Some international companies choose to set up a representative office to create a presence in the market without the expense of setting up a fully-fledged operation in the country. The following is an overview of the advantages and disadvantages of this option.

Some international companies chose to set up a representative office to create a presence in the market without the expense of setting up a fully-fledged operation in the country. Healy Consultants assists with Cambodia company formation, corporate bank account opening and tax planning together with virtual office services in Cambodia.

This option may be a channel for marketing the parent company’s products and services, sourcing local goods and services, as well as collecting information for its parent company.

This type of company is not subject to Cambodian tax laws as it is regarded as a cost center and derives no income from its activities.

A commercial representative office are allowed to (i) Contact customers for the purpose of introducing customers to its principal (ii) Research commercial information and provide the information to its principal (iii) Conduct market research (iv) Market goods at trade fairs and exhibit samples and goods in its office or at trade fairs (v) Buy and keep a quantity of goods for the purpose of trade fairs (vi) Rent an office and employ local staff and (vii) Enter into contracts with local customers on behalf of the principal. It may also undertake commercial relations for the purpose of introducing itself to prospective clientele.

A representative office is not liable to corporate tax in Cambodia, although its staff are liable to personal income tax.

A Cambodian representative Office cannot make sales, perform services or engage in the manufacturing, processing or construction sectors in Cambodia. It can carry out advertising, conduct market research, participate in trade fairs, store goods and maintain a local office with local staffs. The RO-Agent can enter into a contract with a local enterprise in Cambodia if the principal enterprise is authorized. It is required to lease office space in Cambodia.

The RO-Agent is subject to commercial registration requirement, the compliance of which shall be done at the Ministry of Commerce. The words "Representative Office Agent" shall be placed before or after the name of the principal enterprise.

To obtain a Cambodia business license, a foreign company must have been in operation for at least a year. The company is required to submit a copy of its business registration certificate from its home country. If this certificate has a validity period, the remaining validity period must be at least one year, thus ruling out the opening of a representative office by a Hong Kong company, for example.

The license application must be supported by a notarised copy of the foreign company's audited annual report and Articles of Association. The annual report must also be legalised by the nearest Cambodian embassy or consulate.

Cambodian translations of all foreign-made documents are required, and these must be notarised by a Cambodian State Notary or Cambodian embassy or consulate.

A representative office is unable to open a corporate bank account in Cambodia.

All representative offices and branches, in addition to the application form and business registration certificate, must submit an audited financial statement of the Mother company.

Representative offices are not allowed to act as representatives for other traders and cannot sublease their offices.

Chief representatives are not permitted to act as heads of local branches or companies.

Licenses will be revoked if a company fails to submit their annual activity report for two consecutive years.

For additional information on any of our Cambodia representative office services, email email@healyconsultants.com or call us in Singapore at (+65) 6735 0120.