Understanding Minimum Capital Requirements for Foreign-Owned Companies in Cambodia

Cambodia offers a relatively open investment framework within ASEAN, with simple company registration procedures and broad foreign ownership allowances. Foreign investors must still understand that companies are required to register at least KHR 4 million (US$1,000) in paid-up capital. While this amount satisfies the statutory minimum, the practical capital required for tax registration, banking, licensing, and operational credibility is often far higher.

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Capital planning in Cambodia, therefore, extends beyond meeting the legal threshold and forms an essential part of market entry preparation.

What minimum capital mean for foreign investors in Cambodia

Cambodia permits companies to register with low capital, but foreign-owned entities are evaluated based on the substance behind the declared amount. When declared capital aligns with the economic footprint of the business, regulators, banks, and commercial partners interpret the company as credible and capable of sustaining operations. When capital is unrealistically low, these same institutions may treat the entity as underfunded, which slows onboarding and increases scrutiny. In practice, capital serves as an early indicator of operational seriousness.

Paid-up capital vs registered capital

Registered capital is the total amount declared in the Articles of Incorporation and recorded with the Ministry of Commerce. Paid-up capital is the portion that shareholders have contributed, usually through deposits into the corporate bank account.

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Foreign companies often register higher capital and pay it in gradually. This is permitted, but it increases scrutiny during tax registration, licensing processes, or audits. Although incorporation can be completed before paid-up funding is fully deposited, regulators expect proof of capital once the business enters operational stages, particularly when assessing solvency, shareholder loan arrangements, or sector-specific licensing requirements.

How capital shapes market entry for foreign-owned companies

Capital becomes a decisive factor during the shift from registration to operations. The General Department of Taxation evaluates whether declared capital can reasonably support projected expenses, especially during loss-making periods or when reviewing shareholder loan arrangements. Banks require evidence that capital has been deposited before activating accounts because this forms part of their AML and KYC checks. Sector regulators in fields such as finance, insurance, logistics, and telecom assess whether available capital aligns with the obligations and risks associated with the license being sought.

Across agencies, capital becomes a benchmark for economic substance and operational credibility.

How much capital should foreign investors declare?

Although the statutory minimum is low, foreign investors should choose a capital level that supports twelve to twenty-four months of operating costs.

Lean service companies typically require between US$10,000 and US$30,000. Trading and import-export companies generally need between US$50,000 and US$150,000, depending on inventory cycles, supplier payments, and logistics needs. Light manufacturing operations often begin at US$150,000 to US$300,000 due to equipment purchases, facility preparation, and input requirements.

A simple example shows how expectations differ from the legal minimum. A trading company that declares only US$5,000 will struggle to explain how it expects to finance shipments or inventory turnover. Even if technically compliant, banks and tax authorities may question the viability of such a business, resulting in delays and greater scrutiny.

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Cambodia allows capital injection in foreign currency, and transfers are generally straightforward. Banks still expect the declared capital to be deposited as proof of genuine operational readiness.

When too little capital creates operational problems

Undercapitalized companies face delays at critical early stages. Banks may postpone account activation if declared capital is too low for the expected scale of activity. Tax authorities may question whether the company has sufficient funding to sustain real operations, which increases the likelihood of audit or rejection of certain deductions. Insufficient capital also complicates applications for foreign work permits and visas because regulators evaluate the employer’s financial capacity. In regulated industries, inadequate capital can block licensing altogether.

Across the ecosystem, low capital reduces confidence among regulators, suppliers, and business partners.

Sectors with mandatory high capital requirements

Banking and microfinance

The banking sector carries some of the most demanding capital obligations in Cambodia. Commercial banks must hold US$75 million in capital. Specialized banks must maintain US$15 million. Deposit-taking microfinance institutions require US$30 million, and non-deposit-taking MFIs must maintain US$1.5 million. These levels protect depositors and ensure institutional stability.

Insurance sector

Insurance companies must hold registered capital equivalent to roughly US$7 million, based on the benchmark of five million Special Drawing Rights. Mandatory deposits must also be placed with the National Treasury and approved commercial banks. These reserves ensure that insurers can meet policyholder claims and maintain long-term solvency.

Real estate development

Capital requirements for real estate projects vary by type. Developers of housing and co-owned buildings must commit capital equal to between 20 and 100 percent of total construction costs. Land parcel developers must maintain capital equal to 40 percent of infrastructure investment, including utilities, roads, and basic site preparation. These rules reduce the risk of incomplete or abandoned developments.

Securities sector

Companies in the securities industry are required to comply with stringent capital standards. Licensed underwriters are required to hold at least KHR 40 billion (US$10 million). Other licensed intermediaries must meet ongoing solvency and net-capital requirements set by the Securities and Exchange Commission of Cambodia to maintain market stability.

Adjusting capital after incorporation

Declared capital should be treated as the starting point of a company’s financial structure. Many companies increase capital as operations expand, as new licenses are sought, or as banks and regulators require stronger financial positions. Capital reductions are also possible when justified by operational maturity and the company’s financial condition. All changes must be updated consistently across the Ministry of Commerce, the General Department of Taxation, and banking partners. Shareholder loans can supplement capital when structured on commercial terms and without creating thin-capitalization issues.

Strategic capital planning for foreign investors in Cambodia

The statutory minimum of KHR 4 million is sufficient for incorporation but not for actual operations. Foreign investors should select a capital level that reflects projected expenses and satisfies the practical expectations of banks, tax authorities, and sector regulators.

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