Cambodia is a Southeast Asian country neighbored by Vietnam, Laos, and Thailand. The capital of the country is Phnom Penh. Cambodia has a rich and ancient history which is evident from several monuments including Angkor Wat. The official language of Cambodia is Khmer and the total population is estimated at 17 million people.
Despite a tumultuous political history witnessing bloody French occupation and the infamous Khmer Rouge regime, Cambodia is on the path of development for the past few decades. The major contributors to the country’s growing economy are tourism, agriculture, and raw material.
Types of companies in Cambodia
In the last few years, Cambodia’s economy has witnessed an upward pattern of 7% annual growth per year. Various factors of the economy including garments, construction, tourism, etc. have played an integral role. Foreign and local investors have regained trust in the political situation which has led to more investors joining the pool.
Businesses tend to operate through structured operations, known as companies, here are the type of companies prevalent in Cambodia.
| S# | Type of business structure | Local name | Min. Paid-up capital required (USD) |
| 1. | Sole Proprietorship | Nek Mechas Achivakam Yekh | No paid-up capital required |
| 2. | Partnership | Krom Mitha | No paid-up capital required |
| 3. | Limited Liability Company (LLC) | Krom Horm Anloun Setthak Kik | $1,000 |
| 4. | Public Limited Company ((PLC) | Krom Horm Sathearak Sangsang Nav Salamoul Bat | $500,000 |
| 5. | Joint Venture (JV) | Krom Del Ban Derbey Borkeuj Borjeang | No paid-up capital required |
Sole Proprietorship
A sole proprietary business is the simplest business structure in Cambodia. It requires one person who owns and operates the business. The owner may hire staff; however, the decision-making rights stay with the owner, hence exposing the owner to all liabilities in a personal capacity.
Partnership
A partnership is formed between two or more individuals who promote their economic interests mutually. Partners may agree to be general partners or create a limited partnership. The limited partners are liable to the extent of their share in the business, while the general partners are personally responsible for all liabilities.
Limited Liability Company
An LLC is a formal business structure that has to adhere to a set of regulations and structural requirements by the state. In an LLC, the owners are not personally responsible for debts, the company is.
Public Limited Company
A PLC is a complex business structure. It requires a board of directors, legal representation, minimum paid-up capital, etc. Additionally, a PLC is subject to publishing its financial statements, operations, and any structural changes. A PLC is formed by large enterprises to generate capital through the public by offering company shares in a stock exchange.
Joint Venture
A JV is between two or more companies usually. The companies may be rivals in the market, but come together to attain a certain objective or fulfill an economic purpose.
Costs involved in registering a company in Cambodia
The costs incurred during the registration process depending on the size, type, and nature of the business.
Here are a few costs that are most likely to be incurred:
Company Name Reservation
The fee for reserving a company name in Cambodia is approximately $25.
Memorandum and Articles of Association
The cost of preparing the Memorandum and Articles of Association will vary depending on the complexity of the document and the professional firm hired for this service. The cost can range from between $75 and $250.
Business Registration
The fee for registering a business in Cambodia is $37.
Certificate of Incorporation
The fee for obtaining a Certificate of Incorporation in Cambodia is $25.
Tax Registration
The fee for tax registration in Cambodia is $12.50).
Other Fees
Other fees may include legal fees, translation fees, and notarization fees, which will vary depending on the professional firm engaged for these services.
In summary, the total cost of registering and incorporating a company in Cambodia can range from USD 150 to USD 500 or more, depending on the type of company and the professional services engaged.
Operational expenses of a company in Cambodia
The expenses incurred during the normal course of business can be different for different companies. Depending on the size and nature of the company, here are some estimates that may be considered while budgeting.
Labor Costs
Cambodia has relatively low labor costs compared to other countries in the region. The minimum wage in Cambodia is currently $190 per month for the garment and footwear sector and $192 per month for all other sectors.
Rent and Utilities
The cost of rent and utilities in Cambodia varies depending on the location and type of property. For example, office rent in Phnom Penh can range from $8 to $30 per square meter per month, while residential rent can range from $200 to $800 per month.
Taxes and Fees
Businesses in Cambodia are subject to a range of taxes and fees, including corporate income tax, value-added tax (VAT), and other regulatory fees. The corporate income tax rate in Cambodia is currently 20%, and the VAT rate is 10%.
Transportation
The cost of transportation in Cambodia can vary depending on the mode of transport, distance, and location. For example, the cost of a tuk-tuk ride in Phnom Penh can range from $1 to $3, while the cost of a taxi ride can range from $10 to $30 depending on the distance.
Professional Services
Businesses in Cambodia may need to engage professional services such as legal, accounting, and auditing services. The cost of these services will depend on the complexity and scope of the work required.
Advantages of doing business in Cambodia
Cambodia is a developing country and has undergone a number of structural, political, and economical reforms. The geographical location of the country allows easy access to Asian markets.
Other major advantages are listed below:
Easy and Fast Registration Process
The registration process for companies in Cambodia is relatively easy and fast, taking only a few days to complete.
Low Minimum Capital Requirements
The minimum paid-up capital requirements for registering a company in Cambodia are low, making it easier for entrepreneurs to start and operate their businesses.
Access to ASEAN Markets
Cambodia is a member of the Association of Southeast Asian Nations (ASEAN), providing access to a market of over 650 million consumers.
Low Labor Costs
Cambodia has relatively low labor costs compared to other countries in the region, making it an attractive destination for businesses looking to reduce labor costs.
Government Support
The Cambodian government has implemented several policies and initiatives to support the growth of the business sector, including tax incentives, investment guarantees, and the creation of special economic zones.
