Major Forms of FDI in Cambodia
This article is intended to give you a brief introduction to the major forms of foreign direct investment (FDI) in Cambodia.
- Limited Company
Limited company is the most common form of foreign direct investment in Cambodia. There are three types of limited company under the Law on Commercial Enterprises of Cambodia.
(1)
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Single Member Private Limited Company
A natural person or legal person as the shareholder can establish a single member private limited company. A single member private limited company can have one or more directors. There are no restrictions on the maximum number and nationality of the director. Any legally competent natural person over 18 years old may serve as a director.
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(2)
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Private Limited Company
A private limited company has from two to thirty shareholders and at least one director.
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(3)
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Public Limited Company
A public limited company can issue securities to the public. It shall have more than thirty shareholders and at least three directors.
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- Representative Office
A representative office does not have independent legal person status. It is prohibited from undertaking any profit-making activities, e.g., regularly buy or sell goods, perform services or engage in manufacturing etc. A representative office may perform the following acts:
(1)
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Contact customers for the purpose of introducing customers to its head office.
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(2)
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Research commercial information and provide the information to its head office.
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(3)
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Conduct market research.
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(4)
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Market goods at trade fairs, and exhibit samples and goods in its office or at trade fairs.
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(5)
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Purchase and keep a quantity of goods for the purpose of trade fairs.
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(6)
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Rent an office and employ local staff.
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(7)
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Enter into contracts with local customers on behalf of its head office.
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- Branch
A branch also does not have independent legal person status. The head office shall be liable for the losses and debts of the branch. A branch may undertake the same business activities as a local company except for activities that are prohibited from foreign investment. However, to compare with a limited company, a branch is not eligible for a status of qualified investment project (“QIP? to be approved by the Council for the Development of Cambodia to receive investment incentives.
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