Cambodia

Key Highlights of Cambodia-China Double Taxation Treaty

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

Recently, China’s State Administration of Taxation (the SAT) released an announcement, setting out the effectiveness of the new China-Cambodian Double Taxation Treaty (DTT) and the associated protocol. The new DTT – signed on October 13, 2016 – entered into force on January 26, 2018, and will be applicable to income received on or after January 1, 2019. 

The treaty aims to create a clear legal framework built on increased fiscal transparency that will improve the tax collection mechanism between the two countries and increase cross-border trade and investment.

It is important to note that the DTT does not apply to Hong Kong or Macau, as these regions have a separate tax system and do not fall under the taxation laws of the People’s Republic of China.

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Cambodia Grants Validation to European Union Patents

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

In January 2017, the government of the Kingdom of Cambodia and the European Patent Organization (EPO) entered into an agreement on validation of European patents. The agreement came into effect on March 1, this year and makes Cambodia the first Asian country to grant validation to European patents. Similar agreements have come into force between the EPO and Morocco, between the EPO and Moldova, and between the EPO and Tunisia in the last three years.

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Cambodia’s Investment Outlook for 2018

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By: Vasundhara Rastogi

ASEAN Briefing-Cambodias Investment Outlook for 2018 (002)

Cambodia is among the fastest economies in the world, registering a stable economic growth rate of 6.9 percent to 7.6 percent every year, over the last 10 years. Though relatively less developed than its neighboring countries, Cambodia presents huge opportunities for foreign investors. Cambodia is known for its macroeconomic stability, low-cost labor, competitive investment incentives, and a pro-business government. Besides, it has the most favored nation (MFN) and generalized system of preference (GSP) status that gives it a preferential access to the world’s most lucrative markets such as Europe, North America, Korea and Japan. Cambodia has also signed numerous trade agreements, such as the US Cambodia Trade and Investment Framework Agreement (TIFA) in 2006 and ASEAN Free Trade Agreement (AFTA) starting from 2015, that facilitate and promote greater trade and investment between signatory countries.

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Cambodia’s DTAs with Singapore and Thailand Come into Effect

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

On January 1, 2018, Cambodia’s two Double Tax Agreements (DTAs) – with Singapore and Thailand – came into effect. The DTA with Singapore – Cambodia’s first income tax treaty – was signed on March 20, 2017, whereas the DTA with Thailand was signed on September 7, 2017.  The two DTAs aim to clarify taxation rights on all forms of income arising from cross-border economic activities between the signatory jurisdictions in respect of tax on profit, including withholding tax, additional profit tax on dividend distribution and capital gains tax; and tax on salary while minimizing double taxation. The agreements also provide for reduction or exemption of tax on certain types of income, lowering barriers to cross-border investment and encouraging bilateral trade.  

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Cambodia’s Garment Manufacturing Industry

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

ASB- Singapore Employment Permits - Part II

Cambodia is strategically located in the heart of Southeast Asia. The country is bordered by Thailand, Laos, and Vietnam, and has the Gulf of Thailand to its south-west. The country is popular for providing a low-cost manufacturing base for several industries. Among the many advantages that the country offers to investors are duty-free access to some large and developed markets, a stable economy, and several government incentives. Additionally, there are several special economic zones exclusively established to promote manufacturing across the country. In this article, we briefly discuss the chief characteristics of the garment manufacturing industry in Cambodia and the advantages it offers to foreign investors.

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Investing in Cambodia’s Phnom Penh

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By Vasundhara Rastogi

Phnom Penh, once known as the ‘Pearl of Asia’, is the capital and largest city of Cambodia. Located at the confluence of three major rivers –  the Mekong, the Tonle Sap River, and the Bassac River -, the city serves as Cambodia’s major economic, business, and trading destination. Though the city is located 120 miles away from the sea, its proximity to the Mekong river valley makes it an ideal port – connecting the landlocked region to the South China Sea via Vietnam by the Hau Giang channel of the Mekong Delta. Phnom Penh is home to 1.5 million people, and serves as a major global and domestic tourist destination in Cambodia. Khmer, the most popular and official language of the country is the main language; English and French are also widely spoken.

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The Guide to Employment Permits for Foreign Workers in Cambodia

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By Dezan Shira & Associates
Editor: Vasundhara Rastogi

ASB- Cambodia Employment Permits  (002)

Foreign nationals planning to work in Cambodia must obtain a valid E-class visa, previously known as ‘business’ or ‘ordinary’ visa, along with a work permit and employment card issued by the Ministry of Labor and Vocational Training (MLVT).

Besides, foreign applicants must satisfy the following conditions:

  • have a job offer from an employer who is compliant with relevant regulations regarding the employment of foreign nationals in Cambodia;
  • have entered Cambodia legally;
  • possess an original passport with at least six months validity;
  • have the right to reside in Cambodia;
  • have the physical qualifications for the relevant job; and
  • have no communicable diseases.

In this article, we explain what foreign nationals entering Cambodia need to know as regards employment related visas and work permits in the country.

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The Southern Economic Corridor: Boosting Trade and Investment in Cambodia

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By Bradley Dunseith

Stretching eastwards from Myanmar through Thailand and Cambodia to Vietnam, the Southern Economic Corridor (SEC) aims to further integrate the Association of Southeast Asian Nations (ASEAN) by improving connectivity and trade. In Cambodia, new clusters are growing around border towns and in existing industrial hubs along the route of the SEC. Foreign businesses are investing in Cambodia, benefiting from both the country’s cheap labor pool as well as the improved connectivity brought on by the SEC. 

SEC: a snapshot

The SEC is one of the many development projects initiated in the Greater Mekong Subregion (GMS). The GMS is a natural economic area loosely connected by the Mekong River – the 12th longest river in the world. The GMS spans an area of 2.6 million square kilometers and a total population of 339 million people, as of 2015. In 2015, trade within the GMS amounted to US$444 billion.

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Import and Export Procedures in Cambodia – Best Practices

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By Bradley Dunseith
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Cambodia is strategically positioned within South East Asia. With a major port on the Gulf of Thailand, the country also shares land borders with Thailand, Laos and Vietnam.

In 2015, Cambodia exported US$16.1 billion worth of goods and imported US$15.3 billion. Cambodia’s top export destinations include the United States, the United Kingdom, Germany, Japan, and Vietnam. Cambodia’s top import sources include Thailand, China, Vietnam, Hong Kong, and Singapore. Furthermore, many goods traveling through South East Asia go through Cambodia to reach their final destination.

In this article we explain best practices for import into and exporting out of Cambodia, while highlighting the unique procedures required to ship imported goods through the country on transit clearance.

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ASEAN Growth to Remain Resilient Despite Regional Vulnerabilities

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By Bradley Dunseith

In April, 2017, the World Bank (WB) released their biannual East Asia and Pacific Economic Update, entitled, “Sustaining Resilience.” As the title suggests, the WB anticipates growth in East Asia and Pacific, including ASEAN states, to remain resilient despite risks from global and regional vulnerabilities. In this article, we go through “Sustaining Resilience” and summarize the WB’s forecast for developing ASEAN states generally as well as their country specific predictions for economic growth.

About the report

The WB predicts that large developing economies will continue to grow moderately while smaller regional economies will benefit from the rapid growth of their neighbors as well as high commodity prices. The WB marked that poverty has continued to decline in most countries and will continue to fall with sustained growth and rising labor incomes. However, the WB report noted that global policy uncertainties means that countries must address macroeconomic vulnerabilities so as to prepare for external shocks to the economy. External shocks – such as changes in US policy – disproportionately affect smaller countries; as such, the WB report strongly recommends small economics to improve the efficiency of their public spending in preparation of needed structural changes.

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