Company Registration Services
Starting a business in Cambodia is a smart move for investors and entrepreneurs alike. Cambodia is an emerging market with a young and vibrant workforce, rich natural resources, and a growing consumer base.
In Cambodia, the Law on Commercial Enterprise was revise in 2015 to simplify the company registration process and attract more foreign investment. The changes include the introduction of an online registration system, allowing companies to be registered with a single shareholder, and reducing the minimum share capital requirements for limited liability companies. On 29th January 2022, amendments were made to the Law on Commercial Enterprise and the Law on Commercial Rules and Register.
Registering a company in Cambodia is a relatively simple process that can be completed within a few days. The first step to registering a company in Cambodia is to choose the right business structure. The most common business structures are Sole Proprietorship, Limited Liability Company, Foreign Company and Partnership Company. Each business structure has its advantages and disadvantages, and right choice depends on your business goals and financial situation. An LLC is the most popular business structure for foreign investors as it provides a flexible ownership structure and limited liability protection.
Sole Proprietorship
A business owned and operated by a single individual who is responsible for all aspects of the business, including profits and losses. This business form is officially called Enterprise with a Small Taxpayer Class which can provide goods and services like a family business. In Cambodia, this business form is not allowed to export or import goods or services from overseas and cannot upgrade to Limited Liability Company. This business form cannot use the word CO., LTD./PLC./GP./LP. at the end of the name.
Limited Liability Company
In this form, the shareholder has limited profit and loss responsibility according to the capital investment mentioned in the Memorandum and Articles of Association only. This business form is officially called Company with a Medium or Large Taxpayer Class. There are three types of Limited Liability Company below:
- Single-member Private Limited Company
A Single-member Private Limited Company is owned by an individual or a legal entity shareholder. This business form can be upgraded to a Private Limited Company and Public Limited Company. This business form is required to put CO., LTD. at the end of the name. - Private Limited Company
A Private Limited Company is owned by more than one and up to thirty person or legal entities shareholders. This business form can be upgraded to a Public Limited Company. This business form is also required to put CO., LTD. at the end of the name. - Public Limited Company
A Public Limited Company is authorized to issue stocks/bonds. Mostly invest in finance and insurance sector. This business form is required to put PLC. at the end of the name.
Foreign Company
A business form which is subsidiary of a legal entity from overseas 100%. This business form is officially called Company with a Medium or Large Taxpayer Class. There are two types of Foreign Company below:
- Representative Office
This business form is require to use the word Representative Office of before the original registered name of the parent company, but there is no Memorandum and Articles of Association. Generally, it in a Medium Taxpayer Class only. The operating expenses depend on fund transfers from the parent company. Mostly it has business activities such as marketing research or customer relations or quality control to support the parent business activities. It is not allowed to import or export or sell goods and services. Especially is not allowed to claim the Value Added Tax (VAT) purchased. - Branch
This business form is required to use the word Branch of before the original registered name of the parent company, but there is no Memorandum and Articles of Association. Generally, it is in a Large Taxpayer Class. The operating expenses depend on fund transfers from the parent company, but it can operate import or export or sell goods/services like the Private Limited Company. But the accounting structure, record, flow, and term is mostly following to the parent company.
Partnership
- General Partnership
A general partnership is a contract between 2 or more persons who combine their property, activities, or knowledge to engage in business to make profits. All general partners are jointly and severally liable for the obligations of the general partnership.
The name of a general partnership has to include at least one of the partner’s name, and it is mandatory to place the word GP. at the end of the name.
The general partnership has a legal personality separate from that of each of its partners. A general partnership will obtain legal personality upon registration in accordance with the Law on Commercial Rules and Register, and will have the following rights to
• To own movable and immovable property in its own name
• To carry on business in its own name
• To enter contracts in its own name
• To sue and be sued in its own name
• A general partnership has Cambodian nationality if it has:
• The recorded ownership held by natural or legal persons of Cambodian nationality exceeds 51% - Limited Partnership
A limited partnership is a contract between 1 or more general partners who are the sole persons authorized to administer and bind the partnership, and 1 or more limited partners who are bound to contribute to the partner’s capital.
The liability of the limited partner is liable only to the extent of the sum of money/property the partner contributed, whereas the general partners are jointly and severally liable for the debts of the partnership to third parties.
A limited partner is not allowed to manage the limited partnership’s business. Additionally, the limited partner cannot negotiate business on behalf of the limited partnership, act as agent for the limited partnership and allow his/her name to be used.