Are you interested in setting up a business in Cambodia?

Cambodia has become a popular destination for entrepreneurs and investors in Southeast Asia to set up businesses. With its growing economy, favorable investment policies, and relatively low cost of living, Cambodia is an attractive option for those looking to start a business. However, setting up a business in a foreign country can be complicated, and Cambodia is no exception. In this article, we’ll walk you through the steps you need to take to successfully set up a business in Cambodia, including obtaining the necessary licenses, finding a suitable location, and navigating local regulations. Whether you’re a seasoned entrepreneur or a first-time business owner, this guide will help you through the process of establishing a successful, sustainable business in Cambodia.

Common business types in Cambodia

Doing business in Cambodia generally requires interacting with several key government agencies, including the Ministry of Commerce (MoC), the General Department of Taxation (GDT), and the Ministry of Labour and Vocational Training (MLVT). These three agencies are crucial in your business registration process. Business operations in Cambodia can be conducted in three different forms:

1. Registered company or subsidiary in Cambodia
2. Branches of foreign companies
3. Representative Office of a Company Outside Cambodia

The new IT platform for registering businesses simplifies the process, allowing investors to complete registration with the Ministry of Commerce (MoC), the General Department of Taxation (GDT) and the Ministry of Labour and Vocational Training (MLVT) in one online session. The process takes only eight working days and a digital license or certificate is obtained.

Fees can be paid through electronic banking, with a payment receipt automatically generated as proof of payment. It should be noted that businesses that need to register with government agencies other than the Ministry of Commerce, the General Administration of Taxation, and the Ministry of Labor and Vocational Training will have to follow the procedures of those agencies.

Main types of companies in Cambodia

1. A limited company or subsidiary established in Cambodia

The latest law on commercial enterprises does not set minimum capital requirements. However, if the company's articles of incorporation and share prospectus do not include the number and price of shares, the company must issue at least 1,000 shares with a par value of at least KHR 4,000 per share. It is important to note that certain licensed activities may have their own minimum capital requirements.
Foreign ownership is generally unrestricted, except for land holdings. Prior to registration, the company's name must be approved by the Ministry of Commerce. An Articles of Incorporation and a Share Statement need to be prepared and submitted to the Ministry of Commerce to complete the registration.

2. Branches established in foreign countries

For registering a branch, the Ministry of Commerce requires relevant documents and information from the parent company and the branch. The branch must use the name of its principal, such as "Branch of XYZ Co. Ltd.". The branch has the right to conduct business activities such as sales and purchases of goods and services.

3. Representative Office (RO) of a company outside Cambodia

The operations of a representative office are restricted and it cannot engage in profit-making activities such as buying or selling goods or services or construction. A representative office must use the name of its parent company, for example "XYZ Ltd. Representative Office".

Cambodia’s requirements for foreign investors

For foreign investors , registration and disclosure requirements to the Ministry of Commerce (MoC) vary depending on the type of investment.

• If it is a foreign company, the Ministry of Commerce needs the foreign investor's full name, address, nationality, and the number of shares held in the company.
• For branches, the foreign company's place of registration, structural details and other prescribed information must be disclosed to the Ministry of Commerce.
• A Representative Office (RO) has the same requirements as a Branch Office.

In addition, if the company or branch needs to apply for a specific license to conduct business, the foreign investor may be required to provide additional information.

A Step-by-Step Guide to Business Registration in Cambodia

The steps for registering a Cambodian company are as follows:

1. Select your business type: Sole Proprietorship, Partnership, Limited Liability Company, etc.
2. Conduct a name search: Check with the Ministry of Commerce to see if the desired company name is available.
3. Preparation of registration documents: Preparation of necessary registration documents, including articles of incorporation and share statements, as well as business plans.
4. Registration with the Ministry of Commerce: Submit the registration documents and required information to the Ministry of Commerce for approval and registration.
5. Get a tax number: Register for a tax number with the General Administration of Taxation.
6. Register for licenses and permits: If your business requires a license or permit, such as a business license or a foreign employee work permit, register with the relevant government agency.
7. Register for Social Security: Register for social security with the Ministry of Labor and Vocational Training.
8. Opening a corporate bank account: Open a corporate bank account for your Cambodia business.
9. Commencement of business operations: Once you have obtained all necessary registrations and approvals, you can begin your business operations in Cambodia.

Please note that these steps may vary depending on the type of business, type of business operation, location, and other factors. Before registering a business, it is recommended that you consult a local attorney, accountant, or business consulting firm for more specific and detailed information and advice.

Summarize

In summary, establishing a business in Cambodia offers a range of opportunities for growth and success. The country’s pro-business policies, favorable tax regime, and favorable geographical location make it an attractive destination for foreign investment. However, investors must navigate the local business environment and regulations to successfully establish their operations.