How to a Business in Cambodia: Tax, Registration, Visa, Work Permits
Are you considering starting a new business in Cambodia but need more information?
Look no further. You’ll find everything you need right here in our Business Cambodia guideline. From how to open a business in Cambodia, necessary licenses, calculating and spending tax; right through to how to close your organization when you’re finished.
If you can’t get your answer here, just ask us at Cambodia Time and we’ll point you in the right direction.
How can ASEAN Economic Community membership affect my start-up?
Cambodia officially became a member of the ASEAN Economic Community (AEC) in December 2015, while it is still too early to assess the impact that new members will have on our country. Benefits from:
- Access to markets with more than 600 million people (or nearly 10% of the world’s population) in ASEAN.
- Exchanging knowledge and improving processes to implement good production practices, HACCP, intellectual property rights, etc. For example, Cambodia recently signed three IPR treaties governed by WIPO: the Madrid Protocol, the Patent Cooperation Treaty, and the Hague Agreement. Concerning the International Registration of Industrial Design.
- the estimated tax regime, forcing all enterprises to join the real regime.
- The country recently signed a double tax agreement (DTA) with Singapore, China and Brunei, while a new DTA with Thailand is expected to arrive soon.
- Low transaction costs on trading, importing raw materials by eliminating (or reducing costs) taxes and non-tariff barriers, as well as exporting our final products.
- Advances in processing for customs, logistics and logistics for trade.
- Recruit skilled workers from different countries, as well as education and capacity building programs to train existing staff.
- With the membership of the ASEAN Economic Community, we will see all the right regulations and taxation that make import and export and business-related activities clearer and easier to understand. In fact, it will lower prices here. Cambodia, for example, recently abolished.
- Get opportunities for ASEAN capital investment.
Business start-ups increasing in Cambodia?
Cambodia also saw a 4% increase in new listed companies in the first three months of 2015. In 2014, nearly 4,000 businesses registered with the Ministry of Commerce, an increase of 29% in 2013. In addition, the number of trademarks registered with the Ministry of Commerce increased from 4,199 in 2015 to 4,685 last year. Increase in registered trademarks after Cambodia joined the Madrid Protocol in 2015. The total number of active trademarks in the country exceeds 47,000. There were 513,759 informal businesses in Cambodia as of 2014, however, only 10,565 enterprises were registered. Most foreign companies are run by Chinese, South Koreans, Japanese and Vietnamese who are doing business in the garment, footwear, agriculture, agro-tourism, construction and real estate sectors. 5,128 of the registered businesses operating in Cambodia are foreign. 2,028 belong to Vietnamese and 382 belong to the United States or Europe. These increases may also reflect the tightening of the Cambodian government’s business registration requirements and compliance with these laws throughout the Cambodian market.
However, Cambodia is ranked 180 out of 190 countries in terms of ease of starting a business, according to the World Bank Group. Frequent challenges include a lack of access to information on regulations and licenses and permits required for specific industries and a lack of professional strength.
Why should I set up my business in Cambodia?
It has a simple tax system that offers a lot of incentives, especially in selected industries and those operating from special economic zones. The company can be 100% foreign owned. Provides free access to US and EU. Cambodia has young population with large and cheap labor. Interestingly, this country accept US dollar in every business transaction. Easy for businesses to exchange money at home and abroad. Cmbodia is the Center for Foreign Business which is located in the heart of the ASEAN Economic Community (AEC).
What do I need to officially open a business in Cambodia?
Valid Visa, Work Permit and Bank Account with a minimum balance of $ 1,000 (4 million Riel) – You can withdraw it immediately once the business is officially established. A Health Certificate is requied. More often than not, a police report from your home country confirms that you are in good standing and have no criminal record.
What shoul I do to register a business in Cambodia and how longer will it take?
- To register a firm in Cambodia the name have to also end up being registered with the MoC.
- To receive the company’s constitutive documents-which include the certificate of incorporation, the Content of Association, and the business license-you will want to register with the Ministry of Trade (MoC). The procedure can today end up being transported on the web right here.
- Within 15 calendar times of having signed up with the MOC, the brand-new enterprise need to register with the GDT. At the GDT, you will get the taxes patent and the VAT certificate of the brand-new firm.
- Finally, most enterprises must pay a visit to the Ministry of Labour and Vocational Training (MLVT), which registers the firm below the Labour Law, provides workbooks for Khmer employees and work licences and employment credit cards for foreign workers. If the brand-new firm provides even more than eight workers, they must also end up being signed up under the State Public Protection Finance.
- The Globe Bank or investment company latest estimation is that it takes 99 days for the whole process to be completed.
What licences do I need to operate a business in Cambodia?
Recently established businesses also need to obtain the necessary licences in order to operate. Permited business licences are issued by the relevant ministry. For example, a posting firm would want a license from the Cambodian Ministry of Details; while a business focused at travelers would want to apply to the Cambodian Ministry of Tourism. Busienss licences are renewed annually. The Cambodian Ministry of Work must also be contacted and given a Declaration of the Starting of Business before functions start or within the first 30 times of procedure if the business has less than eight employees.
What tax fees do I have to pay and when?
Within 15 calendar days of registering with the MoC, businesses must register with the General Department of Taxation (DGT) to receive a taxpayer’s identification number (TIN). Registering as a taxpayer will cost you $500 and $650, for a half-year and a full-year respectively.
At the GDT, you will obtain the tax patent and the VAT certificate of the new company. If all is in order, it will take the GDT between two and four weeks to issue the tax patent and VAT certificate. Various taxes are also payable each month, usually on the 20th. They are the tax on salary; the prepayment of profit tax (equal to 1% of turnover); and VAT (equal to the total VAT charged to your customers minus VAT payable to your suppliers).
Are there compulsory adult review requirements in Cambodia?
By law, if a Cambodian based company fulfils two or more of the following three criteria, they must have their financial statements audited by a registered external auditor. This must be completed within six weeks after the finish line of the financial 12 months.
The first prerequisite is if revenue of that business is more than $750,000 annually; Second of all, if the value of total property of the business is usually more than $500,000; And, thirdly, if the organization employs more than 100 users of staff.
What types of taxes audits might your business be subject to?
There are three types of audit in Cambodia: a desk audit; a limited audit; and a comprehensive audit. Desk audits merely re-examine information already submitted to the General Department of Taxation (GDT) and involve no visit from tax auditors. Limited audits are more in-depth than desk audits, with the option of tax auditors going to the company’s premises to examine additional documents. Comprehensive audits are more thorough than the other two and may uncover potential tax exposures through examination of any area of the business. Desk audits and limited audits are carried out by the local Khan (district) branch of the GDT. If the business is classified as a “Large Taxpayer” both desk audits and limited audits are carried out by the Department of Large Taxpayers (DLT). Large taxpayers include Qualified Investment Projects, branches of foreign enterprises or multi-national companies, and any other enterprise with annual turnover in excess of KHR1,000M (around $250,000). All comprehensive audits are carried out by the Department of Enterprise Audit (DEA). If taxes have been underpaid, a notice of tax reassessment is issued outlining the outstanding sum, plus a penalty of up to 40 percent on the owed sum and interest of two percent per month. Businesses have 30 days to appeal and provide evidence for the tax authority to evaluate.