s• Complaints, suggestions

and compliments• Virtual forums• Comments on posts• B-learning courses• Videos• Multimedia aids and

tutorials

16.493Fans

36.939Followers

+ 10.309Views

+ 500Users

5.855photos

3rd* one between Chambers of Commerce

2nd* one between Chambers of Commerce

* Ranking according to Alexa.com

Social Networks

Linked In

You tube

We manage our business with excellence

We use Project Management Institute (PMI) standards to support the implementation of key strategic programs

Risk management – COSO ERM Risk framework

Certified ISO 9001:2008

Awards

Iberoamerican Quality award

One of the best 5 projects in corporative

social responsability2nd Social Innovation

experience

Colombian Quality in

Management award

2009 201120082006 2007 2010

High technology 6th place between 100

companies in Colombia

2012

Colombia Online Award category "Big Business"

Conclusions

Where Public Registrars don’t have the right ability to render services efficiently, Chambers of Commerce as in the Colombian case have prove to be a good alternative

• Natural ally of business and companies

• It´s non profit nature allows them to invest remaining operational balances in the business community

• The private sector is willing to support their activity if services are rendered efficiently and at affordable prices

• Facilitates interaction between the government and private sector in benefit of business sector

Thank you!

Luz Marina Rincó[email protected]

43

A look at the Bogota Chamber of Commerce

Business Strengthening

companies created with our support on 2013

4,346

“Formalized” business

13,978


We made several trade shows with business expectations of

USD$106.5 Million

Funding support to 150 companies reach

USD$5.5 Million


We develop 3 commercial platforms for music and visual arts sectors

ADR – Alternative Dispute Resolution

Arbitration

296cases

7,511 cases

Conciliation

agreements with a level of 80%

60companies

Internal Business

ADR


ADR – Alternative Dispute Resolution

school conciliation


47,996cases

CLUSTER Michael E.Porter


“geographical concentration of companies and institutions in

the same business, with common and complementary

activities”




activities”

CLUSTER

8Cluster

initiatives

Michael E.Porter



activities”

CLUSTER

8Cluster

initiatives

• IT & Software• Business turism and events• Creative industries and content• Fashion & apparel• Footwear & leather goods• Jewelry and fashion• Graphic communication• Cosmetics

Michael E.Porter



activities”

Public policies proposals

Private-publicarticulation

Knowledge management

Business Enviroment

We create 6 subsidiaries …