Cambodia is one of the most developed countries in Southeast Asia. This jurisdiction is frequently underestimated but it offers pretty favorable conditions for doing business along with numerous tax benefits. Among the most developed sectors of the local economy, these ones should be listed in the first turn: agricultural, service sectors, and tourism. At the same time, many other industries have a huge potential for growth and are open to investments. So, company incorporation in Phnom Penh or any other city of this state is potentially associated with the subsequent benefits.
Why Set up a Business in Cambodia?
Any business decision associated with company incorporation in Cambodia can potentially bring these benefits to a foreign investor:
- openness to foreign capital and minimal bureaucracy;
- 100% foreign ownership is allowed;
- high-quality and reliable banking services, Internet banking is available;
- absence of currency control limitations.
Legal and Organizational Forms in Cambodia
If you wish to create/buy a company in Cambodia or establish your official presence in any other acceptable way, these forms are open for this purpose:
- Private limited company - the most widespread form of doing business because of the narrowed monetary obligations that it envisages for the founders. They will not bear any liabilities in excess of the funds contributed to the project. According to Cambodian laws, a minimum of KHR 4 million (approximately USD 1,000) is compulsory in this case. This entity may have 2-30 members of any nationality.
- Branch - a simplified and quick-to-register alternative to a corporate entity. Any non-resident company may establish a branch (without a separate legal personality) in Cambodia. A branch is allowed to handle the same types of economic activities as abroad. It can foster cooperation with local partners and customers in a more effective way. No minimum capital requirements are envisaged in this case.
Steps to Register a Company in Cambodia
Any undertaking of establishing a company in Cambodia should comprise these by-default steps:
- Forming the scope of economic activities that will be carried out through a future business entity in Cambodia. Choosing the most appropriate business form for that purpose.
- Arranging premises as an official business address.
- Gathering all must-have details and documents about the entity’s promoters, including its final beneficiaries and a mother company (if any).
- Preparing drafts and executing all must-have registration documents for a new entity.
- Depositing the authorized amount of share capital.
- Submitting the set of registration documents through the Cambodia Data Exchange (CamDX) system. The Ministry of Economy and Finance is an official authority in the incorporation area. In the case of positive feedback, the information about a new company will be entered in the Register of Companies. The registration will be proved by the Certificate of Registration.
- Registering a new company for the purposes of paying taxes and compulsory social security payments.
- Opening corporate bank accounts.
- Obtaining licenses and special permits that may be required for specific types of regulatory activities.
Legislative and Regulatory Aspects
It is generally easy to incorporate a new business in Cambodia. It enhances the legal and regulatory framework on an ongoing basis to make the local environment more attractive for non-resident investors. It may take around 2-4 weeks to establish a company in Cambodia. Doing specific sorts of economic activities will still require getting a license/permit as such activities are regulated by law.
Taxation in Cambodia
Any preliminary business decision to buy or start a company in Cambodia should be assessed along with the next peculiarities of taxation applicable in this country:
- Profit tax (for business forms) - 20%
- Income tax (for individuals) - 20%
- Value-added tax - 10%
- Withholding tax (for non-residents) - (1) dividends - 14% (2) interests - 14% (3) royalties - 14%
- Capital gains taxes - (1) for business forms - see profit tax (2) for individuals - 20%.
How Prifinance Attorneys Can Assist You
If you have decided to buy or form a company in Cambodia, Prifinance attorneys are ready to assist with bringing this business idea into practice. Experts have versatile experience in the sphere of registration (more than 11 000 successfully-completed cases worldwide) and are ready to apply this experience for your business purposes. Forward the details and list your expectations solely.