Enhancing National Policies
This section describes the most recent investment-specific and investment-related measures per ASEAN member state.
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Cambodia
Year Category Sub-Category Description 2013 Investment and Business Environment The Council for the Development of Cambodia (CDC) In an attempt to improve the administrative proceedings for the investment applications, the Government demanded that Ministry of Economy and Finance and Council for the Development of Cambodia (the CDC) issue a regulation (Joint Prakas (declaration) on Public Services delivered by the Council for the Development of Cambodia dated 28 December 2012) to determine a one-stop service at the CDC. The one-stop service serves as a window through which investment-related applications are applied and investment-related approvals or denials are issued. Incidental to this one-stop service, list of application fees, and list of documents required upon applying and specific time frame for each application have been established and made available to the public. Follow-up mechanism has been set up to ensure the smooth and transparent processes of the applications and approval and denials. That mechanism is the “complaint desk” located within the CDC. Applicants who claimed to be mistreated or who are dissatisfied with the services at the CDC may report or file a complaint to the management of the CDC through the complaint desk.
Cambodia is now in the process of studying the possibility to revise the current investment law and regulations as well as to establish law on the special economic zones.2014 Openness Law on Invesment Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment and 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation, or prior authorization from authorities. These include the manufacturing of cigarettes, movie production, rice milling, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone carvings, and silk weaving. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Restriction Foreign Exchange Law There are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. Expropriation and Compensation Law on Expropriation In 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Copyrights Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand. 2015 Openness 1994 Law on Investment Cambodia’s 1994 Law on Investment established an open and liberal foreign
investment regime. All sectors of the economy are open to foreign investment and 100
percent foreign ownership is permitted in most sectors. In a few sectors, foreign
investment is subject to conditions, local equity participation. These include the
manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and
printing, radio and television, manufacturing wood and stone and carvings. There is little
or no discrimination against foreign investors either at the time of initial investment or
after investment.Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the
investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to
implement exchange controls only in the event of a foreign exchange crisis. In the event of
such a crisis, the NBC may issue regulations to be implemented for a maximum period of
three months, imposing certain temporary restrictions on the activity of authorized
intermediaries, or their foreign exchange position, or any loans in domestic currency
extended to nonresidents.Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law
on Expropriation which sets wide range of guidelines on the procedures for land taking for
the purposes of public interest. The law defines public interest activities that include
construction of infrastructure projects, development of buildings for national protection
and civil security, construction of facilities for research and exploitation of natural
resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government.
However, the law dictates that such expropriation can only be made with fair and just
compensation.Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the
protection of property rights, including the Land Law, the Law on Copyrights, and the
Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual
Property Organization (WIPO) and the Paris Convention for the Protection of Industrial
Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual
Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual
property protection and cooperation with the United States and Thailand.2016 Openness 1994 Law on Investment Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment to all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. There is little
or no discrimination against foreign investors either at the time of initial investment or after investment.Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of
three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency
extended to nonresidents.Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just
compensation.Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual
Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Additionally, Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand.2017 Openness 1994 Law on Investment Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment of all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand. 2018 Openness 1994 Law on Investment Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment of all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, Law on Granting Ownership over Private Part Of Ownership Building for Foreigner, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand. 2019 Openness 1994 Law on Investment Cambodia's 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment of all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Restriction The Foreign Exchange Law Restriction—there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of
three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency
extended to nonresidents.Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property
Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand.Regulatory Reform, Policy Reform and Investment Facilitation Government Private Sector Forum(G-PSF) Since 1999, Cambodia has established the Government Private Sector Forum(G-PSF), an effective platform to improve business and investment environment through a demand driven process. On May 29, 2019, the 18th G-PSF was conducted successfully and resulted in many fruitful
outcomes. During the forum, the RGC has set out a number of policies aimed to facilitate and build a sound and more favorable trade and investment climate such as:
- Removal of the role of Cambodia Import Export Inspection and Fraud Repression Directorate-General (CamControl)from inspecting the goods for export and imports, and has facilitated the speedy export and import process at the border.
- Abolishment of Kampuchea Shipping Agency and Brokers (KAMSAB);
- Exemption of Certificate of Origin requirement for exportation to any countries that do not require Certificate of Origin;
- Finalization of E-Commerce Law;
- Tax incentive and other types of incentive for SMEs and development of SMEs in prioritized sectors;
- Tax incentive for expansion of investment project,
- Reduction of fees on Container Scanning Charge, Terminal Handling Charge, Ocean Freight Charge, Container Imbalance Charge, Emergency Bunker Charge, Stevedoring Charge, Gate Fee, LO-LO Scan fee,
- Reduction of electricity tariffs, especially for electricity used by industries;
- Reduction of numbers of listed goods for inspection;
- Digitalization and Simplification of Business Registration Mechanism (Online Registration);
- Digitalization of Tax System such as Online VAT Refund and Online VAT Credit
- Restructuring of the list of monitoring authorities, simplified the monitoring process to manufacturing industries such as factory,
- Comprehensive Reform of some governmental institutions to effectively serve investors
- Improvement of logistic infrastructures
Aside from the above regulatory and institutional reforms, as part of the effort to improve trade facilitation, the government has established a National Single Window (NSW) that allows parties involved in trade and transport to lodge standardized information and documents with
a single-entry point to fulfill all import, export, and transit-related regulatory requirements.
This NSW facility is currently in service.2020 Openness 1994 Law on Investment Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment and non-discrimination of all investors, no nationalization, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility, no capital control. Additionally, 100 percent foreign ownership is permitted in most sectors. Despite liberalizing investment, investment in some sectors is subjected to conditions under local equity participation. These included but not limited to, the manufacturing of cigarettes, film production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. Despite Cambodia’s investment openness, certain restriction measures are subjected to national security or state of emergency. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to non-residents. Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) in 1995 and has acceded to a number of international IPR protocols, including the Paris Convention for the Protection of Industrial Property (1998), the Madrid Protocol (2015), the WIPO Patent Cooperation Treaty (2016), the Hague Agreement Concerning the International Registration of Industrial Design (2017) and the Lisbon Agreement on Appellation of Origin and Geographical Indications (2018). Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation in 1995. Cambodia has also concluded bilateral legal instruments on intellectual property protection and cooperation with the United States, Singapore, EU, Japan, etc. Regulatory Reform, Policy Reform and Investment Facilitation Government Private Sector Forum(G-PSF) Since 1999, Cambodia has established the Government Private Sector Forum(G-PSF), an effective platform to improve business and investment environment through a demand driven process. On May 29, 2019, the 18th G-PSF was conducted successfully and resulted in many fruitful outcomes. During the forum, the RGC has set out a number of policies aimed to facilitate and build a sound and more favorable trade and investment climate such as:
- Removal of the role of Cambodia Import Export Inspection and Fraud Repression Directorate-General (CamControl) from inspecting the goods for export and imports, and has facilitated the speedy export and import process at the border.
- Abolishment of Kampuchea Shipping Agency and Brokers (KAMSAB);
- Exemption of Certificate of Origin requirement for exportation to any countries that do not require Certificate of Origin;
- Finalization of E-Commerce Law;
- Tax incentive and other types of incentive for SMEs and development of SMEs in prioritized sectors;
- Tax incentive for expansion of investment project,
- Reduction of fees on Container Scanning Charge, Terminal Handling Charge, Ocean Freight Charge, Container Imbalance Charge, Emergency Bunker Charge, Stevedoring Charge, Gate Fee, LO-LO Scan fee,
- Reduction of electricity tariffs, especially for electricity used by industries;
- Reduction of numbers of listed goods for inspection;
- Digitalization and Simplification of Business Registration Mechanism (Online Registration);
- Digitalization of Tax System such as Online VAT Refund and Online VAT Credit
- Restructuring of the list of monitoring authorities, simplified the monitoring process to manufacturing industries such as factory,
- Comprehensive Reform of some governmental institutions to effectively serve investors
- Improvement of logistic infrastructures
Aside from the above regulatory and institutional reforms, as part of the effort to improve trade facilitation, the government has established a National Single Window (NSW) that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. This NSW facility is currently in service.2021 Cambodia Investment Climate Expropriation and Compensation The Law on Expropriation has adopted in 26 February 2010, which sets wide range of guidelines on the procedures for land taking for the purposes of public interest and applies to expropriation involving public physical infrastructure projects in the Kingdom of Cambodia. The property can be expropriated in case of the natural disasters and emergencies as determined by the government. However, the law dictates that such expropriation can be made with the fair and just compensation. Property Rights Protection Article 44 of the Constitution of the Kingdom of Cambodia, the Land Law (2001), Law on Concession (2007), Civil Code (2007) and Law on the implementation of the Civil Code (2011) are the main framework applicable to real estate transaction. In addition, Cambodia has adopted legislations concerning the protection of property rights, including the amendment to the Land Law (2020), the Law on Construction (2019), Policy Paper on Public-Private Partnerships for public Investment Project Management 2016-2020 “PPP Policy 2016-2020”. Moreover, the draft law on Public-Private Partnership (PPP) is drafting and expect to get the approval in 2021. Regulatory Reform, Policy Reform and Investment Facilitation Since 1999, Cambodia has established the Government Private Sector Forum (G-PSF), an effective platform to improve business and investment environment through a demand driven process and provide a reliable platform for the business community. On May 29, 2019, the 18th G-PSF conducted successfully and resulted many fruitful outcomes. Although, this forum was postponed since 2020 due to the Covid-19. But the Aftercare mechanism under the thirteen Sectoral Working Group are still work actively to consult with the private sector through the online meeting.
As regards to improve the trade facilitation, the government has established a National Single Window (NSW) since 1 July 2019, that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. This National Single Window facility is currently in service. Furthermore, on 15 June 2020, Cambodia has launched the online business registration platform run through the Cambodia Data Exchange (CamDX).
It is in place for facilitating the business registration in Cambodia by allowing business people to register their business with 6 main ministries in one platform such as Ministry of Commerce, General Department of Taxation, Ministry of Labor and Vocational Training, Ministry of Interior, Ministry of Economy and Finance as well as the Council for the Development of Cambodia. The online portal and digital service is available at registrationservices.gov.kh.
Moreover, the draft sub-decree on Cambodia Data Exchange is currently in progress with active consultations and close collaboration from all relevant ministries and institutions that are the stakeholders in this single portal.Updated Laws and Policies Law on Special Economic Zones (SEZ) The draft Law on Special Economic Zones (SEZ) has been also prepared for the purpose of continuing the development of SEZs in provinces, promoting hubs for SMEs, developing industrial corridors, and encouraging competition among SEZs. The Draft aims to promote the establishment of the large industrial clusters within the special economic zones in Cambodia. Law on Competition The draft Law on Competition designed to help consumer purchase goods and services a fair prices as well as increasing the quality and variety of the offer available to them in Cambodia. It will provide incentive to entrepreneur to run business efficiently and fairly, promote the establishment of new business and protect the economy from harmful anti-competitive practices. Law on Food Safety The draft Law on Food Safety also will be finalised in 2021 is important to protect the health of consumers for ensuring that chemical does not use in food including fruits and vegetables. Law on Commercial Enterprise The amendment of the law on Commercial Enterprise and the amendment of the Law on Commercial Rules and Registration are now are proceeding to the Cabinet. The amendments aim to smoothen and optimize business registration on the finance ministry’s joint information technology platform, Cambodia Data Exchange (CamDX), and set clear regulations and procedures to support the applicable mechanism and ensure consistency between the two laws. Labor Law The amendment of Labor Law has already sent to the Cabinet, and this amendment focus on three points: revising work shift regulations strengthen the Arbitration Council and improving the attractiveness and competitiveness of the investment environment. It aims to make Cambodia’s Labor Law more consistent with countries in the region Law on Government Securities The adopted New Law on Government Securities on 26 December 2020, via Royal Kram No.NS.RK.0220.040. This New Law abrogated the Law on Government Securities promulgated through Royal Kram No.NS.RK.0107.001 dated 10 January 2007. The New Law aims to provide a general framework to (1) manage the issuance and trading of government securities, (2) provide a transparent, accountable, effective, and efficient management of government securities, and (3) ensure sustainable management of public debt. The New Law covers the issuance, trading, and management of government securities both within and outside of Cambodia. Law on Anti-Money Laundering and Combating the Financing of Terrorism The adopted New Law on Anti-Money Laundering and Combating the Financing of Terrorism on 27 June 2020. It replaces the old Law on Anti-Money Laundering and Combating the Financing of Terrorism, which adopted in 2007 and subsequently amended in 2013. Law on Organization and Functioning of Non-Banking Financial The adopted Law on Organization and Functioning of Non-Banking Financial Service Authority on 16 January 2021. It has adopted to regulate and supervise the non-banking financial sector in Cambodia. The non-banking financial sector includes, but not limited to, insurance and private pension, securities, social security, accounting and audit, real estate, pawnshop, and transfers as security. 2022 Openness 1994 Law on Investment Cambodia’s 1993 Constitution established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment of all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. Such openness remains to date with Cambodia’s commitment to facilitate investment and readiness to accommodate the new normal; such commitment is proven by its adoption of the new law on investment in 2021 (to be elaborated in later section). Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand. Regulatory Reform, Policy Reform and Investment Facilitation Government Private Sector Forum(G-PSF) Since 1999, Cambodia has established the Government Private Sector Forum(G-PSF), an effective platform to improve business and investment environment through a demand driven process. Over the last few years, the government is set out a number of policies to reforms aimed to facilitate and build a sound and more favorable trade and investment climate such as: Investment Facilitation 1. Introduction of information technology platform (QR-Code) in excess of hard document submission and storage;
2. Reduce period of issuance of registration certificate from 31 Days to 20 working Days;
3. Single registration certificate;
4. Special procedures for applying for work permits and employment books and the temporary long-term stay permit;
5. Receive after-care services.Digitalization reform: Establish the Cambodia Data eXchange (CamDX): from 15 June 2020 for Commerce, Tax, Labor, Investment and data of Khmer National ID 1. Digitalization and Simplification of Business Registration Mechanism (Online Registration);
2. Digitalization of Tax system such as Online VAT refund and Online VAT Credit;
3. Digitalization for QIP registration application;
4. Digitalization for Master List application and payment.SMEs Tax incentives Tax incentives and other types of incentives for SMEs and development of SMEs in prioritized sectors and SME Bank: From October 2018, this scheme provides a tax exemption from the tax on income for 3 to 5 years and provides additional incentives for deductible expenditures for 6 priority sectors including agro-industry, food manufacturing and processing, manufacturing for the tourism sector, manufacturing for supplying other local manufacturers, Research and Development (R&D) associated with IT, and MSMEs located in SME clusters zones. The tax incentives provided to qualifying SMEs include:
- An exemption from Tax on Income for three (3) years for newly registered enterprises or from the date of tax registration update for existing enterprises;
- An exemption from Tax on Income for five (5) years for newly registered enterprises or from the date of tax registration update for existing enterprisesTrade facilitation reform 1. Removal of the role of Cambodia Import Export Inspection and Fraud Repression Directorate-General (CamControl) from inspecting the goods for export and imports and has facilitated the speedy export and import process at the border on 28 January 2019
2. Abolishment of Kampuchea Shipping Agency and Brokers (KAMSAB) on 5 February 2019.
Exemption of Certificate of Origin requirement for exportation to any countries that do not require Certificate of Origin: From January 2019, Local exporters are not required to produce a Certificate of Origin (CO) at Cambodian customs if the document is not required by authorities in the destination country.
2. Promulgation of E-Commerce Law: 2 November 2019
3. Reduction of fees on Container Scanning Charge, Terminal Handling Charge, Ocean Freight Charge, Container Imbalance Charge, Emergency Bunker Charge, Stevedoring Charge, Gate Fee, LO-LO Scan fee
4. Reduction of electricity tariffs, especially for electricity used by industries from 19.7 Cents to 18.7 Cent per GWh, 2020.
5. Reduction of numbers of listed goods for inspection.
6. Restructuring of the list of monitoring authorities, simplified the monitoring process to manufacturing industries such as factory, (IDP and Law on Investment)
Aside from the above regulatory and institutional reforms, as part of the effort to improve trade facilitation, the government has established a National Single Window (NSW) that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. This NSW facility is currently in service.2023 Openness 1994 Law on Investment Cambodia’s 1993 Constitution established an open and liberal investment regime. All sectors of the economy are open to foreign investment, for instance, equal treatment of all investors, no requirement of local equity participation, no price controls on products or services, no restriction on foreign currencies convertibility. Additionally, 100 percent foreign ownership is permitted in most sectors. In a few sectors, foreign investment is subject to conditions, local equity participation. These include the manufacturing of cigarettes, movie production, exploitation of gemstones, publishing and printing, radio and television, manufacturing wood and stone and carvings. Such openness remains to date with Cambodia’s commitment to facilitate investment and readiness to accommodate the new normal; such commitment is proven by its promulgation of the Law on Investment in 2021 (to be elaborated in later section). Restriction The Foreign Exchange Law there are no restrictions on the conversion or transfer of capital of the investors. The Foreign Exchange Law permits the National Bank of Cambodia (NBC) to implement exchange controls only in the event of a foreign exchange crisis. In the event of such a crisis, the NBC may issue regulations to be implemented for a maximum period of three months, imposing certain temporary restrictions on the activity of authorized intermediaries, or their foreign exchange position, or any loans in domestic currency extended to nonresidents. Expropriation and Compensation Law on Expropriation in 2009, the National Assembly approved the Law on Expropriation which sets wide range of guidelines on the procedures for land taking for the purposes of public interest. The law defines public interest activities that include construction of infrastructure projects, development of buildings for national protection and civil security, construction of facilities for research and exploitation of natural resources, and construction of oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. However, the law dictates that such expropriation can only be made with fair and just compensation. Property Rights Protection Law on Patent and Industrial Design Cambodia has adopted legislation concerning the protection of property rights, including the Land Law, the Law on Copyrights, and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization (WIPO) and the Paris Convention for the Protection of Industrial Property. Cambodia is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States and Thailand. Regulatory Reform, Policy Reform, and Investment Facilitation Government Private Sector Forum(G-PSF) Since 1999, Cambodia has established the Government Private Sector Forum (G-PSF), an effective platform to improve business and investment environment through a demand driven process. To recover the country’s economy which was hit by the Covid 19, the government has set out a number of policies and reforms aimed to facilitate and build a sound and more favorable trade and investment climate. These policies and reforms are as follows:
- Development of the National Roadmap for Trade Facilitation for 2022-2025
- Reduction of fees on Container Scanning Charge, Terminal Handling Charge, Ocean Freight Charge, Container Imbalance Charge, Emergency Bunker Charge, Stevedoring Charge, Gate Fee, LO-LO Scan fee
- Maintaining the status of electricity tariff and tariff structure for 2022 the same as that of 2021, including electricity used by industries (for example, the electricity tariff for industrial consumers supplied by EDC connected at medium-voltage lines in Phnom Penh and Takhmao was fixed at 13.7 cent/kWh in both 2021 and 2022.)
- Reduction of numbers of listed goods for inspection.
- Restructuring of the list of monitoring authorities, simplified the monitoring process to manufacturing industries such as factory, (IDP and Law on Investment)
Aside from the above regulatory and institutional reforms, as part of the effort to improve trade facilitation, the government has established a National Single Window (NSW) that allows parties involved in trade and transport to lodge standardized information and documents with a single-entry point to fulfill all import, export, and transit-related regulatory requirements. This NSW facility is currently in service.Digitalization Reform Cambodia Data Exchange (CamDX) Attracting the private sector requires the government’s involvement in creating a favorable investment environment, a big part of which is the business registration procedure. The pervious business registration procedure in Cambodia (before June 15, 2020) required business owners to register directly with relevant ministries and institutions following their respective procedures and required to submit the same documents repeatedly to different ministries and institutions, which made the whole procedure complicated and time-consuming. Understanding that there is an urgent need to assist the investors and experiencing the challenges amidst the pandemic, our Prime Minister decided to introduce effective measures as a package to enhance Cambodia's competitiveness, which includes developing an online business registration system. Without delay, the feasibility study was divided into two groups: (1) regulations and (2) technical.
After months-long of work, we have created the Cambodia Data Exchange (CamDX) platform that, based on decentralized and once-only principle, enables ministries and institutions to automatically exchange data with each other without the need for system integration. With these data exchange and authentication mechanisms, the Online Business Registration System launched its first phase on June 15, 2020 and covers its packaged registration with the Ministry of Commerce, the General Department of Taxation, and the Ministry of Labor and Vocational Training. Companies or enterprises that make investments in any projects that are qualified for incentive can also continue registering online with the Council for the Development of Cambodia.
As a result, businesses can file the application online only once and will be able to get registered with the Ministry of Commerce, the General Department of Taxation, and get acceptance of the notification of the enterprise opening from the Ministry of Labor and Vocational Training in just 8 working days with a fee reduction of over 40%.
In short, the government has invested in digital platform to accommodate the rapid digital transformation in business.
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