Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Cambodia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
* Takes place simultaneously with another procedure.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Deposit the legally required initial capital in a bank and obtain deposit evidence. | 1 day | no charge |
| 2 | Check the uniqueness of the company name | 5 days | USD 10 |
| 3 | Have an abstract of the company organization documents (bylaws, memorandum, and articles of association) published in a recognized public newspaper | 7 days | USD 15 |
| 4 | Incorporate the company with the Commercial Register, maintained at the Office of the Clerk of the Commercial Court | 25 days | USD 105 |
| 5 | Make a company seal | 1 day | USD 15 |
| 6 | Have registration documents stamped and approved by Phnom Penh Tax Department | 3 days | USD 49 |
| 7 | Register the company for VAT and patent at the Real Regime Tax Office | 13 days | USD 390 |
| 8 | Notify the Ministry of Labor of the start of operations and hiring of employees | 30 days | USD 250 (8-200 employees) |
| * 9 | Receive inspection from Labor Inspector | 1 day simultaneous with procedure 8 | Included in Procedure 8 |