On 14 March 2025, the Royal Government of Cambodia issued Sub-Decree No. 39 ANKr.BK on Tax Incentives in the Securities Sector to refine existing provisions and the application of tax incentives, in line with Article 12 of the Law on Financial Management for 2010. The Sub-Decree aims to strengthen support for the growth of Cambodia’s capital markets. The Sub-decree applies to companies conducting initial public offering (“IPO”) of equity and/or debt securities approved by the Securities and Exchange Regulator of Cambodia (“SERC”), as well as government securities and both resident and non-resident public investors.
Key Updates Introduced Under Sub-Decree No. 39 ANKr.BK
While Sub-Decree No. 39 ANKr.BK retains the core framework established under Sub-Decree No. 42 ANKr.BK dated February 24, 2022, it introduces some key changes to the eligibility period for the tax incentives, which is reduced from 3 years to 2 years from the effective date of this Sub-Decree.
Unchanged Provisions and Continued Legal Effect
Aside from the key changes introduced by Sub-Decree No. 39 specifically the shortened timeframe for IPO eligibility, the reduced duration of income tax incentives, and the capital gains tax exemption all other provisions from Sub-Decree No. 42 remain in full effect. These include:
- A 50% income tax reduction for companies that publicly issue equity securities representing more than 20% of total voting shares, or debt securities exceeding 20% of total assets with a maturity of at least 7 years.
- Proportionate income tax incentives for companies issuing 20% or less of voting shares or debt securities, calculated based on a proportion basis detailed in the appendix of the sub-decree, with caps set at 20 billion riels for equity and 8 billion riels for debt.
- Additional tax incentives for companies issuing securities to fund green initiatives or projects within priority sectors, as determined by the Ministry of Economy and Finance.
- Public investors are entitled to a 50 percent withholding tax reduction on interest and/or dividends earned from holding and/or buying-selling government securities, equity securities, and debt securities.
- Conditions governing tax compliance, reporting requirements, and circumstances that may lead to the revocation of incentives, particularly the power of the General Department of Taxation to revoke tax incentives if it is found that the company has the intention to evade taxes through the initial public issuance of securities. This condition is key to maintaining the integrity of the Cambodian tax system, as malign taxpayers may try to get tax amnesty for tax debt and tax incentives by going public.
The promulgation of Sub-Decree No. 39 reflects the Royal Government of Cambodia’s broader policy direction of leveraging fiscal instruments—particularly tax incentives—as a strategic tool to drive economic growth and sectoral development. Over the past decade, the government has consistently implemented tax incentive schemes across key industries, including tourism, aviation, agriculture, and manufacturing, with the aim of enhancing competitiveness, attracting foreign direct investment, and promoting sustainable development. The 2 years extension of tax incentives to the securities sector marks a significant step in aligning Cambodia’s economic infrastructure with international standards.
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