According to Law on Commercial Enterprise (LOCE) in Cambodia, the investor intending to open a business is required to set up an entity either in the form of a sole proprietorship, general or limited liability, partnership, public limited liability company, the foreign branch, and the RO, with either a foreign or Cambodian national.
Private Limited Company
To establish a Private Limited Company, the entity should have from 1 to 30 shareholders. The Private Limited Company is not allowed to offer its shares or other securities to the public; however, it is allowed to transfer its shares to the other shareholders.
Public Limited Company
The process of running a Public Limited Company is regulated and has more restrictions compared to other forms of entities. There shall be at least three directors managing the Public Limited Company. The shareholders shall elect directors by an ordinary resolution of shareholders who have the right to vote.
The form of this entity may offer the securities to the public – financial institution and insurance company; however, it is required to have the approval from the relevant authorities.
Foreign Company
A foreign company may set up a branch to start up a business operation in Cambodia which has the same legal entity as its principal.
– Foreign branch: Before commencing a business, a foreign branch should apply for the business registration with the MoC. The procedure of registration of the foreign branch is similar to the Private Limited Company except its own articles of incorporation. In addition, all the liabilities of the branch office will belong to its principle.
– Representative Office (RO): Foreign companies that wish to explore the feasibility of doing business in Cambodia may register as a RO with the MoC. The RO’s activities are confined to market research, feasibility studies, advertising and marketing activities on behalf of its head office. The RO is prohibited from entering into any contractual arrangements facilitation for selling goods or services.
– Subsidiary: Foreign investors who wish to have at least 51% shareholding of a legal entity in Cambodia should establish their entity in the form of a limited company which maintains nationality as a foreign entity. However, a foreign nationality in Cambodia is not eligible to hold the land right as mentioned above.
