That redundant, slow, and expensive documents is usually one of the main reasons why a business owners commit acts of corruption. This is the case in many cities in the country and Puebla is no exception. This situation can frustrate and hinder new investment and, in the worst case, lead to informality or business closures.

According to the National Survey on Regulatory Quality and Government Impact on Business (ENRIGE) 2020, Puebla is the second municipality, from 42 analyzedwhere more entrepreneurs, seven out of 10 (69.5%) see comply regulations and time required to process as barriers to doing business. The bit of information offered by the municipality is another matter referred to 46.7% of those surveyed were from Pueblaa figure that exceeds the national average (28.9%).

The above describes it better. Berenicea young woman who started a water purification project in the Valle del Rey neighborhood in 2019. “The truth is that they never tell you what you need to bring, they give half the information, the whole mess, it’s a shame that can use technology, page net dependency is not renewed”, he also ensures that the procedures and permits to open his business are convoluted, because the information provided by the authorities is given a “dropper”, forcing interested parties to go again and again to government offices.

But, contrary to what local entrepreneurthe city government’s position is different, because they maintain that open a low risk business can be done in five working days, as long as you have all the documentation. However, everything shows that Berenice’s opinion is not an isolated case, because According to a survey conducted by Ethos among entrepreneurs from 15 cities in the country, Opening a business takes longer in this municipality, as they take between 31 and 60 days. “It was terrible: I literally went every day with all my documentation, every day the manager changed the game and found a new error, so I had to print it all over again. The procedure is never first time because they give you step by step instructions. Even the workers from different dependencies knew me so much that they forced me to give up”, recalls Berenice and emphasizes that this process took almost two months.

LICENSES AND INSPECTIONS, ENTREPRENEUR’S CALVARI

In this city, one requirement could hamper paperwork, with the risk of businesses dying without achieving formal registration, as would be the case with Berenice, because processing health clearance and notification of opening a business is an ordeal.

Apart from the above, there are unnecessary procedures such as proof of partiality and the issuance of an official number. In this regard, the consultant and president of the Mexican Franchise Network, Francisco Lobato Galindo, believes that this document is unreasonable, because when a place pre-existing, the authorities have restricted the property with respect to a public road, marked the restriction or influence it has and indicated the official number corresponding to its entrance. However, without this evidence, the city government did not grant the operating permit.

Lobato, also founder of consultancy Xpert Bisnis Businessand mostly Puebla serious structural problems, since such complex and free procedures are designed to encourage corruption. “It’s not feasible in the nation’s capital city, if you want to open a business you have to have at least 40 procedures. This situation favors reward collection to expedite authorization.”

This is confirmed by Gonzalo Arellano, who is also the owner of the refining plant. “You have to distribute money for firefighters or for Civil Protection, among other dependencies, you have to spend a lot. Not only do you invest in your product and where you will work, before and after you have to distribute more money to all relevant agencies, this is complicated and is an ordeal.” Faced with this reality of corruption, unnecessary paperwork and slow processes, citizens and authorities are organizing themselves to find solutions.

NEW HOPE: UNION OF BUSINESS, GOVERNMENT AND OECD

Since February last year, to promote a better business environment, employers and governments, both state and local, have drawn up a joint plan with the Organization for Economic Cooperation and Development (OECD). The project is called “Increasing competitiveness for economic recovery” and aims to simplify and digitize procedures. The OECD begins by evaluating the procedures that have the most impact on the company, then issues recommendations (based on international best practice, particularly from countries such as the UK and Canada). The following accompanies the Puebla City DPRD in its implementation.

Even though a country like Yucatan and Colima have successfully digitized, with the help of the OECD, some of their procedures for opening a business, Puebla will be the first entity in the country who will have platform that centralizes both the procedures of the country and those of its capital. In addition, the OECD project will achieve reduce from 288 to 165 business opening procedures and it’s 100% online.

This project will complement the program “Virtual Window“a platform where you will have access to all kinds of city information and where you can manage some procedures such as land use certificates, business opening notices, operating permits, among others; all this without having to go to the city office and eliminating waiting times and long lines. Next, project ‘Opening Puebla’s Word‘ will allow entrepreneurs to open immediately and from then on they will have 90 days to formalize their business setup.

puebla can attack the structural problems that have plagued him for decades and improve business environment in this municipality. During 2022 it will be seen whether the above efforts are sufficient to incorporate more informal workers into formalities, while eradicating or reducing the costs of corruption to promote the economic development of the municipality.

*This report is part of the series “The odyssey of opening a microbusiness in Mexico”, coordinated by the Ethos Public Policy Laboratory