Other BriefingsCambodia Introduces Tax Incentives for Government Securities Investors
Cambodia’s Ministry of Economy and Finance (MEF) issued Notification No. 007 on July 21, 2026, introducing new tax incentives for investors in government securities issued in 2026.
For foreign investors, the measures lower withholding tax on interest and provide exemptions covering interest income and capital gains from qualifying securities.
What are Cambodia’s new tax incentives for government securities?
The incentives cover three main areas:
- Tax on Income: Interest earned from government securities issued in 2026 is exempt from Tax on Income (TOI).
- Withholding tax: The withholding tax on interest received by resident taxpayers is reduced from 6 percent to 3 percent. For non-resident taxpayers, the rate is reduced from 14 percent to 7 percent.
- Capital gains tax: Investors receive a full capital gains tax exemption on the purchase and trading of government securities.
Cambodia’s 2026 government securities issuance program covers maturities of one, two, three, five, 10, and 15 years. The securities are planned to be issued through the National Bank of Cambodia Platform.
The range of maturities gives investors access to both shorter- and longer-term Cambodian government debt. The inclusion of 10- and 15-year securities also extends Cambodia’s government debt market further along the yield curve, building on earlier efforts to develop government bond maturities.
What the tax incentives mean for foreign investors
For foreign investors, the most immediate impact is the reduction in withholding tax on interest from 14 percent to 7 percent. This directly increases the interest income retained from qualifying government securities.
For instance, if a foreign investor receives KHR 100 million (US$24,700) in qualifying interest income, a 14 percent withholding tax would result in KHR 14 million (US$3,460) being withheld. At the reduced 7 percent rate, the withholding falls to KHR 7 million (US$1,730).
The investor would therefore retain an additional KHR 7 million (US$1,730) under the incentive, before considering any tax obligations in its home jurisdiction.
The tax advantage is not limited to interest income. The capital gains exemption is also relevant to investors that sell qualifying government securities before maturity, allowing eligible gains from trading the securities to benefit from the incentive.
Assess Cambodia’s investment opportunities with Dezan Shira & Associates
Cambodia’s 2026 tax incentives strengthen the investment case for qualifying government securities, particularly for foreign investors benefiting from the reduced non-resident withholding tax rate.
Dezan Shira & Associates assists foreign investors in assessing Cambodian tax treatment and structuring investments in Cambodia and across ASEAN.
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