February 1, 2012

Ministry ends unpopular fee for Cambodia business

A newly issued prakas aims to reform Cambodia’s product registration process by eliminating distribution fees, officials say.

Industry, Mines and Energy Minister Suy Sem signed the prakas on January 24.

Meng Saktheara, director-general of the general department of industry at MIME, said the prakas would encourage producers to register their products now that the ministry had eliminated some expensive application forms and fees.

He said producers previously had to pay between US$180 and $200 to the ministry before their products hit the shelves.

The prakas will retain two of the previous stipulations requiring payments for initial establishment and to start operations, but will do away with the unpopular distribution permission fee.

According to the Ministry of Fin-ance and Economy and MIME, current registration fees will remain 50,000 riel ($12.50) for capital less than $50,000, and 100,000 riel for capital between $50,000 and $250,000. 

Capital between $250,000 and $500,000 will cost 200,000 riel, and 400,000 riel will be required for capital over $500,000.

“This is a big reform. It’s the cancellation of those restrictions that led to burdens and complications for the private sector,” Meng Saktheara said.

“In the short term, we may lose a bit because we have stopped coll-ecting money from here. For the medium- and long-term, however, we will gain profits.”

Lun Yeng, executive director of the Federation of Associations for Small and Medium Enterprises of Cambodia, said FASMEC had previously brought the problem to the government’s attention, and that he considered the prakas a successful step towards eliminating past complexities and improving business relations.

Lun Yeng said the reduced complications would encourage many informal businesses to complete their official registration.

“I thought the new registration procedures established by the ministry were not complicated or expensive, and allowed registration to be completed at one time,” he said.

The new rule allowed businesses to pay the establishment and operations fees simultaneously, which streamlined a company’s start-up process, Lun Yeng said.

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