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Cambodia Business Startup Guide in Tourism

Tourism Business Set Up Guide

Cambodia homes to the richest cultural and natural heritages nationwide especially in Siem Reap where Angkor temples are located. With all these potentials, tourism business become one of the leading business sectors in Cambodia to invest in. In this Cambodia business startup guide, Sam Inspire is pleased to share with you how to set up a business in Cambodia especially in travel and tour section covering how to register a Travel Agent, Tour Operator / DMC company in Cambodia from A to Z. This article is featuring the different types of enterprises available in Cambodia. How to register a business to the three initial ministries with online single portal service. Different types of tax holders in Cambodia. And different public prices to be paid and deposited to the ministries.

Why Doing Tourism Business in Cambodia?

According to the statistics by the Ministry of Tourism of Cambodia, there had been a significant increase of international tourist from five million in 2016 to close to seven millions in 2019. Unfortunately, due to the global crisis of the Covid-19 pandemics, the number has been rapidly declined in 2020 and 2021 and believed this will continue through 2022. Nevertheless, the Royal Government of Cambodia has recently put up two important plans (Covid-19 Crisis Restoring Roadmap 2021-2025 and Siem Reap Tourism Development Master Plan 2021-2035) to get the international tourists back to Cambodia. From these plans, Cambodia expected to welcome international tourists who have full vaccinated to Siem Reap in this late 2021.

These are just some numbers and facts to proof the growth of tourism in Cambodia. However, the main reasons behind this growth are the cultural heritages with ancient temples, most hospitable people, unique ways of life and more. Furthermore, the rich and diversified natural heritages such as Tonle Sap great lake, Kulen National Park, Cardamom Mountain Range, the great Mekong Rivers and more… Above all, Cambodia is a safe and an administration-free-friendly and flexible work processes, which is a great plus for any companies to invest in Cambodia. All these human and natural inheritances plus its virginity as a new underdeveloped destination in Asia, made Cambodia a destination that is right to invest in tourism business now.

Watch a Full Virtual Tours of Angkor Wat, the UNESCO World Heritage on Sam Inspire Vlog here:

YouTube video player

12 Types of Business Ownership Forms in Cambodia

To do any businesses in Cambodia legally, it is required to register with the Ministry of Commerce of Cambodia (MoC) or relevant provincial administration if your business is a local small family style. However, this article focuses more for the businesses which need a proper and secure registration with the MoC, therefore it is important to understand the forms of enterprise in Cambodia. A well-rounded apprehension on the forms of the enterprise allows you to fill out the registration form correctly. Cambodia Enterprises are categorized into four main forms and eight Sub-forms making a total of twelve types of business forms in Cambodia and each  of  which  carries  different characteristics as following:

I. Sole Proprietorship

A sole proprietorship in Cambodia is owned and operated by one person. The single-owner owns all capital and profits. However, the sole proprietorship is not a separate legal entity, and the owner will be personally liable for any debts.

II. Partnership

There are two types of partnerships, the general partnership and limited partnership:

  1. General Partnership (GP)

A general partnership is a contract between two or more persons who combine their property, activities or knowledge to conduct business to generate profit.

The general partnership has a legal personality separate from the partners. The general partnership will have legal personality upon registration with the Law on Commercial Rules and Registers and will be entitled to the following rights:

The name of the partnership must include the name of one or more partners, and General Partnership or GP must be at the end of the name or below it.

A general partnership is considered to have Cambodian nationality if:

2. Limited Partnership (LP)

A limited partnership is a contract between one or more general partners who are the sole persons authorised to administer and bind the partnership, and one or more limited partners who are bound to contribute to the capital of the company.

The name of the limited partnership must include the name of one or more general partners and Limited Partnership or LP at the end or below the name.

The liability of the limited partner is limited to the amount of money he/she contributed, while the general partners are liable for the debts of the partnership to third parties.

Limited partners are not entitled to:

Limited partners can examine reports and progress of the partnership and provide advisory opinions on the management of the partnership.

III. Limited Liability Company

The limited liability company (LLC) is the most common business entity in Cambodia. The LLC can be 100% Cambodian-owned, 100% foreign-owned or a combination of Cambodian and foreign shareholdings. The LLC can have between 1 to 30 shareholders.

There are three types of Limited Liability Company:

  1. Private limited company (Ltd.)

A private limited company must have between 2 and 30 shareholders and requires a minimum of one director who can be either a local or foreigner.

The private limited company cannot issue shares or securities to the public, and may have one or more restrictions on the transfer of each class of its shares.

The private limited company is a separate legal entity and will not be personally liable for the company’s debts. The minimum share capital for setting up a private limited company is KHR 4 million.

The company name must include the words Private Limited Company or Ltd at the end of the name.

2. Single-member private limited company

The single-member private limited company is a private limited company that has one person or entity as the shareholder and a minimum of one person as the director. The single-member private limited company can be converted to a private limited company upon the shareholder’s approval to increase company shareholders.

3. Public limited company (Plc)

A public limited company can issue shares and securities to the public. The name must include Public Limited Company or Plc at the end of the company name. It requires a minimum of three directors and at least two or more shareholders. Banks, insurance companies and finance companies must register as public limited companies.

IV- Foreign Business Entities in Cambodia

A foreign business is a legal person formed under the laws of a foreign country having a place of business in, and doing business in Cambodia.

There are three types of foreign business entities in Cambodia:

  1. Representative office

Foreigners can set up a representative office to gain presence in the Cambodian market and promote the products and services of the foreign parent company. The representative office cannot engage in trade or provide services, sell, purchase, manufacture, process or construct in Cambodia.

Representative offices are permitted to perform the following activities:

2. Branch Office

The branch office is not a separate legal entity from the foreign parent company; therefore, the parent company is liable for the branch’s debts and obligations.

Branches can conduct commercial activities, such as buying and selling products, and can engage in manufacturing, processing and construction. The branch name can be the same as the parent company and must have the words Branch above or in front of the name.

The branch office cannot engage in any Qualifying Investment Projects (QIP) for which tax incentives are available. To qualify for the QIP incentives, you must have a company incorporated in Cambodia.

3. Subsidiary

A subsidiary is a foreign company in Cambodia with at least 51% of the shares held by the foreign parent company. The subsidiary is a separate legal entity from the parent company, and can be set up as a partnership or limited company. Subsidiaries can conduct business the same as local companies except for activities that are prohibited to foreigners, such as owning land.

Looking to invest in Tourism Business, any ones of the above business listings are permitted, therefore you better to well consider the most appropriate form for your own need.

Cambodia MOC Business Certificate

Required Documents to Register a Business in Cambodia

Any business entity registration in Cambodia needed to pass the first three ministries. Ministry of Commerce (MoC) to obtain a license to do business in Cambodia. General Department of Taxation (GDT) to apply for a tax registration and Patent Tax. Ministry of Labor and Vocational Training (MLVT) to inform that a company is doing business in Cambodia and also to register the staff there for taking the benefit of National Social Security Fund (NSSF). All these three ministries could be done online through a Single Portal Service of the joint ministries.

Therefore here are the most appropriate reference of documents needed to prepare before processing the registration of the business to each ministry.

Sole Proprietorship

I- Ministry of Commerce (MOC)

II- Taxation Department (GDT)

Cambodia Patent Tax Sample
  • A current photo with white background, clear, shows both ears size 4×6 (3 photos)
  • Employee number and Total salary (If any)
  • Expected income per day and per month
  • Property tax receipt (Ask the landlord that they pay tax on land and building to the tax department once a year)
  • Do you have signboard?
  • Date of start business
  • Map of location
  • Picture of location (In and outside)
  • Bank certified letter (have to give the bank certified letter within 15 working days after tax registration)

Ill- Ministry of Labor and Vocational Training (MLVT)

  • Estimated number of total employee ……………. Female…………….
  • Number foreigner employee ………….. Female …………….
  • Number of hours working per week……. …….Hours
  • Weekly Holiday
  • Sunday
  • Half of Saturday and Sunday
  • Saturday and Sunday
  • 1 day, taking turns
  • Other
Ministry of Labor Cambodia Certificate

Partnership

I- Ministry of Commerce (MOC)

II- Taxation department (GDT)

III- Ministry of Labor and Vocational Training (MLVT)

Limited Liability Company

I- Ministry of Commerce (MOC)

II- Taxation department (GDT)

III- Ministry of Labor and Vocational Training (MLVT)

Foreign Business Entities in Cambodia

I- Ministry of Commerce (MOC)

II- Taxation department (GDT)

III- Ministry of Labor and Vocational Training (MLVT)

Note: Sam Inspire only share this as information purposes only, any changes or additional documents needed are solely up to your agent or up to the ministries. Consult with them is the still the best way for a successful registration.

Once you have selected which business form is suitable for your business and have all the above documents prepared. You are good to start registering your company now. Thanks to the great job of Government for having this Single Portal Business Registration including the above three ministries. This helps the registration processes a lot easier and faster from months to eight days only.

Please download the guides on how to use the System in Khmer and English as following:

From this booklet, you will learn everything about the system as well as how business work in Cambodia and good enough to kick off your business. Once you are ready to start your business registration, just visiting this registration website https://www.registrationservices.gov.kh/ for more information. Hereunder is a video guide to the general business registration as well:

YouTube video player

Understanding Different Types of Business Tax in Cambodia

Even though, all registration could be done in one go but understanding how the processes of registration work can not be ignored. According to the attached guidebook, after your registration at  MoC, you need to register tax at GDT. All businesses are obligated to pay taxes on a self-declaration basis  based  on the  annual  turnover of the enterprise. In this case, turnover refers to the cost of supplying goods or services that are the business activities of the taxpayers have made. Understanding the classification of taxpayers allows you to learn about the cost of your registration at GDT when you register your business through the new IT platform and how the further taxes work in your business operation.

Under self-declaration regime, taxpayers are classified into three different types as follows:

Small TaxpayerMedium TaxpayerLarge Taxpayer
– Has an annual turnover ranging from 250 million riels (approx. USD62,500) to 700 million riels (approx. USD175,000), or
– Has a total turnover exceeding 60 million riels (approx. USD15,000) for any three consecutive calendar months, or
– Is expected to have a total turnover for the next three consecutive calendar months exceeding 60 million riels (approx. USD 15,000), or
Engages in bidding, price consulting or price surveying in the supply of goods or services.
– Has an annual turnover between 700 million riels (approx. USD175,000) to 4000 million riels (approx. USD1,000,000), or

– Has registered as a legal entity or representative office.
– Has an annual turnover over 4 billion riels (approx. USD1,000,000), or

– Has registered as a subsidiary of a multinational company or a foreign company branch, or

– Has registered as a Qualified Investment Project (QIP).

Only Sole Proprietorship could be entitled to small tax payers from the 12 listings of business forms discussed above. And the most common types of tax payers for business in Cambodia especially tour operator / travel agent or DMC are medium Taxpayer.

Travel Agent and Tour Operator Business Registration

Holding the licenses and certificates from the three ministries above ready in your hand doesn’t mean that you can already do your Travel Agent and Tour Operator business legally. There is one last step to go on which is registering your tourism business activity with the Ministry of Tourism of Cambodia (MoT) to get the .

Cambodia Tour Operator Business License

To start the application, you need to prepare for the following documents.

  1. Company Terms of Conditions (01 copy)
  2. Identity card or passport of the applicant (01 copy) *
  3. Certificate of office or lease with confirmation from local authority (01 copy) *
  4. Business Security Deposit Confirmation Letter from Foreign Trade Bank of Cambodia (FTB) (01 copy) *
  5. Certificate of Business Registration from MoC (01 copy) *
  6. Contract to implement the law on tourism and other laws of the state (01 copy) *
  7. Photo (4×6) (by the manager) *
  8. Patent Tax Certificate / Card (01 copy)

As for the question of how much is the deposit amount required to be made to FTB (Foreign Trade Bank of Cambodia) for tourism business. It will vary depending on the type of tourism business you are doing such as Travel Agent, Tour Operator and so on. According to Prakas #112ប្រក issued on November 1st, 2018 here are the list of amounts to deposit:

Once you have all the required documents ready, you can apply for this tourism license online here https://www.cambodiatourismindustry.org/

Official Tariffs for Business Registration in Cambodia

The following tariff is one time payment. Please bare in mind that there are ongoing payment like taxes and other annual fees such as USD 20 to the ministry of Commerce and around USD 300 to tax department for Patent Tax and around USD 300 to Ministry of Tourism for Tourism License Renewal.

list of Cambodia business registration fees

As for tourism business registration fees show in the video demonstration above is 300,000 Riels which is around USD 75. However, you could expect to spend around USD 300 to appoint a third party agent to do the job for you.

Conclusion

Just a piece of advice from Sam’s experience doing many business in Cambodia from tiny busy at a local administrative office to ministry level. No matter, how good knowledge and how much resources you could gather. Making business registration by your own is not 100% promising. Instead, appointing someone or some companies who are doing the business consulting business has a lot of pros. You could get all your doubts answered and from here, you have a good connection for your ongoing consultation need, example monthly and annual tax declaring as well as license renewal assistance at a minimal fees.

From Sam’s experience, it cost him USD 1500 to USD 2000 including all public fees and service fees to hold a Tour Operator / DMC License in hand along with all other required licenses and certificates. This saved him a lot of time for him to focus on his business startup and operation.

The question of who to contact for doing this job for you, please Google there are a number of companies out there. If you don’t feel confident, just drop Sam a line so that he could share some contacts.


Believe we have covered most the difficult points that new Startups might find it hard to find anywhere. Hope this helps you to run your business startup successfully. If there is any Area For Improvement (AFI), please feel free to comments, we will be so grateful and not taking it for granted.

Note: This article is for information purpose only, no liability will be taken for legal or official reference. Revisions could be done at the author’s discretion.

SAM INSPIRE family hopes you find this information useful to your research. This article is the reflection of Mr. Sam’s findings with zero political touch. If you need further support, please feel free to contact Sam, he will be so happy to do more steps to help you out.

If you find value in this article and wish to support Sam to do more, please feel free to spread the words. Thanks for being part of Sam’s journey, Sam Inspire – Cambodia Travel and Event Blogger – the Power of 3 E’s, Energize, Educate, Empower

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