Simplifying The Process Of Registering Business in Cambodia

Cambodia possesses a relatively simple tax system. It offers several incentives, especially in select industries and those operating from a Special Economic Zone. In Cambodia, companies can be 100% foreign-owned. In this country, there is an availability of Large, cheap workforce.

business meeting

Legal Authority

Business and commercial enterprises in Cambodia are registered, at least 15 days prior to the commencement of business activities at the Ministry of Commerce. A business entity is assumed to exist on the date a certificate of incorporation is issued by the MOC.

Governing Law:

The Process of the Company Registration in Cambodia is governed by the Law on Commercial Rules and Commercial Register and Law on Commercial Enterprises.

Business Structure: The types of Entities in which form a foreigner can invest in Cambodia are explained below :

1. Limited Liability Company: The limited liability company is the most common form of investment vehicle in Cambodia. It can be 100 percent Cambodian-owned, 100 percent foreign-owned, or have any combination of Cambodian or foreign shareholdings, subject to certain restrictions. The minimum share capital required for incorporating a company is KHR 4,000,000 (approximately US$1,000).

2. There are three types of Limited Liability Company:

a. Private Limited Company: It is a widely accepted form of business entity. Minimum two and a maximum of 30 shareholders are required for incorporation. The liability of shareholders is limited to capital contribution.

b. Single Member Private Limited Company: This type of entity is incorporated by one person.

c. Public Limited Company: For the incorporation of this type of entity minimum three directors are required. These companies have been authorized by the law on Commercial Enterprises to issue securities to the public.

3. Branch Office: An applicant may commence its operations in Cambodia through a branch office. It is an extension of the parent company, thus maintaining liability with the parent company. It may conduct business activities in Cambodia in the sectors in which it is registered.

4. Representative Office: They are primarily concerned with sourcing local goods and services, and gathering local information for the parent company. They are not allowed to buy and sell goods or offer paid services to customers.

5. Partnership: Investment in this form is most common among local and small businesses. Investors have two options for investing in this form of entity i.e a. General Partnership is similar to a sole proprietorship but it involves two or more people combining their efforts and/or assets.

B. Limited Partnership: It involves one or more of the partners which merely contribute capital to the business while the other partners retain the general designation.

6. Sole Proprietorship: Investment in this form is most popular among small owner-operated businesses. Sole Proprietor can take away the entire profits but simultaneously also liable for any losses and debts.

Procedure for Company Registration:

a. The first and foremost requirement is to deposit the initial capital of 4 million KHR i.e required for company incorporation at an authorized bank.

b. The next step is to file an application for the name approval for the Company Registration in Cambodia through the Department of the Ministry of Commerce. They will verify the uniqueness of the name and provide it if it is there.

c. After the name approval, the applicant is required to prepare articles of association and memorandum in accordance with the regulations, applicable laws and standards set by the Ministry of Commerce.

d. The next step is the issuance of Company Seal and within a one-day registration certification by the Cambodian Ministry of Commerce.

e. The next step is to apply for TIN, VAT and Patent Tax registration.

f. Before starting operation, it is mandatory to submit a declaration in written form to Cambodian’s Labor Ministry

g. After establishing business and announcement of starting operation in Cambodia, it is to make sure that the applicant must receive an inspection from the Labor inspector

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