Laws & Regulations
Laws & Regulations

All businesses operating in Cambodia must comply with Cambodian laws related to registration, taxation and the labor law. As a business owner, it is your responsibility to ensure you follow all requirements when registering and running a commercial entity. This section provides the necessary information including road maps and sample documents to ease the process of registration and legally operating a business in the Kingdom of Cambodia. It gives you a better understanding of the standards, licenses, taxes, legal compliance, import and export procedures required for your type of business. Please click on each sub-heading for more detailed information.

Business Licenses

Business Licenses

Cambodia is a growing and developing country and many new businesses are starting up. Local Micro, Small, and Medium Enterprises (MSMEs) are often not familiar with all the legal procedures or how to register their businesses properly. However, starting a business in Cambodia has become easier with the introduction of a digital registration platform. The Information Technology Platform was introduced and launched by the Ministry of Economy and Finance (MEF) in June 2020. It enables seamless registration through a faster, more economical, and more convenient process. Small and Medium Enterprises (SMEs) need to have several registrations and licenses. The number of licenses and inspections depends on the nature of the business, the size of the operation and the business location. Here are the list of Licenses/Certificates that are required to have:  Certificate of Incorporation (Business Registration)Permit on Small and Medium Factory & Handicraft EstablishmentCertificate of operation on Small and Medium Factory & HandicraftLicense for the Use of Product Registration Mark ចបផLicense for the Use of Product Certification Mark CSTax Registration for Patent Tax, VAT Number and Transfer TaxLocation Approval LicenseRegistration for Opening Enterprise, Establishment Ledger, Payroll, and Internal Work Rule (within 30 days)Trademark Registration (optional)Tax Permit on Sign BoardPermit on Sign Board Where can I register? You can apply for these licenses as below: For Operating License on Small and Medium Factory & Handicraft and Permit on Small and Medium Factory & Handicraft Establishment, you can apply them at the General Directorate of Small and Medium Enterprises & Handicraft of Ministry of Industry, Science, Technology, and Innovation (MISTI) or Provincial Department of Industry, Science, Technology, and Innovation. For Certificate of Incorporation (business registration), you can register your certificate through the following link: www.registrationservices.gov.kh or you can go to the Department of Business Registration/Provincial Department of Commerce to assist you in business registration.For License for the Use of Product Certification Mark ចបផ & CS, you can apply them at the Institute of Standards of Cambodia (ISC) in Phnom Penh.For Tax Registration for Patent Tax, VAT Number and Registration Tax, you can apply them at the General Department of Taxation in Phnom Penh or Provincial Tax Branch.For the Location Approval License, you can apply it at Phnom Penh Municipality.For Registration for Opening Enterprise, Establishment Ledger, Payroll, and Internal Work Rule, you can register it at the Ministry of Labor and Vocational Training (MoLVT) or online registration recognized by the Ministry of Labor and Vocational Training.For Trademark Registration, you can register it at the Department of Intellectual Property of the Ministry of Commerce (MoC) or the Provincial Department of Commerce.For Tax Permit on Sign Board, you can apply it at the General Department of Taxation or Provincial Tax Branch.For Permit on Sign Board, you can apply it to Phnom Penh Municipality. What Inspection Should I Expect? While operating your business, you should expect the following inspections: (1) Product Quality Inspection by the Ministry of Industry, Science, Technology, and Innovation (MISTI); (2) Location Inspection by Phnom Penh Municipality; (3) Operational Hygiene Inspection by the Ministry of Health (MoH); (4) Fire Safety and Security Inspection by the Ministry of Interior (MoI); (5) Labor Compliance Inspection by the Ministry of Labor and Vocational Training (MoLVT); (6) Environmental Inspection by the Ministry of Environment (MoE); and (7) Local Authority Inspection by the Ministry of Interior (MoI). If you are not clear which licenses are obligatory for specific businesses, help in this process can be given by specialized service providers. Under the Service Providers section, you can explore local service providers in various sectors. You can easily find and access information for service providers with the necessary information for broadening your business effectively.  

Tax

Tax

Taxation is a difficult policy area for Micro, Small and Medium Enterprises (MSMEs) but one which requires careful attention. MSMEs have many concerns about tax matters, for example:  Indirect taxation (Value Added Tax), Direct taxation (income, capital, double taxation, etc.), Tax compliance costs, and the administration of tax compliance processes.   Here, you can access the information that you need about government regulations on taxation and to learn more about your tax obligations and rights as a business owner in Cambodia.  If you are still unsure on the required steps you can find help from specialized service providers (See the Service Providers section). The most important Government Regulations on Taxation for (MSMEs) are: SME tax incentives scheme (from Oct 2018)– Sub-decree N.124 provides a tax exemption from the tax on income for 3 to 5 years and provides additional incentives for deductible expenditures for 6 priority sectors including Agricultural or agro-agricultural products, Food manufacturing​ and processing, Manufacturing of local consumable goods, waste recycling and production of goods for the tourism sector, Manufacturing of finished products, spare parts or assembling parts to supply other manufacturers, Research and Development (R&D) associated with IT or the supply of IT-based services and Enterprises located in SME Cluster Zones and Enterprises developing the Cluster Zone. Customs (Sub-Decree N.50):on 25 March 2019, a new customs incentive was announced. SMEs in the following priority sectors (domestic sellers, Special Economic Zones (SEZ), exporting or supporting export, portable water, and in the IT sector) may obtain a customs duty exemption on imports of production equipment, construction equipment, and raw materials/other production inputs.  Tax Incentive on Voluntary Registration (Sub-Decree N.17) defines the tax incentive mechanism to be provided to small and medium-sized enterprises for encouraging them to voluntarily register themselves for the tax to create a transparent and fair tax system. 

Standards

Standards

Standards provide technical specifications (guidelines or requirements) for products, production processes, and services. If used consistently, they ensure quality, safety, efficiency, reduced costs and ease companies’ integration into national as well as global value chains and trade. The Royal Government of Cambodia supports standardization as a powerful and strategic tool for the improvement of the efficiency of Cambodian businesses. To prove that their products follow the respective National Standards, Micro Small and Medium Enterprises (MSMEs) and particularly medium enterprises, must apply for a standard certificate, related to their industry or trade, through the Institute of Standards of Cambodia (ISC). This section will provide you with information to help you ensure that your business follows the Standards of Cambodia (SC), the International Standards, and the Technical Regulations of Cambodia.  What is the ISC doing?  The Institute of Standards of Cambodia (ISC) pays special attention to standardization as standards can influence many areas of public concern such as the competitiveness of the industry, the functioning of the market, the protection of the environment and human health, as well as innovation.  The Institute of Standards of Cambodia (ISC) is the body responsible for the preparation of National Standards and guidelines for products, commodities, materials, services, and operations. ISC, as a correspondent member of the International Organization for Standardization (ISO), and can sell and adopt ISO standards nationally.   Certification by the Science Technology and Innovation National Laboratory (STINL) In terms of services provided to Micro, Small and Medium Enterprises (MSMEs) and particularly to medium enterprises, ISC provides testing services through its Science Technology and Innovation National Laboratory (STINL), which is also the Cambodian Certification Body. The ISC and the STINL provide training and consulting services regarding standards such as ISO 9001, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Hygiene Practice (GHP), and Good Manufacturing Practice (GMP). Information about the regulations is free of charge. Standard documents are provided for a small fee for the copyright. The Institute of Standards of Cambodia (ISC) provides standard certification through testing and measurement to determine the quality and characteristics of products, based on national and international ISO standards. Application of globally recognized measurements by the National Metrology Center of Cambodia (NMC) Metrology is the science of measurements and establishes a common understanding of units such as size, length, weight and so on. It provides accuracy, quality, and safety to keep the market competitive and ensures that products can be compared worldwide. The Royal government of Cambodia supports metrology as a critical tool to promote innovation and industrial competitiveness by advancing the measurement science, standards, technology with international recognition. The National Metrology Center of Cambodia (NMC) is responsible for all of the metrological work imposed by the Metrology Law of Cambodia and ensures that metrology contributes to fair competition, quality of products, strengthening of innovation, reduction of technical barriers, and the protection of the environment and public well-being to support the economic growth in Cambodia. As member of international and regional organizations, the NMC can ratify the national standards with three distinctions as National Primary Standard, Secondary Standard and Working Standard. Under German Development Cooperation, with support of the Federal Ministry for Economic Cooperation and Development (BMZ), the NMC was partner of the regional project “Strengthening the Quality Infrastructure in ASEAN”, implemented by the Physikalisch-Technische Bundesanstalt (PTB) between 2015 and 2021. Relevant for Small and Medium Enterprises (SMEs), notably medium enterprises, NMC contributes to the implementation of a global measurement system that results in globally recognized certificates. The NMC also provides consultation and training services regarding the quality infrastructure (QI), measurement standards in calibration, measurement uncertainty, analytical methods of validation, and verification of test procedures as well as metrology registration, verification, calibration, and license services. The application form and documents requirements are different for each service.

Import & Export

Import & Export

This section provides information, documents, guidelines, and procedures for importing and exporting goods into and from Cambodia by Sea /River, Air, and Land. We also provide links to application forms for starting the process of import and export. Additionally, this section provides updates and news on Free Trade Agreements between Cambodia and other states and elaborates on specific standards in exporting and importing from specific countries doing trade with Cambodia.   In this part, we explain best practices for import into and exporting out of Cambodia, while highlighting the unique procedures required to ship imported goods through the country on transit clearance. Registration Both importers and exporters first need to register with Cambodia’s Department of Business Registration, under the Ministry of Commerce. Cambodia uses the Automated System for Customs Data (ASYCUDA) created under the United Nations Conference on Trade and Development (UNCTAD). To register with ASYCUDA, importers and exports require a Taxpayer Identification Number (TIN). To acquire a TIN, importers and exporters must register with the General Department of Taxation, under the Ministry of Economy and Finance. Finally, importers and exports must register with the General Department of Customs and Excise. Subsequently, importers and exporters need to register their value added tax (VAT) accounts with the General Department of Taxation (Ministry of Economy and Finance). Importers and exporters operating out of Special Economic Zones (SEZs) must apply with the Free Zone Management Department of the General Department of Customs and Excise in Phnom Penh. Required Documents For importers Businesses importing into Cambodia must provide the following documents when their goods arrive: Customs Import Declaration;Commercial Invoice;Packing List;Road Transport Document (if arriving by land);Bill of Lading (if arriving by sea);Import Permit;Insurance Certificate;Tax Certificate;Certificate of Origin; andCompany Registration. For exporters  Businesses exporting out of Cambodia must provide the following documents before their goods depart: Customs Export Declaration;Commercial Invoice;Packing List;Road Transport Document (if departing by land);Bill of Lading (if departing by sea);Terminal Handling Receipts (if departing by sea);Insurance Certificate;Export Permit; andCertificate of Origin.  Additional documents for certain imports and exports All foodstuff, chemicals, drugs, and electrical (or electronic) equipment imported into Cambodia requires a pre-arrival assessment. This assessment is conducted by the Cambodian Import-Export Inspection and Fraud Repression Directorate-General. All animals (live or dead) as well as animal by-products require permission from the Ministry of Agriculture, Forestry, and Fisheries. All plants and plant products require a phytosanitary certificate issues by the Ministry of Agriculture, Forestry, and Fisheries. A complete list of import and export goods with proper HS Codes, tariff rates, and additional measures can be found here. For goods in transit Goods that traverse into Cambodia en route to subsequent destinations must provide an import declaration under Cambodia’s transit regime (under the General Department of Customs and Excise). To transit goods through Cambodia, the following documents are necessary: Commercial Invoice;Packing list;Certificate of Insurance; andCertificate of Origin. Transitory goods do not incur import tariffs. But, either a check or letter of guarantee issued by a financial institution must be provided as security. Goods in transit must follow the route through Cambodia dictated by customs officials. Tariffs and Taxes Cambodia follows the 8-digit Harmonized System (HS) Code under the World Customs Organization (WCO). Cambodia’s tariff classifications confirm with the Association of Southeast Asian Nations (ASEAN) Harmonized Tariff Nomenclature (AHTN). For importers Cambodia applies tariff rates between 0 and 35 percent. Typically, primary goods and raw materials incur a tariff rate of 7 percent; capital goods and locally available raw materials a tariff rate of 15 percent and; finished products as well as alcohol, petroleum, vehicles, and precious metals a tariff rate of 35 percent. For a complete good-by-good breakdown of tariff rates visit the website of the Cambodia National Trade Repository. Goods such as agricultural equipment, school material, pharmaceutical products, and sport equipment are exempt from import tariffs. Cambodia charges a flat 10 percent value-added tax (VAT) on all imported goods. Cambodia also charges a special tax on certain imported goods. For exporters Cambodia levies an export tax on goods leaving the country which ranges between 0 and 50 percent. Special Economic Zones (SEZs) Cambodia has in total 39 special economic zones to date – including at the port of Sihanoukville. Businesses operating out of these SEZs can import raw material and production equipment without paying import duties and are exempt from VAT on both imports and exports.  As mentioned above, importers and exporters operating in SEZs require additional documentation. Free Trade Agreements Cambodia is a partner to the ASEAN Trade in Goods Agreement (ATIGA) and a member of five regional FTAs through the ASEAN with: Australia;China;India;Japan; andKorea. In order to avail to the benefits of these FTAs, exports and importers must apply for a Certificate of Origin for their goods from the Export-Import Department. Cambodia has set up a National Trade Repository as a source for all regulatory information for traders to import and export goods. You can get an overview of the detailed description of the cargo clearance processes from the Handbook on Customs Clearance and other related official documents below.  

Starting a Business

Do you dream of being independent and running your own business? Maybe you want to become your own boss? Or do you have a great solution to a problem you see in the world? If yes, becoming an entrepreneur might be right for you. However, starting a business isn’t easy and you need to be prepared for a long period of struggle until your enterprise starts to turn a profit. This section guides you on what you need to start a business as well as giving you advice to help you through this journey. There are also professional Service Providers who can help you through some of the steps or even through the complete setup process. Before you start, check if you’re ready:Starting a business requires effort and commitment. It’s important to know what’s involved and whether you’re actually well suited to business and self-employment. We recommend you first take some time to critically evaluate yourself and learn about the challenges of owning a business. Are you really ready to own your own business?Whether you’re starting a new business or buying an established one, you’ll need to be prepared. Consider these key areas to make sure you are ready. 2. Refine your idea Once you are certain you’re cut out for running your business, it’s time to review and refine your business idea. A great way to do this without diving directly into a lengthy and detailed business plan is to use a tool such as the Business Model Canvas. This gives you a single page snapshot of the key elements of your business and how they work together. You can find a free download here. The Business Model Canvas ensures that you start thinking about your mission and value proposition from the very beginning. You will need to think about and make notes about the following key areas: Customer segments:Who are your customers? Value proposition:What are your products or services? What problems are you solving for your customers? Revenue streams:Where does your income come from? Channels: How do you communicate with your customers? How do you deliver your goods or services? Key Activities:What do you do every day to run your business? Key Resources: Who are the people, the skills, the tools and the finances you need to run your business? Key partners:Who are your key partners in running your business? Cost Structure:What are your main costs? More information about this tool can be found here: https://www.businessmodelsinc.com/about-bmi/tools/business-model-canvas/. Ngeay Ngeay also offers a free video course in Khmer to help you through the Business Model Canvas here. 3. Conduct research market To start and run a successful business you need to understand your customers and your target market. Market research can help you to understand and make informed decisions about the marketing of your products and services. There are different types of market research: primary and secondary. Primary research involves gathering information first-hand through surveys, interviews, and talking to (potential) customers and other businesses. Your research can be formal or informal. Secondary research uses information and data that has already been collected and analyzed by others. You can research your markets using information such as government statistics and trade publications. Evaluate your target audience A key purpose of market research is to get to know your target customers. You need to understand who is going to buy your product and why? What are their needs and pain points? How can you reach them? How do they make a decision to buy? Where will you find and how will you communicate with them? Research the competition and market saturation You need to know your competition, so you can beat them and prevent them from taking your customers. Remember competition is not always a bad thing; it means there is already a healthy market for your product or service and that customers are willing to pay. Learn as much as you can about how your competitors attract customers, what value they provide and anything they are missing. At the same time, check for market saturation. You may think that the coffee shop or the flower shop in your neighbourhood looks like a great business idea, because it seems to be flourishing, but you need to consider: are there enough customers for this type of business? Maybe the market is already saturated with numerous businesses offering similar products or services. If you want to enter an already crowded market, what will be your Unique Selling Proposition (USP)? How will you stand out and be different? Will you have a more specialized service? A lower price? Something that no one else can offer? Simply copying another business or business idea is not a winning approach. You need to understand the market size and the portion of this you can potentially captur Validate your idea It’s a good idea at this stage to field test your idea, product or service. Speak to potential customers and get their feedback on your proposed product or service and see how interested they are in it and whether they would be willing to pay for it. You can do through by sending out surveys, talking to people in person or on social media, running ads or attempting a pre-sale campaign to gauge interest. Ngeay Ngeay also offers a free video course in Khmer to help you prepare a marketing strategy for your business here. 4. Write a business plan A business plan is a must if you are thinking of getting outside financing through a loan or investment. However, even if you are starting small and starting with your own funds, a business plan will help you to plan: how much money you’ll need to get started, how to get profitable, what you need to do and what the longer-term future looks like. Think of a business plan as a road map for your business, a tool to help you manage your goals and track your progress. If you’ve already developed a simple overview of your business, using a tool like the Business Model Canvas, this will be a great starting point for you. How formal or structured your business plan will be, will depend on whether you plan to use to raise funds or use only as an internal document. What goes into a formal business plan? There are different ways to structure a business plan, but most contain at least the following elements: Executive SummaryYour teamCompany overviewIndustry and Market AnalysisMarketing PlanOperational PlanFinancial Strategy A great way to get support in writing a business plan, check the list of training opportunities here. [link to training opportunities page] You can also seek support from the list of service providers here. [link to service providers page] There are also numerous websites that can provide you templates, guidance and advice on writing business plans. 5. Make your business legal To start and operate a business in Cambodia, you will need to get registered. The first step will be to review the different types of business structures and to decide which one is the best for you. You will also need to decide on a name and check if it is available. To help you decide, you should research the structures and pros and cons of the above types of businesses and select the one that is most suitable for you and your business. A good place to start is here. This site contains a table comparing the different registration types along with the benefits and drawbacks of each. Registration Steps and Requirements in Cambodia In Cambodia, you can register your new busines through the One Portal system here. This User [insert pdf download here] Guide from the Ministry of Economy and Finance is very useful to help you get prepared for this process. It includes an overview of how to use the system and the documents you will need to prepare for submission. The main steps in registering your business, whether you use the One Portal system, or a service provider are: Name Search and confirmationBusiness registration with the MOCTax registration with GDTDeclaration of opening with MoLVTLicensing and other requirements based on operations and industry. Read more about licensing here. [link to content on licenses]You may need to secure additional licenses and permits in order to have approval to do certain activities based on your type of business and industry. You can find more information on licenses and permits in the Business License section of this website.You may also choose to register a trademark. Registering a trademark can protect your brand assets, such as your business name or logo. To learn how to register a trademark, see the links below.EN_ Official Video Explanation on Online Trademark Filing System in CambodiaOfficial Portal to Trademark Registration in Cambodia If you have staff members you will also need to apply for National Social Security Fund (NSSF). You can learn more about NSSF and how to apply here. 6. Financing your business Whether you’re starting a business from scratch or buying an existing business or franchise, some approaches you may consider for funding: Fund your business yourself through self-fundingSecure venture capital from investorsUse crowdfundingGet a small business loanSmall and Medium Enterprises investment programsIt’s important to remember that investors such as business angels and venture capitalists may expect some level of existing self-funding or existing equity in the business in order to invest.You may also require financing for other areas of your business such as property, vehicles, machinery and tools, or inventory. There are different types of financing that may be available for you such as:A bank or MFI loanA line of creditLeasingTrade credit from suppliersLoansInvestmentsFor guidance on deciding which methods are the best for your business, you can find counselling services through our resource partner network (see Service Providers). 7. Preparation for operations As a registered entity, you will need to submit monthly and annual tax declarations to the General Department of Tax (GDT). To help you to do this, you will need support, at least initially, from a bookkeeper or accountant who has experience in this area. You will need to set up a well-organized filing system, prepare numbered receipts and invoice books, making sure you keep very detailed and careful copies of every transaction. This is in addition to setting up and using a system such as QuickBooks to keep track of income and expenses and so that you can create monthly, quarterly and annual financial reports. These are not only needed for reporting but also help you analyse your business and make best decisions for operations and growth. Even if you are starting small, correct and accurate financial record keeping is a must. If you are not planning to engage a full-time accountant, you can hire a service provider to help you with monthly submissions. 8. Prepare for growth As you begin your business, you will experience successes and set-backs. You need to see these as learning opportunities. With your Business Model Canvas or business plan in hand, you can re-evaluate and re-assess your strategy and plan for future growth based on experience. You should review your progress each month, looking at the numbers from the monthly accounting reports and reviewing your strategy. Repeating this quarterly and annually will allow you to track your performance and make decisions based on results and data in hand. This helps you to prepare for all types of situations before they arise, making sure you are ready for the ebbs and flows of the business.

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