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Commerce Minister Sun Chanthol talks during the launch ceremony of an online business registration portal yesterday morning at the Ministry of Commerce in Phnom Penh.
Commerce Minister Sun Chanthol talks during the launch ceremony of an online business registration portal yesterday morning at the Ministry of Commerce in Phnom Penh. Pha Lina

Firm registry moves online

Local and foreign firms looking to register their business in Cambodia can now do it from any internet-connected device after the Ministry of Commerce yesterday launched its long-awaited online business registration portal.

The new, paperless system enables prospective businesses to search for a company name, upload shareholder and board of directors’ information and pay the registration fees online, as opposed to the old system where representatives had to physically go to the ministry to complete registration procedures – a time-consuming process that also created opportunities for corruption.

“This system was established to eliminate the face-to-face meeting between the company and [ministry officials],” Commerce Minister Sun Chanthol said. “We have also cut down the timeframe [for business registration] from five to seven days to only one hour.”

Chanthol said the online registration system was prompted in part by Cambodia’s continuous poor ranking for the ease of starting a business in the World Bank’s annual Doing Business report. The Kingdom ranked 180 out of 189 countries in this year’s report, only marginally better than its 184 ranking last year.

“In the World Bank’s evaluation next year we hope to do better and the ranking will rise to 21,” Chanthol said, qualifying this statement by adding that the drastic improvement would only be possible if other countries do not institute any new reforms.

The online registration system was developed by Foster Moore International, the same software registry company that developed an online registry for New Zealand, which led all countries in the World Bank’s Doing Business 2016 report in terms of speed of starting a business. New Zealand companies can incorporate online in a single afternoon, the report noted.

Cambodia’s $750,000 registration system requires firms to upload a memorandum or article of association, as well as proof of address and identity cards for company directors. Once submitted, the registering company can use Acleda Bank’s online payment gateway to pay the relevant fees, though the minister said other banks were open to provide this service.

Sok Sopheak, director-general of trade service at the ministry, said one of the biggest challenges encountered during the project’s six-month implementation was the absence of legislation governing e-commerce in Cambodia. He said clarity on this legislation would aid the ministry in sharing the online data with other line ministries and agencies.

Another challenge will be re-registering nearly 50,000 businesses that were incorporated using the old system.

“In the past, there were many companies that did not inform the ministry about their closure, but the ministry cannot yet remove them from its database,” Sopheak said. “But now we will know who the active companies are.”

The Commerce Ministry has asked all registered enterprises to fill in their details in the online system by March next year, or face a fine.

However, Chanthol said the ministry just needed them to fill in their company name to ensure that there would be no overlap with any new registrations.

“We still need to discuss with the Ministry of Economy and Finance how much the penalty should be,” he added.

The new online business registration system will go live next month, coinciding with the roll out of a separate automated online system for issuing certificate of origin (CO), a critical document that ensures Cambodian exports can avail preferential tariff and duty exemptions accorded by the European Union and other nations. Businesses cannot print the CO themselves, as the EU does not accept digital signatures.

George Edgar, ambassador for the European Union delegation, said automation of export procedures was a priority for the EU, and simplification of the processes would benefit countries receiving preferential treatment, like Cambodia. He added that the EU would have a new system in place in 2017. However, it would still require physical signatures on COs.

“The system will continue to require a physical signature and we will work with the [Cambodian] government to make e-signatures possible,” he said.

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