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Cambodia

Starting Business in Cambodia

Business Opportunities in Cambodia

Low-cost labor and swift economic growth make Cambodia a desirable place for a business to set up in. A private limited company can be set up in Cambodia without requiring a resident director. A minimal capital of around USD 1000 is required to set up a business in Cambodia. Hence, a business name registration in Cambodia may yield a profit right industry is selected for the expansion of a business.

Cambodia renders commercial business ideas across several grounds like real estate, agriculture, textile, etc. The list below comprises the top business opportunities for capitalists to start a business in Cambodia:

  • Tourism 
  • IT and technology
  • Healthcare
  • Food and beverage
  • Agriculture
  • Textile
  • Education services
  • Real Estate
  • Transport and logistics

The factors that fascinate foreign investors in setting up a company in Cambodia are economic stability over a long period, rapid economic growth, a reliable political landscape, and extensive investment opportunities in various sectors. 

Benefits of Starting a Business in Cambodia

Below we have listed a few advantages of doing business in Cambodia:

  • Strategic location: Cambodia is centrally located in Southeast Asia, giving it access to some of the world’s fastest-growing economies, including China, India, and Vietnam.
  • Low labor costs: Cambodia has a low-cost labor market, which makes it appealing to investors looking to set up manufacturing or production operations.
  • Government incentives: To attract foreign investment and promote economic growth, the Cambodian government provides various tax benefits, exemptions, and reductions.
  • Natural resources: Cambodia has abundant natural resources such as timber, minerals, and agricultural land, providing significant business opportunities in these sectors.
  • Emerging tourism industry: Cambodia’s tourism industry is rapidly growing, providing opportunities for businesses in hospitality, travel, and tourism-related services.

Requirements for Starting a Business in Cambodia

Before enjoying the advantages of doing business in Cambodia, you must meet the requirements for setting up a company in Cambodia. The following things that the investors should fulfill to start a business in Cambodia are mentioned below:

Visas and work permits 

One of the vital steps to take to start a business in Cambodia is a valid visa suitable for working in Cambodia. The most common visa which allows working in Cambodia is the EB visa. The visa can be renewed indefinitely based on 3, 6, or 12 months. One thing to remember is that Cambodian visas shorter than half a year allow single entry.

The Cambodian Ministry of Labour issues work permits with one year validity. The renewal of a work permit should be done each year between January and March. 

Tax Registration and Obligations

Corporate income tax, Value-added tax (VAT), withholding tax, and other taxes must be paid in Cambodia. Company registration in Cambodia must include the General Department of Taxation (GDT) for receiving a taxpayer’s identification number (TIN). 

Employment Contract

The Cambodian Labor Law permits Fixed Duration Contract (FDC) or Specific Duration Contract (SDC) and Undetermined or Unfixed Duration Contract (UDC). According to Labor Law, any signed labor contract is valid for up to two years.

Types of Business Structures in Cambodia

Cambodia has a variety of business entities to offer to investors. Every business entity differs from the other in terms of activities. Foreign investors who desire to start a business in Cambodia can pick their choices from these different business entities below:

Sole Proprietorship

Being the most straightforward business entity, the legal personalities between the owner and the entity remain unseparated. Only one individual owns and functions in this type of business structure. 

Partnership

  • General Partnership: In this partnership, the contract is between 2 or more persons. The partners work in synergy to make profits in business.
  • Limited Partnership: This is a partnership in which the contract is between 1 or more general partners. These general partners are the sole individuals who administer and tie up the partnership. It also includes a contract between 1 or more limited partners wherein the individuals must hand out their contributions to the partner’s capital.

Limited Liability Company(LLC)

It is the most commonly found business structure in Cambodia. The LLC can be 100% domestic or 100% foreign-owned or a combination of local and foreign shareholdings. It can have up to 30 shareholders. 

Foreign business

Cambodia offers three types of foreign business entities. They are:

  • Representative office
  • Branch office
  • Subsidiary

Company Registration Process

Company registration in Cambodia is straightforward and hassle-free once you are acquainted with the registration process. The steps below explain the procedure for incorporating a company in Cambodia:

  • Survey the requirements you need to meet: You must meet specific requirements before starting the registration process. Firstly, you must select a business entity that fits in perfectly for your firm. Secondly, you should publish a registered address for your office. And lastly, you must get hold of a local resident agent for your company.
  • Reserve a name for your company: Check the list of business name registration in Cambodia to ensure that the name you proposed for your company is available. 
  • Pay the requisite fee: The payment fee is dynamic as it changes with different business structures.
  • Receive confirmation once the company registration process in Cambodia is completed: Once the process of the company incorporation in Cambodia is done, you will receive a certificate and an article of incorporation. You will get the final approval only when you get both documents stamped.
  • Finish off with the post-registration procedures: These include opening a bank account and depositing the initial capital as per your business entity. You must also apply to the General Department of Taxation in Cambodia to register for tax.

How Much Does it Cost to Incorporate a Company in Cambodia?

As mentioned, the requisite fee for company incorporation in Cambodia varies according to your business structure. Various service providers, such as law firms (both local and international), provide company registration services from a price point that starts from USD 1,000 and could range over USD 4,000. 

However, it is essential to take note of the average official fees for company registration in Cambodia, ranging from USD 800 to USD 1,600. All firms do not include the official fee, so pay heed to their services if you associate with any of the firms.

Are Foreigners in Cambodia on Certain Passes Allowed to Start a Business in Cambodia?

The Kingdom of Cambodia permits 100% foreign ownership. A foreign capitalist is fit for setting up a company in Cambodia. Foreign investors can ultimately hold limited liability companies in Cambodia without any restrictions on the nationality of the shareholders or directors. There are no restrictions on trade as well.

However, any foreign investor cannot own land in Cambodia. A company is eligible to own land only when registered with a Cambodian citizen who holds the company’s shares of at least 51%. Any foreign shareholder cannot exceed the shares over 49%.

Government Assistance for Foreign-owned Businesses

Cambodia offers liberty to foreign investors for setting up a company in Cambodia. The government gives authority to run 100 % foreign-owned businesses in most sectors. There are a few sectors, such as rice milling, gemstone mining, cigarette manufacturing, and movie production, where the participation of local equity or prior authorization is necessary. 

The CDC also acts as the secretariat to G-PSF (Cambodia’s Government-Private Sector Forum) to provide a public-private consultation. The mechanism of this consultation works in such a way that benefits the private sector of Working Groups. 

How Can Multiplier Help?

Setting up a business in Cambodia can seem arduous if you are unaware of the procedure or how to direct the steps. Company incorporation in Cambodia requires specific steps, such as tax registration, declaring a registered official address, getting the legal documents, sticking to the rules and regulations, etc. You need proper guidance for the breakdown of details in a more straightforward format.

Multiplier is a platform that offers the configuration to start a business in Cambodia. Multiplier assists business owners and hiring directors in consistently exercising market opportunities, recruiting talent, and consistently setting up teams in different countries consistently while maintaining affordability. 

Frequently Asked Questions

While Cambodia offers many business opportunities in industries like textile, tourism, real estate, etc., agriculture remains the primary industry in rural areas.

 Cambodia’s Corporate Income Tax(CIT) is 20% enacted through a self-assessment regime.

You should meet the following criterion to register your company in Cambodia:

  • At least one director is required, who must be at least 18 years old, and can be of any nationality.
  • Holding a registered office
  • Maintaining records
  • At least one shareholder is required

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