Qualified Investment Project (QIP)
To be admitted as a Qualified Investment Project (QIP), the investor has to register the investment project with the Council for Development of Cambodia (CDC) or Provincials-Municipalities Sub-Committee (PMIS) and receive a Final Registration Certificate (FRC) under the Law on Investment (Article 2 and 6, “Amended Law on Investment”).
Investment Incentive
Investment Incentives granted to a QIP
QIPs are entitled to the following investment incentives (Chapter 5, “Amended Law on Investment”):
QIPs may elect to receive a profit t tax exemption or use special depreciation.
Profit tax exemption (Selective): A tax holiday period is composed of “Trigger Period + 3 years + Priority Period”
– Trigger Period (Maximum 3 years): Commencing on the issuance of the Final Registration Certificate and ending on the last day of the taxation year immediately preceding the earlier of:
(a)- If the QIP derives a profit, the taxation year that the profit is first derived; and
(b) If the QIP derives income from the Investment Activity in respect of the sale of goods or services, the third taxation year after the taxation year in which the income is first derived.
– Priority Period: To be determined according to the type of project and investment capital in the Financial Management Law.
Priority Period
Source:
Chapter 2, Royal Kram NS/RKM/1205/140 on the Promulgation of the Law on the Financial Management in the year 2006
The “Law on Banking and Financial Institutions” was enacted in 1999, aiming to serve to improve financial facilities, strengthen the base of financial institutions and make it easier for the investors to get business financing in Cambodia and by referring to new Prakas No. B7-016-117-Pro-Kor dated March 22, 2016 of National Bank of Cambodia on Minimum Registered Capital of Banking and Financial Institutions (Article 4, 5 & 7).
Commercial banks locally incorporated as local company or foreign subsidiary shall have minimum capital equal to at least KHR 300 Billion Riels (USD75 Million).
Legal Procedure:
– First Step: Writing down a regulatory about Bank, Specialized Bank or Microfinance Institution,
– Second Step: Submit to Ministry of Commerce (Company Establishment),
– Third Step: Submit to General Department of Taxation of Patent within 15 days counting from the completed day from Ministry of Commerce,
– Fourth Step: Submit to National Bank of Cambodia for License.
Actually now the National Bank of Cambodia will not be allowed for issuing the license to new Bank and MFI, so the majorities of the global financial firm try to find the indirect investment by the method of Merge and Acquisition (M & A) with the existing Bank & MFI or by setting up a Specialized Bank such as Woori Finance Cambodia Plc and Maruhan Japan Bank Plc.
Remarks:
In currently there are 37 commercial banks, 13 Specialized Banks, 54 Micro-Finance Institutions. (Sources: National Bank of Cambodia)
There are three scales of Pawn Business and Transfer of Title
1- Small Scale
2- Medium Scale
3- Big Scale
Referring to the Declaration No.: 030 MEF on Management of Pawn Business and Transfer of Title dated January 13, 2017, all companies and enterprises who intent to operate the pawn business and transfer of title in Cambodia should be carried out as below:
1- Pawn business and transfer of title for small scale, all companies and enterprises should be submitted to the Provincials-Municipals Department of Economic & Finance for License.
2- Pawn business and transfer of title for medium and big scale, all companies and enterprises should be submitted to the Ministry of Economic & Finance for License.
Bank Deposit
All companies and enterprises should be installed the deposit of the registered capital in Foreign Trade Bank (FTB) or any bank and then the Bank will issue the bank confirmation, and then Company bring this bank confirmation to the Ministry of Economic and Finance (this deposit amount can withdraw at any time). After that the Company will install the deposit in National Bank of Cambodia (NBC) in amount of 10% of the registered capital and this amount can be able to withdraw after the company stop the business operation completely and must be complied with the conditions as stated in Article 25 of this Declaration.
Loan Amount
1- All companies and enterprises who received the license from Ministry of Economic & Finance , the loan amount providing to the Pawnee or transferee of title not over than 20% per transaction of the registered capital. The loan providing for the possessor right document not over than 20,000.000 Riels (Twenty Million Riels) per transaction of the pawned property.
2- All companies and enterprises who received the license from Provincials-Municipals Department of Economic & Finance, the loan amount providing to the Pawnee or Transferee of title not over than 20% of the registered capital. The loan providing for possessor right document not over than 4,000,000 Riels (Four Million Riels) per transaction.
Interest Rate
The interest rate will be determined by covenant between Pawnbrokers or transferor of title and Pawnee or Transferee of title will be in consent with the regulation and provision of the Law that is still in effective.
Loan Period
This contract is effective to implement at maximum in Four (04) months executed from the pawned date or transferred date and can be renewable.
Type of Business License consisting as bellows:
The License to Estate Agent
Type of Professional Certificate consisting as bellows:
The Professional Certificate of Property Valuation
The Professional Certificate of Estate Agent
Note:
Legal Procedure
Resources: Declaration No. 636 SHV dated June 29, 2017 of the Ministry of Economic & Finance.
There are four kind of tourist licenses:
1- Travel Agency (Air Ticket)
2- Inbound Tour Operator (Bring foreign Tourist to visit Cambodia)
3- Outbound Tour Operator (Bring Cambodia Tourist to visit abroad)
4- Domestic Tour Operator (Local Tourist to visit in Cambodia)
Remarks:
In order to operate the business in the sector of travel agent in the Kingdom of Cambodia, any legal person and natural person should be implemented with legal procedure of each stages as bellow:
RESTAURANT
In order to operate the business in the sector of Restaurant in the Kingdom of Cambodia, any legal person and natural person should be implemented with legal procedure of each stages as bellow:
HOTEL
In order to operate the business in the sector of Hotel in the Kingdom of Cambodia, any legal person and natural person should be implemented with legal procedure of each stages as bellow:
Construction companies and enterprises that conduct activities within the Kingdom of Cambodia shall be subject to the jurisdiction of the Ministry of Land Management, Urban Planning and Construction (MLUC).
