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Everything you need to know about investing in Cambodia

For the past two decades, Cambodia has experienced rapid economic growth. Broad access to global markets and an economic policy that openly courts foreign investment means the country’s economy is expected to continue growing

March 12, 2018
Everything you need to know about investing in Cambodia
Downtown Phnom Penh, Cambodia Photo: Kith Serey EPA/EFE


The local currency, the Khmer Riel (KHR), was introduced in 1980. However, the Kingdom is a partially-dollarized economy, with 80% of deposits and credits in the country’s banks in US dollars. One dollar is equal to roughly KHR4,000.

Foreign exchange control
Commercial transactions up to $10,000 may be made freely between residents and nonresidents, provided they are made through an authorized bank. Transfers exceeding $10,000 must be declared to the National Bank of Cambodia prior to the transfer.

Preferential market access

Everything But Arms (EBA): Guarantees Cambodia, as a Least Developed Country (LDC), duty-free access to the European Union for exports of all products, except arms and ammunition.

US Generalised System of Preferences (GSP): A 40-year-old trade preference programme under which the United States provides duty-free treatment to imports from developing countries. Cambodia has had access to the US market since 1996. In June last year, the scheme was expanded to include travel goods.

Most Favoured Nation (MFN): Cambodia has been a member of the World Trade Organisation since October 2004 and has been awarded the preferential Most Favoured Nation status by many developed nations such as China, France, Germany, the UK and the US.

Association of Southeast Asian Nations (Asean): an Asean member since 1991, Cambodia also benefits from numerous regional trade benefits. By 2018, Asean hopes to have completely eliminated all tariffs between member states.

Investment incentives

Foreign entities can own 100% of a local business or commercial enterprise and the Cambodian government:
• Does not discriminate against non-Cambodian investors.
• Does not undertake a nationalisation policy.
• Does not impose price controls on products or services.
• Does not impose controls on foreign exchange.
• Does not impose trade restrictions.
• Allows for the free repatriation of profits and free remittance of royalty, interest, loan repayments, dividends and capital.
• Allows foreigners to lease land for up to 50 years (the Law on Investment restricts foreigners from owning land in Cambodia).

Companies granted Qualified Investment Project (QIP) status are entitled to the following investment incentives:
• QIPs may elect to receive a profit tax exemption (maximum total six years) or use special depreciation (40% special depreciation allowance on the value of the new or used tangible properties used in the production or processing). An annual Certificate of Obligation Satisfaction (or “Certificate of Compliance”) has to be obtained by the QIP to be entitled “Profit Tax Exemption”. A QIP shall be subject to a profit tax rate after its tax exemption period as determined in the Law on Taxation.
• Duty free import of production equipment, construction materials etc.
• A QIP shall be entitled to 100% exemption of export tax, except for activities as stipulated in other legislation.
• A QIP located in a designated SPZ or EPZ is entitled to the same incentives and privileges as other QIPs.

Economic breakdown

Access to credit

Cambodia is ranked joint 7th out of 190 economies on the ease of obtaining credit. The credit bureau recently started to provide credit scores to banks and financial institutions, which greatly improved access to credit information.

(Source: World Bank, Doing Business 2017)

Starting a business

There are nine key steps to starting a business in Cambodia:

  1. Conduct an initial check for uniqueness of the company name and obtain company name approval at the Business Registration Department – seven days / $10
  2. Incorporate the company with the Business Registration Department at the Ministry of Commerce – 30 days / $420
  3. Make a company seal – one day / $15
  4. Open a bank account, deposit the legally required initial capital and obtain deposit evidence – one day / no charge
  5. Have registration documents stamped and approved, register for TIN, Patent tax and VAT tax – 30 days / $100
  6. Notify the Ministry of Labour of the start of operations and hiring of employees – 30 days / $69
  7. Submit company original statutes and capital deposit evidence at the Business Registry – one day / no charge
  8. Receive inspection from Labour Inspector – one day / included in procedure 6
  9. Register at the National Social Security Fund – 14 days (simultaneous with previous procedure) / no charge

(Source: World Bank, Doing Business 2017)

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