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Business trends

Cambodia rolls out online business registration to slash red tape

New system promises to cut time needed to start a company to just 8 days

Cambodia has consistently scored low on rankings of ease of doing business. The government hopes a new online system will help change that.

PHNOM PENH -- Cambodia has launched a new online business registration system that it says will reduce the time to start a company from three months to eight days.

Unveiled on Monday, the digital service -- available at registrationservices.gov.kh -- promises to improve the country's bureaucracy, which regularly receives dismal ratings for inefficiency and corruption.

It will roll procedures handled by the finance, commerce, interior and labor ministries; the tax department; and the Council for the Development of Cambodia, into one online process.

The move comes as the country's economy, which relies heavily on tourism and garment making, has taken a heavy blow from the coronavirus pandemic, despite Cambodia itself recording relatively few cases.

Speaking at the launch of the service, Cambodia's Minister for Economy and Finance Aun Pornmoniroth conceded the previous system -- in which applicants had to deal with each ministry separately -- was "costly and complicated."

Pornmoniroth said the new service would cut the price of starting a business by 50%.

The website will also provide a portal for potential investors to register qualified investment projects, he said.

"This will promote the competitiveness of Cambodia," Pornmoniroth said.

Since 2016, Cambodia has repeatedly slipped down the World Bank's "Doing Business" rankings.

In the 2020 report, it came in 144th out of 190 economies assessed. Of its neighbors, only Laos fared worse, at 154th. Thailand and Vietnam came in at 21 and 70, respectively.

In terms of starting a business, Cambodia was close to the bottom -- 187th. It took an average of 99 days to start a company, with nine separate procedures. By comparison, the East Asia and Pacific average was 25.6 days and 6.5 procedures.

Stephen Higgins, managing partner of investment management and advisory firm Mekong Strategic Partners, said the new system's time frame would make an "enormous difference."

"[It] will put Cambodia in line with the OECD High Income group of companies at 9.2 days for starting a business," he said.

In its latest report, the World Bank found, officially, it cost about $743 to start a business in Cambodia, or 53% of income per capita. The regional average for this figure was 17.4%.

The bank said the costs calculated did not include bribes. Corruption is rampant in Cambodia, wrote GAN Integrity in a 2017 report, which stated that bribes, gifts and facilitation payments to "get things done" were common.

Anti-corruption campaigner San Chey said he hoped the simpler digital system would help reduce corruption, but called for further measures, like a watchdog to help businesses.

"An ombudsman office [could] be created to help them during the registration," said Chey, executive director of the Affiliated Network for Social Accountability.

Bretton Sciaroni, chairman of the International Business Cambodia of Cambodia, said he looked forward to an improved World Bank assessment, which he said had been unfairly negative.

"I always thought the World Bank study was nonsense. If you wanted to do business in Cambodia, registering a company was not an impediment. ... Maybe it's not as efficient as other countries, but you could get it done," he said.

"This should improve our ranking for next year -- the fact that we've got online business registration. So from a public relations standpoint, for the image of Cambodia, this is a good development."

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