Choosing to expand to Cambodia is a wonderful opportunity for your company to create new business partnerships, form relationships with valuable talent, and grow across borders. However, opening a new location in another country also comes with its share of challenges. If you expand through traditional methods, you have to learn how to set up a Cambodia subsidiary, meet the country’s employment laws, and continue to handle day-to-day operations for both the subsidiary and your parent company.
G-P understands the stress of global expansion, which is why we provide an alternative. With us, you can start operating and hiring in Cambodia in a few days — without the stress of setting up your own Cambodia subsidiary. Plus, we’ll handle matters of compliance, so you’ll only need to worry about making your new location successful.
How to set up a Cambodia subsidiary
Choosing to set up a Cambodia subsidiary should begin with considering certain factors, such as your location, regional language, and business goals. Separate cities and regions often have their own Cambodia subsidiary laws, availability, costs, and more. You should always research your desired location before choosing a physical office space.
Language can also influence where you incorporate and what kind of team members you need to hire. Cambodia’s official language is Khmer, but separate locations use different dialects, including some minority languages. Not everyone speaks English, so you should hire a translator or employees who speak the regional dialect in the location where you incorporate.
Finally, it’s important to consider your business goals, as they impact the type of entity you should choose for incorporation. Cambodia allows companies to incorporate as a limited liability company (LLC), joint-stock corporation, branch, or representative office. Each entity impacts how you can operate in the country, so you should choose the structure that works best for your business. Many companies decide to incorporate as an LLC because of numerous benefits.
The steps to set up a Cambodia subsidiary include:
- Creating an in-country bank account.
- Depositing your minimum paid-up capital.
- Registering with the Ministry of Commerce.
- Submitting a memorandum and articles of incorporation.
- Registering your unique company name.
- Registering trademarks at the Department of Intellectual Property.
- Registering with the tax department and obtaining a taxpayer identification number.
- Making a declaration with the Ministry of Labor before opening the business.
- Obtaining all necessary licenses from the right ministries.
Cambodia subsidiary laws
Cambodia’s subsidiary laws differ based on the type of entity you choose. LLCs require at least USD 1,000 as paid-up capital, as well as 2 shareholders and 1 director. Your shareholders and directors do not need to be Cambodian nationals, and they do not have to live in the country while working for your company.
You’ll also need to set up a corporate bank account in Cambodia to pay employees and deposit your paid-up capital. The country’s laws also require a physical office space, a registered real estate agent, and a local business name in Khmer. Finally, LLCs must file annual tax returns and register for VAT.
Benefits of setting up a Cambodia subsidiary
Once you go through the Cambodia subsidiary setup process, you’re ready to start hiring employees, adding them to your payroll, and giving out benefits and compensation. When you incorporate as an LLC, your company will also benefit from the limited liability structure. Your parent company won’t have to worry about litigation or fines related to the subsidiary, and your subsidiary can operate in the way that best algins with the local culture.
Instead of having to set up your own subsidiary, you can partner with an Employer of Record like G-P to help you start working in a few days. You won’t have to learn Cambodia’s subsidiary laws, and you can free up your time to run your company with peace of mind.
Other important considerations
Before you start the incorporation process, we recommend planning the time you will need to complete the process. It can take weeks or months to incorporate, and you may have to travel back and forth to Cambodia multiple times to make sure everything goes smoothly.
Enter new markets with G-P — no new entities required.
Beat the competition and enter new markets in minutes, not months, with G-P. We’ve paired our industry-leading team of in-region HR and legal experts with our #1 Global Growth Platform™ to help you hire compliantly in 180+ countries, eliminating the need to set up local entities or subsidiaries.
Get in touch today to learn more about how we can streamline the global growth process.