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Another setback for online company registration goal

The Ministry of Commerce in Phnom Penh, as seen last year.
The Ministry of Commerce in Phnom Penh, as seen last year. Vireak Mai

Another setback for online company registration goal

The Ministry of Commerce has extended the deadline for companies to register online after yet another poor response to its automated online business-registration system, a ministry official said yesterday.

Om Dararith, director of the ministry’s commercial registration department, said only 10,248 companies – or about 20 per cent of the total due – had fulfilled their obligation to register online by the end of June. He said the ministry would grant the remaining companies another three months to complete the registration procedure, warning of penalties to those that fail to comply.

He suggested the poor response to the automated registration system, which was first launched last December with high expectations, could simply be a consequence of companies being genuinely unaware of their obligations. New companies must register using the ministry’s online portal, while some 42,000 companies already on record at the ministry are required to re-register online.

In a sign the message might finally be getting through, Dararith noted that the volume of online registrations spiked just days before the June 30 deadline, with more than 200 companies per day using the automated system, compared with about 60 companies per day before.

He said the ministry would redouble its efforts to inform businesses of their registration obligations, and this time around it would take a tougher stance on those that ignore its directive. “After this extension, if [companies] still fail to fulfil their obligations they will be punished,” he said.

Companies that fail to register online by September 30 would have their names forwarded to the Ministry of Economy and Finance, as well as the tax department, for further action, he warned.

The new online business-registry platform was intended to reduce the graft and red tape that investors often complained of when registering in person at the Ministry of Commerce. It also aimed to help improve Cambodia’s consistently poor international ranking for the ease of starting a business.

In 2016, the Kingdom ranked 180 out of 189 countries in the World Bank’s annual Doing Business report.

Various reasons have been given for the private sector’s slow adoption of the new online business registration system, including its deceptive complexity and slow responses. Some businesses have also cited the lack of online payment options, as fees can only be paid by account holders at Acleda Bank, Canadia Bank or the Foreign Trade Bank of Cambodia.

Nguon Meng Tech, director-general of the Cambodian Chamber of Commerce, said the ministry should prolong the window for re-registration until the end of the year as the automated system was not that simple for small businesses, especially those that had not yet computerised their operations.

“The ministry should create a group of technical facilitators to help explain the whole process [to businesses,] from the first step through the last,” he suggested.

Hang Sovanna, assistant to director of FASMEC Microfinance, said that while the new paperless business registration system is easier than the manual system it replaces, some challenges remain. One issue he discovered was that the feedback period from the ministry was longer than the two days promised.

“My application was incorrect on two points and I got a feedback e-mail to correct them,” he said. “I sent the corrected application back to the ministry. That was about four days ago, and I still have not received any reply from the ministry.”

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