The Ministry of Commerce’s new online business registry launched in December with high expectations, pitched as a way to reduce the graft and red tape often faced by investors and improve Cambodia’s consistently low international ranking in the ease of starting a business.
But four months on, few firms have signed up, according to the ministry, which has pushed back the deadline for registration.
On the day of the initial deadline, March 31, the Commerce Ministry released a statement announcing that it had been extended to June 30 due to “the majority” of 42,000 licensed businesses having yet to sign up through the new system.
“We have noticed that the number of businesses re-registered is small. That’s why we decided to extend the time,” Long Kemvichet, a ministry spokesman, said this week, adding that firms risked losing their license to operate if they did not meet the next deadline.
“The process still operates normally without any problem so we are not sure about the reasons why they don’t re-register their businesses. It could be because they are not interested,” he said, adding that the ministry had made extensive efforts to inform businesses about the new system.
Anthony Morreale, communications manager at the European Chamber of Commerce, said on Tuesday that the ministry had indeed actively promoted the online registry, but that more needed to be done.
“We still meet companies (European or not) who are unaware of the details of the online re-registration, especially that it is compulsory and free,” he wrote in an email, calling the initial deadline “ambitious.”
“In our opinion, the reason for the slow rate of re-registration lies somewhere between user error, technical issues, and some lack of understanding in the new system,” he said.
Olivia Wilden, executive director of the British Chamber of Commerce, said it was “crucial” for companies to follow the ministry’s directive but noted that some companies were still facing bureaucratic hurdles when re-registering.
“It is our understanding that companies have faced certain challenges due mainly to an inconsistency in the process vis-a-vis other Ministries also involved in the process of business registration and the nature of a new system that is evolving,” she said.
Bretton Sciaroni, chairman of the International Business Chamber of Commerce, said that despite most businesses missing the original deadline, he was optimistic that companies would eventually comply.
“It was not realistic to have them all re-registered in the time frame envisioned,” he said. “It will happen, but the delay was inevitable.”