A Cambodian investment registration certificate may be issued within 20 working days. That does not mean a business can begin operating within 20 working days.
Cambodia’s Law on Investment, promulgated on 15 October 2021, introduced a clearer system for registering investment projects and granting incentives. Sub-Decree No. 139, dated 26 June 2023, later established detailed eligibility requirements and incentive classifications.
What changed?
Eligible investment activities are now divided into three groups. Depending on their classification, Qualified Investment Projects (QIPs) may receive income-tax exemptions for three, six or nine years.
Certain activities are excluded from QIP incentives. Others may qualify only for customs-duty, special-tax and value-added-tax exemptions on eligible construction materials and production equipment. Classification therefore matters: two projects of similar value may receive different benefits based on their actual business activities.
The rules mainly affect businesses establishing new operations, expanding production, importing equipment or acquiring an existing registered project. Priority areas include manufacturing, agriculture, technology, logistics, infrastructure, tourism, healthcare, education and renewable energy.
QIP registration does not replace other legal requirements. A project may still need construction permits, environmental approvals, labour registrations, tax and customs registrations and sector-specific licences.
Approved projects also face continuing obligations. Investors may be required to submit reports, undergo inspections and obtain approval before making material changes to the project. A sale, acquisition or merger must be handled carefully if the investor intends to preserve the project’s incentives.
Foreign investors receive important protections, including rights relating to foreign-currency transfers and protection against unlawful expropriation. Restrictions remain. Foreign investors cannot own land directly, and the employment of foreign personnel remains subject to quotas and work-permit requirements.
Before applying, businesses should confirm the project’s precise activity classification, compare the available tax options and identify every additional approval required for operation. The incentives can be valuable, but only when the project is correctly structured and remains compliant.
Commerce & Investment Law Group advises Cambodian and international clients on investment structuring, QIP applications, regulatory approvals and ongoing compliance.
This article provides general information only and does not constitute legal or tax advice.
Official sources: Council for the Development of Cambodia – Law on Investment and Special Briefing on the Law on Investment.
