One of the main reasons Cambodia’s economy has seen a huge increase over the last ten years is down to their favourable foreign investment laws. There are many benefits to operating your business in Cambodia, listed below are what we believe to be a few of the most beneficial:
- Foreigners have the right to own businesses and are free from trade restrictions, price controls and foreign exchange regulations.
- Foreigners can lease land for up to 99 years.
- The use of the US Dollar across the country makes for a stable and trusted economy.
- Income can be sent back to your home country.
- There is no obligation to change your citizenship.
- Special tax rates and exemptions are available through QIPs (Qualified Investment Projects)
There are many types of QIP to which the government will give special terms. You’ll need to register with CDC (Council for the Development of Cambodia) or PMIS (Provincial Municipal Investment Sub-Committee). You can then choose between profit tax exemption or a special tax depreciation.
The tax exemption comes in 2 parts, the tax holiday followed by the priority period. The tax holiday is for a term of 3 years, which starts when the Final Registration Certificate is issued. The priority period allows another 3-year period of tax exemption, based on the value of capital and the type of project. The other option is the special depreciation rate of 40% on production materials.
Industries that qualify for the tax exemption are:
- Training and Education Institutions
- International Trade Exhibition and Convention Centres
- Construction of a Modern Market or Trade Centre
- Manufacturing of animal feeds; leather and metal products; electrical or electronic appliances; office materials; toys; sporting goods; motor vehicles and their parts or accessories; ceramic products; food products and beverages; textile; garments; footwear; hats; wooden furniture and fixtures; paper; rubber; plastic products; water supplies; traditional and modern medicines; freezing and processing of aquatic products; cereal and crop products; chemicals; cement; fertiliser; petrochemicals.
Throughout Cambodia there are also Special Economic Zones, these locations have special laws and budgets for roads, bridges and power sources that will fall favourable to those setting up a business in Cambodia. These zones are especially beneficial for manufacturing, production and industrial operations. With government officials assigned to provide help as and when needed, Cambodia sets out to look after those willing to invest in its economy and future.
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For a more detailed look at the benefits and government guidelines for setting up your business in Cambodia, visit http://www.cambodiainvestment.gov.kh/investment-scheme/investment-incentives.html