Despite a new online business registration system going live earlier this year, setting up a company in Cambodia has become more difficult, a report from the World Bank has said.
The World Bank’s “Doing Business 2017” report, released last Wednesday, found that while Cambodia had narrowed the gap with world-leading economies and still outpaced its regional rivals Laos and Myanmar, it still faced problems of registration, contract enforcement and insolvency resolution.
Joanna Nasr, a private sector development specialist with the Bank, said the added procedures put in place by the new online registration system had slowed down the process.
“There is a requirement to submit after a registration the evidence of the deposit capital as well as the statutes. They need to be submitted to the department of business registration once registration is completed. So that added a procedure to the process,” she said.
Chan Sophal, director of the Center for Political Studies, said while the government had intended to speed up the registration process using the online system, “it appeared not to work well.”
Ky Sereyvuth, an economics professor, said the slow process was the main factor making investing in Cambodia unattractive compared with neighboring countries.
He said he had carried out comparative research into the process and found that Cambodian registrations took more than double the amount of time it takes in Korea and a week longer than in Vietnam. “So it’s still a challenge,” he said.
Tan Monivann, vice-president of the Mong Reththy Group, however, said the process was efficient and “faster and cheaper than before.”
He suggested that a lack of knowledge of the new system among investors and businesspeople could be responsible for any shortcomings, coupled with a lack of infrastructure.
In Channy, CEO of Acleda Bank, said new developments, such as the creation of a Credit Bureau, which will run background checks on potential borrowers, will also contribute to improving the business climate.
He said that he understood the frustrations of business people, as they “think that time is money” and, “When they wait too long, they will lose more opportunities.”
He added that to counter this frustration the government must move quickly to facilitate the establishment of new businesses.