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Cambodia, formally the Kingdom of Cambodia, is a Southeast Asian nation situated in the southern part of the Indochinese Peninsula. It has an area of 181,035 square kilometers (69,898 square miles), with Thailand to the northwest, Laos to the north, Vietnam to the east, and the Gulf of Thailand to the southwest. Cambodia has a two-season tropical monsoon climate, and the nation is made up of a central floodplain centered on the Tonle Sap Lake and the Mekong Delta, bordered by hilly areas. Phnom Penh is the capital and biggest city.
Cambodia is a sovereign state with a population of around 17 million people. Buddhism is the official state religion, as stated in the constitution, and is practiced by more than 97 percent of the people. Vietnamese, Chinese, Chams, and 30 hill tribes are among Cambodia's minority groups. Phnom Penh, Cambodia's capital and biggest city, serves as the country's political, economic, and cultural hub. The kingdom is an elected constitutional monarchy with a monarch, presently Norodom Sihamoni, chosen as head of state by the Royal Council of the Throne. The Prime Minister, now Hun Sen, is the longest-serving non-royal leader in Southeast Asia, having reigned since 1985.
The Cambodian area has been populated since ancient times. Jayavarman II crowned himself king in 802 AD, unifying the warring Khmer lords of Chenla under the banner of "Kambuja." This was the start of the Khmer Empire, which lasted over 600 years. The Indianised empire aided the expansion of Hinduism and eventually Buddhism over most of Southeast Asia, as well as undertaking several religious infrastructure projects. The most renowned of these temples is Angkor Wat, which is a World Heritage Site. Cambodia's authority declined in the fifteenth century, while its rivals Vietnam and Thailand gained stronger. Cambodia became a French protectorate in 1863 and eventually became part of French Indochina.
Cambodia obtained independence from France in 1953, after a period of Japanese rule during WWII. Despite Cambodia's neutrality, the Vietnam War entered the nation along the Ho Chi Minh and Sihanouk trails in 1965. A coup in 1970 established the US-aligned Khmer Republic, which was toppled by the Khmer Rouge in 1975. From 1975 to 1979, the Khmer Rouge governed Cambodia and committed atrocities. They were deposed in the Cambodian–Vietnamese War. The de facto government became the Vietnamese-occupied People's Republic of Kampuchea, with efforts to reconstruct the country after the massacre hampered by little international recognition and continuous fighting.
Cambodia was temporarily ruled by a United Nations mission (1992–93) after the 1991 Paris Peace Accords, which effectively ended the conflict with Vietnam. The UN withdrew following elections in which around 90% of registered citizens voted. The 1997 coup solidified control under Prime Minister Hun Sen and the Cambodian People's Party, which still holds power today.
Cambodia is classified as a least developed nation by the United Nations. Cambodia is a member of the United Nations, ASEAN, the Regional Comprehensive Economic Partnership, the East Asia Summit, the World Trade Organization, the Non-Aligned Movement, and La Francophonie. Although Cambodia is a multi-party state by constitution, the political system is centered on a single political party, the Cambodian People's Party. While Cambodia's per capita income remains low in comparison to other surrounding nations, the country boasts one of Asia's fastest-growing economies. Agriculture continues to be the most important economic sector, with substantial development in textiles, building, clothing, and tourism contributing to greater foreign investment and international commerce. Cambodia, which is rich in biodiversity and seasonal tropical forests, has a high rate of deforestation and is regarded as one of the most susceptible nations to climate change. Corruption, poverty, and human rights have been identified as important challenges in the nation by foreign observers.
Employees are entitled to 18 days of paid leave per year, which accrue at 1.5 days per month.
An additional day of paid leave is provided for every three years of work.
Cambodia recognizes 15 public holidays.
Employees are entitled to up to 6 months of sick time each year if a medical certificate can be provided.
Sick compensation is calculated as follows:
For the first month of sickness, 100%.
For the second and third months of sickness, you will get 60% compensation.
For the fourth and sixth months of sickness, you will be unpaid.
Maternity leave is 90 days long, and the woman is entitled to 50% of her salary during that period.
Cambodia currently has no provisions in the law regarding parental leave.
In Cambodia, parental leave falls under the category of special leave.
Special Leave - Employees are entitled to up to seven days off per case if it affects a member of their immediate family.
A fixed-term contract may be canceled prior to its expiration date if both the employer and employee agree. Both the employee and the employer must sign an agreement in front of a labor inspector to accomplish this. If neither party agrees, the employment contract cannot be canceled save for egregious misbehavior or force majeure.
A written notice must be issued in the case of indefinite employment contracts. If the employer initiates the dismissal, the employer must demonstrate fair cause. Employers are required to inform the Ministry of Labor.
When an employee is terminated, he or she has the right to obtain a certificate of employment detailing the dates of employment and details about the role held. If the employer refuses, the employer must compensate the employee for lost wages.
The notice period is determined by the duration of employment and the structure of the employment contract. Employees who work for less than six months on indefinite employment contracts are entitled to a seven-day notice period. For employment lasting between six months and two years, a 15-day notice period will apply. A 15-day notice period will be required for employment spanning six months to two years. Employees who have worked for the organization for two to five years will receive a one-month notice period. After five to 10 years of employment, there will be a two-month notice period. Employees with more than ten years of service must give three months' notice. No notice period will be required for fixed-term contracts of up to six months. For those with six months to one year of employment experience, a ten-day notice period will be required. Employees who have worked for the company for more than a year will receive a 15-day notice period. The employee is entitled to two days of paid leave per week during the notice period to conduct job searches.
Probation periods vary according to the employee's skill level. Regular employees are subjected to a three-month probation. Skilled employees are subjected to a two-month probation. Unskilled employees are subjected to a one-month probation.
If the employer fails to provide written notice or does not adhere to the notice period, the employee must be compensated for the amount earned during the notice period. Severance pay will be tantamount to 7 days' earnings for work lasting more than six months but less than one year. Severance pay for employees with more than one year of service will be 15 days' wages for each year of service. The severance pay is capped at a total of 6 months' worth of wages.
In Cambodia, the standard workweek is eight hours per day and 48 hours per week. Employees are entitled to at least one day off per week, or a 24-hour period. This is frequently done on Sundays. Employees should not be required to work more than nine hours per day and should not be required to work more than two hours of overtime per day.
Night work that lasts at least 11 consecutive hours, including the hours between 10 p.m. and 5 a.m., is compensated at 130% of the normal rate during the day.
The maximum amount of overtime permitted per day is two hours. Employees are entitled to receive 150 percent of their regular rate of pay for overtime hours worked. If the overtime is worked at night, on a Sunday, or on a public holiday, the rate is increased to 200 percent of the basic pay. Employers must obtain approval from the Ministry of Labour before scheduling overtime.
For regular employees, the monthly minimum wage is 730,002.00 KHR. The minimum wage for probationary employees is 709,947.00 KHR.
Regular garment workers earn a minimum wage of USD 192, while probationary garment workers earn a minimum wage of USD 187.
Cambodia is in the process of implementing a universal health care system. Employers may provide health insurance. Employees who are injured on the job are usually entitled to have their medical bills covered by their employer.
Employees are generally provided with health care allowances, housing allowances, transportation allowances, and attendance bonuses.
Companies in Cambodia are subject to a corporate tax rate of 20 percent.
Individuals in Cambodia are imposed an income tax rate that ranges from 0 percent to 20 percent. The actual percentage varies depending on the income tax bracket the individual belongs to.
The standard rate for the value-added tax (VAT) or goods and sales tax (GST) in Cambodia is set at 10 percent.
A valid business visa is required for foreign employees who want to work in Cambodia (E-class visa). The E-class visa is valid for 30 days at first. By applying to the Ministry of Interior's immigration department, the visa may be renewed for one month, three months, six months, or a maximum of one year at a time (MoI).
E-visas may be acquired at the closest Cambodian embassy as well as upon arrival at Phnom Penh International Airport. The six- and 12-month visas enable applicants to enter Cambodia several times, but the one-month and three-month visas only allow for one entrance.
A foreign worker must get a work permit and an employment card in addition to an E-visa. This is the employer's duty if they apply via the MVLT.
Businesses who are unable to recruit eligible Cambodian nationals or a sufficient number of competent Cambodian nationals may request that the employment limit be raised. The MLVT issued Prakas No. 277/20 on August 14, 2020, allowing enterprises to exceed the 10% quota limit.
Employment contracts in Cambodia may be written or verbal, and they must include information about the employment, such as working hours, compensation, and working conditions. In certain cases, the contract must be recorded.
Fixed-term employment contracts must be in written and include the start and end dates of work. A fixed term contract's original duration cannot exceed two years, although fixed term contracts may be renewed. A renewal cannot be more than two years long, and the maximum period of a fixed term contract (including renewals) cannot be more than four years. If there is a one-month gap between the end of one fixed-term contract and the commencement of another, the overall period of the contract might be extended.
If a fixed contract's renewal term exceeds two years, or the overall length of the contract, including renewals, exceeds four years, the deal is changed to an indefinite period contract. A one-month grace period applies if a fixed-term contract expires and the employee continues to work. If new fixed term contract is not created and signed during that month's grace period, the existing fixed term contract automatically transforms to an indefinite duration contract.
United States Dollar (USD)
Cambodian Riel (KHR)
When deciding to establish a Cambodia subsidiary, various elements should be considered, such as your location, regional language, and company objectives. Separate towns and areas often have their own Cambodia subsidiary legislation, availability, prices, and other considerations. Before selecting a real office space, you should always do research on the chosen location.
Language might also impact where you integrate and who you recruit for your workforce. The official language of Cambodia is Khmer, however various areas use distinct dialects, including several minority languages. Because not everyone speaks English, you need engage a translator or staff who speak the local dialect in the area where you want to incorporate.
Finally, examine your company objectives, since these will influence the sort of organisation you should incorporate under. Companies in Cambodia may form as a limited liability company (LLC), joint-stock corporation, branch, or representative office. Because each entity has an influence on how you may operate in the nation, you should choose the structure that works best for your company. Many businesses choose to incorporate as an LLC for a variety of reasons. The following actions are required to establish your Cambodia subsidiary:
1. Establishing an in-country bank account
2. Making a deposit of your minimum paid-up capital
3. Getting a business license from the Ministry of Commerce
4. Submitting a memorandum of incorporation and articles of incorporation
5. Creating a distinctive business name and registering it
6. Obtaining a trademark registration from the Department of Intellectual Property
7. Obtaining a taxpayer identity number and registering with the tax department
8. Before starting a company, you must file a statement with the Ministry of Labor.
9. Obtaining all required permits from the appropriate ministries
Cambodia's subsidiary rules vary depending on the kind of organization you pick. A minimum of $1,000 in paid-up capital is required for an LLC, as well as two stockholders and one director. Your shareholders and directors are not need to be Cambodian citizens, nor are they required to dwell in the country while working for your firm.
In order to pay workers and deposit your paid-up capital, you must also open a corporate bank account in Cambodia. The country's rules also need a physical office space, a registered real estate agent, and a Khmer-language company name. Finally, LLCs are required to submit yearly tax reports as well as register for VAT.
