Locals have reacted enthusiastically to a government directive forbidding self-employed foreign nationals from undertaking work in 10 small-business categories.
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The jobs affected are taxi, truck and tuktuk drivers, street vendors, hairdressers, masseurs, goldsmiths, shoeshiners, mechanics, and sellers of traditional instrument, Buddha statues and souvenirs.
All are relatively low-paid, informal occupations that are often taken up by Vietnamese, Indians, and Chinese nationals.
“I support the government’s directive for banning the foreign nationals from performing micro-jobs or businesses,” says Yor Manh, 27, a grilled banana vendor who works on Norodom Boulevard.
Paradoxically Yor, a newly wedded man from Prey Veng province, started his business as a street vendor a little more than two years after returning from Malaysia, Indonesia and Thailand where he was a migrant worker.
“I think doing business here in Cambodia is easy. We can stop whenever we want. Our working hours are up to us unlike being a migrant worker in a foreign country,” he says.
“Being a migrant worker is hard,” he adds. Every day, Yor leaves his rental home at 7am and goes home in the evening. He earns from 50,000 riel (just over $12) to 60,000 riel a day.
He adds that the money from the sale of grilled banana supports his family, including house rental, and keeps some for savings and medical care.
“It is good to ban foreign nationals from doing this jobs because we have more room to earn a living,” Yor adds, referring to Labour Ministry’s directive on foreign workers on Aug. 28.
Self-employed foreigners in Cambodia have to pay $360 per year for long-term visas to the immigration department and another $130 per year for an employment book or card, according to the ministry. They can be fined $10 for each day for overstaying their visas and risk deportation.
“A self-employed person refers to those who work and earn an income without an employer,” Labour Minister Ith Samheng says in the directive, adding that the ministry will no longer issue or renew work permits for foreigners doing 10 listed menial jobs. Those who fail to comply with the directive can be punished under the labour laws. A Labour Ministry report in 2018 states that there are 160,077 foreigners from 93 countries working in the Kingdom across all sectors.
More than 100,000 are Chinese, Vietnamese, Filipino, Thai, Indonesian, Taiwanese, Malaysian, South Korean, Indian and British.
Cambodia has about 10,000 self-employed foreign nationals. Among them, 5,000 to 7,000 self-employed foreigners work in micro-jobs and small businesses, says Heng Sour, a spokesperson from the Ministry of Labour and Vocational Training.
He says the directive does not affect foreign nationals who come to work in Cambodia registered under licensed enterprises or private companies. However, the owners of the enterprises and companies must report the number of foreign employees to the ministry.
“Based on the labour law and investment law, the private sector could have up to 10 per cent of foreign nationals working for their companies.
“If they cannot find the right skilled personnel locally, they can apply to the Labour Ministry for a higher quota of foreigners,” Heng adds.
The government says the reason for the limitations on foreign workers is because Cambodians can do the job, while only locals are able to do certain types of work. This protects the local job market.
“This prakas [directive] is very beneficial for the local economy because it helps protect local employment and and provides opportunities for local Cambodians,” says Sandra d’Amico, vice-president of the Cambodian Federation of Employers and Business Associations (CAMFEBA). The bar on the occupation and professions regarding foreigners is extremely fair and reasonable and it is good from a business perspective.
“There is no research on the economic loss to Cambodia [as a result of the jobs to foreigners]. [In any case] most of the self-employed foreigners work in the low-paying informal sector and micro-enterprises,” she says.
She adds that it is not good for the economy if foreigners earn a living here while enjoying Cambodian resources and other facilities but not contributing to the country in terms of tax.
“This prakas also improves the investment environment by making Cambodia competitive,” she adds.
Ath Thorn, president of the Cambodian Labour Confederation, says the directive is to supplement the labour laws on foreign workers in the informal job sector. The government noticed that having foreigners in the job sector creates competition with locals. The directive aims to protect locals by returning some of the informal jobs that were taken away by foreigners, he adds.
Ath notes that similar measures were put in place in other countries such as Singapore, Malaysia and Thailand. “I think the majority of foreigners who take these jobs are Vietnamese and Chinese nationals. If foreigners open a business and register with the ministry, they can still do it, but if they are self-employed, it is not allowed.”
Enforcing the directive
In order to enforce the directive, Heng says the Labour Ministry will no longer issue or renew work permits for foreigners working in these jobs.
“The Labour Ministry and Interior Ministry have joint group and work inspectors in each provincial department and cities across the country. Immigration officers will also investigate enterprises and jobs handled by people,” Heng adds. The authorities are also allowed to stop foreigners who may have ignored the directive.
“They can send information to immigration officers or the labour ministry so that we can take action and stop [illegal] activities or force them to leave the country if they do not comply with the law in the Kingdom,” says Heng.