Are you conducting a business registration in Cambodia? Cambodia, despite being classified as a medium-level country in terms of economic development, offers significant depth and potential for foreign investment. .
To establish a company in Cambodia, registration with the Ministry of Commerce (MoC) and the General Administration of Taxation (GDT) is mandatory. Registering with the MoC is a relatively convenient process, as it allows businesses to complete the registration online through the business registration portal. However, depending on the specific industry, additional registrations with other relevant departments may be required. For instance, travel agencies must register with the Ministry of Tourism, while private universities must register with the Ministry of Education, Youth, and Sports. The General Administration of Taxation in Cambodia also offers an online registration system, making it easier to complete the registration declaration.
In the following sections, we will delve into the regulations and types of companies in Cambodia, outlining the procedures for company establishment as well as the obligations that arise once a company has been established.
Step 1: Determine Your Business Structure
6 entitie Types in Cambodia
When it comes to establishing a company in Cambodia, it is crucial to carefully consider and select the most appropriate business entity. In Cambodia, you have a range of options to choose from, including six different types of entities:
- Sole Proprietorship: This is a business structure where a single individual owns and operates the business. It is the simplest and most straightforward form of business entity, offering full control and ownership to the individual.
- Partnership: A partnership involves two or more individuals or entities joining together to operate a business. Partnerships can be either general partnerships or limited partnerships, each with its own set of rights, responsibilities, and liabilities.
- Limited Liability Company (LLC): An LLC is a popular choice for many businesses as it provides limited liability protection to its owners, known as members. It combines the flexibility of a partnership with the limited liability benefits of a corporation.
- Public Limited Company (PLC): A PLC is a type of company that can offer its shares to the public through a stock exchange. It is suitable for larger-scale operations and raising capital from a wide range of investors.
- Branch Office: This option allows a foreign company to establish a branch in Cambodia, enabling it to conduct business activities in the country. The branch office operates as an extension of the foreign company and must comply with Cambodian laws and regulations.
- Representative Office: A representative office is primarily established for non-profit activities, such as market research, promotion, or liaison purposes. It is limited in its commercial activities and cannot generate direct revenue in Cambodia.
Each business entity type has its own advantages, disadvantages, and legal requirements. It is essential to consider factors such as the nature of your business, desired level of liability protection, and long-term objectives before making a decision. Consulting with legal and business professionals familiar with Cambodia’s regulations can help you make an informed choice for your company.
Step 2: Choose Company Officers
As you move forward with company registration, it’s important to consider the selection of company officers.
For a private limited company, it’s mandatory to have at least one director, while a public limited company must have a minimum of three directors. The nationality of the company directors is not restricted.
A private limited company must have between 2 to 30 shareholders. Alternatively, a single-member private limited company can be formed by a single individual.
| Company Type | Minimum Number of Directors | Maximum Number of Directors | Minimum Number of Shareholders | Maximum Number of Shareholders |
|---|---|---|---|---|
| Private Limited Company | 1 | No maximum limit | 2 | 30 |
| Public Limited Company | 3 | No maximum limit | N/A | N/A |
| Single-Member Private Ltd. Co. | N/A | N/A | 1 | 1 |
Don’t Forget to Point The Registered Agent for business registration in Cambodia
It’s essential to appoint a registered agent for the company. The registered agent must be a legally competent individual and a resident of Cambodia. Their role is to receive official documents and papers from courts on behalf of the company.
Step 3: Prepare the Articles of Incorporation
You’ll need to prepare the articles of incorporation. The document should contain the following details:
- Authorised capital, issued capital, and paid-up capital
- Business activities of the company
- Company incorporation period
- Purposes and objectives of the company
- Company name and domicile
- Number of shares, share classification (if any), number of shares per classification, rights attached to each share, and nominal value for each share
- Board of directors and board of commissioners’ names and numbers
- Procedures for holding general meetings of shareholders
- Procedures for appointing, replacing, and dismissing board members
- Profit utilization and dividend distribution procedures
- Registered office address
Step 4: Register Yout Office Address
- For businesses operating in Phnom Penh:
- Register the address with the Phnom Penh Municipal Office.
- Submit the following documents:
- Application form to the Mayor of Phnom Penh
- Copy of the company’s articles of incorporation (for limited companies)
- Copy of the registration certificate
- Copy of the business license issued by the Ministry of Commerce
- Copy of the identity card or passport of the person who signed the application
- Photo of the front entrance of the office
- Land title or lease agreement
- For businesses operating in Siem Reap:
- Register the address with the Siem Reap Municipal Office.
- Submit the same set of documents mentioned above for Phnom Penh registration.
By following these guidelines and providing the necessary documents, you can ensure the proper registration of your company’s office address.
Step 5: Register Your Company with the Government Authorities.
To register your company with the Business Registration Department in Cambodia, you must use the Online Registration Services through the Cambodia Data Exchange (CamDX) system under the Ministry of Economy and Finance.
To register online, you will need to create a user account by providing your personal information and contact details. Here are the steps:
| Step | Description |
|---|---|
| 1 | Create a user account on the Cambodia Data Exchange (CamDX) system under the Ministry of Economy and Finance. |
| 2 | Select the desired company type and reserve a name for the company. |
| 3 | Register the company’s business activities according to the Standard Industrial Classification (SIC) codes and submit the required shareholder’s and director’s information, along with the registered office’s lease agreement. |
| 4 | Pay the registration fee of KHR 2,155,000 through ABA pay or credit/debit card. |
| 5 | Upload the necessary documents, including the land title or lease agreement of the enterprise’s location, current photos of the director, shareholder (if applicable), and/or representative, national identification card or passport, and articles of incorporation in both English and Khmer. |
| 6 | Wait for the Ministry of Commerce’s approval and receive the Certificate of Registration. |
Capital and Currency Restrictions for Businesses in Cambodia
In Cambodia, although the national currency is the Riel (KHR), most transactions are made in US dollars. The Law on Commercial Enterprises (LCE) requires companies to issue a minimum of 1,000 shares with a minimum par value of 4,000 KHR per share, resulting in a minimum capital requirement of 4,000,000 KHR (approximately 1,000 USD). However, some licensed activities are subject to higher capital requirements.
Minimum Registered Capital Requirements
The National Bank of Cambodia (NBC) has established minimum registered capital requirements for licensed banks, specialized banks, and microfinance institutions (MFIs). According to Prakas B7-016-117, the requirements are as follows:
| Type of Institution | Minimum Registered Capital |
|---|---|
| Locally incorporated commercial banks or foreign bank subsidiaries | USD 75,000,000 |
| Branches of investment-grade foreign banks | USD 50,000,000 |
| Branches of non-investment grade foreign banks | USD 75,000,000 |
| Locally incorporated specialized banks | USD 15,000,000 |
| MFIs with a deposit-taking license | USD 30,000,000 |
| MFIs without a deposit-taking license | USD 1,500,000 |
Fund Transfer Regulations in Cambodia
Transferring funds into or out of Cambodia is currently unrestricted, as long as it is done through authorized intermediaries such as commercial banks. The purchase of foreign currencies is also free from restrictions and can be easily done through the local banking system.
However, during times of economic or financial crises, the National Bank of Cambodia (NBC) may impose temporary restrictions on authorized intermediaries. Additionally, any transfer of funds overseas that are equivalent to or more than USD 10,000 requires a prior declaration to be submitted to the NBC by the transferee.
It’s important to note that while there are no ordinary restrictions on foreign exchange operations, they must be conducted through authorized intermediaries. This ensures a secure and stable environment for fund transfers in and out of Cambodia.
Conclusion:
In conclusion, starting a business in Cambodia requires navigating various rules and regulations. However, with the right guidance and preparation, the process of business registration can be streamlined and successful. By understanding the minimum capital requirements and other regulations, entrepreneurs can take the necessary steps to register their businesses and begin operations in Cambodia.
If you have any questions about setting up a manufacturing business in Cambodia, consider the benefits of the Manhattan Special Economic Zone (MSEZ). Located near the capital city of Phnom Penh, the MSEZ offers a range of incentives and resources to support the growth of businesses in the area.
Don’t miss out on the opportunity to establish your business in Cambodia – start planning your registration process today!
References
- Business registration procedure. (n.d.). Making It Easy Cambodia. https://www.makingiteasycambodia.com/business-registration-procedure.html
- Acclime Cambodia. (2022, September 8). How to Register a Company in Cambodia: Step-by-Step Guide | Acclime. https://cambodia.acclime.com/guides/how-to-register-company/
- Market Entry and Business Set-up. (n.d.). KPMG. https://kpmg.com/kh/en/home/services/corporate-services0/market-entry-and-business-set-up.html