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Credit bureau makes business easier

Credit bureau makes business easier

A report released by the World Bank on Tuesday highlighted Cambodia as the most improved country in terms of businesses getting credit, due to the establishment of the country’s first credit bureau in March.

Cambodia ranked 133 out of 185 in the World Bank’s report, up from 141 in the previous year. It was also one of the top 50 countries to narrow their distance from the top spot over the past eight years, according to the report.

However, the report also noted the addition of a new tax on immoveable property as a policy decision that has negatively impacted the ease of doing business in the Kingdom.

The World Bank report also discusses the importance of transparency and its role in the ease of doing business worldwide.

Kol Preap, executive director for Transparency International, said that in Cambodia paying bribes is considered standard practice when doing business.

“Corruption has become a systematic issue in Cambodia and paying bribes is often considered a normal activity to gain access to certain services,” he said.

These issues can deter European and Western companies from setting up subsidiaries in Cambodia due to the strict regulations and anti-corruption laws in their home countries, said to Kol Preap.

In contrast, businesses from China, Malaysia or Vietnam might not be regulated as strictly, allowing them to gain a competitive advantage over those from the West or Europe, he said.

“Our goal is to reduce corruption so development can flourish and to promote a better, levelled playing field for conducting business in Cambodia,” added Kol Preap.

According to John Brinsden, a member of the International Business Chamber of Cambodia’s executive committee, the Kingdom’s business landscape is highly variable.

“Some negatives are bureaucracy, corruption, infrastructure issues and for some companies they’re concerned about being targeted by NGOs and human rights organisations over labour issues should they choose to
operate here,” he added.

However, in Brinsden’s experience, Cambodia stands out from other countries in terms of how open it is to investment, both foreign and domestic.

“The access to senior government officials to express concerns is unique from most other countries in Asia,” said Brinsden, who identified the Government-Private Sector Forum as a specific example.

“I would say to foreign businesses considering coming to Cambodia, to come here, because you actually have a chance to talk to the government and help frame regulations and laws,” he said.

The Doing Business report is a worldwide overview of regulatory policies and reforms across the full lifecycle of a business, including start-up and operations, paying taxes and protecting investors.

To contact the reporter on this story: [email protected]

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