Starting a Business in Cambodia Is Getting Harder, Report Says

Almost every aspect of starting or operating a business in Cambodia is becoming more difficult, according to a World Bank report released Wednesday.

Compared to last year, Cambodia dropped in nine out of 10 categories used to measure the ease of doing business in the country, according to the report, “Doing Business 2015,” which surveyed 189 countries. Cambodia’s overall ranking fell from 134 last year to 135 this year.

The report ranks the ease of starting a business, dealing with construction permits, setting up electricity, registering property, accessing credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Only in the category of enforcing contracts did Cambodia maintain the same rank as in 2013: 178.

In the category of starting a business, Cambodia fell from 183 to 184, ahead of only Chad, Equatorial Guinea, the Central African Republic, Haiti and Burma.

“Starting a business in Cambodia requires 11 procedures, takes 101.0 days, costs 139.5 percent of income per capita and requires paid-in minimum capital of 26.1 percent of income per capita,” the report says.

“Cambodia made starting a business more difficult by introducing a requirement for a company name check at the Department of Intellectual Property and by increasing the costs both for getting registration documents approved and stamped by the Phnom Penh Tax Department and for completing incorporation with the commercial registrar,” it says.

Cambodia fell the furthest in the category of paying taxes, slipping five spots from 85 to 90.

In trading across borders, the country fell four spots to 124. In protecting investors, it fell three to 92.

In three categories—dealing with construction permits, acquiring electricity and accessing credit—it slipped two spots: to 183, 139 and 12, respectively.

Finally, Cambodia dropped one rung in the categories of registering property, from 99 to 100, and resolving insolvency, from 83 to 84.

Overall, Cambodia is still lagging far behind other countries in the region. Singapore ranked 1 in the world, Malaysia 18, Thailand 26 and Indonesia 114. Only Laos and Burma rated lower than Cambodia, at 148 and 177, respectively.

But banking executives Wednesday said that doing business in Cambodia appears to be getting easier.

“I think if anything, it’s become a little easier in the sense of increased transparency and improvement in certain areas like customs,” ANZ Royal CEO Grant Knuckey said.

“It’s a matter of perspective though—from some points of view, things like the work visa crackdown are a ‘less easy’ factor, but I’d prefer to look at it in the context of a clear and gradual improvement in the country’s institutional frameworks,” he said.

In Channy, CEO of Acleda Bank, said the number of people taking out loans — an indicator of the rate at which business are started — had not decreased at his bank.

“The loan growth is still strong in the bank. Last year, our total loan outstanding was 1.468 billion, but by end of September this year, it was 1.8 billion,” Mr. Channy said.

“Since the end of September, we’ve had 358,000 loan customers. Last year, we had a total of 334,000,” he said.

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