Higher fees and new registration requirements have made starting a business in Cambodia more difficult over the past year, according to a report released by the World Bank yesterday.
Cambodia ranked 137th out of the 189 countries surveyed in the report, titled Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises. Cambodia slid two positions from 135th last year.
In the 11th edition of the annual report that investigates rules and regulations that enhance and constrain business activity, the US-based World Bank outlined a number of new bureaucratic hurdles that caused Cambodia’s rank to dip.
“Cambodia made starting a business more difficult by introducing a requirement for a company name check at the Department of Intellectual Property and by increasing the costs for both getting registration documents approved and stamped by the Phnom Penh Tax Department and completing incorporation with the commercial registrar,” the World Bank said in the report.
As for overall ease in starting a business, Cambodia was ranked an abysmal 184th.
Hiroshi Suzuki, CEO and chief economist of the Business Research Institute for Cambodia, said he agreed with the World Bank’s assessment.
For example, he said, the new data show that incorporating a company with the Business Registration Department in the Ministry of Commerce costs $400, as opposed to $105 in last year’s assessment. Also, having registration documents stamped and approved by the Phnom Penh Tax Department rose to $250 from $49 in the previous report, he said.
“However, these costs are not expensive if you compare them with other countries,” Suzuki added.
Despite the rising fees, the report showed that in terms of “getting credit”, Cambodia ranked 52nd out of all 189 countries, a 10-place jump.
Var Roth San, director of the Intellectual Property Department at the Ministry of Commerce, said that he disagrees that the requirement for a company to register its name at the department constrains business activity, adding that the World Bank should meet with him first before issuing such reports.
This year, Singapore topped the list as the easiest country to do business in, while Libya, the Central African Republic and Chad took up the bottom spots.