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Investment in Cambodia
- 2. Table of contents Cambodia at a glance Council for Development of Cambodia(CDC) Role and Responsibility Investment Approval Process Legal business type in the company according to the law of investment Major investment in Cambodia Incentive of Law of investment in Cambodia Cambodia Accounting System Cambodia Tax system Summary of Tax rate in Cambodia When is the tax should be paid? Reason to invest in Cambodia Cambodia economic situation Map explorer of Cambodia Average flight from Cambodia to other ASEAN countries ASEAN Infrastructures Recent Development in Cambodia Prohibited fields of investment Comparison between Cambodia and Thailand References
- 3. Cambodia at a glance Land area: 181,035 km2 Population: 15,458,332 ( 2014 Estimated) GDP: USD $18Billion ( Estimate2015) GDP per capita: $1,146.083 ( 2015estimate) Legal system: Constitutional Monarchy Political: Prime Minister of Cambodia is selected by voting from people Membership: WTO,IMF,WB,UN, ASEAN
- 4. The Council for Development of Cambodia (CDC) is the sole and One- Stop Service organization responsible for the rehabilitation, development and oversight of investment activities. The CDC is responsible for the evaluation and the decision-making on all rehabilitation, development and investment project activities (Article 3, “Amended Law on Investment”) Council for Development of Cambodia (CDC) Role and Responsibility
- 5. Investment application CDC issues a Conditional Registration Certificate to the Applicant Company Registration / Ministry of Commerce Relevant licenses, as appropriate / Ministry of Industry and Energy Review and approval of construction plan / local authorities- Ministry of Land Management, Urban Planning and Construction. Initial environmental impact assessment / Ministry of Environment Tax Department Registration / Ministry of Economy and Finance CDC issues a Final Registration Certificate to the Applicant 3 working days 28 working days Investment Approval Process
- 6. Legal business types in Company according to Law of Investment A. Enterprise B. Limited Company C. Partnership D. Foreign Business a. Commercial representative b. Branch c. Subsidiary
- 7. Major Investment 2011 2012 2013 2014 2015 2011-2015 Agriculture 794.5 556.6 1,128.80 264.7 482.6 3,227.20 Industries 1,340.80 1,489.70 1,106.70 2,835.60 919.3 7,692.10 Infastructure 2,782.30 227.8 2,620.80 353.5 3,129.80 9,114.20 Tourism 845.6 691.5 106 479.6 111.9 2,234.60 Total 5,763.20 2,965.60 4,962.30 3,933.40 4,643.60 22,268.10 Major Investment in Cambodia 26% 10% 17% 36% 11% Major Investment Major Investment Agriculture Industries Infastructure Tourism
- 8. Improve infrastructure and utility Improve modern education and technical training Highly recommend for investment project that bring back the positive development Encourage and support for project that bring back skill and develop innovation Encourage and support for investment project that develop new product by using local process product Highly recommended investment to consult with CDC in order to form the business in Cambodia Incentive of Law of Investing in Cambodia
- 9. Accounting System KICPAA (Kampuchea Institute of Certified Public Accountants and Auditors) CASs(Certifier of Accounting Standard) ASEAN federation of accountants (AFA) IFRS(International Financial Report Standard) Cambodia Accounting System
- 10. Tax Laws Law on Taxation of The Kingdom of Cambodia 2003 Financial act 1994,1995,2007 Other provision(Prakash, Sub decree, direction and notification…) Cambodia Tax System
- 11. Corporation tax rate: 20% Sales/service tax rate: 10% Oil, gas, and business related to mineral exploitation is 30% Insurance: 5% Withholding tax: 10% to 15% VAT 10%, 0% for industries who supply certain goods and service to exporters Personal income tax : 0% to 20% Cambodia no tax on capital gain Taxes on specific goods and services: Gazed soft drinks, alcoholic product, beer : 20% Cigarettes: 15% Entertainment services, air transport of passengers: 10% Telephone services: 3% Summary of Tax Rate in Cambodia
- 12. Every month by before 15th day of the following month. For annual profit tax by before March 31st of the following year. VAT by before 20th day of the following month. When is the tax should be paid?
- 13. Reason to Investment in Cambodia Rich in natural resource Friendly investment environment Full supply of utility( electricity and water) Fully supporting from government on private sector One stop service by CDC Has the lowest labor cost and a dynamic workforce among ASEAN countries Have international airport and port for transport the products Member of ASEAN Member of Mekong Fives WTO member since 2004 increasing trade integrations Not entered double tax agreement
- 15. Map Explorer of Cambodia
- 16. Average Flight from Cambodia to other ASEAN Countries
- 18. Recent Development in Cambodia Aeon Shopping Mall Camko City Olympia City Wattanac Capital and Canadia Tower
- 19. Production/processing of psychotropic substances and narcotic substances Production of poisonous chemicals, agriculture pesticide/insecticide and other goods by using chemical substances prohibited by international regulations or the World Health Organization, that affect the public health and environment Processing and production of electrical power by using any waste imported from a foreign country Forestry exploitation business prohibited by Forestry Law. Prohibited Fields of Investment
- 20. Compare between Cambodia and Thailand Cambodia Thailand Currency Riel Bath Currency rate($1) 4079.63 Riel 35.25 Bath Trade organizations WTO,ASEAN,AFTA WTO,APEC, IOR-ARC,ASEAN GDP $18.61 billion $1.054 trillion GDP per capital $1,225 $15,319 GDP growth 0% -0.30% Inflation 5% 3.02% Population 15.6 million 68 million Land area 181,035 km2 513,120 km² Industry Tourism, garments, construction, rice milling, fishing, wood and wood products, rubber, cement, gem mining, textiles Tourism, textiles and garments, agricultural processing, beverages, tobacco, cement, light manufacturing such as jewelry and electric appliances, computers and parts, integrated circuits, furniture, plastics, automobiles and automotive parts; world's second-largest tungsten producer and third-largest tin producer Export $6.781billion $214.37 billion Export Commodities Clothing, timber, rubber, rice, fish, tobacco, footwear Electronics, computer parts, automobiles and parts, electrical appliances, machinery and equipment, textiles and footwear, fishery products, rice, rubber Import $8.895million $202.65 billion Import commodities Petroleum products, cigarettes, gold, construction materials, machinery, motor vehicles, pharmaceutical products Capital goods, intermediate goods and raw materials, consumer goods, fuels Labor force 8.8million 39.41 million Electricity import 1.83billion kWh 9.575 billion kWh Electricity export 0 1.535 billion kWh Telephone line 584,000 6.391 million Mobile 19.1 million 84.075 million Internet user 78,500 17.483 million Railway 690 kmm 4,071 km Roadway 39,618 km 180,053 km Waterway 3,700 km 4,000 km
- 21. Sector 2009 2010 2011 2012 2013 2014 Total Agriculture Products 60 72 64 69 61 37 363 Mineral and Ceramics 13 18 31 31 26 27 146 Light Industries/Textiles 48 65 62 69 67 37 348 Metal Products and Machinery 157 217 300 452 410 296 1,832 Electric ad Electronic Products 108 189 180 261 241 168 1,147 Chemicals and Pape 63 107 101 183 169 106 729 Service 165 188 166 292 250 241 1,302 Total 614 856 904 1,357 1,224 912 5,867 Major Investment in Cambodia 2011 2012 2013 2014 2015 2011-2015 Agriculture 794.5 556.6 1,128.80 264.7 482.6 3,227.20 Industries 1,340.80 1,489.70 1,106.70 2,835.60 919.3 7,692.10 Infastructure 2,782.30 227.8 2,620.80 353.5 3,129.80 9,114.20 Tourism 845.6 691.5 106 479.6 111.9 2,234.60 Total 5,763.20 2,965.60 4,962.30 3,933.40 4,643.60 22,268.10 Foreign Investment Projects Approval by BOI
- 22. http://www.iasplus.com/en/jurisdictions/asia/cambodia http://www.cambodiainvestment.gov.kh/investors-information/taxation-and-accounting.html https://en.wikipedia.org/wiki/Cambodia http://uk.practicallaw.com/3-524-4317#a929134 http://country-facts.findthedata.com/l/110/Cambodia http://www.pwc.com/kh/en/publications/2012/assets/cambodia-tax-book2012-05042012.pdf http://www.tax.gov.kh/en/brief.php http://www.rd.go.th/publish/fileadmin/user_upload/AEC/AseanTax-Cambodia.pdf http://www.cambodiainvestment.gov.kh/law-on-accounting-law-on-corporate-accounts-their-audit-and-the-accounting- profession_020708.html http://www.cambodiainvestment.gov.kh/investment-scheme/investment-application-procedures.html http://pps.com.kh/PPSUploadFiles/iv/167_en-us.pdf http://www.cambodianembassy.org.uk/publications/PDF/Tourism/Investing%20in%20Cambodia%202013-2014.pdf http://www.cambodiainvestment.gov.kh/investment-enviroment/investment-trend.html References
Editor's Notes
- According to the law of investment in Cambodia there are four types of companies that can register in order to start a business in Cambodia, enterprise, limited company, partnership, and foreign business. Enterprise: Limited Company: Private Limited Company( one or more director) and Public Limited Company( at lease three director) Partnership: the contract between two or more people in verbal writing form in order for them to join a business together in Cambodia. Limited company can be Limited partners and general partners Foreign Business: Commercial representative office, Branch, Subsidiary. Representative office brand can be research of marketing or informational. Representative Office, which although restricts what the company can do; for example, they will not be able to buy or sell goods Branch Office which can function like the original company and like any other business in Cambodia. Subsidiary => at 51% of capital held by foreign company
- http://www.imf.org/external/pubs/ft/survey/so/2015/CAR111715A.htm http://www.indexmundi.com/factbook/compare/cambodia.thailand
- Improve infrastructure by make more road and fixed the one that broken with a high quality. Also increase the supply of electricity from the neighborhood in order to support inside the country need and for supply for the new investment projects Encourage and create the high educational institution in the country also promote the training course for local people in order for them to have the ability to work with difference kind of industry that they like or willing to find a new skill with the international company that going to come to invest in Cambodia We encourage the invest project that benefit the country development and also help to protect our country environment. We will not welcome for the investment project that will bring the pollution to the country or unappropriated act to destroy the country culture or harm to people We prefer the investment project that help our labor to learn something new and bring back the skill that we never have before or improve the skill that we already have . Also to innovate the technology skill in the country in order to improve or make the new product that benefit human life. By using the resource that we already have, it will help to reduce the cost of import the product and help to improve the local people economic In order for the new company who want to invest or do research in Cambodia they have to consult with CDC( Council for the Development of Cambodia) so it will help them to understand more about the process of preparing legal paper work in setting up a company or start the research in Cambodia. Moreover, it will make them to be aware of the country constitution and their effectiveness. Highly recommended investment to consult with CDC before forming a business in Cambodia. It make them be aware of follow the rule an regulation and also protect the benefit of employees and environment of Cambodia. Also make sure they governance their business with morality and ethical
- http://www.slideshare.net/kongsonitraranya/cambodian-accouting-standards KICPAA(Kampuchea Institute of Certified Public Accountants and Auditors) => CASs( certifier of accounting standard) Audit certified Public Accounting and Audit ASEAN federation of accountants (AFA) The using of international accounting standard is good for international investor who want to invest in Cambodia. It not hard for them to follow the account in Cambodia and make them feel that accountstandard ing system in Cambodia is the same as their home countries. Moreover, it bring confidential for Cambodia accounting system to international investor The National Accounting Council (NAC) and the Kampuchea Institute of Certified Public Accountants and Auditors (KICPAA).The institutions will operate under the authority of the Ministry of Economy Ministry of economic and finance is the one who set the rule for standard of reporting financial statement Law on accounting and Prakas IFRS: International Financial Report Standard Association of Chartered Certified Accountants (ACCA) Cambodia do not have CPA but we accept ACCA
- http://aseanup.com/guide-taxes-cambodia/ Above is the summary of the tax rate in Cambodia Withholding tax 15% for income of performing service, royalties for intangible mineral, interest paid by the bank or institute of saving 10% for income from rental of movable and immovable property 6% for interest paid by domestic bank or saving institution for fixed term deposit account 4% for income from interest paid by domestic bank and saving institution for non-fixed term saving account Withholding tax for non-resident taxpayer is 14% of amount: interest, royalty, rent, and other income connect with the use of property, compensation for management or technical service, dividend Cambodia do not have anti-avoidance provision in tax law also not double taxation agreement yet
- http://www.slideshare.net/cheasoue/cambodian-tax-system
- Member of ASEAN free movement of goods and services, free flow of capital, free flow of skill labor force, production base, single market 630 million customers Member of Mekong fives: row with ASEAN and Mekong Fives. Source of water and electricity Friendly investment environment: there is no disaster like other country the same region, for example: earthquake, volcano, typhoon, or SEZ special economic zone that developed for attract the international investment projects Mekong river that the source of water supply for manufacturing
- http://www.imf.org/external/pubs/ft/survey/so/2015/CAR111715A.htm http://textile-future.com/-textile-manufacturing/news/focus-on-the-cambodian-garment-and-footwear-sector-and-its-labour-standards/3740/ The near-term outlook remains broadly favorable, and growth is projected to remain robust at 7 percent in 2015, and rise modestly to 7.2 percent in 2016, supported by lower oil prices, and the same factors that contributed to past growth.
- https://cambodia.opendevelopmentmekong.net/map-explorer/ Map explorer tell where the resource is located in Cambodia
- - The average flight from Cambodia to other countries in ASEAN member is one hour and thirty minutes
- ASEAN infrastructure Open a for transportation to country ASEAN members The road is connecting and there is an agreement between ASEAN country
- Recent investment in Cambodia http://achmanagement.com/portfolio/aeon-mall-cambodia-co-ltd/ http://www.khmertimeskh.com/news/24922/cambodia---s-real-estate-booming/ http://www.investphnompenh.com/buying-properties-in-cambodia-foreigners-guide/ http://mlscambodia.com/Olympia_City-cambodia-real-estate-news-211.html