Business and Investment
Conducive Investor Climate
A conducive investor climate is a favorable environment marked by transparent regulations, stability, and robust infrastructure, promoting confidence and growth for investors.
Qualified Investment Projects (QIP) are entitled to generous incentives such as:
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Income tax exemption for up to 9 years or special depreciation
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Export tax exemption
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Full import duty tax exemption (construction material, equipment, production inputs)
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Value-added tax exemption for local production inputs
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150% tax deduction for R&D, innovation, training, employee welfare facilities & services, machinery upgrading
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After the IT exemption period has expired, the QIP is entitled to pay more income tax at a progressive rate proportional to the total tax due as follows-
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25% for the first two years
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50% for the next two years
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75% for the last two years
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An investor also has the right to deduct capital expenditure through special deduction as stated in the tax provisions in force. Eligibility of deducting upto 200% of specific expenses incurred for upto 9 years, as determined by the law on Financial management and/or the Sub-Decree.
150% tax deduction on the following activities- R&D Innovations, Training, Employee Welfare Facilities, machinery upgradation
Competitive Incentives:
In Cambodia, all investors are guaranteed fair treatment, foreign or domestic. There is no requirement of local equity participation when setting up a business in Cambodia. In relation to restitution, compensation or other economic remedies in the event that their investment suffers losses due to armed conflict, disapperance or the state of emergency, that there are laws and policies of the royal government of Kingdom of cambodia on any reasonable restitution and compensation. The Royal Government of Cambodia shall not fix the prices of products or services of the Investment Project. In accordance with applicable laws and regulations, there are also no restrictions for investors on foreign currencies convertibility and repatriation.
Open Economy:
Investment project proposals are reviewed through a single-window service by the Council for the Development of Cambodia (CDC). If the proposed investment project is not on the “negative list”, the CDC shall issue the Registration Certificate within 20 working days.
Upon reciept of thr invest project Application, the Council for the Development of Cambodia shall review and make a decision on the application through a single-window service mechanism.
Efficient Process:
Remarkable economic growth, consistent business environment, and care for sustainability.
Consistent, Sustainable Growth:
Favorable trade agreements, growing logistical infrastructure, and proximity to key markets.
Connecting Trade Infrastructure:
Young & energetic talent, increasingly proficient, and competitive wages.
Competitive Workforce:
Article 56 of the Cambodian Constitution declares that Cambodia shall adopt a market economy system. The Constitution further says in Article 61 that the State shall promote economic development in all sectors and remote areas, especially in agriculture, handicrafts, and industry, with attention to policies concerning water, electricity, roads and means of transport, modern technology and a system of credit.
New Article 10 of the Law on the Amendment to the Law on Investment (The Amended Law on Investment) also guarantees that the Cambodian Government shall not fix the price or fee of products or services of an approved Qualified Investment Project (QIP), which is also entitled for investment incentives (see “Chapter IV INVESTMENT”). Thus, Cambodia provides economic and business activities with the most open and freest environment. Article 56 of the Cambodian Constitution declares that Cambodia shall adopt a market economy system.
Principles of Economic Management
Steps to setup business in Cambodia
Addressing key business needs
Before any investment project can commence its operation in Cambodia, it is important for project owners to be aware of any regulatory compliance and requirement. Subsequently, you may proceed with recruitment, financing, and property procurement. For more details and guidelines, visit our last resources.
Registering your investment project
Following the checklist on our website, you can prepare your documents accordingly and submit at the reception desk (one-stop service). Registering your investment project can also be done online at https://qip.cdc.gov.kh/login. Once all required documents are submitted, registration certificate will be issued within 20 (twenty) working days.
Incentives and Schemes
The Cambodian government offers generous incentives to investors help boost sustainable and robust economic development. To check your eligibility for QIP status, please visit Incentives and Schemes. For investments in SEZ, you can find further information about SEZ success story and other leading companies at SEZ
Visas & Immigration
According to article 22 of the law on investment of the Kingdom of Cambodia promulgated on 15 October 2021, the Council for the Development of Cambodia or the Municipal-Provincial Sub-Committee shall issue a letter to certify the investment status for the persons involved in the Investment Project at the request of the Investor to be used for applying for a temporary long-term stay permit, work permit and employment book and other necessary purposes in accordance with the procedures in force. Special procedures for applying for work permits and employment book as stated in this article shall be set out in the joint Prakas of the Council for the Development of Cambodia and the Ministry in charge of Labor. Procedures and special procedures for applying for a temporary long-term stay permit as stated in this article shall be determined by a separate Sub-Decree.
Other Online Services
We provide innovative ways of investment facilitation in part of the efforts to streamline the approval process via online platform. You can request for a simpler import duty exemption of items to be used in the investment project at the implementation process through Master List Online linked with the National Single Window. You can also find a domestic qualified suppliers of production inputs in Cambodia by accessing to the Supplier Database with Sustainability Dimensions (SD2).
Under the LoI (Chapter 6), 19 investment sectors (listed in Article 24 of the LoI) – if they are not on the Negative List (still to be defined in a Sub-Decree) – shall receive investment incentives after obtaining a Registration Certificate certifying their QIP status. The incentivised sectors are:
Incentives and Schemes
Other sectors and investment activities not listed by the LoI deemed by the Royal Government of Cambodia to have potential for socio-economic development
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Health
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Electrical and electronic industries
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Special economic zones
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Physical infrastructure
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Education, vocational training and productivity promotion
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Tourism and tourism-related activities
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Mechanical and machinery industries
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Spare parts, assembly and installation industries
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High-tech industries involving innovation or research and development
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Industries supplying regional and global production chains
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Innovative or highly competitive new industries or manufacturing with high added value
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Agriculture, agro-industry, agro-processing industry and food processing industries serving the domestic market or export
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Industries supporting agriculture, tourism, manufacturing, regional and global production chains and supply chains
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Small and medium-sized enterprises in priority sectors and small and medium-sized enterprise cluster development, industrial parks, and science, technology and innovation parks
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Environmental management and protection, and biodiversity conservation and the circular economy
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Green energy, technology contributing to climate change adaptation and mitigation
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Digital industries
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Physical infrastructutre
Basic Incentives
Investment activities registered as QIP are entitled to choose between 2 basic incentives.
Option 1: Tax Exemption Period
an Income Tax exemption for 3 to 9 years, depending on the sector and investment activities, from the time of earning of first income. Sectors and investment activities, as well as the period of income tax exemption, shall be determined in the law on financial management and/or the LoI Sub-Decree.
After the income tax exemption period has expired, the QIP’s income tax will only increase gradually over 6 years, at a progressive rate proportional to the total tax due as follows: 25 % for the first 2 years, 50 % for the next 2 years and 75% for the final 2 years.
Further, this option includes:
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Prepayment Tax exemption during income tax exemption period
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Minimum Tax exemption provided that an independent audit report has been carried out
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Export Tax exemption, unless otherwise provided in other laws and regulations
In addition to the incentives of option 1 or option 2
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Export QIP and Supporting Industry QIP are entitled to customs duty, special tax and value-added tax exemption for the import of Construction Material, Construction Equipment, Production Equipment and Production Inputs;
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Domestically Oriented QIP is entitled to customs duty, special tax and value-added tax exemption for the import of Construction Material, Construction Equipment, and Production Equipment. The incentives for Production Inputs shall be determined in the Law on Financial Management and/or the Law of Investment Sub-Decree.
The second option for basic incentives entails:
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Deduction of capital expenditure through special depreciation as stated in the tax regulations in force;
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Eligibility of deducting up to 200 % of specific expenses incurred for up to 9 years. Sectors and investment activities, specific expenses, as well as the deductible period, shall be determined in the Law on Financial Management and/or the Law of Investment Sub-Decree;
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Prepayment Tax exemption for a specific period of time based on sectors and investment activities to be determined in the Law on Financial Management and/or the LoI Sub-Decree;
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Minimum Tax exemption provided that an independent audit report has been carried out; and
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Export Tax exemption, unless otherwise provided in other laws and regulations.
Option 2: Special Depreciation
Additional Incentives
In addition to the basic incentives, investment activities registered as QIP receive additional incentives, which are very much focused on advancing local production, R&D and improving the working conditions of local employees:
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Value-added tax exemption for the purchase of locally made Production Inputs for the implementation of the QIP.
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Deduction of 150 % from the tax base for any of the following activities:
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Research, development and innovation
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Human resource development through the provision of vocational training and skills to Cambodian workers/employees
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Construction of accommodation, food courts or canteens where reasonably priced foods are sold, nurseries and other facilities for workers/employees
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Upgrade of machinery to serve the production line
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Provision of welfare for Cambodian workers/employees, such as comfortable means of transportation to commute from their homes to factories, accommodation, food courts or canteens where foods are sold at reasonable prices, nurseries and other facilities.
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Entitlement to income tax exemption for the Expansion of QIP which will be determined in the LoI Sub-Decree.
Special Economic Zones are strategically ready zones for your business to operate with easy access to transport infrastructure. Over the past few years the export output of the SEZ has been significantly increased. SEZs situate in the most suitable location possible to help your business thrive and make your successful story.
Special Economic Zones
Why Special Economic Zone
Ready logistical infrastructure
often located strategically by expressways connecting directly to airport or seaport
Reliable and affordable utilities
including reliable water, electricity, and internet services
One-stop, on-site services
including administrative and import-export procedure from relevant government authorities
Generous incentives
for Qualified Investment Projects (QIP)
Special Economic Zone Map
Protect national independence, sovereignty, territorial integrity and neutrality; maintain peace, security, stability, order, and social unity.
Cambodia will continue to uphold its independent decision making in both domestic and foreign policy aspects – in politics, economy, trade, investment, especially in national security and defense – with respect to the principles of permanent neutrality, non-alignment, peaceful coexistence with neighbors and with all countries in the world, as well as peaceful settlement of disputes and mutual benefits.
Cambodia preserves and exercises its sovereign rights in pursuing a course of action that is most appropriate in safeguarding its territorial integrity and core national interests in accordance with the Constitution.
Cambodia will continue to do its utmost in safeguarding rights and interests of the Cambodian people overseas, to cooperate with host country’s authorities concerned to address Cambodian migrant workers’ challenges and to render migrant workers with necessary services and support when needed.
Cambodia’s Foreign Policy Direction
The Kingdom of Cambodia pursues a foreign policy that protects and promotes its national interests, by undertaking the following five main tasks:
Foster more friendship abroad based on the spirit of national independence
Cambodia will work to better strengthen existing friendly relations, cooperation, and partnerships with other countries; restore cooperative relations with old friends, and foster good relations with a new one, especially with countries in the Eastern and Central Europe, Central Asia, Africa, Middle East, and Latin America.
Cambodia is also committed to further contribute to the enhancement of people-oriented and people-centered ASEAN Community, maintain and consolidate ASEAN unity and centrality, and through ASEAN, promote and strengthen relations with external partners for socio-economic growth and development conducted based on two fundamental principles which are an adherence to consensus in all decision-making process and non-interference in internal affairs of others.
Promote economic diplomacy
In contribution to the realization of the government’s vision in transforming Cambodia into a high-middle-income country by 2030 and a high-income country by 2050, the shifting focus from the practice of traditional diplomacy to a diplomacy that places economy, culture, and tourism at its cores will significantly contribute to the attraction of foreign investment, diversification of investment sources, the expansion of export markets for Cambodian products, tourists attraction, and the promotion of Cambodian culture on the world stage.
Cambodia will continue to pursue the path of economic liberalization, open trade and globalization as well as strive to promote multilateral trade with the WTO. In this spirit, Cambodia had also constructively played its part in efforts to reach an agreement on Regional Comprehensive Economic Partnership (RCEP), and will continue to negotiate free trade agreements with other countries such as the Republic of Korea and the Eurasian Economic Union.
Continue to support and strengthen multilateralism
In the governance of the world affairs, and actively engage in global efforts in addressing challenges which threaten peace, security, rule-based international order, and sustainable development. Cambodia will continue to actively contribute to the maintenance of peace in the world by dispatching its forces to participate in the UN peacekeeping missions, professionally carry out humanitarian actions, strictly adhere to international laws and regulations, and build good relations with local community and people.
Cambodia also welcomes and supports all initiatives that promote peace, stability and prosperity in the region, and that are mutually beneficial and complementary. It is, therefore, crucial and necessary to build synergy and complementary among flagship regional initiatives such as the “Belt and Road”, the “Indo-Pacific Strategy”, and other policies of major regional countries toward Southeast Asia, as well as various mechanisms under the Mekong sub-regional cooperation.
Enhance the quality, efficiency and capacity of Cambodian diplomats
Promoting internal reform in both physical and non-physical infrastructure has become a priority to prepare a diplomatic corps that is professional, patriotic, active, and capable.
Investing in human resource development as well as professionalism through the establishment and strengthening roles of the National Institute of Diplomacy and International Relations (NIDIR) becomes more necessary and significant to serve the core interests of Cambodia.
In this regard, Cambodia welcomes all foreign friends for their continued support and good cooperation in human resource development, whether in the forms of scholarships, study tours, exchange of experiences, training courses, or sharing knowledge and ideas.
Special Incentives
In addition to basic incentives and additional incentives, this law paves the way for the Royal Government to provide special incentives to specific sectors and investment activities that have high potential to contribute to national economic development, which are identified in Financial Law for Management.