Investment Law

Cambodia has adopted a liberal foreign direct investment policy without bias or discrimination. The open door policy imposes few restrictions on foreign investment, and with its potentially abundant natural resources, relatively inexpensive and motivated labor force, Cambodia offers advantages and significant potential in many industries. These include agriculture and agro-industry, food processing, tourism, mining, land, labor intensive industries such as manufacturing and service industries. Cambodia’s rich historical heritage and beautiful coastline, mountains and forests offer tourism and other foreign investment opportunities. Cambodia offers guarantees, incentives and simplified investor friendly procedures.

  1. Where do you start when you want to invest in Cambodia?

For many investors, the place to start is the CDC. Established by the 1994 Law on Investment, the CDC is the one-stop decision-making body for private and public sector investment. It is chaired by the Prime Minister and composed of senior ministers from various government agencies. The Cambodian Investment Board (CIB) is the CDC’s operational arm for private sector investment. The CIB reviews investment applications and grants concessions to investors and investment projects meeting the requirements laid out in the Investment Law.

  1. What incentives and other benefits does the country offer investors? Are there other benefits?

The types of investment incentives that may be available for qualified investment projects (QIPs) include:

  • profit-tax exemptions for specified periods of up to nine (9) years OR special depreciation rights;
  • import duty exemptions for production equipment, construction materials and production imports for exported products; and
  • equal treatment of investors regardless of nationality, including no price fixing, no nationalizations, and free purchase and remittance of foreign currencies, including remittance of royalties, management fees, profits and repatriation of capital abroad.

Some activities are not eligible for incentives, and some are prohibited.

  1. Are companies free to make contracts and other agreements with other companies?

Companies may contract freely, subject only to restrictions on illegal or immoral activities or those that threaten public order.

  1. Are there any foreign exchange restrictions? Are investors free to take profits out of the country?

There are no foreign exchange restrictions on the transfer of funds into or out of Cambodia through banks. Subject to tax on profits and withholding taxes on dividends, interest, royalties, rent, other income on property, and compensation for management or technical services, investors can freely repatriate the proceeds from their investments. In the event of liquidation, an investor is free to transfer the proceeds (assets).

  1. Are there any protections for the investors?

The law states that foreign investors cannot be discriminated against and are equal in the eyes of the law to national businesses with the sole exception being ownership of land.

  1. Will there be any changes to the Law on Investment?

The original Law on Investment was promulgated in 1994, and was amended in 2003. The Royal Government is now considering further amendments to the law, which are anticipated in 2015. One of the amendments being contemplated is making a separate law to cover the Special Economic Zones, which currently are dealt with in sub-decrees to the Law on Investment.

 

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