Tax Pocket Guide to Investing in Cambodia

Cambodia’s present legal framework combines laws and principles from the various legal systems implemented since Cambodia’s independence from France in 1954.

Investment in Cambodia is, in most cases, a straightforward, direct and open process. It can be as easy as forming a company through registration of the corporate documents at the Ministry of Commerce, which normally takes around three to four weeks and is completed online from 1 January 2016. In most cases, however, additional operating licenses will be required. For investment projects to be eligible for investment incentives – which include profit tax exemptions or special depreciation and import duty exemptions – registration with the Council for the Development of Cambodia (“CDC”) is also required.

Unlike many countries in South East Asia, there are no industries closed to foreign investors. There are also only a few business sectors that cannot be fully foreign-owned. As a result, a greater proportion of investors choose to establish 100% foreign-owned limited companies in Cambodia than in many other developing countries.

Of course, there are certain industries that may not be engaged in by both local and foreign entities, such as the manufacturing of psychotropic drugs, weapons and ammunitions, chemicals and agents prohibited under international treaties.

Only a Cambodian national or company can own land. However, a foreign entity may either (a) enter into a long term lease (50 year term with a 50 year extension) in respect of land in Cambodia or (b) use a landholding company over which it has de facto control (notwithstanding a minority shareholding) to acquire the land itself.

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