CAMBODIA Country Profile

Licences, Infrastructure and Public Utilities

Business Corruption

When operating in Cambodia, companies should expect to deal with extensive red tape in order to obtain the proper licences and business permits. Companies should be aware that the large number of rules and regulations for operating a business give public officials opportunities to exploit or subvert them, thereby increasing the risk of corrupt practices.

According to the Economic Institute of Cambodia 2006, the majority of small and medium sized companies experience unofficial inspections where public officials come to collect unofficial fees.

Political Corruption

High level officials are suspected of issuing illegal permits to conceal unlawful activities, such as illegal logging operations. Global Witness 2007 reports examples of the illegal issuing of harvesting permits to cover up illegal logging, as well as issuing permits to build roads through forest areas. This has given easy access to all sorts of illegal activities in the forests, such as logging, poaching and expropriation of land.

According to Corruption Monitor 2008, several examples have appeared in the media regarding corruption within the public works and construction with the result that work is both expensive and sub-standard. For instance it was revealed that a public official in a provincial transport department gave a road construction contract to a company which was owned by his relatives. The company not only built low quality roads but was even allowed to utilise state-owned equipment to perform the job.

Frequency

The World Bank & IFC: Doing Business 2009:
- In order to construct a warehouse, a company must go through 23 procedures and spend 709 days to obtain the needed licences and permits; the costs amount to 64% of the per capita income.

Transparency International: Global Corruption Barometer 2009:
- 40% of households who had contact with registry and permit services in 2008 report to have paid a bribe.

- 29% of households who had contact with medical services in 2008 report to have paid a bribe.

The World Bank & IFC: Enterprise Surveys 2007:
- 8% of companies surveyed view business licensing and permits as a major constraint for doing business.

- To obtain a construction-related permit takes 35 days.

- To obtain an electricity connection takes less than 16 days.

- To obtain a landline telephone connection takes 4 days.

- To obtain water connection takes 8 days.

- To obtain an import licence takes less than 6 days.