Investment in cambodia

Investment in Cambodia

Investment In Cambodia

Loh Boon How, CA

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An overviewOnce known as the Khmer Empire, is a country located in the southern portion of theIndochinaPeninsula inSoutheast Asia.

Bordered byThailandto the northwest,Laosto the northeast,Vietnamto the east, and theGulf of Thailandto the southwest.

The capital is Phnom Penh and most of them speak Khmer language.B. H. Loh & Associates2

Map of Cambodia

B. H. Loh & Associates3

Statistic of Cambodia vs Vietnam CambodiaVietnamArea (10,000 km)1833Population15 million93 millionGDP (USD)160 billion1,700 billionGDP per capital (USD)1,1001,827Min wage (USD)128130Admin salary (USD)150200Worker salary (USD)128130


EMPLOYMENT INFORMATION


What is the social security rate?The National Social Fund (NSSF) has stipulated that employers who employ 8 employees and above, are required to pay 0.8% of the employees average monthly salary as social security contribution meanwhile employees are exempted from the payment.B. H. Loh & Associates6

What is the regulation for the employment of foreign workers?According to the Ministry Of Labour And Vocational Training (MLVT), the regulation for employment of foreign personal as follow :The foreign personnel are required to provide evidence that their relevant qualification or skill set can not found in Cambodia.Foreign personnel must apply for license renewal by November every year.B. H. Loh & Associates7

What is the regulation for the employment of foreign workers?The number of foreign employees should not exceed 10% of the total number of Cambodian employees. If it is necessary to increase the number of foreign personnel, applications need to be made accordingly.


LAND UTILISATION INFORMATION


Can foreigners purchase propertyAccording to the Civil Code of Cambodia stipulated that only Cambodians are allow own the land in Cambodia. However, if the foreign company wants to purchase land in Cambodia, the Cambodian must own over 51% of the companys capital.B. H. Loh & Associates10

What are the leasing regulations?B. H. Loh & Associates11If the foreigner investors whom lease property on Cambodia, the contract can be sustained for 50 years. After which the contract will be terminated, the contract could be renewed for less than 40 years. In other word, the duration for leasing land is maximum 90 years.

How many existing Industrial Zones and Economic Areas?Currently, there are 27 Special Promotion Zones under development in Cambodia. Amongst of them, Vattanac Industrial Park,Canadian Industrial Park,Por Chen Tong Industrial Park.The above mention are the 3 major industrial park,Their average area surface is 15 20 hectares.B. H. Loh & Associates12

Where are the main ports in Cambodia?Phnom Penh,SihanoukvilleB. H. Loh & Associates13

What is the common lease price for office building and factory?CambodiaVietnamOffice (USD/ping)2725Residential (USD/ping)2230Factory (USD/ping)68

Notes :1 Ping = 36 square feetsB. H. Loh & Associates14

COMPANY SETTING UP INFORMATION


What are the required documents, procedures, equity ratio and minimum registered capital for setting up a foreign enterprise?In order to setting up a foreign enterprise the minimum capital is :

The companies can be owned wholly by foreigner investors and require at least one director and one shareholder.

EntityMin capital(USD)Paid up capital(USD)Company50,0001,000Factory1,000,000250,000


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For offshare company (for both company and factory as well)2 sets of Certificate of Incorporation, M & A and other relevant documents, which are not required to be legalized by Cambodia Embassy, but have to be notarized by legalized by lawyer or government.

6 photocopies of directors and shareholders valid passport and identity card.


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For Cambodia company / factoryNew company nameCompanys business item,6 copies of Cambodian companys director and shareholder valid passport and identity card,2 copies of personal bank credit certificate of Cambodian companys director in English (included the deposit account at least USD 1,000)6 copies of 2 x 2 colour photo of Cambodian director,1 original copy of lease contract,1 photocopy map of the campany.B. H. Loh & Associates18

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How to set up a foreign-invested company?The company name will be verified by the Minister Of Commerce (MOC).After the company name approved, the investor should open a bank account. Then, the investor should remit capital into the bank and apply 2 copies of credit certificate from the bank, which is required to submit to MOC.The investor should submit required documents to MOC and obtain a business license, M & A and company stamp from MOC.B. H. Loh & Associates19

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How to set up a foreign-invested company?Apply tax license from Administration Of Taxation,Apply VAT tax application from Cambodia Development Council (CDC).The company can start business once grant an approval.B. H. Loh & Associates20

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How to set up a foreign-invested factory?The company name will be verified by the Minister Of Commerce (MOC).After the company name approved, the investor should open a bank account. Then, the investor should remit capital into the bank and apply 2 copies of credit certificate from the bank, which is required to submit to MOC.The investor had to submit the investment proposal to Cambodia Development Council (CDC), The CDC will obtain all relevant license within 5 6 months.B. H. Loh & Associates21

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How to set up a foreign-invested factory?MOC will issued a business license, M & A and company stamp.If the factory need to apply for the exemption from import duties, the investor should apply directly to CDC. (Import duties exemption for 2 3 years, and apply for an extension of 1 7 years after the expiry).No foreign currency controls, which allow the factory free access of foreign exchange fund.B. H. Loh & Associates22

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How to set up a foreign-invested factory?MOC will issued a business license, M & A and company stamp.If the factory need to apply for the exemption from import duties, the investor should apply directly to CDC. (Import duties exemption for 2 3 years, and apply for an extension of 1 7 years after the expiry).No foreign currency controls, which allow the factory free access of foreign exchange fund.B. H. Loh & Associates23

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INCOME TAX INFORMATION & SPECIAL ECONOMIC ZONES


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What are the corporate income tax, withholding tax and personal income tax in Cambodia?If a foreigner living in the country for over 183 days within a taxable year, he / she should deemed as a resident, otherwise the foreigner should be deemed as a non-residentCambodiaVietnamPersonal resident0 20%5 35%Personal non-resident20%Enterprise (company / factory)2022%Withholding tax14%


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Where are the Special Economic Zone (SEZ)Phnom Penh SEZ about 18 km from Phnom Penh CityManhattan SEZ located at the border of Tay Ninh, Vietnam and Kompong Cham, Cambodia.Sihanoukville SEZ located 200 km from southwest of Phnom Penh.B. H. Loh & Associates26

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B. H. Loh & AssociatesAddress :No. 1-3-15, Goldhill Complex, Tingkat Paya Terubong 1,11060 Penang.

H/P No. : 016-4893382Email : [email protected] / facebook : bhloh.com.my

Thank youB. H. Loh & Associates28

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Investment in cambodia