Setting up a business in Cambodia

While it's relatively easy to set up a business in Cambodia, it can be hard to ensure it flourishes, as the landscape is competitive. Value addition is key to survival and, whatever the type of business you start, it's important to provide quality products or services, and focus a lot of time and effort on developing a loyal client base.

If you are thinking of starting a business in the Kingdom of Wonder, it's important to thoroughly research the market and be sure of the feasibility of your brainchild beforehand. Though the market is growing, it's still small and impressionable. Cambodia's traumatic past is still relatively recent, and the country is consequently far less developed than many others. As a result, many things are still new to the people and there's a tendency for locals to be easily influenced to sway between different products, places and brands.

Top tips

If you're interested in being your own boss in Cambodia, then start by looking for a void in the market that is in line with your skill set and interests. Once your vision is underway, prioritise building a strong team, implementing good policies, and developing effective management and operation systems.

Be sure to know your strengths, as well as that of your product/service, your customers, and the market conditions. This will help you to know when to diversify ' and even cut your losses ' as and when required, and to harness a clear understanding of your brand. Then you can focus your attention on marketing and public relations to reach as wide a customer base as possible. Social media marketing is a particularly important tool, as creating quality content for various social media platforms can be instrumental in driving growth.

For your business to thrive in Cambodia, it is imperative to focus on your customer service experience and customer relationship management; consistently provide quality products; choose convenient locations with an enjoyable atmosphere; and have a strong sense of branding. When it comes to pricing, the quality can justify the price but it's important that customers don't feel that they are being overcharged.

Most funding for start-ups in Cambodia comes from 'angel investors', which are people who are willing to back business ideas and the founders behind them with the necessary money. While you could get a bank loan, a relationship with an angel investor is often more than purely financial ' they can often act as mentors and help you to make connections too. Often you need a lot more than just money to make a new business work in Cambodia, and having the support of an angel investor can be just the extra support you need.

Requirements and registration

There are no restrictions to a business being 100% foreign-owned in Cambodia, so long as no land ownership is involved. In order to set up a business in Cambodia, you will need a valid visa, a work permit and a Cambodian bank account with a minimum balance of US$1,300 (even though the law officially only states a minimum capital requirement of US$1,000).

As part of an attempt to automatise bureaucratic procedures, an online business registration system was launched by the Ministry of Commerce in December 2015. The idea behind this online registration system is to make the process of registering a business in Cambodia more transparent and efficient, which should, in turn, attract more investors.

To set up a business in Cambodia, it is now compulsory to register it online via the Ministry of Commerce Business Registration website. You have 15 days to complete your application once you have started the process, or it will be removed from the system. Fortunately, however, registering your business online is relatively straightforward, so long as you have all the necessary documentation and follow these simple steps:

• Create a user account on the website

• Reserve a company name in both English and Khmer, and pay a service fee for this

• Register your company and pay another service fee for this

• Print your certificate of incorporation

In order to speed up the process, it is best to know your company's single share value and have the name of your company in both English and Khmer before you start. One of the biggest roadblocks for many foreigners seems to be selecting a suitable Khmer name for their company, as the Ministry of Commerce has apparently rejected some Khmer names on the grounds that they did not have the same meaning as the name in English.

You should be prepared to upload the following documents to your online application:

• A proof of identification, such as a valid passport

• A medical certificate showing you are in good health

• A proof of your company's location, such as a utility bill or a rental agreement

• A letter, signed by a director of the company, that declares you have no criminal record, as well as a police report from your home country identifying you as having no history of criminal activity

• A list of staff, which states the number of male and female employees, and local and foreign staff

• Your company's memorandum and articles of association

If your company is owned by another company, then you will also need to submit the parent company's certificate of incorporation

Registering a business in Cambodia costs about US$430. Only three banks in Cambodia are authorised to process the registration fees ' ACLEDA Bank, FTB Bank and Canadia Bank -' so you'll need to open an account with one of these banks in order to pay the service fees involved. However, do note that only ACLEDA Bank account holders can pay the fees directly online. If you have an account with FTB or Canadia, you will need to go into a branch to complete payment.

After registering your company with the MOC, you will receive a variety of documents, including the business license, the certificate of incorporation, and the Articles of Association.

Within 15 calendar days of having registered, you should then register your enterprise with the General Department of Taxation (GDT), where you will obtain a tax patent and VAT certificate. You will then be required to visit the Ministry of Labour and Vocational Training (MLVT), which will register the company under the Labour Law, and provide work permits and employment cards for foreign workers. If your company has more than eight employees, you will also need to register it with the National Social Security Fund.

In 2017, the World Bank ' in conjunction with the International Finance Corporation ' estimated that it takes 99 days on average to complete the whole process of incorporating and registering a new firm in Cambodia, and the cost of all procedures amounts to approximately US$615 in total. However, many business owners have reported the process to be much quicker, especially if you are setting up a small or medium-sized company, which will involve less paperwork. The key is to be as prepared as possible in advance, and to consider recruiting a specialised Khmer-speaking consultant to advise you, as well as an attorney to review your documents.

Useful links:

B2B Cambodia
The Ministry of Commerce's Online Business Registration system
World Bank