Experts call for faster, cheaper business registration process

To encourage more young people to become entrepreneurs, the government must prioritise improving the process of starting and registering a business, reducing capital requirements, and expanding access to finance, experts said last week.

Speaking at the Central Bank’s ‘Macroeconomic Conference on Broadening Sources of Cambodia’s Growth’, held Friday at the Cambodia-Japan Cooperation Center in Phnom Penh, Ly Sodeth, World Bank senior country economist in Cambodia, said the key areas the government must focus on are business registration, supporting entrepreneurship, and facilitating access to finance.

Addressing these areas properly will encourage more young would-be entrepreneurs to start their own business, while also increasing the number of small and medium-sized enterprises (SMEs) that choose to register with the Ministry of Commerce and the tax department.

Mr Sodeth said the process of registering a business in the Kingdom is still cumbersome and expensive, particularly when compared to neighbours Thailand and Vietnam. He pointed out that Cambodia slipped this year in the World Bank’s ease of doing business index, going from the 131st position to the 138th spot.

“I think a reform is needed to encourage more business to register, support entrepreneurship, and promote domestic investment, innovation and institutional improvement,” Mr Sodeth said.

“The most important aspect is business registration. Cambodia ranked the worst in the ‘business registration’ category, which requires physical presence. If we eliminate the need to come to the ministry to register, a lot more businesses will join the fold. However, even registering a business online is often quite burdensome in Cambodia,” he added

“Also very helpful for businesses would be to eliminate fees demanded when registering a business. Likewise, eliminating the need for assets and collateral for young entrepreneurs who want to take out a loan will encourage a lot of people to start their own business.”

Yong Sarah Zhou, resident representative of the IMF in Cambodia, said entrepreneurship is key to economic diversification in Cambodia, adding that the government must focus on reducing the cost of starting a business, supporting entrepreneurs, developing infrastructure and maintaining macroeconomic stability.

“If Cambodia wants to move up the value chain, it needs to investment in infrastructure, remove barriers to entrepreneurship, lower business costs, develop its human capital and target the demands of the global market as needed,” Ms Zhou said.

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