The number of newly registered businesses in Cambodia fell by nearly 27 percent in 2009 when compared to the previous year, according to Commerce Ministry figures.
According to data obtained Friday, 2,045 companies, branches and representative offices opened in the country last year compared to 2,784 in 2008.
“It certainly is possible that the economic downturn had an effect. It would be surprising if it hadn’t had an effect,” said Bretton Sciaroni, chairman of the International Business Club. “Before September a year ago, when we had a relatively robust economic environment, we had more companies registering.”
The drop in newly registered businesses comes during a downturn in all of Cambodia’s major sectors. Construction projects have been put on hold due to a sluggish real estate market and tens of thousands of people have lost their jobs in the garment sector since September 2008, according to the Garment Manufacturers Association in Cambodia.
The figures show that 34 businesses were dissolved during the course of 2009 compared to just 29 in 2008. They also show that the total number of existing businesses in Cambodia has risen to 19,649 from a just 31 in 1990.
More than 60 percent of all businesses registered in Cambodia last year where Cambodian-owned, though many of those enterprises have a foreign business partner.
Mr Sciaroni added that the turmoil hitting the garment industry had likely had a negative effect on foreign investor interest in creating new businesses in Cambodia.
Nonetheless, experts say that rekindled enthusiasm for the country’s agriculture and construction sectors will no doubt help bolster the levels of new business entrants into the economy.
“The agro sector remains relatively strong compared to the other ones,” said Mr Sciaroni, adding that his legal consultancy, Sciaroni & Associates, was currently dealing with investors in agriculture on a daily basis.
Agriculture “was a strong point last year and will continue to be this year,” he said.
Economists say the main reason for the relative success in the agricultural sector is because investors there are usually more preoccupied with laying out a long-term strategy rather than benefiting on a short-term basis.
“The global economic crisis was to blame for the drop [in businesses] registering here,” said Vann Theary, deputy director of commercial registration in the Commerce Ministry.
Ms Theary said, however, that she expected a rise in business creation here in 2010.
“Now at the beginning of January the number of businesses is already going up,” she said, adding that about 70 new enterprises had already been registered in the first week of January.
Most businesses that register at the ministry, she said, are small and medium sized enterprises. However, there has been a noticeable rise in both construction and agriculture firms over the course of the last two or three months, she added.