Setting up a business in Phnom Penh can also involve various challenges and costs, such as legal and regulatory hurdles, infrastructure and utility issues, human resource and skill gaps, etc. Therefore, many business owners and foreign investors choose to set up their businesses in special economic zones (SEZs) in Phnom Penh, which are designated areas that provide various incentives and advantages for businesses.
SEZs are part of the Cambodian government’s economic diversification initiatives to attract foreign investment and promote export-oriented industries. As of 2019, Cambodia has 54 SEZs covering mainly four zones, namely, the Phnom Penh Zone, Sihanoukville Zone, Manhattan Zone and Tai Seng Bavet Zone. The Phnom Penh Zone is the largest and most developed SEZ in Cambodia, with more than 100 international companies from 15 different countries operating in the zone.
Some of the benefits of setting up a business in a SEZ in Phnom Penh are:
- Tax incentives: Businesses in SEZs enjoy various tax incentives, such as 100% corporate tax exemption for up to nine years, 100% VAT exemption on exports and transactions within the SEZ, import/export duty exemption, free repatriation of profits, etc.
- Regulatory facilitation: Businesses in SEZs benefit from simplified and streamlined procedures for business registration, licensing, customs clearance, labor recruitment, etc. The SEZs also have dedicated authorities and agencies to provide one-stop services and support for businesses.
- Infrastructure and utilities: Businesses in SEZs have access to reliable and modern infrastructure and utilities, such as roads, water supply, electricity supply, telecommunication services, internet services, etc. The SEZs also have facilities such as warehouses, factories, offices, dormitories, etc., that are ready for use or rent.
- Human resources and skills: Businesses in SEZs have access to a large pool of skilled and semi-skilled workers who are trained by the SEZs or by vocational training centers. The SEZs also provide various services such as health care, education, recreation, etc., for the workers and their families.
- Market access and linkages: Businesses in SEZs have access to a large and growing domestic market as well as regional and international markets. The SEZs also facilitate linkages and cooperation among businesses within the zone or with other zones or sectors. The SEZs also attract foreign direct investment (FDI) and technology transfer that can enhance the competitiveness and innovation of businesses.
In conclusion, setting up a business in a SEZ in Phnom Penh can provide various benefits for business owners and foreign investors who want to tap into the potential and opportunities of the Cambodian market. However, setting up a business in a SEZ also requires careful planning and preparation, as well as compliance with the rules and regulations of the SEZ. Therefore, it is advisable to seek professional advice from a qualified consultant or accountant to help you plan and optimize your business affairs.
List of references:
- [1]: Special Economic Zones in Cambodia – Spurring Development
- [2]: Advantages and Disadvantages of the Phnom Penh Special Economic Zone
- [3]: Cambodia Special Economic Zones (SEZ) – Healy Consultants
- [4]: SEZ in Cambodia (Special Economic Zones) – Tetra Consultants
- [5]: Special Economic Zones – Council for Development of Cambodia
- [6]: Special Economic Zones – Ministry of Commerce
- [7]: Special Economic Zones – Ministry of Labor
- [8]: Special Economic Zones – World Bank
https://link.springer.com/chapter/10.1007/978-981-19-9155-4_16
https://www.tetraconsultants.com/jurisdictions/register-company-in-cambodia/sez-free-trade-zones/
