Due to its strategic location, low-cost manufacturing and ease in sourcing raw materials, Cambodia continues to grow as an attractive investment destination. With countries in the European Union, United States and Canada heavily invested in Cambodia, many enterprises are turning to Cambodia to manufacture and produce goods.
Setting up the correct entity according to your business needs, is an essential part for all enterprises expanding globally. It is important to choose the most appropriate entity based on the purpose, goals and development of your enterprise. Therefore, a good place to start is to learn about the various entities available and determine which one best suits your needs.
The 4 most common entities set up in Cambodia are:
1.A limited liability (LLC) company in Cambodia
The requirements for establishing a private limited company are:
For an LLC to be set up, it is not necessary for the shareholders to be ordinarily residing in Cambodia. Depending on the industries and the nature of the project, a higher amount of capital may be required. Once an LLC has been established, it must be registered for VAT.
2. Joint stock corporation
A joint stock corporation (JSC), also known as a public limited company, has similar requirements to the LLC. The primary difference between a JSC and an LLC is that a JSC can freely trade shares and they are able to have more than 30 shareholders.
A limitation has been placed on JSC’s, as only companies, banks and financial institutions listed on the Phnom Penh Stock Exchange are allowed to be set up as a JSC.
3. Branch office
Foreign companies are permitted to open branch offices in Cambodia. In order to operate lawfully, they need to appoint a representative and the branch must retain the same name as its overseas counterpart. It takes between 4 – 8 weeks to set up a branch office.
4. Representative office
Foreign companies are able to establish a representative office in Cambodia. As with the branch office, the representative office must retain the same name as their foreign counterpart. The powers of a representative office are limited. It takes approximately 4 weeks to set up a representative office.
If you would like to expand your enterprise to Cambodia, however you are not ready to establish your own legal entity, you may want to explore the use of a Professional Employment Organization (PEO). A PEO will allow your company to operate legally in Cambodia, and hire staff, without the need of establishing a costly entity. This solution may be used as an alternative to establishing one of the above legal entities.
Whether it be an independent entity or a PEO, INS Global is one of the most well established HR consultancies in Asia. With more than 14 years’ experience and a diverse team, INS Global is well equipped to provide a solution according to your needs.