The cost of starting a business in Phnom Penh depends on several factors, such as the type and size of your business, the location and facilities, the legal and regulatory requirements, and the tax and accounting obligations. According to the World Bank’s Doing Business report, the average cost of starting a business in Cambodia is 8.5% of income per capita, which is about $120. However, this is only an estimate based on a standard case of a small company with up to 50 employees and a start-up capital of 10 times income per capita. The actual cost may vary depending on your specific situation.
Here are some of the main costs that you may incur when starting a business in Phnom Penh:
- Business registration: This is the first and most important step to start a business in Phnom Penh. You need to register your business with the Ministry of Commerce (MoC) and obtain a certificate of incorporation. You can do this online through the MoC’s website or through an agent. The online registration fee is $100 for a limited liability company (LLC) or $150 for a public limited company (PLC). The agent fee may vary depending on the service provider.
- Tax registration: After registering your business with the MoC, you need to register your business with the General Department of Taxation (GDT) and obtain a tax identification number (TIN). You also need to pay an annual patent tax, which is based on your turnover and type of business. The patent tax ranges from $100 to $1,200 for small taxpayers (with annual turnover below $62,500) or from $400 to $5,000 for medium taxpayers (with annual turnover between $62,500 and $175,000). You also need to register for value-added tax (VAT) if your annual turnover exceeds $62,500.
- Location approval: Depending on your type of business and location, you may need to obtain a location approval license from the local authorities, such as the municipality or the district office. The location approval license verifies that your business premises comply with the zoning regulations, building codes, fire safety standards, and environmental requirements. The fee for the location approval license may vary depending on the size and nature of your business.
- Operating license: Depending on your type of business and sector, you may need to obtain an operating license from the relevant ministry or agency. For example, if you want to operate a factory or a handicraft workshop, you need to obtain an operating license from the Ministry of Industry, Science, Technology, and Innovation (MISTI). If you want to operate a restaurant or a hotel, you need to obtain an operating license from the Ministry of Tourism (MoT). The fee for the operating license may vary depending on the sector and category of your business.
- Other costs: Besides the above-mentioned costs, you may also incur other costs when starting a business in Phnom Penh, such as renting or buying a property, hiring staff, buying equipment and supplies, obtaining insurance, marketing your products or services, etc. These costs depend largely on your business plan and budget.
To sum up, starting a business in Phnom Penh can be both rewarding and challenging. You need to consider various costs and procedures that are involved in setting up and running your business. You also need to do your research and seek professional advice if needed. By doing so, you can increase your chances of success and profitability in this emerging market.
