Investment Law of Kingdom of Cambodia introduced in August 1994 encourages foreign investment, and clearly stipulates investing procedures, guarantee mechanism, incentives and land ownership, etc. According to Order of Implementation of Investment Law of Kingdom of Cambodia, local government provides coordination for investment activities and personnel to those foreign investments receiving incentives approved by Cambodia Investment Board. From 2003, Cambodia national Assembly amended Investment Law to simplify procedures for foreign investment.

Besides, Business Regulations and Business Registration Law and Amendment, Constitution Law of Council for Development of Cambodia and Amendment, Responsibilities and Operation Law of Forming the Board of Council for Development of Cambodia, and Tax Law and Amendment, these laws and regulations standard business norms, business registration and tax levy.

Cambodia joined ASEAN in 1999 and later into WTO as 148th member in September 2003. At present, Cambodia is much more open up with free trades. Foreign investors can gain more incentives locally and export preferences provided by Europe and America and other countries.

1. WFO Factory: 100% owned by foreign investor, with minimum 1 shareholder and 1 director. It is separate legal person, and without limitation on domestic and foreign sales. 2. WFO Trading Co.: It can import and export independently and can be agent of import and export business. It can sale products in and abroad as well as setting up branches / chain stores nationwide. 3. BBC Factory (Contractual joint venture): same as “processing plant”, “contractual plant” in China or “joint venture” in Vietnam. 4. Joint venture (factory): at least two shareholders, similar with Chinese joint venture (factory). Foreign own shall not exceed 49%, in which investing no less than 30% of the total capital. 5. Rep. office: Sign contracts, hire clerks, promote products, and establish business relationship with customers on behalf of parent company. However, it cannot sale, provide direct service or conduct manufacturing and constructing business. Many rep. office are permitted.6. Branch: it takes similar function of trading company such as sale, import and export, provide services or conduct any legal business, etc.

1. Director / Shareholder: At least 1 shareholder and 1 director. Legal representative must be foreigner. 2. Registered capital: There is no minimum registered capital requirement for trading co. (rep. office/ branch), which only needs to register 50,000 Riel. But for WFOF, it needs to register 5 billion Riel (US$ 125k) so that it can verify total amount of cheque and enjoy tax incentives. 3. Time & ways of contribution: it is not mandatory to pay up registered capital. Investors are allowed to contribute mechanical equipment / workshop / building materials / raw materials as capital; or intangible assets such as patent / trademark / technical as capital. 4. Operating period: it can be longest for 77 years, but should register business license every three years. 5. Establishing location: no regional limits, nationwide. Investment in the special zones encouraged by government can enjoy preferential tax.

Land ownership must be held by Cambodian nature person or corporation (foreign own more than 51%). Foreign investors can use land by leasing it, and can extend lease period to 99 years long. Real property and personal property (special permitted land or leasing land) can be as charge or transferred.

Machines can be imported or rented through two kinds of ways and shall be exempted from tariffs on manufacturing equipment, building materials, spare parts and raw materials of manufacturing enterprises. Foreign investor can contribute machinery as part of capital, and without limitation on money and equipment proportion.

General investment projects should pay 20% corporate income tax. If foreign investment are encouraged projects such as agriculture / tourism / environmental protection / high-tech / labor-intensive industry / export-oriented industry / infrastructure construction and energy industry, those who get the approval from CDC can enjoy 3-8 years tax holiday; after expiration of the period, corporate income tax is levied in the rate of 9%. Those who invest surplus into project shall be exempted from income tax.

Companies conduct commodity sales and services in Cambodia should pay 10% VAT, exported products & foreign service exempted. Investments that: 1. Export at least 80% of total output of products; 2. Are in the priority Special Development Zone announced by CDC; 3. Tourism; 4. Labor-intensive industry / processing industry and agricultural industry; 5. Imported building materials / manufacturing material / various materials / semi-finished products / raw materials and parts and accessories for infrastructure construction and energy production, shall be exempted from custom duty and other taxes.

Offshore company need not legalized by local Embassy. CRC will provide one-stop service for registration, such as notarization and documents service in 3 days at the prior period of registration, which facilitates your registration in about 28 days. Trading co. / branch / rep. office needs registration in Ministry of Commerce and Tax Bureau; WFOF requires approval from CDC.

Procedures: 1. Offshore company formation (double-holding structure); 2. Collect offshore company information; 3. Company name check; 4. Approval by authority (only for WFOF); 5. Issue Investment Permit; 6. Gazette incorporated; 7. Public security registration & open bank A/C; 8. Tax / Custom registration.

To enjoy preferential treatment, it has to pass the approval by CDC then get permit. Applying procedures: 1. Submit application documents (a. application form and relevant documents b. articles of incorporation or BCC/BOT contract c. feasibility study report); 2. Apply filing, and pay certain fees (first stage); 3. State investment projects, and interview with investment verification department; 4. Get project approval, pay certain fee (second stage); 5. Pay performance bond (1.5%-2.0% of the total amount of investment); 6.Register for the formal Investment License issued by CDC; 7. Receive performance bond back when finishing 30% of investment in 6 months.

When applying registration, one of directors or shareholders should go to Legal Affair Office of Business Department to fill the registration form. He has to show and record his ID card or passport and sign to ensure the documents submitted is correct, complete, and no fraud statement. Main required documents are as follows: 1. Application Form; 2. Memorandum & Articles of Corporation (M&A); 3. Copy of Directors / Shareholders' ID or Passport; 4. Certificate of No Criminal Record for Directors; 5. (If any nature person) Shares Allocation Resolution.

Expect those forbidden and particular items, such as telecommunication basic service / nature gas / oil exploration / mineral exploration (oil / gas exploring base). 1. Advanced technology / high-tech / labor-intensive industries and processing manufacturing; 2. Arming, forestry & fishery / mining / non-metallic minerals and natural resources industries such as oil and gas / infrastructure construction and energy industry; 3. Travel related industry / environmental protection industry; 4. Agricultural industrial goods manufacturing and processing industry; 5. Industries in special zones.