New Commercial Companies Law encourages Private Sector Growth

Fri. 31 of March of 2017, 02:23h

On the 27th of March, the National Parliament approved the Commercial Companies Law. The Government developed the law in order to simplify the creation of small and medium sized commercial enterprises in line with its policies to boost private sector growth and encourage economic diversification. The draft law had been prepared by the office of the Minister of State, Coordinator of Economic Affairs (MECAE) and discussed with the private sector and relevant ministries before it was approved by the Council of Ministers.

The law’s recent approval in the National Parliament represents a significant step in the implementation of the Government’s  legislative reform process to improve the business environment, which includes a review of the regulations for registration and licensing, and the creation of a legal regime for insolvencies and business recovery.

The changes included in the Commercial Companies Law eliminate elements that were outdated and introduce others which are focussed on future growth. These simplify the establishment and management of small and medium-sized enterprises, and the legal regime of corporate business, introduce mechanisms to improve the business image of Timor-Leste to foreign institutions, notably the World Bank, and ensure greater consistency with the rest of Timor-Leste’s commercial legislation, in particular the commercial register.

The Commercial Companies Law are an important part of measures to “create a favourable environment for the implementation and cost effective operation of business activities” as articulated in the Government’s 2015-2017 Guide for Economic Reform and Growth of Timor-Leste.