Business Registration Requirements Relaxed for Informal Workers

In a bid to stimulate the informal economy, which makes up 85 percent of the workforce, the Government has announced workers in the sector no longer have to apply for a permit or renewal for their business
Informal workers in Cambodia no longer need to apply for business permits, as the government aims to improve livelihoods nationwide. Kiripost/Siv Channa
Informal workers in Cambodia no longer need to apply for business permits, as the government aims to improve livelihoods nationwide. Kiripost/Siv Channa

Informal workers no longer have to apply for a permit or renewal for their business at the One Window Service Office (OWSO) in a move that aims to improve livelihoods nationwide, according to an announcement from Prime Minister Hun Manet.

On Wednesday, the Prime Minister issued an order to temporarily stop the provision of some administrative services related to opening businesses at municipal and district levels that are set in the inter-ministerial proclamation dated December 29, 2016.

This means that citizens who have businesses in the informal economy no longer need to apply for a permit or renewal at the OWSO of municipal and district administrations. This includes businesses in the arts, including painters and sculptors, hairdressers, salons, and makeup shops with a capital of less than $1,000.

The same applies to businesses in the education and sports sectors, such as sports equipment vendors. In the tourism sector it includes local restaurants, such as food stalls and coffee shops, as well as motorbike tours. In the industry and handicraft​ sector, it includes motor repair shops, electronics repairs and car washes, among others.

Citizens can also engage in businesses in the trade and agriculture sectors, such as wholesale and retail businesses and agricultural equipment.

The decision to suspend the permit requirements for certain businesses in the informal economy forms part of the Government's preparations for the ‘National Strategy on Informal Economic Development 2023-2028’.

“The national strategy aims to facilitate, provide benefits, nurture, and raise awareness of businesses, occupations, and jobs in the informal economy,” the official announcement said.

The new regulations will be implemented imminently and will help to formalize the informal economy and improve the lives of those who work in it, according to the official announcement on September 13.

Som Prohous, 29, owns Pastor Motorcycle Repair. He is optimistic about the announcement, which will help small businesses such as his save money and time, benefit its own population.

“It is good for small businesses. It will not be complicated, and they do not need to spend their work time requesting information in the process of opening a business,” he said. “Otherwise, it helps reduce spending costs as just renting a small space for my shop costs $500 a month.”

After operating his motorcycle repair business along Preah Trasak Paem Street in Kan Doun Penh for 10 years, Prohous said that this type of business does not generate much income.

He hopes the Government will provide consistent support for people's survival and growth in the informal economy sector.

Similarly, Hang Srey Moch, who has operated a food stall in Kan Doun Penh for three years, told Kiripost that the Government should provide convenience to small businesses that generate little income.

"I am glad to hear that because my business is small, I cannot earn a lot of money. If I need to pay like other big businesses, that is not the problem for me."

Yong Kim Eng, president of the local People's Center for Development and Peace, told Kiripost that it is important to provide relief to citizens and reduce their financial burden during an economic downturn.

“If the Government withdraws some administrative services that businesses need to pay for when opening at municipal and district administrations, it will reduce the financial burden on businesses as individuals are already struggling to make a living to support themselves,” Kim Eng said.

He recommends that the Government provide financial assistance and training to small businesses in the informal economy sector to help them overcome the challenges they face in maintaining and growing their businesses.

The informal economy in Cambodia is a sector that is neither taxed or monitored by any form of Government. It is estimated to account for 40 percent of the country's GDP and 85 percent of its workforce. The informal economy is made up of a variety of activities, including agriculture, small trading, construction, and domestic work, according to the Ministry of Economy and Finance in February 2023.


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