Starting a Business in Cambodia
Starting Business in
Cambodia
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Cambodia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2014.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Deposit the legally required initial capital in a bank and obtain deposit evidence Agency: Bank Initial capital of KHR 4 million must be paid in before registration at any authorized bank in Cambodia. The bank must provide a bank statement certifying the deposit. There is no time limit for the firm to pay the entire amount. | 1 day | no charge |
| 2 | Conduct an initial check for uniqueness of the company name at the Intellectual Property Department Agency: Intellectual Property Department, Ministry of Commerce The Intellectual Property Department has to do an initial name check for uniqueness. | 2 days | Included in Procedure 3 |
| 3 | Obtain the company name approval at the Business Registration Office Agency: Ministry of Commerce The uniqueness of the company name is researched at the Department of Business Registration of the Ministry of Commerce after the approval from the Intellectual Property Department. | 5 days | USD 10 |
| 4 | Publication of an abstract of the company organization documents (bylaws, memorandum, and articles of association) in a Gazette Agency: Gazette A director, a shareholder, or a proxy with mandate shall prepare an application for publication in a gazette, which includes the following: • Company name (and abbreviation, if any) • Company form • Summary of business objectives • Company term • Total capital in cash • Director(s) full name, occupation, nationality, and address • Location of company to be registered It takes 1 day to get confirmed approval of the gazette announcement. Companies need to show this approval and application document (at least three copies) for registration. Usually publication occurs within 7-10 working days, sometimes longer, maximum 1 month, depending on how long business registration at the MoC takes. | 7 days | USD 15 |
| 5 | Incorporate the company with the Business Registration Department in Ministry of Commerce Agency: Business Registration Department, Ministry of Commerce The memorandum and articles of association shall be prepared based on the company form and consistent with applicable law, regulations, and the standards set for such documents by the Ministry of Commerce. These documents shall be submitted in triplicate with original copies, as required (one copy each filed at the Business Registration Department, Ministry of Commerce. The memorandum and articles of association must include the following information: • Company name • Corporate form • Business objectives • Company duration • Registered office • Stated capital in Khmer currency and shareholding • Name, address, and nationality of shareholders and director • Transfer and shares transfer • Accounts • Dissolution of company • Change of company legal form • Announcement of company establishment The following documents must be presented to the Ministry’s Registrar in the specified quantity: • Registration forms for registration (model): three sets • Copy of identity card or passport of each company member: three sets • Photo (4” x 6”) of each company member: three sets • Reference letter from a particular bank, clarifying the minimum capital KHR 4,000,000: one original • Articles of incorporation: three sets • Application for newspaper announcement: three sets • Declaration of nonguilt of directors: three sets In 2006 the Ministry streamlined registration application requirements by eliminating the need for a statement of conformity and local government approvals. The Ministry publishes the company formation notice in the Official Gazette. During the transitional period in which the Kingdom has no Commercial Court, the organization and maintenance of the Commercial Register and the governance of the capacity to conduct commerce, as provided by law, is entrusted to the Ministry of Commerce. All commercial matters are under the jurisdiction of the ordinary courts and ministry officials. The time for commercial registration may take 2-3 weeks. | 25 days on average | USD 400 |
| 6 | Make a company seal Agency: Ministry of Commerce The Ministry of Commerce issues a seal to the company together with the registration certificate. | 1 day | USD 15 |
| 7 | Have registration documents stamped and approved by Phnom Penh Tax Department Agency: Tax office at the khan level The documents need to be stamped are (1) Memorandum and Articles of Association, (2) Ministry of Commerce Letter of Approval and (3) Certificate of Incorporation. This is obtained at one of the tax department branch offices at the khan (district) level, of which there are 7 in the city. | 3 days | USD 250 |
| * 8 | Register the company for patent at the Tax office at the khan level Agency: Tax office at the khan level Registering the company for patent at the Tax office at the khan level costs USD 285. | 30 days on average (simultaneous with previous procedure) | USD 285 |
| * 9 | Register the company for VAT at the General Tax Department Agency: General Tax Department A tax registration form and related document must be completed with the assistance of the Real Regime Tax personnel, and copies of commercial registration documents must be provided. It takes about 2 weeks to get the temporary Tax ID number, about 3-6 weeks for the definitive one. | 2 weeks (simultaneous with previous procedure) | USD 100 |
| 10 | Notify the Ministry of Labor of the start of operations and hiring of employees Agency: Ministry of Labor All businesses must submit a written declaration to Ministry of Labor before their actual opening. All employers must submit a written declaration to the Ministry of Labor when hiring or dismissing an employee, within 15 days of the date of hiring or termination at the latest. In addition, each enterprise with at least eight employees must have established internal regulations that adapt such general provisions of the labor code as conditions of hiring and calculation and payment of wages and perquisites, including in-kind benefits, work hours, health and safety measures, and personal leave, including holidays. The internal regulations must be filed within 3 months of firm opening. All establishments must maintain a payroll ledger, a declaration of personnel, a book of establishment, and labor regulations (in Khmer version). As required by law, local employees shall be provided with a “labor book” upon completing a physical examination at the Labor Health Center (KHR 10,000 for each employee, which is usually covered by the employer). The procedure cost covers five processes (a) Announcing the opening of a new company and registering it with the Ministry of Labor; (b) declaring of staff (updated as necessary); (c) developing internal regulations; (d) obtaining the payroll ledger and book (record) of establishment; (e) electing staff delegates; (f) filing employment contracts; (g) obtaining employee handbooks and work permits for foreign employees; (h) registering with the National Social Security Fund ("NSSF"); (i) paying contributions for staff to the NSSF |
