Cambodia’s business climate improves ‘immensely’

Cambodia’s business environment is much improved, a report released today by the World Bank and the International Financial Corporation claims, with the Kingdom moving 15 places up the ranks. 

Cambodia comes 135th of 181 countries in terms of business convenience in 2008, compared to 150th rank in 2007. The improvement was chiefly attributed to the credit reforms and business closure laws, according to the 2009 Business Report, Rasmei Kampuchea reports. Cambodia passed a bankruptcy bill last year.

The credit law reform has permitted companies to use “mobile” assets and intangible property, including vehicles and accounting inventories, as collateral to access loans. Previous laws were based on concrete collateral such as land or buildings. Financial institutions also have better access to information through an online database set up by the Ministry of Commerce.

“The World Bank report regards Cambodia as introducing the most reforms in the globe to allow businesses access to credit,” Koh Santepheap reports.

“This is a better result stimulating the continuation of reforms, especially while other countries are also reforming,” said Stephane Guimbert, a senior World Bank economist.

He said that the reform of import and export procedures has also contributed to a better business atmosphere, Koh Santepheap reports.

“In Cambodia indicators of international business practices have improved with the period of import decreasing from 37 days to 22 days and the period of export falling from 46 days to 30 days,” he said, adding that such indicators will further improve as an automatic customs database was introduced at Sihanoukville ports with World Bank support in May, according to Rasmei Kampuchea.

The 2009 Business Report compared businesses in 181 countries using 10 indicators, including business setup, application for construction permits, staff employment, credit access, property registration, taxation, international trade, contract law practices and business closure, the newspaper explains.

The classification of the countries for business convenience was based on the study of laws regulations and interviews of service providers such as accountants and lawyers.

The report’s assessment of Cambodia’s business climate is similar to the result of a recent World Bank survey of 500 businesses in Cambodia that showed reports bolster economic and investment growth.