INCORPORATING A COMPANY IN CAMBODIA

Transcription

1 INCORPORATING A COMPANY IN CAMBODIA 1 - LEGAL FRAMEWORK AND REQUIREMENTS Cambodian company framework is covered by a circular issued by the Ministry of Commerce. Different types of company The Cambodian legal framework derives mostly from the French system. It allows for diverse types of company among which the most common are the following: 1. Partnership (general and limited) or in french Société en nom collectif (SNC) and société en commandite; 2. Limited Liability company or in French SARL standing for Société à Responsabilité Limitée which represents 90% of the incorporated companies; 3. Public Limited company (Plc) or in French Société anonyme (SA) (5%). The following note summarizes the legal framework for Ltd Companies: Shareholders Between two to thirty shareholders can form a Limited Company. But a limited company may have only one shareholder in some cases such as a parent company holding 100 % of a local company (see below). However the circular states that the single shareholder is a natural person (translated from personne physique in French i.e. an individual shareholder). Foreign control Non residents and foreigners are entitled to full control over local companies whatever the type. Foreign parent companies can incorporate a fully owned subsidiary in Cambodia or one that is at least 99% foreign controlled. Nevertheless, it has to appoint a Resident Manager (see below). Updated

2 Management of the company Directors The company is usually managed by a board of directors including the President chairing the board and managing the operations of the company. In this case the directors are the shareholders but they may appoint third parties as members of the Board. Resident Manager Resident Managers may be locals or foreigners. The Resident Manager is hired by the company under the provisions of a working agreement. The appointment is handled through a proxy signed by the lawyer of the parent company attached to the articles of association and the appointment is registered within the Cambodian registration office at the same time as the company s incorporation. Share transfer Any shareholder may transfer his shares freely at any time to another shareholder or to members of his close family or to any person having a financial interest in the company. Formalities Registration of newly formed companies is mandatory. The office of registration is a civil service monitored by the Ministry of Commerce called the Legal Affairs Division of the Ministry of Commerce. Delay of incorporation The applicant is usually provided with the certificate of incorporation and the patent certificate 2 weeks from the date of filing the incorporation form to the registration office. An announcement will be made in the press and the Ministry of Commerce will release the official seal of the company. Audited account Non mandatory for Limited company or SARL. Seed capital Initially the capital for the formation of a limited company or SARL amounts to riels, (i.e.). How to proceed? o Bank transfer (or WESTERN UNION). o SWIFT Transfer delay: practically 4 to 7 banking days. Updated

3 Industry regulation. Some businesses referring to specific industries need to be registered and get a license from the government. Example: Tourism industry Travel agencies and Tour operators need to buy a license from the Ministry of Tourism. Such a license amounts to more or less $US 500. In addition they have to make a deposit at the National Bank of Cambodia of $US No license is required for catering business. Trademark Trademarks may be registered on the trademarks register providing a fee of 500 USD. In the case of Compass group, the local company may be registered under the name for example of Compass Group Cambodia and this trademark being protected under the local law. o O o Updated

4 2 CORPORATE AND BUSINESS TAX 1. Corporate tax: 20 % of the net profit before tax. But a minimum tax is levied on a monthly basis amounting to 2 % of the monthly return. Unless authorized by the Ministry of Commerce, the fiscal year is closed every December 31 st. The Corporate tax is computed and liquidated every month of March. In case of excess payment in advance, there is no refund. The amount overpaid is forwarded over the next years with no time limit. 2. Dividends distributed abroad are taxable at the rate of 15 % of their value. No anti double taxation treaty has been enforced. 3. VAT: 10% on goods and services consumed. Tax return to be submitted monthly with minimum tax payment of 30 USD. 4. Patent Tax payable annually: first year of incorporation 550 USD then 350 USD. o O o Updated

5 INCORPORATION DOCUMENTS For incorporation purposes, the applicant should provide ACTION GROUP with the following documents: 1. Photocopy of Passport with entry visa in Cambodia or Cambodian ID card for the shareholders, the directors and the resident manager, signed by the applicants; 2. Information form to complete application form as per attached 3. Bank certification for the registered capital; 4. 6 Identity photos (shareholders, directors, resident manager); 5. Copy of residence title or lease agreement of company address (in case no location has been identified, a registered office is acceptable). 6. Proxy to authorize ACTION GROUP to incorporate the company and sign the resident manager contract. Company incorporation documents and seal: When registered, the company receives three documents: - a certificate of incorporation from the ministry of commerce; - a receipt for the payment of the patent tax from the ministry of finance; - a certificate of registration for VAT purpose from the ministry of finance. In addition, an official seal is granted by the Ministry of commerce to authenticate the signature of the legal representative of the company. o O o Updated

6 INFORMATION FORM NAME OF THE COMPANY: NAME AND ADDRESS OR HEAD OFFICE OF SHAREHOLDERS: ADDRESS OF THE COMPANY: o Or o Registered Office : Updated

7 DIRECTORS and RESIDENT MANAGER NAME AND ADDRESS (photocopy of passport or ID card for Cambodian citizen): ACTIVITIES OF THE COMPANY Updated

8 Options (under specific request and separated quotation) 1 - Internet: E Mail address Domain Name application 2 - Logo: 3 Letterhead 4 Business card 5 - Other Updated

9 BUDGET Incorporation fee: Registration Office Fees $US 500 Legal Fees (ex VAT) $US 1, TOTAL $US 1,500 Registered Office Monthly fees $US 50 Fiduciary services (Tax return, mailing, and miscellaneous formalities) Monthly fees $US 150 Tax Annual Patent $US 550 VAT monthly return $US 30 Trademark registration Registration fees $ 500 o O o Updated