Foreign company registration options in Cambodia.

This is the ultimate guide to foreign company registration options in Cambodia.

There are four types of business setup options available to foreigner entrepreneurs and investors  in Cambodia:

• Private limited company
• Representative office
• Foreign branch office
• Subsidiary

…all of which can be 100% foreign-owned.

If you are seeking to expand your business into Cambodia, one of the following four options will be an appropriate choice.

Option 1: Private limited company

(See also the Acclime guide to setting up a private limited company in Cambodia)

A private limited company is a limited liability company with private ownership and is the most common business entity in Cambodia. The private limited company can be 100% foreign-owned. It must have 2 to 30 shareholders and requires a minimum of one director who can be either a local or foreigner.

The private limited company cannot issue shares or securities to the public and may have one or more restrictions on the transfer of each class of its shares. The private limited company is a separate legal entity and the shareholders of the company will not be personally liable for the company’s debts.

A private limited company that has only one shareholder is called a single-member private limited company.

What is a single-member private limited company?

The single-member private limited company is a private limited company that has one legal person (company or individual) as the shareholder and a minimum of one person as the director. The single-member private limited company can be converted to a private limited company upon the shareholder’s approval to increase company shareholders.

Documents needed to register a private limited company

• The passport of the shareholder(s) or the certificate of incorporation if the shareholder is a company
• Articles of incorporation in both English and Khmer
• Proof of address of the registered office
• Details of the registered agent in Cambodia
• Details of the company directors and signed copies of the information page of each director’s passport
• A list of staff indicating males, females and foreign staff
• An outline of the business you will be undertaking

Steps to registering a private limited company

1. Registration with the MEF and reserve company name

Company registration must be made through the Ministry of Economy and Finance’s (MEF) Cambodia Data Exchange (CamDX) system. To register online, you will need to create a user account, which requires a name, personal information and contact details.

You will have to enter a proposed name in Khmer, which the proposed names will be automatically checked. The name can also appear in another language (most commonly English). The reservation fee is KHR 40,000.

Once you have paid the fee, the name will be reserved. The name will be reserved for two weeks from the approval date and to extend the reservation period, you will need to make another payment to reserve the name for another two weeks. The previous period was three months, but from 1 October 2020, the MoC has issued the notification no. 2993 which amended on the period of reserving the company from three months to two weeks only.

After registering your company, you will receive a Certificate of Registration.

2. Opening a corporate bank account and depositing the capital

After registering the company and receiving the certificate of incorporation, you can use that to open a corporate bank account and deposit the required capital into the bank. The capital should be at least KHR 4 million.

3. Tax registration

Tax registration must be made through the CamDX online registration system within two weeks.

Once registered, the GDT will issue a taxpayer identification number and receive a taxpayer identification card, VAT certificate and patent tax certificate.

4. Registration with the National Social Security Fund and Ministry of Labour and Vocational Training

Finally, the company must submit an opening declaration with the Ministry of Labour and Vocational Training.

Companies with eight or more employees will have to register with the National Social Security Fund (NSSF).

The Ministry of Economy and Finance has recently introduced an online registration system which aims to streamline the registration process. Once MoC registration is completed, the application will be forwarded to the GDT for registration and then to MLVT. The stated aim is to complete the registration process in eight days. Currently, registration of a new company takes 3-4 weeks.

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Option 2: Representative office

Foreigners can set up a representative office to gain presence in the Cambodian market and promote the products and services of the foreign parent company.

The representative office cannot engage in trade or provide services, sell, purchase, manufacture, process or construct in Cambodia.

Representative offices are permitted to perform the following activities:

• Contacting customers and introducing customers to the parent company
• Researching commercial information and providing information to the parent company
• Conducting market research
• Market goods at trade fairs and exhibit samples and goods in offices or trade fairs
• Rent an office and employ local staff
• Enter contracts with local customers on behalf of the parent company

Documents needed to register a representative office

To register a representative office in Cambodia, you will need the following documents:

• Coloured copy of the registration certificate and articles of association of the foreign parent company
• Letter of appointment from the foreign parent company for the authorised officer of the representative office
• Authorisation letter from the foreign parent company allowing the representative office to use its name and logo legally
• Coloured scan of the passport of each director of the foreign parent company along with the signature and residential address
• Coloured scan of the passport of the authorised officer of the representative office along with the signature and residential address
• Principal business activity in Cambodia
• English name of the representative office in Cambodia
• Current photo no longer than three months of the authorised officer with a white background
• Details of the premises out of which the representative office will operate

Steps to registering a representative office

1. Choosing a name

The name of the representative office must be the same as the parent company and have the words Commercial Representative office or Commercial Relations Office in front of or above the name. The name should be in Khmer language and can also be in another language (usually English).

Once you have decided on a name, you must reserve the name. To reserve a company’s name, the name application must be submitted to the online company registration services.

Upon approval, the name will stay reserved for two weeks from the approval date. If you want to extend the reservation period, you must make another payment to reserve the company name for another two weeks.

2. Registering with the CamDX

Once you have the registered office name, you must then submit the required documents and registration form to the CamDX’s online system. Upon confirmation, a Certificate of Registration will be issued.

3. Opening a corporate bank account

After registering your representative office with the MoC, you will need to open a corporate bank account.

Some banks in Cambodia you may consider are:

• ACLEDA Bank
• Canadia Bank
• Foreign Trade Bank of Cambodia
• Union Commercial Bank
• ANZ Royal
• Vattanac Bank
• Maybank Cambodia

4. Tax registration

You must apply for tax registration within 15 days after incorporating your company, otherwise, you will be fined. Tax registration can be made through the online business registration website.

The following documents must be uploaded:

• Property information of where the business is located
• Bank account details

5. Labour and National Social Security Fund registration

A representative office with at least one employee must apply for labour registration with the Ministry of Labour and Vocational Training. Registration with the National Social Security Fund is also required, and employers are to make monthly NSSF contribution payments.

Option 3: 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.

Branches can conduct commercial activities, such as buying and selling products and can engage in manufacturing, processing and construction. The branch name can be the same as the parent company and must have the words Branch above or in front of the name.

The branch office cannot engage in any Qualified Investment Projects (QIPs) which tax incentives are available. To qualify for the QIP incentives, you must have a company incorporated in Cambodia.

Documents needed to register a branch office

The following documents are required when registering a branch office:

• Certificate of incorporation of the foreign parent company and its structure
• The Memorandum and Articles of Association of the foreign parent company
• Details of representatives of the branch office in Cambodia
• Details of the business premise of the branch office
• The name of the branch office
• Letter of appointment from the foreign parent company for the authorised officer of the branch
• Coloured passport copy of each director of the foreign parent company and signatures
• Recent photo of the local authorised representative with a white background

Steps to registering a branch office

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. Name reservation can be made at the CamDX registration service.

Upon approval, the name will stay reserved for two weeks from the approval date. If you want to extend the reservation period, you must make another payment to reserve the company name for another two weeks. The previous period was three months, but from 1 October 2020, the MoC has issued the notification no. 2993 which amended on the period of reserving the company from three months to two weeks only.

2. Branch office registration

Like the representative office, the branch must register with the CamDX online registration system. Once the registration is complete, you will receive the Certificate of Registration.

3. Opening a business bank account

The next step after receiving the Certificate of Incorporation is opening a business bank account.

4. Tax registration

Tax registration must be made within 15 days of registering your branch office. Registration for tax can be made at the single window service website.

5. National Social Security Fund registration

The same with a representative office, the branch office must register with the Ministry of Labour and Vocational Training and NSSF to make monthly contributions for employees.

Option 4: Subsidiary

A subsidiary is a limited company in Cambodia with at least 51% of the shares held by the foreign parent company. The subsidiary is a separate legal entity from the parent company. Subsidiaries can conduct business the same as local companies except for activities that are prohibited to foreigners.

Documents needed to register a subsidiary

• Certificate of incorporation of the foreign parent company and its structure
• The Articles of Association of the foreign parent company
• Details of the business premise of the subsidiary
• The name of the subsidiary
• Letter of appointment from the foreign parent company for the subsidiary
• Coloured passport copy of each director of the foreign parent company and the subsidiary and signatures

Steps to registering a subsidiary

To set up a subsidiary in Cambodia, please refer to the steps for registering a private limited company stated above.

Conclusion

You should carefully decide on which entity you will set up as not all three foreign company registration options in Cambodia allow business activities and may be restricted to activities that do not generate profit.

Do not hesitate to contact Acclime for support throughout the procedure of setting up a foreign company in Cambodia.