Earlier this month, it was reported that the Chinese local government in Huangpu, Guangzhou, is piloting a company registration blockchain platform. The authority hopes to encourage economic development by making starting a business more accessible and efficient.
In China, a physical company seal, or ‘chop’, is needed to notarize official documents as signatures are not legally binding. The seals need to be engraved so that each is unique, then are kept under lock and key. In fact, multiple seals are necessary for different purposes, such as contracts, legal documents, and invoices. Getting the seals made is one of many time consuming processes in company registration.
In Huangpu, China, establishing a company previously required several other time consuming processes such as seal engraving, tax registration, and organizing market supervision and banking. Now, the district allows such licenses and tax claims to be submitted digitally, reducing the time to start a business to just one day.
This is thanks to the “Guangzhou Deepening Commercial System Reform Implementation Plan” issued in March. It has now been revealed that the reforms extend to a pilot blockchain platform, also in Huangpu, for company registration.
The pilot hopes to create a shared platform for commercial services with blockchain. To register a company, applicants log in to a single platform where they use the “one form, one collection, one-click operation” system.
Blockchain technology comes in to verify digital identities, utilizing a system built by China’s Ministry of Public Security. This further allows for efficient vetting of new companies where, for instance, submitted addresses are checked for authenticity. By sharing data and platforms with law enforcement, details are also checked against legal records and company blacklists.
The pilot has already seen success in efficiency, compressing the required information to report by around 85%. The reporting time was also reduced to just 15 minutes. Huangpu District plans to improve the platform by adding more business licenses for applicants and integrating with a credit information platform.
Last year, a similar blockchain initiative was launched in Switzerland by a team including IBM and Swisscom. There, too, the company registration process involves many stakeholders and physical processes. IBM later worked on a blockchain corporate registry solution in France.