On 26th June of 2023, the Royal Government of Cambodia issued a Sub-decree No.139 ANK/BK on the Implementation of the Law on Investment of Cambodia (“Sub-Decree”). This Sub-Decree is a long-awaited supporting regulation to the new Law on Investment which was promulgated in the late 2021. It consists of 7 chapters and 28 articles which include the details of the investment incentives, investment project registration procedure, the negative list and the priority sectors. This Sub-Decree also provides more comprehensive provisions on investment protection, acquisition, sale or merger of investment project, and nullification of investment project.
This Sub-decree is applicable to the investment project registered with the Council for the Development of Cambodia (“CDC”) or the Municipal-Provincial Investment Sub-Committees (“MPISC”).
The investment project under this Sub-decree includes:
QIP: The Application for QIP registration shall satisfy the following conditions:
EQIP: The application for EQIP registration shall satisfy the following conditions:
GIP: The application for GIP registration shall satisfy the following conditions:
The applicant for the registration of QIP, EQIP or GIP shall submit the investment project registration application to CDC or MPISC. This application can be submitted through information technology platform.
Upon the receipt of the investment project registration application, the officer in charge shall process the application without delay as per the internal administration rule of CDC or MPISC. The officer in charge is required to issue a letter confirming the receipt of the application for later use to withdraw the registration certificate.
CDC or MPISC shall issue the registration certificate within 20 business days upon the application has fully complied with Cambodian laws and regulations. The application shall be reviewed and decided through one-winder mechanism. The registration certificate shall include the QR code which contains the basic information related to the registration for other official uses.
The registration certificate issued by CDC or MPISC shall not exempted the investment project from others permit, license, approval, or register required by ministries, institutions, municipal-provincial administration, department, and entity with respect to the existing law and regulation.
The investor is required to submit the written request for the approval from CDC or MPISC for any changes related to investment project and the memorandum and articles of association of the investor deposited at CDC or MPISC. The request shall be reviewed as per the existing procedure.
The CDC or MPISC has the obligation to inspect the investment project as per the Law on Investment to review the legal compliances and any obligation performances which are the conditions for the receipt of registration certificate. The CDC or MPISC is required to provide a prior notice before such inspection unless any doubt occur which allow the relevance authorities to conduct inspection without prior notice.
The investor has the obligation of report to the CDC or MPISC on a semi-annual and annual basic on tax related issues and the actual performance of the investment project as per the forms and formalities issued by CDC or MPISC. The CDC or MPISC is required to issue the certificate of investment compliance on the basic of the above reports.
The investment incentives under this Sub-decree includes the basic incentives and the additional incentives based on the level of technological usage or the priority of Cambodian government.
The investment project obtained QIP registration certificate is entitled to the basic incentives as follows:
Option 1: The QIP is entitled to the followings:
Option 2: The QIP is entitled to the followings:
In addition to the incentives in option 1 or option 2:
The QIP is entitled to the additional incentive as follows:
The CDC or MPISC is required to establish investment after-care service mechanism to enhance the effectiveness of investment facilitation to increase confidence and seek for opportunities to address the challenges of the investor in all stages of investment project implementation which will ensure the benefits of all stakeholders, equality of competition, and favorable investment environment. This Sub-Decree sets out 11 (eleven) points of investment after-care services to be carried out by CDC and MPISC.
The investment project can continue to receive the investment incentive, investment guarantee and investment protection and continue to perform its obligation as per the Law on Investment and this Sub-Decree after the investment project is acquired, sold or merged unless otherwise prohibited by the laws and regulations or limited by its registration certificate or other concession agreements.
A person who wishes to acquire or sell the investment project is required to submit the written request to CDC or MPISC along with other essential documents set out in the Sub-Decree. An investment project is considered as acquired, sold, or merged upon the receipt of the official approval and certification of the new memorandum and articles of association of the entity to carry out the investment project from CDC or MPISC. The investor who continues to implement the investment project through this acquisition, sale, or merger shall obtains the existing rights and obligations of the investment project.
The investment project may be nullified for any of the following cases:
The investment project is nullified when CDC or MPISC confirms the nullification through a written letter. After the nullification, the investor may transfer the existing property abroad or use in Cambodia as per this Sub-Decree. This nullification does not exempt the investor form tax obligations and other obligations as per the laws and regulations in force.
If you require any further information or have any questions, please contact Mr. HOUN Vannak, managing partner of RHTLaw Cambodia.
This legal update is a general information only and is not considered as legal advice or opinion
Ms. YENG Muyneng
M +(855) 60 341 279
T +(855) 23 886 616