Why Setup Business in Cambodia?
Being able to setup a business in Cambodia with only two shareholders and one director, all of which can be foreigners and do not need to be residing in Cambodia, and a capital of US$1,000 to register a company are not the only reasons why investors are so keen to setup a business in Cambodia.
Bordering Thailand, Laos and Vietnam, Cambodia shares its borders with two of the larger and more developed economies in Vietnam and Thailand, here are the reasons why investors are today, more keen than ever to establish, register and setup a business in Cambodia:
It’s Strategic Location
Thanks to sharing its borders next the two more developed economies has allowed Cambodia the benefits of forming close ties with the countries. It is also situated close enough to Southeast Asia’s two biggest leading economies, China and India. Cambodia is also benefitting from its access to maritime trade thanks to its close proximity to the Gulf of Thailand, making this 70th most populous country in the world among the most strategically located countries in the region.
It’s Strong Economy
Tourism and agriculture are two of Cambodia’s strengths, especially tourism, being one of the major sectors that supports the local economy which provides plenty of opportunity to attract foreign investment. Because tourism is such a booming trade, the construction of hotels, resort centres and restaurants are highly encouraged, which holds vast potential for investors who are keen on delving into this sector.
Agriculture is another stronghold of the Cambodian economy which investors can leverage on, with organic farming and agro-processing being the two most appealing for entrepreneurs who want to setup a business in Cambodia.
Other industries in the country which hold great potential include rubber processing, sugar processing, fisheries, jute, palm oil, tropical fruits, organic fruits and vegetables.
The Government’s Qualified Investment Project (QIP)
This incentive by the government offers resident companies incentives, which includes 100% corporate tax exemption for up to nine years, no price controls on investors’ products or services, duty free imports when it comes to the production of equipment and materials, the ability to have a long-term lease on land (a 50-year lease term with a 50-year extension) and a 40% special depreciation allowance on the value of new assets which are used in manufacturing and processing.
Exporting Goods Duty Free
Cambodian-based companies will be able to export their goods free from the duty customs to most main consumers’ markets worldwide. Several countries have already granted duty free access to Cambodia, which include the United States, Japan, China, Turkey, European Union, Australia, New Zealand and all the ASEAN countries.
Companies which have been setup and incorporated in Cambodia, especially if they have been incorporated in one of Cambodia’s four free trade zones will be exempt from the import and export duties, along with income tax for up to 9 years. This is applicable to VAT as well.