Forms of Business Organization

S.A. is a company in which all of the stockholders, unknown to the public, commit only their stake, and which is identified in principle only by the object of its business with the declaration of the amount of its business capital, capital which constitutes the only guarantee to the company's creditors. The S.A. may not be formed with less than seven shareholders. The minimum issued capital is 100 million riels at a par value per share of at least 10,000 Riels. For capital contributions in cash, the par value of the shares must be at least 25% paid-in upon incorporation with the shares been fully paid-up within a period of three years. The Board of Directors must be comprised of at least three directors who must be chosen from among the shareholders of the company.

A Limited Liability Company (S.A.R.L.) is a company of persons and of capital in which the shareholders (associés) are not liable beyond their contributions and are not considered merchants. Whatever its purpose, the S.A.R.L. is a commercial entity and subject to commercial laws and practices. Businesses employing large funds, such as financial institutions and insurance companies may not incorporate as an S.A.R.L. The maximum number of shareholders is 30 and the minimum is 2. Either shareholders or outsiders can be appointed as directors. The minimum issued and paid up capital is 20 million riels at a par value per share of at least 20,000 riels. The shares must be completely paid up in full and distributed. Issued capital must be fully paid in cash or with non-cash items before the company can be incorporated. The transfer of shares in a limited liability company to third parties must have the prior written consent of a majority of the shareholders representing at least three-quarters of the capital of the company.
 

A Sole Proprietorship Limited Company has only one shareholder. It is subject to the same requirements as a limited liability company with the exception that the sole shareholder must be a natural person and may not be another company. The management of the sole proprietorship must be performed by the shareholder or by an individual appointed by the shareholder. A company is considered to have Cambodian nationality if it has a registered office in Cambodia and at least 51% of its shares are owned by Cambodian nationals. Similarly, only companies with Cambodian nationality shall be permitted to register corporate names that imply such nationality A limited liability company with Cambodian nationality is referred to as a "local company" Under the Constitution of the Kingdom of Cambodia, only a local company is entitled to own land. The Chairman of the Board of Directors of a local company must be a Cambodian national. Other directors can be foreigners.

A Commercial Partnership (sometimes called a General Partnership) is an agreement of association, which joins two or more partners with a view to carrying on commercial operations under the same trade name. Each of the partners is deemed a merchant and is held personally jointly and severally liable for the debts of the partnership. The partnership shares are not transferable or assignable without the consent of all partners. Only the names of one or more shareholders form part of the trade name, followed by "SNC" or "et Compagnie S.N.C.", which must also reflect the unlimited liability status of the entity.

A Representative Office (RO) may be established by an eligible foreign investor to facilitate the sourcing of local goods and services and to collect information for its parent company. They also serve as a channel for promoting and marketing the home company's products and services in the host country. International trading businesses interested in gaining entry into the Cambodian marketplace find the RO best suited for their purpose. It is not considered a separate legal entity from its parent company. An RO is regarded as a cost center and accordingly should derive no income from its activities and thus is not subject to Cambodian tax laws. The RO-Agent is under the management of one or more directors who may be appointed and removed by the principal enterprise. It may lease a premise for its office, employ local staff, advertise its products, and organize trade fairs to introduce their commercial products. It can also undertake commercial relations for the purpose of introducing itself to prospective clientele. The RO-Agent can enter into a contract with a local enterprise in Cambodia if the principal enterprise so authorized. However, it may not purchase, sell, or conduct any services as its usual business nor can it conduct any production or construction activities within the country. The RO-Agent is subject to commercial registration requirement, the compliance of which shall be done at the Ministry of Commerce. The words "Representative Office Agent" shall be placed before or after the name of the principal enterprise.

Branch office of a foreign company | Registration of companies | Formality for Registration of a Company

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