Strategies of the Development of Entrepreneurship and SME

If the entrepreneurial activity requires licensing, it is necessary to apply to theappropriate licensing body to obtain the license. The types of activities subject to licensing aredefined by the Law on “Licensing”. There are two types of licenses. Simple license, which isgiven by the Ministry of Finance and Economy within 3 days since submitting the necessarydocuments. Normally, the type of this license is obtained for an indefinite period of timewithout consideration by the licensing commission. Compound license is given for an indefiniteperiod of time, unless otherwise is specified by law. The license is issued within 30 days ofsubmitting the application after consideration by special licensing commission, which may becomposed by the representatives of various agencies and ministries. It must be said that thedocuments for obtaining the license are exact and not many.Not withstanding the chosen form of registration, in case of implementing export orimport transactions it is also necessary to be registered at the State Customs Committee. Thecustoms clearance procedures of exported or imported goods are carried out at the customhouseof the region where the company was registered.One of the most important issues to launch entrepreneurial activity are endeavorsdealing with the procedures, time, and costs to build a warehouse, including obtainingnecessary licenses and permits, completing required notifications and inspections, andobtaining utility connections. In general, there are about 19 requirements, the satisfaction ofwhich takes around 214 days. These include applying and obtaining architectural-constructionalassignment (38 days), requesting and obtaining technical conditions approval from waterauthority (20 days), architectural plan approval from telecommunications provider (7 days),architectural plan approval from electricity provider (17 days), expertise approval ofarchitectural drawings (20 days); submitting Architectural Drawings after Expertise Approval tothe Municipality and obtaining building permit (22 days), requesting ground work inspectionfrom licensed Geologist (1 day), receiving foundation inspection (1day), frame inspection(1day), roof inspection (1 day), requesting and connecting to electricity services (10 days),requesting water and sewage services (9 days), receiving water and sewage inspection andconnecting (1 day), requesting and connecting to telephone (8 days), requesting and obtainingcompletion of construction certificate (14 days), requesting final inspection from themunicipality and applying for occupancy permit (28 days), receive on-site final inspection andobtaining occupancy permit (1 day), registering the building with the Cadastre (14 days),Receiving on-site inspection for building registration (1day).One of the important steps of doing business is registering property. To this concernfirst the seller should obtain a special reference on restrictions towards the property at theappropriate local office of the State Committee of the Real Property Cadastre within 2-3 days.The total cost to complete the procedure is AMD 19,000.The second requirement is to makepayment of stamp duty (for notarization) and notarization of sale-purchase agreement bypublic notary within one day. The cost is AMD 20,000 (Stamp duty for Notarization andNotary’s fees). After it the local office of the Cadastre registers the title and provides aregistration certificate to the new owner. For this is needed 2-7 days (7 days regular procedureand 2 days the fastest). The cost is AMD 40,000 (Stamp duty for registration) + AMD 10,000(registration fee) + AMD 1,000 (cost of cameral works) + AMD 3 per square meter (cost ofmeasurement works for land) + AMD 20 per square meter (cost of measurement works forbuildings and constructions).Ease and convenience of doing business in any country is closely related to the issues ofprotecting investors. There are some dimensions of investor protection: transparency oftransactions, liability for self-dealing, shareholders’ ability to sue officers and directors formisconduct, which define the strengths for investor protection. It is worth to mention that inArmenia the existing mechanisms for investor’s protection are not strong and capable yet.There is much to do to achieve notable results in this area.91