Foreign companies can choose between a branch office or a representative office if they are seeking to explore the Cambodian market and gain new potential customers. This guide will mainly focus on everything you need to know about a branch office in Cambodia.
Let’s jump right in.
What is a branch office?
The branch office is not a separate legal entity from the foreign parent company; therefore, the parent company is liable for the branch’s debts and obligations.
The branch name should be the same as the parent company and must have the words Branch above or in front of the name.
What activities can branch offices carry out?
Branches can conduct commercial activities, such as buying and selling products and can engage in manufacturing, processing and construction.
However, the branch office cannot engage in any Qualified Investment Projects (QIPs) for which tax incentives are available. To qualify for the QIP incentives, you must have a separate legal entity from a foreign parent company which incorporated in Cambodia.
Required documents for registering a branch office
The following documents are required when registering a branch office:
- Land title or lease agreement of the enterprise’s location
- Current photo of no longer than three months of the director with a white background
- National identification card of the director(s)
- Parent company’s article of association
- Parent company’s certificate
- Letter of appointment of director of the branch office
- Reference document (can be a letter specifying an already existed company’s permission to use a similar company name, special licenses and related documents)
- Authorisation letter if the one who wills out the application is your representative
- Proof of paid tax or property information of the enterprise.
Branch office registration steps
Step 1: Choosing a branch name
The branch name must be the same as the parent company and must have the words Branch above or in front of the name. The name should be in the Khmer language and can also be in another language (usually English).
Once you have decided on a name, you must reserve the name and it will be reserved for two weeks and can be extended by making another payment to reserve the company name for another two weeks. To reserve a company’s name, the name application must be submitted to the online company registration services.
Step 2: Branch office registration
After the name is approved, you must then submit the required documents and the completed registration form in CamDX’s online system.
Upon confirmation, a Certificate of Registration will be issued.
Step 3: Opening a business bank account
After receiving the Certificate of Registration, you will need to open a corporate bank account.
The basic documents you will need to open a business bank account are:
- Certificate of Registration
- Resolution of the board of directors to open the account
- Business tax patent (if any)
- Original and copy of identification card or passport of all authorised signatories, shareholders and directors
Some banks in Cambodia you may consider are:
- ACLEDA Bank
- Canadia Bank
- ABA Bank
- Bred Bank
- Vattanac Bank
- Maybank Cambodia
Step 4: Tax registration
Tax registration must be made within 15 days of registering your branch office and uploading your bank confirmation letter. Registration can be done at the single window service website.
Step 5: National Social Security Fund registration
The branch office must register with the Ministry of Labour and Vocational Training and the National Social Security Fund (NSSF) to make monthly contributions for employees.
The minimum monthly salary to calculate the contribution is KHR 200,000, and the maximum is KHR 1.2 million.
If you are a foreign company that intends to expand into the Cambodian economy and engage in business activities, then a branch office maybe the choice you should go for. Do not hesitate to contact Acclime for advice on whether a branch is the appropriate vehicle for you to choose as well as for assistance in setting up a branch office.
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