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Qualified Investment Projects
A Qualified Investment Project (QIP) is an investment project that has received a Final Registration Certificate (FRC) from the Council for the Development of Cambodia (CDC).
QIPs are projects that are entitled to receive fiscal and non-fiscal incentives from the Cambodian Investment Board (CIB).
What is a QIP?
Foreign companies that are registered as QIPs can benefit from either a special tax exemption or a special tax depreciation.
For the tax exemption, eligible foreign investors can receive a tax holiday of three years (starting from the date they receive the Final Registration Certificate). After this three-year tax holiday has ended, the QIP is entitled to another three-year priority period. The priority period starts from the fiscal year that immediately follows the third year of the initial three-year period. The priority period lasts from zero to three years, the definitive length depends on the type of project and the amount of investment capital. The priority period is determined by a Royal Decree, issued by the government.
QIPs that don’t choose to take advantage of the special tax exemption are entitled to a special depreciation allowance of 40 percent of the value of new or used tangible properties used by the company for production or processing. The special depreciation allowance can be deducted during the first year of purchase of the tangible property or the first year using such property.
The three categories of QIPs in Cambodia are:
- Domestic qualified investment projects
- Export qualified investment projects
- Supporting industry qualified investment projects
The following projects are not eligible to apply for QIPs:
- Commercial activities, import and export, wholesale and retail
- Transportation services by waterway, air or roadway (not including the railway sector)
- Tourism services
- Currency and financial services
- Restaurants, bars, nightclubs, bars or massage parlours
- Casinos and gambling
- Newspaper/ Media activities
- Real estate development
• Customs Duties Clearances
Exemptions on customs duties to import machinery or capital goods
• Tax Incentives
QIPs can either choose a tax exemption for up to 9 years or a special depreciation of 40% of tangible assets used in the production.
• Hiring Foreign Employees
No restrictions for foreign employees
• Unlimited Land Lease
QIPs are permitted to enter into unlimited land leases
• Business Restrictions
Business activities that are deemed “sensitive” cannot be approved as QIPs.
• Investment Requirements
The required investment to qualify as a QIP ranges from USD 100,000 to USD 8,000,000 USD
Pricing
FROM
USD 5,000
+ 10% VAT
Application handled by a corporate expert.Scope of work
- Preparing, filing, and submitting the documents required by the CDC.
- Answering questions in relation to the QIP and application process.
- Preparing the client for all aspects of the QIP process.
- Advising you on the post FCR obtention compliance requirements to ensure the smooth operation of your activities.
Need more?
Additional services that you may need as well
- Monthly Accounting and Tax filings From USD 100
What is the process for registering a QIP?
Submission of an Investment Proposal
Our team of experts will help prepare and submit the Investment Proposal at the CDC or PMIS.
Our experts will liaise with the relevant authorities until the receipt of a Conditional Registration Certificate (CRC).
TIME LINE
Minimum one month
Obtention of all the relevant licenses and permits
Our team of experts will prepare and submit the applications for the required licences and permits at the relevant Government authority.
TIMELINE
Minimum one month
Issuance of a “Final Registration Certificate” (FRC)
Our experts will liaise with the CDC or PMIS to ensure the FRC is granted and received as efficiently as possible.
TIMELINE
15 days
Post-registration requirements
Our experts can assist with you the next necessary steps to start your business:
- Work Permit for foreign employees
- Open a corporate bank account
Frequently asked questions
Do I need a lawyer to apply for a QIP?
There is no legal requirement to appoint a lawyer to be approved as a QIP but it is highly recommended to ensure a smooth process and increase your chances to be approved. At Belaws, our expert lawyers take a pragmatic approach and will intervene only when it is strictly necessary for savvy clients.
What determines the investment required for a QIP?
The minimum investment required for a QIP is subject to the intended business activity. For a supporting industry, whose entire production supports the export industry, the minimum investment is USD 100,000. For production of food and beverages, textile, furniture, plastic, the minimum investment is USD 500,000. For a project that involves development of exhibition centers and convention halls, a minimum investment of USD 8,000,000 is required. That minimum investment is mandatory to be granted the incentives.
What business activities can qualify for a QIP?
The following activities can qualify for a QIP:
- Production of animal feed
- Production of leather products and related products
- Production of all kinds of metal products
- Production of electrical and electronic appliances and office materials
- Production of toys and sporting goods
- Production of motor vehicles, parts and accessories
- Production of ceramic products
- Production of food products and beverages
- Production of products for textile industry
- Production of garments, textiles, footwear and hats
- Production of furniture and fixtures that do not use natural wood
- Production of paper and paper products
- Production of rubber products and plastic product
- Clean water supplies
- Production of traditional medicines
- Freezing and processing of aquatic product for export
- Processing of any kind of cereals and crop products for export
- Production of chemicals, cement, agriculture fertilizer and petrochemicals Production of modern medicines
- Construction of modern market or trade center
- Training and educational institutes that provide training for skill development, technology or poly technology that serves industries, agriculture, tourism, infrastructure, environment, engineering, sciences and other services.
- International trade exhibition center and convention halls
After obtaining a QIP approval, what are the compliance obligations?
The following documents need to be submitted to obtain the CoC:
- Articles of incorporation;
- Articles of incorporation issued by the MoC;
- Latest audited financial statements;
- Latest patent tax certificate;
- Certificate pertaining to tax obligations from the Tax Department;
- The latest information regarding the import of materials or equipment by the QIP;
- The CoC from previous years (if applicable); and
- Latest company information extracted from the MoC website (business extract).
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Question Before You Begin? *
Question Before You Begin? *
Speak to our expert by scheduling an immediate consultation on how to set up a Qualified Investment Project with Belaws.
(*) This consultation costs $150 for 1 hour and is intended to provide basic answers to questions you may have about the Qualified Investment Projects. But it is not a Lawyer’s Consultation.
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