The Royal Government of Cambodia issued Sub-Decree No.139 on the Implementation of the Law on Investment in Cambodia on 26 June 2023 to set out details for implementing the investment law.
There are three types of investment projects that can be registered with the Council for the Development of Cambodia (“CDC”) or the Provincial/Municipal Investment Sub-Committee (“PMIS”):
-Qualified Investment Projects (“QIPs”), that may be entitled to tax incentives for up to 9 years and/or certain customs duties exemptions depending on the categories of the investment projects.
-Expanded Qualified Investment Projects (“EQIPs”), that may be entitled to tax incentives on taxable income for up to 9 years depending on the categories of the investment projects; and
-Guaranteed Investment Projects (“GIPs”), that are entitled to investment guarantees provided by the investment law and investment treaties ratified by Cambodia. However, GIPs are not entitled to tax incentives.
The investment guarantees and/or incentives start from the date of the Certificate of Registration, that is the approval issued by the CDC or the PMIS on the registration of an investment project.
Sub-Decree No.139 requires an investor holding a Certificate of Registration to submit semester and annual reports. Failure to meet these reporting requirements may be subject to the loss of investment guarantees and/or incentives.
In addition, acquisition, sale, or merger of investment projects must be registered with the CDC or the PMIS. In the absence of such registration, the investment projects are not entitled to the investment guarantees and incentives upon the completion of such transaction.
The CDC or the PMIS may nullify a Certificate of Registration if:
-the investors fail to meet the requirements for maintaining the Certificate of Registration;
-the investors fail to implement the investment projects within 12 months upon being granted the Certificate of Registration;
-the investment projects being implemented are different from those that have been requested for the Certificate of Registration; or
-there is a request from the relevant ministry, public institution or the investor to nullify the investment project.
If the Certificate of Registration has been nullified, the investors may transfer their assets to another country or use them in Cambodia. Nevertheless, the nullification of the Certificate of Registration does not release the investors from their outstanding obligations imposed by the applicable laws and regulations including outstanding taxes.