The process can be surprisingly simple, but choosing the right structure is crucial for the success of your business. We will explain everything you need to know, from legal forms to registration procedures.

 

CHOOSING THE APPROPRIATE LEGAL STATUS (*)

 

Choosing the right legal status is an important decision that can have a major impact on your business. To select the legal status of your business, here are the initial questions to consider:

• What is the amount of share capital that I am willing to invest?

• What risks am I willing to take as a director?

• What is the amount of available share capital to start the business?

• What are the tax and social constraints associated with each legal status?

• What is the desired mode of operation for the company (sole proprietorship, partnership, etc.)?

• What are the long-term goals of the company, and how can the chosen legal status evolve?

By taking the time to think carefully and ask yourself the right questions, you can choose the structure that best meets your needs and objectives.

 

DETERMINING THE COMPANY NAME CCORDING THE CAMBIDIAN RULES

Like anywhere in the world, choosing a company name in Cambodia requires adhering to certain basic rules and considering several aspects to ensure its effectiveness both in Asia and in the West. It is also important to comply with the guidelines of the Ministry of Commerce (MOC), which impose restrictions on the use of certain words and phrases, as well as on the length of the name. To check restrictions and availability of a name, you can visit the MOC website. Here are the key points to remember:

• Consult the Ministry of Commerce (MOC) website to know about name restrictions and availability.

• Choose a name suitable for both Asian and Western audiences.

 

IDENTIFYING SOCIAL MANDATARIES AND SHAREHOLDERS

When establishing a company, it is crucial to properly identify social mandataries and shareholders…

• Directors (for limited liability companies and public limited companies)

• Shareholders: Can be natural or legal persons.

• Representative (for branches of foreign companies)

 

CAPITAL REQUIREMENTS

It is important to choose the amount of share capital based on the company’s needs. The minimum required share capital to establish a company in Cambodia is $1,000 USD. This amount, whether in cash or in kind (evaluated by an independent expert and duly justified), may increase depending on the type of business and activities conducted. Here is an informative basis according to legal forms:

• Limited Liability Company: Minimum capital of 4,000,000 Riels (approximately $1,000).

• Public Limited Company: Minimum capital of 20,000,000 Riels (approximately $5,000).

• Sole Proprietorship & Branch of a Foreign Company: No minimum capital requirement.

This amount may increase depending on the type of business and activities conducted. For example, banks and financial institutions must have a minimum share capital of $5 million USD.

 

PREPARING REQUIRED DOCUMENTS

Documentary requirements vary depending on the chosen type of business. We recommend seeking assistance from legal and advisory professionals to guide you through these processes. Key documents include:

• Articles of association (for limited liability companies and public limited companies)

• Business registration application (for all types)

• Proof of capital

• Information on shareholders and directors…

 

REGISTRATION PROCEDURE

Establishing a business in Cambodia involves multiple steps with various government institutions. Here are the main procedures to follow:

1. Ministry of Commerce (MOC):

Submit required documents and pay registration fees.

Obtaining the registration certificate timeframe: 10 to 15 working days.

2. General Department of Taxation (GDT):

Register for VAT and other applicable taxes.

3. Ministry of Labor and Vocational Training (MLVT):

Declare employees and comply with labor regulations.

4. National Social Security Fund for Workers (NFSS):

Register and contribute for employees.

5. Obtain permits and licenses (if necessary)

Depending on your business activities, you may need additional permits or licenses.

 

TIMELINE

The complete registration process can take 4 to 6 weeks, depending on the complexity of your application.

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WE OFFER

Creating and registering a business in Cambodia can be a complex process. We recommend seeking assistance from professionals to guide you through these administrative procedures to obtain personalized advice. Our team, with the help of legal partners and business creation consultants, is available to advise and support you during this crucial stage of your project.

• Personalized advice tailored to your business needs

• Analysis of laws and regulations applicable to your industry

• Comprehensive support in administrative processes

Contact us for a free consultation!

 

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(*) The 4 main legal forms of businesses in Cambodia:

1. LIMITED LIABILITY COMPANY (Co., Ltd.)

• Advantages:

• Limited liability for shareholders

• Simple and flexible structure

• Relatively low creation cost

• Disadvantages:

• Cannot raise funds on stock exchange

• Share transfers are more restrictive

2. PUBLIC LIMITED COMPANY (Plc.)

• Advantages:

• Possibility to raise funds on stock exchange

• Easier share transfers

• More prestigious image

• Disadvantages:

• Unlimited liability for shareholders

• More complex and costly structure

• Greater reporting obligations

3. BRANCH OF A FOREIGN COMPANY

• Advantages:

• Allows a foreign company to establish a presence in Cambodia

• Full control by the parent company

• Disadvantages:

• Higher creation cost

• Heavier administrative formalities

• Subject to Cambodian laws

4. SOLE PROPRIETORSHIP

• Advantages:

• Simple and inexpensive structure

• Full control by the entrepreneur

• Disadvantages:

• Entrepreneur’s unlimited liability

• Limited access to financing

• Difficulty raising funds

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The information provided is intended solely for informational purposes and is based on our analysis. It should not be construed as investment advice for any specific project, whose success hinges on various factors. Conducting thorough research is crucial before making any investment decisions, we encourage you to contact us for personalized advice.

Email: info-investment@camckbusiness.com

 

DOCUMENTATION SOURCES

• Ministry of Commerce of Cambodia: https://www.moc.gov.kh/

• Council for Development of Cambodia (CDC): https://www.cdc.gov.kh/

• World Intellectual Property Organization (WIPO): https://www.wipo.int/wipolex/en/legislation/details/5969

• ASEAN Law Association: https://www.aseanlawassociation.org/

• Asian Development Bank (ADB)

PDF Documents:

• Cambodia Companies Law (2005)

• Unofficial English translation of Cambodia Companies Law (2005)

• Business Guide in Cambodia (2023)