It is not all good news for Cambodia on the economic front.
The latest release of the World Bank’s ease of doing business index puts Cambodia in the 144th spot out of 190 countries, a drop of six places from a year ago.
The 2019 ease of doing business index ranked the Kingdom 138th out of 190 nations. Before that, Cambodia sat in the 131st spot, meaning the Kingdom’s ranking has steadily declined in the last few years despite the government’s efforts to make it easier for foreign businesses to invest here.
The 2020 ease of business ranking is based on 10 key factors, including the ease of starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.
New Zealand is ranked number one, followed by (in order) Singapore, Hong Kong, Denmark, South Korea, the United States, Georgia, the United Kingdom, Norway, and Sweden.
In Southeast Asia, only Laos and Myanmar, which ranked 154th and 165th, respectively, are below Cambodia.
Malaysia ranked 12th globally, followed by Thailand (21st), Brunei (66th), Vietnam (70th), Indonesia (73rd), and Philippines (95th).
An increase in regulatory fees imposed by government agencies affected the Kingdom’s ranking.
“Cambodia made starting a business more expensive by increasing the costs associated with business registration at the Ministry of Labour and Vocational Training,” the WB report noted.
It was different from last year when the WB praised the Kingdom for making it less costly to obtain a building permit.
An international economic expert based in Cambodia agreed that there are many areas that Cambodia needs to reform if it wants to go up in the ease of doing business ranking.
Frederic Chan, corporate investment and development officer at WS Asia Pacific Co Ltd, mentioned stricter rules in getting a business visa and the many regulations relating to the employment of foreign workers.
“Now, you need to set up a business before you can get a business visa,” he pointed out. “And it is getting more expensive, especially if you bring your family here.”
“Cambodia needs foreign talent. The regulations should be relaxed or reduced to make it easier for companies here to hire workers from other countries,” he added.
This month saw Cambodia’s ranking in the World Economic Forum’s Global Competitiveness Report jump by four spots, from being 110th in 2018 to 106th this year.