FAQ

About JBL’s services

Q1What kind of services does JBL Mekong provide?
JBL has been supporting Japanese companies in their business expansion and globalization in Cambodia for over 10 years. JBL provides a wide range of services including research at time of entering Cambodia, legal procedures, company/overseas branch/representative office incorporation, licensing and trademark registration, labour and social security procedures, tax filing, translation and real estate registration.
Q2Do you offer services such as review and drafting of contracts, negotiation, authentication by lawyers, litigation, etc.?
Under Cambodian Law, only lawyers or law firms are allowed to handle these matters. JBL Mekong, as a consulting firm, does not handle these matters but will refer you to our partner firm MAR & Associates Law Firm. MAR & Associates have Cambodian lawyers and Japanese lawyers at their Japan desk.
Q3What language do you provide the services in?
We provide our services in Khmer, English, Chinese and Japanese.

Incorporation and commercial registration

Q1When do we need to incorporate a company/register a business?
The Law on Commercial Regulations and Commercial Register stipulates that all companies “doing business” in Cambodia shall be registered in the commercial register, and Article 272 of the Law on Commercial Enterprise stipulates that a foreign company shall be deemed to be “doing business” if it carries out any of the following activities in Cambodia:

● Renting an office or any other space for manufacturing, processing or performing services for more than one month

● Employing any person to work for it for more than one month

● Performing any other act that Cambodian laws authorize for foreign natural and legal persons

Therefore, if you wish to do business in Cambodia, it is necessary to register a commercial entity such as a company.
Q2What kind of entities are available?
Sole proprietorships, partnerships (limited and general partnerships), companies (private and public limited liability companies), foreign branches and representative offices are available.
Q3What is the procedure for incorporating a company?
In 2020, Cambodia introduced an online system for incorporation procedures, which shortens the procedures related to company incorporation at the Ministry of Commerce, General Department of Taxation and Ministry of Labour and Vocational Training. (The system will be extended in 2021 so that some licensing procedures can also be applied for on the system).
Q4What documents and information will be necessary for the company incorporation process?
In addition to the application form, the main documents required are, a copy of the lease agreement, the articles of incorporation and the certificate of incorporation of the parent company and their English translations (required to be notarised), a resolution of the board of directors of the parent company, a copy of the corporate bank account certificate and the articles of incorporation of the new company. The primary information required is the name, address, e-mail address and telephone number of the new company etc., the amount of capital, the number of shares, the composition of the shareholders and the business objectives, personal information of the directors, etc., and information about the shareholders and the parent company.
Q5What kind of organs are required in a company, foreign branch or representative office?
In the case of a company, in addition to a general meeting of shareholders, there must be a director(s) (or, if there is more than one board member, a board of directors and a chairman of the board of directors). If the company issues securities to the public, it may not have an auditor (Article 230 of the Law on Commercial Enterprise).
Only a branch manager may be appointed for a branch office and an office manager for a representative office.
Q6What is the minimum capital requirement?
4 million riels (approximately USD 1,000, see Article 144 of the Law on Commercial Enterprise)
Q7How can a company/overseas branch/representative office’s registration details be checked?
Information on the company name, address and directors can be found on the website of the Ministry of Commerce.

Permits and licenses

Q1What types of permits and licenses exist in Cambodia?
The following types of business are subject to permit/license from the relevant authority:

● Food and beverage industry, and hotel business (Ministry of Tourism)

● Construction (Ministry of Land Management, Urban Planning and Construction)

● Real estate services, insurance agencies and brokers (Ministry of Economy and Finance)

● Customs clearance (General Department of Customs and Excise)

● Transportation (Ministry of Public Works and Transport)

● Medical service (Ministry of Health)

● Overseas labour power dispatchment (Ministry of Labour and Vocational Training)

● Sale of goods and provision of services on the Internet (Ministry of Commerce and Ministry of Post and Telecommunications)
Q2Are there any permits which cannot be obtained by a 100% foreign-owned company?
● The conditions of a license for overseas labour power dispatchment are:

o At least 51% of the company shall be owned by a Cambodian national or legal persons

o The chairman of the board of directors shall be a Cambodian national.

● The practice of law is only licensed for Cambodian nationals.

Restrictions on foreign investment

Q1What are the foreign investment restrictions in Cambodia?
Production/processing of psychotropic substances and narcotic substances; production of poisonous chemicals, agriculture pesticide/insecticide and other goods by using chemical substances, prohibited by international regulations or the WHO, that affect the public health and environment; processing and production of electricity power by using any waste imported from a foreign country; and forest exploitation business prohibited by the Forestry Law.

In addition, foreign natural and legal persons are not subject to permit/license for the businesses mentioned in C above. Furthermore, as a general rule, foreigners are not allowed to own real estate (*see H below for details).

Procedures after incorporation/commercial registration

Q1What procedures are required after incorporation/commercial registration?
In addition to applying for and obtaining permits and licenses to operate the business after it has been incorporated, once workers/staffs have been hired, it is necessary to file with the Ministry of Labour and Vocational Training of their employment (or leaving if they have left) and to register with the National Social Security Fund (NSSF) (if the workers/staffs are not already members). Other ongoing procedures include monthly and annual tax returns, annual renewal of patent certificates, monthly payment of social security contributions to the NSSF, annual updating of information with the Ministry of Commerce, and if the company hires foreign workers, annual quota application and foreign work permit application procedures.

Procedures related to employment

Q1What procedures are required for employment?
If you wish to employ a Cambodian national, they will need to carry out a physical examination with the relevant authority, obtain an employment permit (if they do not already hold one) and complete the employee registration process. They must also register with the National Social Security Fund (NSSF) if they are not already registered.
Q2What procedures are required to employ a foreigner?
If you wish to employ foreign nationals, the foreign nationals are required to hold a foreign employee work permit. To apply for a foreign employee work permit, it is necessary to file the number of foreign employees to be employed in the following year in the quota between September and the end of November each year). Like Cambodian employees, foreign employees are also required to go through the same procedures for employee registration and registration with the NSSF.
Q3What is the difference between a visa and a work permit?
A visa is a permit to stay in Cambodia, whereas a work permit is a permit to work in Cambodia. In order to obtain a work permit, “E” visa is necessary. Please note that it is not possible to apply for a work permit with a tourist visa (“T” visa) etc.
Q4What is the social security system in Cambodia?
Cambodia’s social insurance system is administered by the National Social Security Fund (NSSF), and as of the end of 2021, social insurance covers employees’ compensation insurance and health insurance with a pension scheme to be introduced in 2022 or later. By law, employers are required to register all employees with the NSSF and to pay a monthly premium. The amount of the premium is 0.8% of the monthly wage (capped at approximately USD 2.4) for employees’ compensation insurance and 2.6% (capped at approximately USD 7.8) for health insurance.

Procedures for liquidation of a company

Q1What is the procedure for liquidation of a company/foreign branch?
The first step is to close the accounts and file the monthly and annual tax returns after dealing with the termination of employment and other labour-related matters. The liquidation is then to be filed with the General Department of Taxation, the Ministry of Commerce and the Ministry of Labour and Vocational Training (in the case of non-QIP company). This is followed by a tax audit by the GDT (which usually takes more than one year) and, once the additional taxes have been paid, the process is finally completed by the MOC.
Q2How long does it take to liquidate a company/foreign branch?
This usually takes between 18 months and three years, including the tax audit period.
Q3Does the local manager need to stay on site until the liquidation process is complete?
In the event of a tax audit, it is generally not necessary for either the local manager or the director to be present in the country during the procedure, provided that an accounting or tax consulting firm is able to communicate with the tax authorities on behalf of the company.

Immovable property registration procedures

Q1Can a foreigner acquire real estate property in Cambodia?
Under the law, in principle, only Cambodian nationals and corporations of Cambodian nationality (corporations in which Cambodian nationals or corporations where Cambodian nationals hold 51% or more of the shares) are allowed to own real estate in Cambodia. However, for a condominium unit on the second and higher floors, a co-ownership is permitted to foreign nationals and corporations, subject to certain restrictions (such as restrictions on the percentage of exclusive area owned by foreign nationals and corporations).
Q2How can property registration information be checked?
There is a registration system in place which allows anyone to inspect the property register and obtain a copy of the property register, provided that an application is made to the One Window Service Office with jurisdiction over the property in question and the legal fee is paid. However, in current practice, the registration number of the subject property is required for the application. In this respect, the real estate registration number is information that is written on a certificate of title or a copy of the register, which is difficult for a third party to access, so it is not easy for a third party to inspect it at present. From 2020 onwards, the certificate of title also contains a QR code. Anyone can use it to check the registration information of the property in question (information on the owner is free of charge, whereas information on the collateral is payable).