More than 50,000 companies registered with the Ministry of Commerce will be required to re-register when the ministry rolls out its online registration system next month, a government official said yesterday.

Om Dararith, director of the commercial registration department at the Ministry of Commerce, said the new online system will be launched on December 7, and aims to cut through the notorious red tape involved in starting a business in Cambodia.

“The new system will be faster and easier, save time and cut the unofficial fees associated with current manual system,” he said. “Registration is free and will take only 45 minutes.”

More than 40,000 companies and 10,000 small enterprises have registered in Cambodia using the existing paper-based system – of which only a small portion of the data is available online through the Ministry of Commerce’s website.

According to Dararith, the companies will be asked to re-register once the new automated system goes live. He said the ministry lacks the resources to input the data, while it wants to give companies a chance to verify the information and to correct any errors in the existing records.

“We haven’t issued a prakas or announcement yet, but as a policy, we plan to ask companies that registered manually to re-register online,” he said. “We will give them one year to register online, but we won’t force them.”

Dararith emphasised that no punitive measures had been determined for companies that fail to comply.

The World Bank’s Doing Business 2016 ranks Cambodia a dismal 180 out of 189 countries in terms of ease of starting a business. On average, it takes 87 days to incorporate a business in Cambodia, compared to 20 days or less in most of its regional neighbours.

Sok Sopheak, director-general of the international trade department at the Ministry of Commerce, said the ministry’s new online registration system will reduce the time it takes to register to under six hours.

This reform alone should catapult Cambodia’s ranking in the next World Bank report to “between 20 and 30,” and within the top three among ASEAN countries, he said.

He added that the system is 80 per cent completed and the online registry data will be made available to other government agencies including the taxation department and customs authority.

The Ministry of Commerce commissioned software registry company Foster Moore to implement its online registration project at a cost of $750,000, according to Dararith.

The firm previously developed its Catalyst online registry software for New Zealand, which led all countries in the Doing Business 2016 report in terms of speed of starting a business. New Zealand companies can incorporate online in a single afternoon, the report noted.

In Phirun, head of accounting and finance at consumer products retailer Brand Trading (Cambodia) Ltd, welcomes the government’s new online registration system and said his company would comply with the re-registration process.

“We’re ready to comply, as they have given us a reasonable time,” he said.