2 Notaries and small businesses
Notaries are public officers appointed by government and public agencies to certify documents, thus making them official. Their role is to be impartial. The powers that notaries have vary from country to country, and sometimes region to region.
For example, in Italy notaries are the only authority able to authenticate property transactions, and have the authority to execute public deeds of incorporation.1
The World Bank Doing Business report states that small business start-ups use notary services in 76 of their listed 189 economies worldwide, and 40 of these 79 economies legally require start-ups to do so.
The costs of using a notary
Notarisation can be costly. People setting up businesses can incur notary fees which account for 5.6% of income per capita. These rates are highest in OECD high-income economies, followed by Latin America and the Caribbean. In some economies such as Costa Rica2, notary fees for business registration are fixed by regulation. In others, notary fees are negotiated on the basis of the services they provide.
Small businesses in the Organisation for Economic and Co-operation and Development (OECD) high-income economies widely use notaries when setting up their business.
For example, in Italy, Poland, and the Netherlands a company’s public deed of incorporation and bylaws are often executed before a notary.
Regions where notaries are required in legal transactions, including creating legal entities, the transfer of land and the verification of legal documents are:
- Latin America
- The Caribbean
In 2014 the Council of Ministers of the Organisation for the Harmonisation of Business Law in Africa (OHADA) made the use of notary services in business start-ups optional in the 17 OHADA member states, although notarisation still exists in many OHADA countries.
For example, in Burkina Faso a notary certifies the declaration of start-up capital subscriptions.
The 17 OHADA countries are:
- Burkina Faso
- Central African Republic
- Côte d'Ivoire
- Democratic Republic of Congo
- Equatorial Guinea
- Republic of the Congo
In Latin American economies notary practices currently vary. For example, in Argentina a company isn’t obliged to have its bylaws notarised
In Guatemala company founders must present a letter from a notary to open a bank account.
The notary profession has seen significant advances with the introduction of electronic systems in some high-income economies.
For example, in Belgium, the e-notariat system lets notaries file a company’s deed of incorporation electronically with different institutions and obtain its enterprise number within minutes. In Croatia, notaries can use an electronic system to submit documents to courts.
Notary laws, country to country
Across Europe and Central Asia, approximately one-third of economies include notary services in business formalisation.
For example, in Bosnia and Herzegovina, the 2002 Law on Notary requires that all documents needed for registering a company be prepared and certified by a notary. In Turkey, a company’s legal accounting books must be certified by a notary. In Kazakhstan, the certificate of state registration must be authenticated by a notary.