Business entities in Cambodia in 2021
Healy Consultants will assist our Clients with incorporating the optimal Cambodia business entity for their business needs. Foreign investors willing to start a company in Cambodia are currently usually setting up limited liability companies as public limited companies can only be used to establish a bank or a financial institution. Alternatively, foreign corporations can also register a branch in Cambodia, or a representative office if they only want to conduct noncommercial operations.
The Cambodia limited liability company (private limited company)
- Establishing a Cambodia private limited company can be done with only i) a paid up capital of at least US$1,000 (KHR4 million) ii) two shareholders and iii) one director, who all can be foreigners and do not need to be ordinarily residing in the country before or after Cambodia company setup. The authorities can however request higher capital requirements for complex project and selected industries;
- The Cambodia LLC will also need to have i) a corporate bank account in the country, on which the paid-up capital must be deposited prior to Cambodia business setup ii) real office space and a registered agent as well as iii) a local name in Khmer language. Healy Consultants will assist our Clients to comply with these three requirements;
- After incorporation, all Cambodia LLC must file annual returns and annual tax returns and register for VAT. Although there are no clear-cut rules in Cambodia regarding audit requirements, small businesses are usually exempted.
The Cambodia joint-stock corporation (public limited company)
- Formation of a Cambodia JSC follows procedures similar to those applicable to Cambodia company setup. The main differences between these types of business entities are the Cambodia PLC can freely trade in shares and may have more than 30 shareholders;
- Only banks, financial institutions and companies listed on the Phnom Penh Stock Exchange are currently allowed to be setup as PLCs. Kindly note that only two corporations have been listed on the local stock exchange since its creation in 2010.
The Cambodia branch
In accordance with Cambodia Law on Commercial Enterprises, foreign companies can open a branch office in Cambodia to do business in the country and/or run productive operations, provided they appoint a representative. Branches must have the same name as their foreign company.
The Cambodia representative office
In accordance with Cambodia Law on Commercial Enterprises, foreign companies can also open a representative office in Cambodia. Representative offices must have the same name as their foreign company and cannot conduct neither productive nor commercial operations.
Table of comparison between different Cambodia entities
|LLC||Joint Venture||PLC||Branch Office||Rep Office|
|How long to set the company up?||8 weeks||10 weeks||8 weeks||8 weeks||4 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks||4 weeks|
|Issued share capital required||US$1,000||US$1,000||US$1,000||No||No|
|Allowed to sign sales contracts with local Clients||Yes||Yes||Yes||Yes||No|
|Allowed to invoice Cambodia Clients||Yes||Yes||Yes||Yes||No|
|Corporate tax payable in Cambodia||20%||20%||20%||20%||No|
|Corporate Bank Account||Acleda bank||Acleda bank||Cathay United Bank (CUBC)||BOC in Cambodia||ANZ Royal Bank in Cambodia|
|Must rent office premises in Cambodia||Yes||Yes||Yes||Yes||Yes|
|Allowed to import raw materials?||Yes||Yes||Yes||Yes||No|
|Allows exporting goods?||Yes||Yes||Yes||Yes||No|
|Can the entity hire expatriate staff in Cambodia?||Yes||Yes||Yes||Yes||Yes|
|Do you visit Cambodia for company incorporation?||No||No||No||No||No|
|Resident director required?||No||No||No||No||No|
|Resident shareholder required?||No||No||No||No||No|
|National shareholder required?||No||Yes||No||No||No|
|Minimum number of directors||1||1||3||1||1|
|Minimum number of shareholders||2||2||2||No||No|
|Resident company secretary required?||Yes||No||No||No||No|
|Legal representative required?||Yes||Yes||Yes||Yes||Yes|
|Tax registration certificate required||Yes||Yes||Yes||Yes||Yes|
|Individual shareholders allowed||Yes||Yes||No||Yes||Yes|
|Corporate shareholders allowed||Yes||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed||No||No||No||No||No|
|Public register of shareholders and directors||Yes||Yes||Yes||Yes||Yes|
|How long to get work permit approved||3-6 months||3-6 months||3-6 months||3-6 months||3-6 months|
|Statutory audit required||Yes||Yes||Yes||Yes||Yes|
|Annual tax return to be submitted||Yes||Yes||Yes||Yes||Yes|
|Access to DTA||Yes||Yes||Yes||Yes||NA|
|Estimate of engagement costs||US$7,960||US$7,960||US$7,960||US$9,460||US$9,460|
|Total Cambodia business setup costs in year 1||US$16,135||US$21,285||US$13,185||US$14,685||US$14,685|
|Subsequent annual costs (incl. accounting and tax fee)||US$2,300||US$7,000||US$2,800||US$2,550||US$2,550|
|Sample Engagement Invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|
Frequently asked questions
How many weeks does it take to start a Cambodia LLC?A Cambodia private limited liability company can be incorporated within 16 weeks.
What are the advantages of setting up limited liability company in Cambodia?A Cambodian LLC can be i) wholly foreign owned ii) registered with a low paid-up share capital of US$1,000 and iii) our Client will not be required to travel to complete the engagement. Furthermore, Cambodia offers great tax incentives under the Quality Investment Project program and boasts 4 conveniently located Free Tax Zones (links to FTZ page for Cambodia).
What are the different types of business entities in Cambodia?International entrepreneurs can setup i) Limited Liability Company ii) Public Limited Liability Company iii) Branch Office iv) Representative Office.