January 12, 2012

New business up 20% in 2011


New business registrations increased by more than 20 per cent in 2011 compared to a year earlier, data from the Ministry of Commerce showed.

A total of 3,090 businesses registered with the ministry as of December 2011, compared with 2,572 in all of 2010. Of these, 30-40 per cent were foreign-owned companies – a jump of about 10 per cent, according to the ministry.

Officials and experts said the rise in new business registrations reflects the country’s economic attractiveness.

“The political stability and good business environment that we have here have drawn more investors and new businesses,” said Chan Nora, Secretary of State of the Ministry of Commerce

“These factors make them confident in deciding to run a business or invest in our country – that’s the main point,” he said.

Infrastructure development and an increased power supply for industry is also contributing, according to the official.

“We know that high electricity costs are a barrier for attracting investors here. But now that we have increased power supply from hydro-dams, we will become more attractive to investors in the near future,” he said.

Chheng Kimlong, a lecturer of Business and Economics of University of Cambodia, said the increase also reflects the government’s efforts to urge all entrepreneurs register their businesses.

“The increase in new business registration proves that there is an increase in entrepreneurship, which is a main driving force pushing economic growth," he said.

“The [increase] also reflects the improvement of economic activities because these business activities promote other economic goods and services.”

It’s also a sign that the country’s formal economy is growing, not only unlicensed industry which often goes unaccounted for, he added.

Hum Hean, director of the Business Registration Department of the Ministry of Commerce, was not available for comment about the increase in registrations.

He has previously told the Post that the majority of registered foreign companies are from South Korea, Vietnam, China, Malaysia, Singapore and Thailand, and are operating in the agriculture, service and tourism industry sectors.


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