The Council for the Development of Cambodia (CDC) is mulling whether to allow the Phnom Penh investment subcommittee and its provincial counterparts to approve projects with registered capital of more than $2 million, in an effort to make the process faster and easier.
Although subcommittees can greenlight investment projects valued at under $2 million, larger ventures must pass through the CDC’s Cambodian Investment Board (CIB).
The CDC on December 14 held an inter-ministerial meeting to discuss a draft sub-decree concerning the subcommittees, after the Cambodia Chamber of Commerce (CCC) proposed a number of amendments to current policies and procedures that they determined would smooth things out and be more in line with the new investment law.
CCC vice-president Lim Heng told The Post on December 15 that the sub-decree would be necessary to better synchronise the subcommittees with the recently-promulgated new investment law.
He expects the subcommittees to be able to approve larger projects than before as a result, and said bureaucratic procedures may be slimmed down as well.
The CCC requested the cap be set at $10 million, he said, adding that the new limit aims to encourage more factories and similar projects to be set up in the provinces, and cut down road congestion in the capital.
But with recent research indicating that investment projects with under $5 million in registered capital account for 75 per cent of the total, the cap may be adjusted to this figure, or half of the CCC’s original suggestion, Heng predicted.
He said the CCC’s goal of shifting industry to the provinces was consistent with Phnom Penh Municipal Hall’s plans to relocate a large number
of factories to the capital’s more remote areas, which the administration claims would facilitate the transport of raw materials and curb traffic congestion in more central parts of the city.
Ky Sereyvath, an economic researcher at the Royal Academy of Cambodia, told The Post that raising the cap, or similar provisions for provincial authorities would be a form of fiscal decentralisation, which involves shifting some responsibilities and burdens to lower levels of government.
This, he said, would discourage provincial officials from “making excuses”.
“More decentralisation to the sub-national level inherently means that bureaucracy is reduced, which could be a desirable feature for investors.
“Worth mentioning is that foreign investors would be able to go directly to the provinces, without needing to contact national level agencies over documents, they take such a long time to conduct their studies,” Sereyvath said.
Meanwhile, the CDC signed off on 70 projects with a total capital investment of more than $2.428 billion in January-June, according to The Post’s calculations based on the council’s Facebook statements during the period.
The bulk of the projects were in the fields of garments, footwear and other textile-based goods; travel products; electrical components; bicycle parts; furniture; electricity; and hospitality.