Since 2003, Healy Consultants Group has been efficiently and effectively assisting our Clients with i) Cambodia business registration ii) business licensing iii) Cambodia corporate banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.

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Cambodia business setup summary

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• Advantages and Disadvantages

  Advantages of Cambodia company registration

  

  1. A Cambodia limited liability company can be established with only i) two shareholders ii) one director, who all can be foreigners and do not need to be residing in Cambodia to complete the procedures. Registration of a Cambodia company only requires US$1,000;
  2. The Government’s Qualified Investment Project (QIP) offers resident companies incentives, including:
     • 100% corporate tax exemption for up to nine years;
     • No price controls on investors’ products or services;
     • Duty-free imports of production equipment and materials;
     • Ability to have a long-term lease on land (50 year term with a 50 year extension);
     • 40% special depreciation allowance on the value of new assets used in manufacturing and processing;
  3. One of the key drivers of the Cambodian economy is the tourism sector. Tourism has contributed a 12.2% to Cambodia’s GDP in 2016, according to the report from World Travel and Tourism Council. Moreover, the Cambodian government has further taken measures to promote eco-tourism and implement projects that that enhance the development of the tourism sector of the nation.

  Disadvantages of Cambodia company registration

  1. Doing business and invest in Cambodia can be difficult because:
     • It can take up to four months to complete registration of a company in Cambodia and get its business licenses approved;
     • Before starting a new company in Cambodia, its owners must sign a lease for physical office space. A registered address only is disallowed and a government inspection of the company premises will be conducted;
     • It takes on average no less than two years to obtain a construction permit in Cambodia, to be compared with an average of less than 5 months in other Asia-Pacific countries;
     • Application for electricity connection takes an average of 6 months to be reviewed by Electricite du Cambodge, the sole national electricity provider in Cambodia. Frequent power cuts furthermore increase production downtime, according to the Foreign Business Leader survey;
     • Cambodia lacks proper waterway infrastructure, making it more expensive to transport commodities in comparison with other South-East Asia countries;
     • According to the Global Competitiveness Report 2014-15, roads and railways in Cambodia are highly underdeveloped;
     • For all reasons listed above, Cambodia is ranked as the 6^th most difficult place to run a business in Asia Pacific by the World Bank.
  2. Companies are subject to a corporate tax rate of 20% on their global earnings in Cambodia and the country has not signed yet any double taxation avoidance treaty with other countries;
  3. Before completion of Government registrations, it is mandatory for all Cambodian company to appoint a resident tax representative.
  4. It is hard to find skilled labor in Cambodia, because:
     • Only 10% of the population speaks English;
     • Internet literacy rate in Cambodia is only 5%;
     • Only 5% of the population enters tertiary education;
     • It takes three to six months to obtain work permit for a foreign professional.
  5. There is widespread corruption and inefficient government bureaucracy in Cambodia. The nation has been ranked poorly at the 161^st position (out of 180 nations) in the Corruption Perceptions Index 2017.

• Best uses for a Cambodia company

  1. Cambodia is an excellent place to setup a manufacturing company in Southeast Asia, because:
     • Cambodian companies can export their goods free of duty customs to most main consumers markets worldwide. Several countries have indeed granted duty free access to Cambodia, including: i) the United States ii) the European Union iii) Japan iv) Australia v) New Zealand vi) China and vii) Turkey, as well as all the ASEAN countries;
     • Companies incorporated in one of Cambodia’s four free trade zones are exempt from i) import and export duties ii) income tax for up to 9 years and iii) VAT;
     • Average monthly wage for skilled labor in Cambodia is US$800. Minimum monthly salary is only US$128;
     • Average monthly rental for warehouses is only US$0.2 per sq. m.;
     • There is no foreign exchange controls to hinder repatriation of funds from Cambodia;
     • Because of the above, the textile industry has boomed in Cambodia, with over 300 factories located in the country working for international textile and garments corporations.