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MOC Decentralisation Pilot Plan

MINISTRY OF COMMERCE

COMMERCIAL REGISTRATION DEPARTMENT

MOC Decentralisation Plan – Version 1.0 Page 2 of 39

DOCUMENT ACCEPTANCE and RELEASE NOTICE

This is version 1.0 of the MOC Decentralisation Plan.

PREPARED: DATE:___/___/___ (John Donnelly, ADB TA 4786-CAM) APPROVED: DATE:___/___/___

(Mr. Ho Sarann, Director Commercial Registration Department, Ministry of Commerce)

APPROVED: DATE:___/___/___

(Mr. Long Sophorn, Chief of Companies & Business Registration Bureau, Ministry of Commerce)

1. DOCUMENT STATUS.

Version Date Author Reason Sections

1.0 27 July 2007 J Donnelly Initial Release All

2. DISTRIBUTION:

Copy No Version Issue Date Issued To

1 1.0 27 July 2007 Mr. Ho Sarann and Mr. Long Sophorn, Commercial Registration Department,

Ministry of Commerce

2 1.0 27 July 2007 AD TA 4786-CAM files


Abbreviations ADB -- Asian Development Bank CDC -- Council for the Development of Cambodia ISIC -- International Standard Industrial Classification IT -- Information Technology MOC -- Ministry of Commerce SME -- Small and Medium Enterprise TA -- Technical assistance


Table of Contents 1. Overview ...................................................................................................................... 1

1.1. Background ....................................................................................................... 1 2. Objectives and Scope .................................................................................................. 2

2.1. Objectives.......................................................................................................... 2 2.2. Outcomes and Benefits...................................................................................... 2 2.3. Details of the Plan ............................................................................................. 3 2.4. Deliverables/Outputs......................................................................................... 4 2.5. Proposed Process Flow...................................................................................... 8 2.6. Assumptions and Language .............................................................................. 8

3. Project Management ................................................................................................... 8 3.1. Project Manager ................................................................................................ 8 3.2. Project Team ..................................................................................................... 9 3.3. Quality Consultants ........................................................................................... 9 3.4. Reporting Requirements.................................................................................... 9

4. Stakeholder Communication...................................................................................... 9 4.1. Related Projects............................................................................................... 10 4.2. Registry Upgrade............................................................................................. 10 4.3. Upload to the Internet of the Computerised Registry ..................................... 10

5. Resourcing Requirements......................................................................................... 10 5.1. Budget and Expenditure .................................................................................. 10 5.2. Other Resources .............................................................................................. 11

6. Project Approval and Acceptance ........................................................................... 11 7. Timetable.................................................................................................................... 11 8. Appendices ................................................................................................................. 12


1. Overview

1.1. Background

At present, limited companies can register only with the Ministry of Commerce (“MOC”) in Phnom Penh. Some provincial Departments of Commerce (“PDOC”) assist companies in their province with the application process, but this is informal assistance and there is no formal legislation or legislative guidance that formalises such assistance. Sole proprietorships can already make their applications at the PDOC and small enterprises (not falling in the Real Regime for tax purposes) can obtain their provincial business operating licence at the PDOC. The MOC plans to decentralise the registration process so that all companies are able to make their application to register at provincial Departments of Commerce without the need to visit the MOC headquarters in Phnom Penh. On 29 May 2007 the MOC issued Decision #089 (MOC) on Determination of Site for Piloting Decentralisation of Commercial registration in Battambang Province. This Decision is set out at Appendix 6. A policy condition of the SME Development Program loan (Loan 2129) requires the MOC to issue a Prakas establishing a procedure to allow companies to register outside Phnom Penh. This Prakas should include the pilot roll-out of decentralized registration to a selected province as well as the establishment of an IT system for transmitted registration information to the MOC head office plus the formulation of procedures to be conducted in the provinces. ADB TA 4786-CAM will support the development of the IT system to enable decentralised registration and the formulation of the necessary procedures to be implemented at the provincial level. Following the operation of the Pilot for eight (8) weeks, the MOC will then decide whether the Pilot system “goes live” and becomes a model for future such systems around Cambodia. The purpose of this document is to set out what the MOC proposes under the MOC Decentralisation Plan, including specific items to be carried out under ADB TA 4786-CAM. This document sets out the approvals required, the process thereafter and the formal acceptance of all deliverables set out in this document. The MOC Decentralisation Plan reflects and builds upon the section on Decentralisation within the Plan for Reforming the Cambodia Business Registration System which was issued under MOC Notification 2106 on 8 September 2006 (set out at Appendix 3). The Upgrade of the Computerised Business Registry at MOC and the Upload to the Internet of the Computerised Registry, also set out in the aforementioned plan, are detailed out in separate approval documents. The section on Decentralisation and the Information Technology Plan extract are attached at Appendix 1 and 2, respectively. This MOC Decentralisation Plan is consistent with the RGC’s Strategic Framework for Decentralisation and Deconcentration.


2. Objectives and Scope

2.1. Objectives

In accordance with the ADB SME Development Program (Loan 2129) loan conditionality 3.6, the objectives of the MOC Decentralisation Plan are to:

(i) Issue a prakas establishing a procedure for companies to register at the provincial level,

(ii) The implementation of a pilot program for a rolling-out plan to a selected Department of Commerce,

(iii) Establish an online system for submission of information to the business registry, and

(iv) Formulation of procedures to be conducted at provincial Departments of Commerce.

2.2. Outcomes and Benefits

The outcomes expected from the MOC Decentralisation Plan are set out below together with the expected benefits from those outcomes. Details of the MOC Decentralisation Plan and the associated deliverables are set out at Sections 2.3 and 2.4, respectively.

Outcome 1: A Decentralised Registration System that can be Replicated across Cambodia

Benefit: Once the Pilot system is functioning fully, the same system, training and procedures can be replicated at the other PDOCs in Cambodia.

Outcome 2: Leveraging IT for enhanced Efficiency of the Overall Computerised Registry System

Benefit: PDOC officials at the Pilot location will gain online access to the Computerised Registry data held, allowing name checks to take place remotely. In addition, the PDOC staff will be able to submit application documents in electronic form to the Business Registration Bureau in Phnom Penh.

Outcome 3: New IT Equipment at the Pilot Location

Benefit: The new hardware and software at the Pilot location will ensure improved overall system capacity, added efficiency and reduce the likelihood of Pilot system downtime.

Outcome 4: A Well Supported and Maintained Pilot System

Benefit: The new system components will be covered by a time-limited maintenance and support agreement with a well-known local company. This will ensure the downtime of the system due to hardware problems, for example, will be minimised.


Outcome 5: Improved Capacity of PDOC Personnel

Benefit: The training provided should ensure that all trained staff are capable of using the IT hardware provided and will be well trained in the procedures of decentralised business registration. This capacity will be valuable for the future roll-out of decentralised registration where such personnel could provide training at another PDOC.

Outcome 6: Efficiency Gains for the MOC and Cambodian Businesses

Benefit: The opportunity for business registration at a local PDOC is something that local businesses will welcome. For local businesses, it will avoid the need to travel to Phnom Penh and, for the MOC, it will allow the spreading of the work involved at a time when business registrations are growing.

2.3. Details of the Plan

A detailed timetable of activities under the MOC Decentralisation Plan is set out at Section 7 (Timetable).

The details of the MOC Decentralisation Plan, following the objectives set out at Section 2.1, are as follows. 2.3.1 Issue a prakas establishing a procedure for companies to register at the

provincial level.

The ADB TA 4786-CAM team will work with the Director of the Commercial Registration Department to draft a detailed prakas.

2.3.2 The implementation of a Pilot program for a rolling-out plan to a selected Department of Commerce.

It is envisioned that the roll out plan will be as follows:

a) Carry out a field trip with MOC officials to evaluate possible Pilot locations. (Done)

b) ADB TA 4786-CAM to assess the IT and capacity building requirements at the Pilot location. (Done)

c) ADB TA 4786-CAM to make recommendations for the Pilot location. (Done)

d) Discussions and Approval by MOC of the Pilot location. (Done)

e) MOC Decentralisation Plan presented to MOC by ADB TA 4786-CAM. (Done)

f) Decentralisation Pilot budget approved by ADB. (Done)

g) MOC Decentralisation Plan approved by MOC and ADB TA 4786-CAM.

h) Procure hardware and software, internet access and consumables for Pilot. (Done)

i) Draft Operational Guidelines for Decentralised Operation and present to MOC for approval. (Done)


j) Release final Operational Guidelines for Decentralised Operation.

k) Installation and testing of Pilot system including training.

l) Issue prakas relating to decentralisation.

m) Commence Pilot operation.

n) Commence Pilot dissemination activities.

o) The duration of the Pilot will be eight (8) weeks.

p) A Pilot Assessment document will be produced setting out the lessons learned and the recommendations for future decentralisation of registration to the PDOCs.

2.3.3 Establish an online system for submission of information to the business registry. The PDOC Pilot location will be provided with an internet connection. This would allow the following:

a) Submission of application documentation by e mail to the Business Registration Bureau in Phnom Penh.

b) Access to the Computerised Business Registry information that will be made

available online (See Upload to the Internet of the Computerised Registry approval document). This will provide the PDOC Pilot officials with the ability to conduct initial name checks remotely.

2.3.4 Formulation of procedures to be conducted at Departments of Commerce.

a) This document will be called the Operational Guidelines for Decentralised Operation and will include more detail than the prakas.

b) This document will be provided to the Commercial Registration Department for

approval and will be finalised ahead of the initial training to be provided at the Pilot location. The contents of this document will form the basis of the training for all staff at the Pilot location and will be used to issue MOC notifications to both the public on the operation of the Pilot location and the staff at the Pilot location.

2.4. Deliverables/Outputs

These will be delivered in two clear Phases which are as follows.

Phase I: Installation and training of the Pilot system.

Phase II: Online access to the Computerised Registry and the commencement of Dissemination Activities.


The Pilot will then end eight (8) weeks following going “live” and the system will remain in place as a model for other such decentralisation across Cambodia.

Hardware, Software and Internet Connectivity

Phase I

Hardware Unit Description / Explanation PC Intel Pentium 4 - 3.0GHz Processor / 1MB L2 Cache / 800MHz FSB 80GB HDD 7200RPM SATA 1.44MB FDD internal 512MB (256MBx2) RAM DDR 2 PC 533 CD RW/DVD 48x32x48x/16x internal Combo 10/100 NIC Ethernet Keyboard PS/2 Khmer/English Mouse Optical with Scroll / USB MS Windows XP Professional Licensed

2

Standalone Pilot System computers. Pre-loaded with MS Windows XP Professional.

UPS 650 VA 1 To provide enough power to shut PC down during power outages.

Printer, Scanner and Copier machine (All-in-one) 1

For copying documents sent to MOC, scanning documents for e mail transmission to MOC and general printing.

Software Unit Description MS Office Basic 2007 2 Application Software

Security Software (Norton) 2 To protect both PCs from virus attacks.

Consumables Unit Description Dust Covers 5 For 2 PCS, 2 monitors, 1 printer.

Inkjet ink cartridges As appropriate

Needs to be sufficient for 7,000 mainly black and white sides of paper being printed during the pilot.

Printer Paper 16 reams (70 gsm, 500 sheets per pack) Write once CDs (pack of 100) 1 For back-up Re-writeable CDs (pack of 10) 1 For back-up

Dial-up internet access will be made available from the date of the Pilot system installation and will be available for the duration of the Pilot only. Thereafter, the internet connection will be funded by the MOC.


Pilot System Functionality

The “Pilot System” refers to the hardware, software, internet connectivity, personnel and procedures in place at the PDOC Pilot location. It does not merely refer to the IT system components.

Phase I

Item Pilot System Functionality Comments

1

a) Ability to receive and process applications for all types of business registration (except those that must register with CDC).

b) Application forms and supporting documentation will be submitted to the MOC in hard copy, together with the fees collected.

All types of business registration applications will be permitted at the PDOC. Importantly, companies will be allowed to make their applications at the PDOC.

2

Ability to scan and send application documents across the internet to the Business Registration Bureau at MOC in addition to submitting in hard-copy, together with the fees collected.

Documentation to be sent in electronic and hard-copy form.

3

The business licence can be created (as far as possible without the information that is inserted centrally) at the PDOC and submitted to the Companies & Business Registration Bureau at MOC by e mail and in hard copy.

Certain information will be required for the completion of the licence e.g. the Chronological Number and the Registration Number

4 Name checks are performed by text, e mail or telephone in this Phase I.

The Companies & Companies & Business Registration Bureau at MOC will be contacted to perform the name check initially.

5

Registration Certificates are issued from the Companies & Business Registration Bureau at MOC only. No Temporary Registration Certificate is issued in Phase I.

Phase II

Item Additional Pilot System Functionality Comments

1 Ability to perform preliminary Name Checks online by accessing the Computerised Registry data that has been uploaded to the internet.

Once the Computerised Registry is uploaded to the internet, preliminary online name checks can be made. This is preliminary because the online data is updated periodically and recent registrations may still reside on the MOC Registry only.

2 Temporary Registration Certificates can be issued and may be used until the MOC Registration Certificate

The Temporary Registration Certificate will expire if no


has been issued – within 30 days of the initial date of application.

Registration Certificate is issued, but is valid once issued for the purposes of licence applications etc.

3 Registration Certificates are issued from the Companies & Business Registration Bureau at MOC only.

The official MOC Registration Certificate can be issued only from the MOC at this time.

Training

The training schedule to be provided is set out below. Phase I Objective: After completing this training, the staff of the provincial Department of Commerce will be able to use the Pilot System to the level of functionality set out in Phase I.

Trainer Selected staff from the Companies & Business Registration Bureau at MOC and local IT company in Battambang

Trainees Up to 5 staff at the Pilot location Location Pilot location Language used

Native Khmer Language English (Technical)

Requisite Trainees must be able to type using a computer keyboard and to use Microsoft Word

Material User Manuals + Training Handouts. Timing Training sessions will be on one (1) day, morning and afternoon Duration 3 full day

Phase II

Objective: After completing this training, the staff of the provincial Department of Commerce will be able to use the Pilot System to the level of functionality set out in Phase II.

Trainer Selected staff from the Companies & Business Registration Bureau at MOC

Trainees Up to 5 staff at the Pilot location Location Pilot location Language used

Native Khmer Language English (Technical)

Requisite Trainees must be able to type using a computer keyboard and to use Microsoft Word

Material User Manuals + Training Handouts.


Timing Training sessions will be on one (1) day, morning and afternoon Duration 1 full day

Hardware Warranty

Warranty for one (1) year will cover only those items of computer hardware that have been provided new under the MOC Decentralisation Plan. Out of Scope

1) Providing spare parts for the equipment. 2) Problems related to third party applications that are software specific. 3) Backing up of user/server data. 4) Programming or developing any software-related work. 5) Consumables like printer ribbon, printer head, cartridge, and batteries of the UPS

system etc. 6) Consumables like conduits, cables, faceplates and any other network cable equipment

needed for network, telephone or electrical cabling requirement.

2.5. Proposed Process Flow

This is set out at Appendix 5.

2.6. Assumptions and Language

In finalising this document and details therein, such as the timetable, the following assumptions have been made:

• The timetabled events are adhered to.

• The Ministry of Commerce and the ADB TA team maintain a collaborative and professional working relationship throughout.

• The translation of this document from the English language into Khmer is true and accurate and reflects the spirit and detail of the English language version.

Where there is a dispute concerning the Khmer language version, the English language document will prevail.

3. Project Management

3.1. Project Manager

Mr. John Donnelly, ADB TA 4786-CAM


3.2. Project Team

The project team comprises:

From ADB TA 4786-CAM

• Mr. Ky Ka, ADB Domestic Team Leader

From Commercial Registration Department, MOC

• Mr. Long Sophorn, Chief of Companies & Business Registration Bureau

3.3. Quality Consultants

The ADB TA 4786-CAM team will engage the following as quality consultants for this project:

• Mr. Ky Ka, ADB Domestic Team Leader

3.4. Reporting Requirements

A status report will be prepared by the project manager every two (2) weeks to communicate the progress of the project to the MOC team and the ADB TA 4786-CAM team.

4. Stakeholder Communication

It is envisioned that the following will be key stakeholders and this section sets out how communication with those stakeholders will take place.

Stakeholder(s) Communication

Senior Minister, Minister of Commerce

H.E. Chan Prasidh

It is envisioned that the two weekly reports provided to the Director at the Commercial Registration Department will be summarised for the benefit of the Minister.

Secretary of State, Ministry of Commerce

H.E. Kem Sithan

It is envisioned that the two weekly reports provided to the Director at the Commercial Registration Department will be summarised for the benefit of the Secretary of State.

Under Secretary of State, Ministry of Commerce

H.E. Mao Thora

It is envisioned that the two weekly reports provided to the Director at the Commercial Registration Department will be summarised for the benefit of the Under Secretary of State.

Companies & Business Registration Bureau employees Communication regarding functionality upgrades

and process changes will be achieved by the


training as set out in this document.

Provincial Department of Commerce employees Communication regarding functionality upgrades and process changes will be achieved by the training as set out in this document.

4.1. Related Projects

The Registry Upgrade (See Upgrade Approval Document) and the Upload to the Internet of the Computerised Registry will be related projects. Both projects, set out below, address the ADB loan conditionality 3-5, namely:

MOC to implement a computerized database of an enterprise registry and link the database to the MOC website to make corporate information accessible to the public.

4.2. Registry Upgrade

The MOC Companies & Business Registration Bureau already has a computerised business registry that is used internally. ADB TA 4476-CAM highlighted a number of shortcomings of, or potential improvements to, the existing system. These include, inter alia,:

(i) to allow for ISIC codes of the business activity of the registrant to be used by the system thereby allowing better classification of businesses and improved statistical information,

(ii) an upgrade to provide the functionality to input annual declaration information and identification of the status of the company (“in good standing”, “not up-to-date”, “inactive”, “dissolved” or “illegal”), and

In addition, discussions with the current ADB TA 4786-CAM team have identified some additional necessary functionality improvements that are required. The system functionality upgrades are set out in the Upgrade Approval Document.

4.3. Upload to the Internet of the Computerised Registry

Once the computerised registry has been upgraded, selected information will be made available for online access. The details of this will be agreed with the MOC and will be set out in the Approval Document for the Upload to the Internet of the Computerised Registry.

5. Resourcing Requirements

5.1. Budget and Expenditure

The budget and expenditure required for the hardware, software, internet access and consumables as set out in the deliverables section (Section 2.4) have been approved by and will be disbursed by ADB in Manila.

All funds relating to the operation of the Pilot project by MOC personnel shall be borne by the MOC.


The travel expenses of key MOC employees selected by the ADB TA 4786-CAM team will be borne by ADB TA 4786-CAM for the installation and training visits only.

All expenditure required under this Upgrade Approval will be disbursed to all suppliers and vendors directly by the ADB TA 4786-CAM team.

5.2. Other Resources

No other resources are required for the Registry Upgrade. However, only the system components provided under the Registry Upgrade will be covered by a one (1) year manufacturer’s warranty.

The existing system components at the PDOC Pilot location must be supported by the resources of the MOC/PDOC.

6. Project Approval and Acceptance

The Approval Process

In order for the activities under the MOC Decentralisation Plan, as set out in this document, to commence it is essential that this document be signed at the Document Acceptance and Release Notice page by the ADB TA 4786-CAM Team Leader, Mr David King, and Mr. Ho Sarann, Director of the Commercial Registration Department. Once these signatures are in place the activities under the MOC Decentralisation Plan will commence. The items that will be delivered will be that as set out in the signed MOC Decentralisation Plan.

Completion and System Acceptance

The MOC Decentralisation project will be completed once the new system hardware (and software), new system functionality and training have been delivered to the satisfaction of the MOC. System Acceptance will be evidenced by the signature of an Acceptance Certificate for training and system delivery. The Acceptance Certificates are set out at Appendix 4.

7. Timetable

Please note: Activities in the predecessor column must be completed prior to this activity commencing.

No. Description Who Start Finish Predecessor(s)

to be completed

1 Carry out field trip with MOC officials to evaluate possible Pilot locations.

MOC/ ADB Completed

2 ADB TA 4786-CAM to assess the IT and capacity building requirements at the Pilot location.

MOC/ ADB Completed

3 ADB TA 4786-CAM to present budget for Pilot to ADB (Manilla) ADB Completed

4 ADB TA 4786-CAM to make recommendations for the Pilot ADB Completed


location.

5 Discussions and Approval by MOC of the Pilot location.

MOC/ ADB Completed

6 MOC Decentralisation Plan presented to MOC by ADB TA 4786-CAM.

ADB Completed

7 MOC Decentralisation Plan approved by MOC. MOC July 31 6

8 Decentralisation Pilot budget approved by ADB. ADB Completed

9

MOC Decentralisation Plan signed by ADB TA 4786-CAM following budget approval from ADM (Manilla).

ADB July 27 7

10 Procure hardware and software, internet access and consumables for Pilot.

ADB Done

11 Draft Operational Guidelines for Decentralised Operation and present to MOC.

MOC/ ADB Done

12 MOC Approval of Operational Guidelines for Decentralised Operation

MOC July 30

13 Release of final Operational Guidelines for Decentralised Operation

MOC/ ADB August 3

14 Installation and testing of Pilot system including training of PDOC staff. (Phase I)

MOC/ ADB August 10 10

15 Draft Prakas and work together on finalisation at MOC

MOC/ ADB August 31

16 Issue prakas relating to decentralisation. MOC August 31

17 Commence “Live” Pilot operation.

MOC/ ADB August 13

18 Commence Pilot dissemination activities. ADB Item 17 +

1 day Item 17 + 20 days 17

19 Installation and training for Phase II

MOC/ ADB August 31 17

20 End of Pilot MOC Item 17 + 8 weeks 19

21 Start of Live (not Pilot) operation MOC Item 20 + 1 day 20

22 Pilot Assessment Document presented to MOC ADB Item 20 + 7

days 20

8. Appendices

The attached appendices are as follows: Appendix 1: Section on Decentralisation from the Business Reform Plan Appendix 2: Information Technology Plan Appendix 3: MOC Notification 2106 Appendix 4: Acceptance Certificates Appendix 5: Draft Operational Guidelines for Decentralised Registration


APPENDIX 1 Decentralisation Extract

Below is the section on Decentralisation (Section III) from the Plan for Reforming the Cambodian Business Registration System as issued with MOC Notification 2106. Decentralization The MOC’s current requirement that business people register their companies in person in Phnom Penh makes the process very costly in terms of both time and money for business people living outside the capital. In order to expedite registration for companies in the provinces, decentralization of the process is a must in the medium term. MOC will introduce a 2-step process to decentralize registration: 1. Develop a Plan for Registration at the Provincial Level If registration is to take place in the provinces, two key questions must be answered:

a) Who will serve as the registrar? b) How will the information and fees be sent back to the MOC in Phnom Penh?

It is important that the information and funds be transmitted by means that are both secure and cost-efficient.

Commercial Registration at the provinces. The Ministry of Commerce will establish the branch offices of Commercial Registration Department for a number of combined provinces based on their economic situation. The branch offices are supervised by the technical officials of the Commercial Registration Department of the Ministry of Commerce and a number of official from the Commercial Department come to work all together. Each of the branch offices is authorized to register the companies temporary of a limited time. The Information, documentation requirements and cost of registration. While the temporary license is issued, the Branch Office will send all documentations and fees of cost registration to the Ministry of Commerce in order to obtain the Commercial Registration Certificate and file in the registry. To decentralize registration MOC considers the following:

1. Battambang City is an appropriate location for the initial pilot in registration decentralization. The province is large in terms of population, land area and economy, it is readily accessible by road from Phnom Penh, and has been recognized by donors for its good government. Battambang does not suffer from some of the political tensions that have made coordination between provincial and national governments difficult in the one-stop shop pilot in Siem Reap, which was also under consideration as a pilot site for decentralized business registration.


2. The Department of Commerce rather than the one-stop shop is the most appropriate site for registration. The one-stop shop caters to very small enterprises and operates at the district, not the provincial, level.

3. The Department of Commerce can do initial approvals of registration materials and issue a temporary certificate (good for perhaps 30 days) that would allow companies to obtain necessary licenses while the application is processed by the MOC in Phnom Penh. The Department of Commerce can do a name check with the MOC by fax and phone. The department could also accept Annual Declarations and amended AI.

4. Implementing the pilot would require that the MOC agree to delegate authority to the Department of Commerce to receive registration applications, annual declarations and amended AI. Implementation would also require capacity-building and training at the department so that staff can process applications.

2. Use Information Technology to Improve the Decentralization Process IT applications could produce considerable efficiency gains for the MOC as well as Cambodian businesses in the decentralization process. Officials at the departments of commerce could use the Internet to conduct name checks and communicate other types of registration information with the MOC as well. In the long term, application materials could also be sent online between provincial departments and the MOC. In the longer term, MOC may even be able to allow business people to conduct online name checks themselves and, ultimately, to complete registration applications themselves online. This could be especially useful for those companies in the provinces that have access to IT.


APPENDIX 2 Information Technology Plan

Below is the Information Technology Plan extract (Section IV) from the Plan for Reforming the Cambodian Business Registration System as issued with MOC Notification 2106. OVERVIEW The Ministry of Commerce is committed to using information technology (IT) to improve the transparency and efficiency of business registration in Cambodia. With this goal in mind, the ministry has already created a computerized database of registered companies for internal use. The MOC now plans to make its enterprise registry publicly available on the Internet. This online registry will be updated regularly so that individuals and organizations can access key information about all registered companies that they know is accurate and up-to-date. The online registry will also play a key part in the MOC’s plan to decentralize registration to the provinces. The IT Plan is divided into three steps, each of which will require assistance from the ADB TA Team in the form of technical advice and training, hardware upgrades and time-limited funding. In Step I, the MOC will export data from its in-house electronic database containing key information about registered firms in Cambodia to be put into an online registry that can be accessed by the public via the Internet. In Step II, a system will need to be designed to update the database to reflect changes in company information through time. In Step III, MOC and the ADB TA Team will work with provincial departments of commerce to upgrade their IT equipment and allow them to perform a number of registration tasks currently performed at the MOC in Phnom Penh. All the steps outlined in this plan are projected to be complete by the end of 2007. STEP I: REGISTRY SET UP A. Export into new database The Company Registration Bureau will export existing registration data from the MOC’s database to an Excel file. This Bureau is currently in charge of compiling and maintaining the electronic database of registered firms inside the MOC. The MOC uses a desktop application called CoReg2002, which was written for the MOC by a firm called Bak Touk Computer Company, to store the company registry data. The key data of all registered companies is already available through the MOC; if additional data is to be added to the public registry, Bak Touk will need to provide a password to export the data. B. Uploading Data to Web-Based Application The registry data from the Excel file will need to be imported into an MS Access database file. At that point it will be uploaded for web-based application by the MOC’s webmaster. This application can then be linked to the MOC website.


Step I: Process of Uploading Data to MOC Website

Excel File

MS Access Database File

Registered Company Information

(Web based application)

CoReg2002 (Desktop application)

Export

Import

Upload

A

B


Once Step I is completed, it will be possible for the pubic to access key data about any registered Cambodian firm via the Internet. The current format for company listings in the CoReg2002 database is shown in Figure 2 below.

Fig. 2: Web Page with Information about Registered Companies

Page 1

Page 2

C

Appendices

<Project Title>: Project Business Case – Version 0.A Page 18 of 39

STEP II: UPDATING After the initial data fields shown in Fig. 2 above have been put online, MOC plans to further develop the online registry. In addition to the information that currently appears in the MOC database, three additional fields will be added:

1. Name of registered agent 2. International Standard Industrial Code (ISIC) 3. Status (“In Good Standing”, “Not Up-To-Date”, “Inactive”, or

“Dissolved”) At the same time, the MOC will develop a system for continually updating information about firms to reflect new information received about each registered company on the basis of annual declarations, dissolution filings, and so on. MOC will work to design procedures to ensure that new information (including new registrants and changes in the address, form, or other information about existing firms) is regularly entered in the public database (on a monthly basis at minimum). As noted, a “status” field will be added to the fields shown in Figure 2. The information in the status field can be automatically generated based on the date of the last recorded annual declaration in the database, given the appropriate source code from Bak Touk Computer Company. Currently, the date of a company’s most recent annual declaration (if any) is shown in the “Main Activity” field. STEP III: PROVINCIAL USE When the online public registry has been made fully functional, it will provide a number of additional benefits for provincial departments of commerce involved in decentralized registration. At minimum, it will allow provincial officials to carry out name and trademark checks directly online, without having to go through the MOC. In future, it might also be possible for the departments of commerce to enter information about provincially-registered companies directly online as well. Currently few departments have computers or Internet connections and many local officials are not familiar with computer use. In order for the provincial departments of commerce to take advantage of the online public registry, however, they will require IT equipment upgrading and training. Further details about the decentralization of registration and the role of IT in this process will be contained in the MOC’s Decentralization Plan, to be issued by June 2006.


APPENDIX 3 MOC Notification 2106

Unofficial English Translation by ADB TA 4476

Kingdom of Cambodia Nation- Religion – King

Ministry of Commerce No. 2106 MoC / NTK Phnom Penh, September 8, 2006

Notification on Issuance of the Business Registration Reform Plan

The Ministry of Commerce has the pleasure to inform the domestic and foreign entrepreneurs, traders and the public that in conformity with the Law on Commercial Rules and Registration; the Law on Amending the Law on Commercial Rules and Registration; the Law on Commercial Enterprises; and the Prakas of the Ministry of Economy and Finance on Determining the Fees for Company Registration, Dissolution and the Issuance of Other Certificates, in order to facilitate the domestic and foreign entrepreneurs and traders to carry out commercial registration and encourage businesses to utilize the service of Ministry of Commerce to obtain information on the commercial registration, the Ministry of Commerce hereby issues the Commercial Registration Reform Plan for immediate implementation and in the future so that: (i) All documentation requirements for registration shall be reduced based on the law, and procedures simplified in order to comply with recent developments intended to improve the business environment. (ii) Service fees and costs for registration including forms shall be reduced and made transparent based on the spirit of Prakas No 514 SRV.TH, dated July 17, 2000. (iii) The commercial registration system shall undertake improvements to utilize modern information technology, procedures, and regulatory framework related to decentralized registration under the jurisdiction of the Ministry of Commerce and shall be disseminated to the public and issued at branch offices at the provincial and municipal level. (iv) A national database will be established in order to compile all information in the registry so that the public can search this information easily and so that registration information shall be linked to other concerned Ministries of the Royal Government of Cambodia. This notification shall be provided to the public, entrepreneurs so that they are knowledgeable and ready to comply with the commercial registration reform plan from the date signed.

For Senior Minister Minister of Ministry of Commerce

Secretary of State Kem Sithan

cc:


- Cabinet of the Prime Minister (for reporting ) - Cabinet of Deputy Prime Minister, Sar Kheng (for reporting ) - Cabinet of Deputy Prime Minister, Hor Namhong, (for reporting ) - Council for the Development of Cambodia (for information ) - Ministry of Industry, Mines and Energy (for information ) - Ministry of Economy and Finance (for information) - Ministry of Interior (for information ) - Director General for Royal Gazette and Computer Service - Provincial and Municipal Governors (for dissemination ) - Provincial and Municipal of Departments of Commerce (for dissemination ) - Document and Archives.


Original MOC Notification 2106


APPENDIX 4 Acceptance Certificates

The attached, in English and Khmer, are the Acceptance Certificates for the MOC Decentralisation Plan.


ACCEPTANCE CERTIFICATE For the Installation of the

Decentralised Pilot System

With reference to the Installation of the Decentralised Pilot System as agreed between the ADB TA 4786-CAM team and the Ministry of Commerce - Commercial Registration Department, and as set out in the agreed MOC Decentralisation Plan dated xx/xx/xxxx.

The Installation of the Decentralised Pilot System is, by means of this certificate, hereby officially accepted by the Ministry of Commerce - Commercial Registration Department.

This document certifies that acceptance tests to verify the functionality detailed in the referenced MOC Decentralisation Plan have been carried out successfully and to the satisfaction of the Ministry of Commerce - Commercial Registration Department.

This Certificate of Acceptance is signed in two (2) originals on this date:_____________________________.

_________________________________ Signed for and on behalf of

MINISTRY OF COMMERCE, COMMERCIAL REGISTRATION DEPARTMENT

Name: Mr. Ho Sarann Title: Director, Commercial Registration Department Date: Name: Mr. Long Sophorn Title: Chief of Companies & Business Registration Bureau

Date:


ACCEPTANCE CERTIFICATE For the

Decentralised Pilot System Training

With reference to the Training for the Decentralised Pilot System as agreed between the ADB TA 4786-CAM team and the Ministry of Commerce - Commercial Registration Department, and as set out in the agreed MOC Decentralisation Plan dated xx/xx/xxxx.

The Training for the Decentralised Pilot System is, by means of this certificate, hereby officially accepted by the Ministry of Commerce - Commercial Registration Department.

This document certifies that the Training detailed in the referenced MOC Decentralisation Plan has been carried out successfully and to the satisfaction of the Ministry of Commerce - Commercial Registration Department.

This Certificate of Acceptance is signed in two (2) originals on this date:_____________________________.

_________________________________ Signed for and on behalf of

MINISTRY OF COMMERCE, COMMERCIAL REGISTRATION DEPARTMENT

Name: Mr. Ho Sarann Title: Director, Commercial Registration Department Date: Name: Mr. Long Sophorn Title: Chief of Companies & Business Registration Bureau

Date:


APPENDIX 5 Draft Operational Guidelines for Decentralised Registration


Operational Guidelines for Decentralised Registration

Location The Decentralised Registration Bureau will be based at the provincial Department of Commerce. Registration of an Enterprise at a Decentralised Registration Office All limited companies, sole proprietorships, branches, representative offices and partnerships can obtain full Ministry of Commerce registration by presenting their application to a Decentralised Registration Office which will be situated at a provincial Department of Commerce. The registrant must decide what form of enterprise they wish to register. The options for the type of enterprise are as follows:

• Sole Proprietor • Single Member Limited Company • Limited Company • Public Company • Branch of a foreign company • Representative office of a foreign company • Branch of a Cambodian company

All enterprises must, in the first instance, obtain the appropriate application form from the Decentralised Registration Office at which they will be informed of the formalities of enterprise registration. Small Enterprise Exclusions Small enterprises who operate their business not in the Real Regime (Reference: MEF Prakas 795 for Real Regime thresholds) but within the Estimated Regime (Reference: MEF Notification No. 006 SCN.SHV.PD, dated 20 March 2007) need only apply for a business licence (not Ministry of Commerce Registration) at the provincial Department of Commerce or the operating One Window Service, if their business is located within Phnom Penh Municipality, Siem Reap District or Battambang District. Name Check Formality Every enterprise seeking a registration must undergo a check to ensure the name selected is not in use by another business in Cambodia or a on the Reserved Name list.


A name check may be carried out by a telephone call or a text message from the Registration Official at the Decentralised Registration Office to the Companies & Business Registration Bureau at the Ministry of Commerce in Phnom Penh. This name check is provisional only. A final name check will be performed once all original application documentation arrives at the Companies & Business Registration Bureau at the Ministry of Commerce in Phnom Penh. Application Form and Other Templates Following the name check the enterprise is then given the appropriate application form for that type of enterprise. The application forms shall be the same as used at the Companies & Business Registration Bureau at the MOC. In the case of a limited company application, the Decentralised Registration Office Registration Official will also provide the enterprise with a hard copy or electronic copy (on the applicant’s own media) of the Articles of Incorporation and explain the formalities associated with this document. Documentation Formalities for Enterprise Registration For limited companies, the registration formalities are governed by the Law on Commercial Rules and Commercial Register, the Amendments to the Law on Commercial Rules and Commercial Register, the Law on Commercial Enterprises, Prakas No 163 MoC/M 2004 dated August 23, 2004 determining the Cost for Company Registration and the MOC Notification No. 1414 MOC/SM2006 on the Requirements for Commercial Registration. The enterprise must take to the Decentralised Registration Office the documents for the relevant enterprise. In accordance with Article 25 of the Law on Commercial Rules and Commercial Register, the Amendments to the Law on Commercial Rules and Commercial Register, if the documentation provided is not sufficient then the enterprise shall be allowed fifteen (15) calendar days to return with the complete and correct documentation in full. The Registration Official reviews the Articles of Incorporation and the application documentation and, upon acceptance that these are in order, asks the Registrant to proceed to the Office of the Director to pay the appropriate registration fee (see Appendix 2). Fees Upon payment, the applicant’s name and a record of their payment must be entered into the Fees Book and the applicant is informed as to when they should return for their Registration Certificate and Business Licence. The applicant shall be issued with a receipt for their payment as evidence that they have paid the full fee for the registration of the enterprise.


Enterprises must pay the following fees. All fees collected by the Decentralised Registration Office shall comply with the following legislative instruments: Signature of Receipt for Filing Additionally, the applicant must sign the Receipt for Filing part of the application form. If the applicant is a facilitator/proxy for the enterprise the director or shareholder (for a company) or a general partner (partnership) or manager (if a branch or representative office) must visit the Decentralised Registration Office one (1) day after the payment of the Business Registration Fee and submission of all documents The Receipt for Filing is then countersigned by the Chief of the Decentralised Registration Office. Then the Cashier of the Director’s Office then stamps, signs and dates, and forwards to one of the Registration Officials. Assignment of Business Registration Number and Chronological Registration Number The full set of documentation is passed to a Registration Official for a completeness review. Once reviewed, the Registration Official manually assigns the Chronological and the Business Registration Numbers. This is done by telephone or e mail communication with the Companies & Business Registration Bureau in Phnom Penh. These numbers are issued by the Registry Registration Official at the Companies & Business Registration Bureau in Phnom Penh and are written in a book held at the Bureau. The Chronological Number simply follows the number sequence in the book and the Company Registration Number follows the sequence being used for that type of entity. Chronological Registration Number This takes the form XXX/YY, where XXX is the sequential number of registrations made in the year. The YY number identifies the year, for example 07 represents the year 2007. Business Registration Number This takes the form WWWW/ZZQ where WWWW is a sequential number which represents the number of that type of registration in the year. That is, for limited companies (both private limited and public companies) there is one sequence, for branch offices/representative offices there is another sequence and for sole proprietors there is another sequence. Regarding the ZZQ part: ZZ comprises two digits representing the year, such as 07 for 2007 and the Q part is an identifier code of the Companies & Business Registration Bureau which is one of the following:

Categories (per Section 4 of the Application Form)

Code Used in Enterprise Registration Number

General Partnership Private Limited Company Single Member Private Limited Company Public Limited Company

P = Khmer owned E = Foreign owned


Sole Proprietor I = Khmer owned IE = Foreign owned

Branch / Representative Office B Business Licence Once the Chronological and the Business Registration Numbers have been issued and written on the application documentation, a Registration Official inputs the enterprise information provided on the application documents into an MS Excel macro which produces, in printed form, the Business Licence which sets out the key details of the Application for Company Registration. This draft business licence is sent with the hard copy application documents to Phnom Penh and also e mailed to the Companies & Business Registration Bureau. Approval by the Director of the provincial Department of Commerce The business licence is signed by the Director of the provincial Department of Commerce and the signature must be stamped with a seal by the Head of Administration before the documentation is sent to the Companies & Business Registration Bureau in Phnom Penh. Transfer of Documentation and Fees to the Ministry of Commerce The means by which the documentation and the fees get to the Companies & Business Registration Bureau may vary according to available transport and Registration Officials travelling to Phnom Penh. All documentation sent to the Companies & Business Registration Bureau must be submitted, in the first instance, to the office of the Director of the Commercial Registration Department. Business Registration Certificate and Business Licence Business Registration certificates together with the Business Licence from the Ministry of Commerce shall be collected, sent by post or accompanied by a Ministry of Commerce Registration Official to the provincial Department of Commerce. Notification to Enterprise Enterprises may return for collection on an agreed date or, alternatively, be notified of the availability of their Registration Certificate and Business Licence by telephone. Other Operations at the Decentralised Registration Office The following submissions, usually made only at the Companies & Business Registration Bureau in Phnom Penh, can be made at the Decentralised Registration Office. The procedures are set out below. Amendment to Articles of Incorporation


Where a limited company wishes to make an amendment to its Articles of Incorporation, the company may go to the Decentralised Registration Office to file the required documents and pay the fee due. Enterprise Dissolution Where an enterprise wishes to remove its name from the Commercial Register it can go to the Decentralised Registration Office and make an application for dissolution of the enterprise. Form C is used. The documents required are set out below. Annual Declaration of a Company Using form for Annual Declaration for Commercial Enterprise. In accordance with MOC Prakas No. 149, dated 5 July 2006, all companies registered with the Ministry of Commerce must submit an annual declaration. This annual declaration may be submitted at the Decentralised Registration Office or at the Companies & Business Registration Bureau at the Ministry of Commerce.


APPENDIX 6 Decision #089 on Determination of Site for Piloting

Decentralisation of Commercial registration in Battambang Province

Unofficial English Translation

Decision

on Determination of Site for Piloting Decentralisation of Commercial

registration in Battambang Province

Senior Minister, Minister of Commerce - Have seen the announcement on the implementation the plan of business registration

reform No 2106 MoC/LA - Have seen the plan for business registration reform in Cambodia. - Have seen the report on the implementation activities dated May 30 2007 of ADB TA

4786-CAM and the recommendation for pilot project on decentralization of business registration.

DECIDES

Article 1: Select Battambang province as the location for pilot project on

decentralization of business registration Article 2: The location is named: "Registration Branch of Business Registration

Department" Battambang Center Article 3: Registration Branch as stipulated in Article 2 shall be led by one official

representative of Registration Department acting as Branch Manager Article 4: Registration Branch has the following functions and duties:

- Provide advice and recommendations to the customers and enterprises on the regulation of business registration

- Provide information on the decision of the business registration department about the authorization to use the name of the requestor

- Receive business registration application documents and send to the business registration department to register all business enterprises which have originated office in Battambang

- Deliver the registered documents to the registration agents of the enterprises-companies

- Control and enter the data of business registration of all business enterprises which has office located in Battambang

- Disseminate the contents of the law and legal documents related to business registration and enhance the implementation effectively.


- Prepare report and provide the statistic of all business enterprises which have offices in Battambang province

- Resolve any problem arising from business registration or send the documents to business registration department in case that the problem is serious..

Article 5: General Department of Technique, the cabinet of Senior Minister-Minister of Commerce, Commercial Registration Department, and the Head of Provincial Department of Commerce have the duties to implement this decision effectively since the date of signing

Phnom Penh, Day..Month.. Year 2007 Senior Minister-Minister of Commerce

Copies to - The cabinet of the Prime Minister "for Reporting Information" - Cabinet of the Deputy Prime Minister Sar Kheng "for Reporting Information" - Cabinet of the Deputy Prime Minster Hor Nam Hong "for Reporting Information" - Cabinet of the Council Ministers "for Information" - Cambodia Development Council "for Information" - Ministry of Industry Mines and Energy "for Information" - Ministry of Economy and Finance "for Information" - Ministry of Interior "for Information" - General Department of Royal Gazette and Computer Services "for Information" - Provincial and Municipal Municipality "for Information" - Provincial and Municipal Departments of Commerce "for Information" - Battambang Department of Commerce "for Implementation" - As of Article 3 and 5 "for Implementation" - ADB TA 4786-CAM "for Information" - Archives-Documentation

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