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Investment in cambodia

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Cambodia a newly emerged South East Asia Country, the effort of the government to liberalize the international trade with the rest of the world. The Cambodia has their own advantage compared to other countries

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Investment in cambodia

  1. 1. Investment In Cambodia Loh Boon How, CA
  2. 2. An overview  Once known as the Khmer Empire, is a country located in the southern portion of the Indochina Peninsula in Southeast Asia.  Bordered by Thailand to the northwest, Laos to the northeast, Vietnam to the east, and the Gulf of Thailand to the southwest.  The capital is Phnom Penh and most of them speak Khmer language. B. H. Loh & Associates2
  3. 3. Map of Cambodia B. H. Loh & Associates3
  4. 4. Statistic of Cambodia vs Vietnam Cambodia Vietnam Area (10,000 km) 18 33 Population 15 million 93 million GDP (USD) 160 billion 1,700 billion GDP per capital (USD) 1,100 1,827 Min wage (USD) 128 130 Admin salary (USD) 150 200 Worker salary (USD) 128 130 B. H. Loh & Associates4
  5. 5. EMPLOYMENT INFORMATION B. H. Loh & Associates5
  6. 6. What is the social security rate?  The National Social Fund (NSSF) has stipulated that employers who employ 8 employees and above, are required to pay 0.8% of the employee’s average monthly salary as social security contribution meanwhile employees are exempted from the payment. B. H. Loh & Associates6
  7. 7. What is the regulation for the employment of foreign workers?  According to the Ministry Of Labour And Vocational Training (MLVT), the regulation for employment of foreign personal as follow : 1. The foreign personnel are required to provide evidence that their relevant qualification or skill set can not found in Cambodia. 2. Foreign personnel must apply for license renewal by November every year. B. H. Loh & Associates7
  8. 8. What is the regulation for the employment of foreign workers? 3. The number of foreign employees should not exceed 10% of the total number of Cambodian employees. If it is necessary to increase the number of foreign personnel, applications need to be made accordingly. B. H. Loh & Associates8
  9. 9. LAND UTILISATION INFORMATION B. H. Loh & Associates9
  10. 10. Can foreigners purchase property?  According to the Civil Code of Cambodia stipulated that only Cambodians’ are allow own the land in Cambodia. However, if the foreign company wants to purchase land in Cambodia, the Cambodian must own over 51% of the company’s capital. B. H. Loh & Associates10
  11. 11. What are the leasing regulations? B. H. Loh & Associates11  If the foreigner investors whom lease property on Cambodia, the contract can be sustained for 50 years. After which the contract will be terminated, the contract could be renewed for less than 40 years. In other word, the duration for leasing land is maximum 90 years.
  12. 12. How many existing Industrial Zones and Economic Areas?  Currently, there are 27 Special Promotion Zones under development in Cambodia. Amongst of them, 1. Vattanac Industrial Park, 2. Canadian Industrial Park, 3. Por Chen Tong Industrial Park.  The above mention are the 3 major industrial park,  Their average area surface is 15 – 20 hectares. B. H. Loh & Associates12
  13. 13. Where are the main ports in Cambodia?  Phnom Penh,  Sihanoukville B. H. Loh & Associates13
  14. 14. What is the common lease price for office building and factory? Cambodia Vietnam Office (USD/ping) 27 25 Residential (USD/ping) 22 30 Factory (USD/ping) 6 8 Notes : 1 Ping = 36 square feets B. H. Loh & Associates14
  15. 15. COMPANY SETTING UP INFORMATION B. H. Loh & Associates15
  16. 16. What are the required documents, procedures, equity ratio and minimum registered capital for setting up a foreign enterprise?  In order to setting up a foreign enterprise the minimum capital is :  The companies can be owned wholly by foreigner investors and require at least one director and one shareholder. Entity Min capital (USD) Paid up capital (USD) Company 50,000 1,000 Factory 1,000,000 250,000 B. H. Loh & Associates16
  17. 17. For offshare company (for both company and factory as well)  2 sets of Certificate of Incorporation, M & A and other relevant documents, which are not required to be legalized by Cambodia Embassy, but have to be notarized by legalized by lawyer or government.  6 photocopies of directors and shareholders valid passport and identity card. B. H. Loh & Associates17
  18. 18. For Cambodia company / factory  New company name  Company’s business item,  6 copies of Cambodian company’s director and shareholder valid passport and identity card,  2 copies of personal bank credit certificate of Cambodian company’s director in English (included the deposit account at least USD 1,000)  6 copies of 2” x 2” colour photo of Cambodian director,  1 original copy of lease contract,  1 photocopy map of the campany. B. H. Loh & Associates18
  19. 19. How to set up a foreign-invested company?  The company name will be verified by the Minister Of Commerce (MOC).  After the company name approved, the investor should open a bank account. Then, the investor should remit capital into the bank and apply 2 copies of credit certificate from the bank, which is required to submit to MOC.  The investor should submit required documents to MOC and obtain a business license, M & A and company stamp from MOC. B. H. Loh & Associates19
  20. 20. How to set up a foreign-invested company?  Apply tax license from Administration Of Taxation,  Apply VAT tax application from Cambodia Development Council (CDC).  The company can start business once grant an approval. B. H. Loh & Associates20
  21. 21. How to set up a foreign-invested factory?  The company name will be verified by the Minister Of Commerce (MOC).  After the company name approved, the investor should open a bank account. Then, the investor should remit capital into the bank and apply 2 copies of credit certificate from the bank, which is required to submit to MOC.  The investor had to submit the investment proposal to Cambodia Development Council (CDC), The CDC will obtain all relevant license within 5 – 6 months. B. H. Loh & Associates21
  22. 22. How to set up a foreign-invested factory?  MOC will issued a business license, M & A and company stamp.  If the factory need to apply for the exemption from import duties, the investor should apply directly to CDC. (Import duties exemption for 2 – 3 years, and apply for an extension of 1 – 7 years after the expiry).  No foreign currency controls, which allow the factory free access of foreign exchange fund. B. H. Loh & Associates22
  23. 23. How to set up a foreign-invested factory?  MOC will issued a business license, M & A and company stamp.  If the factory need to apply for the exemption from import duties, the investor should apply directly to CDC. (Import duties exemption for 2 – 3 years, and apply for an extension of 1 – 7 years after the expiry).  No foreign currency controls, which allow the factory free access of foreign exchange fund. B. H. Loh & Associates23
  24. 24. INCOME TAX INFORMATION & SPECIAL ECONOMIC ZONES B. H. Loh & Associates24
  25. 25. What are the corporate income tax, withholding tax and personal income tax in Cambodia?  If a foreigner living in the country for over 183 days within a taxable year, he / she should deemed as a resident, otherwise the foreigner should be deemed as a non-resident Cambodia Vietnam Personal resident 0 – 20% 5 – 35% Personal non-resident 20% Enterprise (company / factory) 20 22% Withholding tax 14% B. H. Loh & Associates25
  26. 26. Where are the Special Economic Zone (SEZ) 1. Phnom Penh SEZ – about 18 km from Phnom Penh City 2. Manhattan SEZ – located at the border of Tay Ninh, Vietnam and Kompong Cham, Cambodia. 3. Sihanoukville SEZ – located 200 km from southwest of Phnom Penh. B. H. Loh & Associates26
  27. 27. B. H. Loh & Associates27
  28. 28. B. H. Loh & Associates Address : No. 1-3-15, Goldhill Complex, Tingkat Paya Terubong 1, 11060 Penang. H/P No. : 016-4893382 Email : bhlohass@gmail.com Web-site / facebook : bhloh.com.my Thank you B. H. Loh & Associates28

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