spot_img

Explainer: How to Start a Business in Cambodia

Nic Platt

Starting a business in Cambodia may seem like a daunting task, but with the proper guidance on the procedure, necessary licenses required to incorporate your business, paying tax and even closing your business, you will be well on your way in no time.

Official Requirements to Start a Business in Cambodia

The official requirements for an individual to open a business in Cambodia are as follows:

  • A valid visa, work permit and a minimum balance of 1000 USD in your company bank account
  • A medical report from a doctor certifying you are in good health
  • A criminal background check from your home country that shows you have no criminal history

If you meet these initial requirements, the next steps to getting your business underway in Cambodia are as follows;

  • First, you must register your company name with the Ministry of Commerce.
  • After registering your company name with the Ministry of Commerce, you are then required to submit a variety of documents to them, which can now be carried out online. These documents include the register of shareholders, the register of directors’ business’s physical address, the original lease agreement, a copy of the property tax receipt, and the bank confirmation letter. When the registration process is complete, you will then receive your company’s constitutive documents.
  • The last step of this stage is a visit to the Ministry of Labour and Vocational Training. Here they will register your business under the current Cambodian labour laws provide work permits for foreign workers and workbooks for Khmer employees. If your new company has more than eight employees, it must also be registered under the National Social Security Fund.

To read our explainer on how to get Cambodian Citizenship through investment click here.

Do You Need Licenses to Start a Business in Cambodia?

  • Licenses are handed out by the relevant authorities. For example, if you are starting a tourism business in Cambodia, you will need to apply for a license at the Cambodian Ministry of Tourism. These licenses are generally renewed annually.
  • Newly established businesses must apply for these licenses.

What Taxes Does My Business Have to Pay in Cambodia?

  • After registering with the Ministry of Commerce, businesses then have 15 calendar days to register with the General Department of Taxation. After registration, companies will recieve a taxpayer’s identification number (TIN). The registration process costs either $500 or $600 for six months or one year.
  • At the General Department of Taxation, you will recieve the tax patent and the VAT certificate of your new company. If everything is in check, it usually takes two to four weeks for this to be issued.
  • Taxes are payable each month, generally on the 20th. Tax on salary, prepayment of profit tax and VAT are all to be paid.
how to start a business in Cambodia
To start a business in Cambodia you are now able to apply for professional licenses through registrationservices.gov.kh.

Closing a Business in Cambodia

If you need to close your business while in Cambodia, there are a few steps you will need to take. It is not as simple as shutting your company and leaving the country. If you do not close your business correctly, you may face fines or legal actions.

  • The first step of closing a business in Cambodia is to write to the Cambodian Department of Taxation with a declaration that you intend to close.
  • An auditor will then assess any outstanding taxes.
  • Finally, a certificate of closure will be issued that then must be taken to the Ministry of Commerce to be finalized.

How long does the business start up  process take?

Through the new online registration process, the government states applications take up to eight business days and a service fee costing around $500.

However, a study taken out by the World Bank along with the International Finance Corporation showed that it takes roughly 99 days on average to go through this entire process and, on average, costs $615.

This article is part of Cambodia Investment Review’s Explainer series. A simple guide to everything you need to know about business and investment in Cambodia.

Telegram Channel

Cambodia's best investment news & views direct into your Telegram account.

spot_img

Related Posts