Copyright 2021 © Sky Asia Network Co., Ltd. All Rights Reserved.
St 284, Olympic, Boeng Kengkorng.
089 888 478/ 093 888 797
All enterprises wishing to do business in Cambodia have to register with the Ministry of Commerce, General Department of Taxation, and Ministry of Labor and Vocational Training at least 15 days before starting their business to whatever form of entity they wish to establish through an online system called the Cambodia Data Exchange (CamDX) via www.registrationservices.gov.kh. In addition to this, if the business activity of a company is related to the relevant ministry, they are obliged to apply for another license or permit from that ministry separately. For example, to open a private school, it has to be registered with the above three ministries and applied for an educational license from the ministry of education, youth and sport.
Forms of entity
According to the Law on Commercial Enterprises of Cambodia, an investor who are seeking to run a business in Cambodia can form up their business to be one of the following forms:
1. Sole Proprietorship
- General partnership
- Limited partnership
3. Limited liability company
- Private limited liability company
- Single-member private limited company
- Public limited company
4. Foreign business entities
- Representative office
- Branch office
A sole proprietorship in Cambodia is not a legal entity that is owned and operated by one person who owns all capital and profits, and the owner will be personally responsible for its all debts.
A general partnership is a contract between two or more persons who combine their assets, activities or knowledge to do business together to generate profits. It is a legal entity according the Law on Commerce of Cambodia. While the partners are liable for the debts of the company to third parties, the partners in limited partnership company is limited liable only to the amount of he/she contributed.
A limited partnership is a contract between one or more general partners which one person is authorized to manage and have obligations in the company with one or more limited partners who are obliged to contribute their capital into the company.
Private limited company
A private limited company is the most advisable form of entity for foreign investment because there are only a few incorporation requirements:
- A minimum capital of 4,000,000 KHR or 1,000 USD
- The number of shareholders must be between two and 30, but one person can form a single member private limited company.
- Requires only one director.
- Shareholders are only liable for their contributed shares.
- The dissolution process is simple.
Private Limited Company is not allowed to issue its shares to the public; however, it is allowed to transfer its shares to the other shareholders.
Single-member private limited company
The single-member private limited company is a private limited company that has only one person as the shareholder. The single-member private limited company can be converted to a private limited company upon the shareholder’s approval to increase company shareholders.
Public limited company
A public limited company can issue shares and securities to the public. The name must include Public Limited Company or PLC at the end of the company’s name. It requires a minimum of three directors and at least two or more shareholders. Banks, insurance companies and finance companies must register as public limited companies.
A representative office does not have legal personality separate from its principals and may perform the following acts in the Kingdom of Cambodia:
- Contact the customers for the purpose introducing customers to its principals
- Research commercial information and provide the information to its principals
- Conduct market research
- Purchas and keep a quantity of goods for the purpose of trade fairs, not for selling or service performance is banned
- Rent an office and employ local staff
- Enter into contracts with local customers on behalf of it principals
A Branch office may perform the same acts as the representative office. Moreover, it can regularly buy and sell goods, perform services and engage in manufacturing. It does not have legal personality separate from its principals as well as representative office.
A subsidiary is a company that is incorporated by a foreign company in the Kingdom of Cambodia with at least 51% of its capital held by the foreign company. In contrast to the representative office and branch office, a subsidiary has its own personality separate from its principals from the date of its registration.
After choosing the form of the entity you want to set up, the next step is to prepare the documents for registration. In order to prepare the Article of Incorporation and some other relevant required documents, the following documents and information are needed:
- Name of the enterprise
- ID card or passport of owner or shareholders
- Numbers of owners or shareholders
- Photos of owner or shareholders
- Capital to contribute in
- Address of Enterprise
- Rental contract (if rent address)
- The number of staff you will hire and working days
- Email and phone contact of owner or shareholders and enterprise etc.
After waiting for 15 working days of processing registration, a company will receive the following documents:
- An article of incorporation certified by the Ministry of Commerce (MOC)
- A company extract (MOC)
- A certificate of incorporation (MOC)
- A bank confirmation letter
- A receipt payment fee to the ministries
- A patent certificate (GDT)
- A value-added tax (VAT) certificate (GDT)
- A tax registration card (GDT)
- A tax obligation and declaration notification (GDT)
- A declaration of opening the enterprise (MLVT)
- A license or permit from the relevant ministry (if any)
Changing Business Information
Some business information will be changed according to the preferences of the owner or shareholders of the company, or according to the requirement from the authorities or some other reasons. Those information are:
- Change business location
- Change business activities
- Add business activities
- Increase capital
- Change the name of the company
- Add branches
- Transfer shares
A company has to notify the tax authorities at most 15 days after changing this information; otherwise, it will be considered as tax obstruction which is the subject of any penalties.