New Law on Investment was promulgated on 15 October 2021. The objective of new investment law is to provide to establish an open, transparent, predictable and favorable legal framework to attract and promote quality, effective and efficient investment by Cambodian nationals or foreigners.

The New Investment Law replaces the 1994 Law on Investment and the 2003 Law on the Amendment to the Law on Investment. The New Investment Law contains 12 chapters and 42 articles.

This Law applies to all Qualified Investment Projects, Expanded Qualified Investment Projects and Guaranteed Investment Projects registered with the Council for the Development of Cambodia or Municipal-Provincial Investment Sub-Committees.

There are 3 forms of investment projects: Qualified Investment Project (QIP), an Expanded Qualified Investment Project (EQIP) or a Guaranteed Investment Project (GIP).

Article 24  of the law states 18 sectors are entitled to be incentivized as QIP. They consists of high-tech industries, innovative industries, small and medium-sized enterprises, digital industries and industries which support regional and global production.

Investment incentive

1. Option 1

• Income Tax exemption for 3 (three) to 9 (nine) years, depending on the sector and investment activities, from the time of earning its first inco Sectors and investment activities, as well as the period of income tax exemption, shall be determined in the law on financial management and/or the Sub-Decree. After the income tax exemption period has expired, the QIP is entitled to paying income tax at a progressive rate proportional to the total tax due as follows:
• 25 (twenty-five) percent for the first 2 (two) years;
• 50 (fifty) percent for the next 2 (two) years; and
• 75 (seventy-five) percent for the last 2 (two) year
• Prepayment Tax exemption during income tax exemption period;
• Minimum Tax exemption provided that an independent audit report has been carried out;
• Export Tax exemption, unless otherwise provided in other laws and regulations; or

2. Option 2

• Deduction of capital expenditure through special depreciation as stated in the tax regulations in force;
• Eligibility of deducting up to 200 (two hundred) percent of specific expenses incurred for up to 9 (nine) y Sectors and investment activities, specific expenses, as well as the deductible period, shall be determined in the Law on Financial Management and/or the Sub-Decree;
• Prepayment Tax exemption for a specific period of time based on sectors and investment activities to be determined in the Law on Financial Management and/or the Sub-Decree;
• Minimum Tax exemption provided that an independent audit report has been carried out;
• Export Tax exemption, unless otherwise provided in other laws and regulations.