Cambodia Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Cambodia generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

What Types of Visas or Permits for Cambodia are there?

Apart from the countries of ASEAN, who have between 14 to 30 days visa-free travel for tourism, all other countries have to apply for:

  • The Electronic Visa (e-visa) can be done online for both the Tourist and E Class visas from June 1 2023, available to all foreigners visiting the country, although not acceptable at all border crossings – so check
  • Through the embassies or consulates abroad for all types of visas, which depends on reason and length of stay, and nationality
  • With a Visa on Arrival available to all international visitors effective at Siem Reap, Sihanoukville and Phnom Penh Airports and the border crossings by land, between Cambodia – Thailand, Laos and Vietnam:

Main Types of Visas

  • Tourist Visa T Class. Single entry, covering a stay of up to 30 days which can be renewed once only and after that, visitors have to leave and return to receive a new visa. For longer stays, visitors should apply for the E Class visas initially
  • E Class Visa. This is also a single-entry visa for a 30-day stay but can be renewed indefinitely. It was known before 2017 as the Ordinary or Business Visa. Since October 2022, all visitors can apply for this as a Visa on Arrival and from June 2023, visitors can also apply for the visa through the electronic online system. There are four E Class Extensions below that can be applied for inside Cambodia for either 1, 3, 6 or 12 months. The 6 and the 12-month extensions are multi-entry while the shorter extensions are only for a single-entry visit
  • EB Visa for Business for Extension of Stay (EOS). Can be applied for by most foreigners (and for their dependents) if they are employees, are freelancers, starting their own business or self-employed and are staying for longer than 30 days. This is not permission to work, only permission to stay for work purposes.
  • EG Visa for Employment EOS is for people looking for work and can be for 1, 3 or 6 months. This is not for visitors who have already been in the country for an extended period, so if applicants have already had an EB Visa Extension, they may not be eligible. Also, this may not be extendable more than once.
  • ER Visa for Retirees EOS for people who can prove they have retired in home country i.e., pension paperwork and have proof of funds in order to support retirement in Cambodia. Generally, this is for over 55s unless they can provide proof of early retirement. This cannot be used for employment and does not require a work permit. It can be issued for 1, 3, 6, 12 months.
  • ES Visa Extension for Students EOS and requires a letter from a registered Cambodian school and proof of funds to support their stay of either 1, 3, 6, or 12 months.

Note: It is advised that applicants buy a ‘fully refundable’ return ticket, or they may be refused entry with just a one-way ticket. This can then be cancelled once within Cambodia.

All people wanting to extend their visas in Cambodia should be registered with the Department of Immigration’s FPCS – Foreigners Present in Cambodia.

Other Types of Visas

  • A Class Visa. For Diplomats
  • B Class Visa. Applied for in advance for workers in government organisations, for example, the United Nations and through invitation
  • C Class Visa. For members of international non-government organisations (previously covered under B Visas). They require a ‘letter of attestation’ from the Ministry of Foreign Affairs
  • D Class Visa. For transit passengers
  • K Class Visa. For descendants of Khmer parents who hold a foreign passport. They have to provide proof of heritage and pay a fee
  • ACMECS Visa. A combined visa for travelling to Cambodia and Thailand in one visit. There are 35 countries whose nationals are eligible for this single-entry visa (to enter Cambodia and Thailand once). Valid for 90 days, giving a 30 day stay in Cambodia and up to 60 days in Thailand
  • Golden Visa ‘My 2nd Home’. Launched in 2022 for foreign investors, providing a fast-track route to Cambodian citizenship after five years. Applicants need to be able to invest US$100,000 in property for a renewable 10-year visa providing residency

There is no specific visa for settlement or transfers from parent company to subsidiary. Employees apply for the E Class visa and EB extension.

Applying for Work Visas and Work Permits in Cambodia

Most work documentation is applied for within Cambodia. The E Class visa can be done electronically (e-Visa) online through the Ministry of Foreign Affairs website or from one of the embassies or consulates in the home country.  The E Class visa is also available as a Visa on Arrival, but there are no guarantees of receiving one as this lies with the Department of Immigration.

Below is the typical required documentation – but changes happen quickly, and information is not always available by searching the web. So, to keep abreast of legal aspects and procedures, a PEO and EOR specialist such as Bradford Jacobs is invaluable.

Steps involved with Work Documentation:

For those with a job offer and contract:

  • Employment contract should contain agreed points about the job, according to the Labour Law. The contract can either be open-ended or for fixed duration and is translated into Khmer and sanctioned by the MLVT
  • Apply for the E Class Visa. Employees should have medical insurance and provide proof of good health
  • Once in Cambodia, people intending to extend their visa should register with the Foreigners Present in Cambodia System (FPCS) set up by the Department of Immigration
  • Employer applies for the Work Permit and Employment Card through the Foreign Workers’ Centralised Management System (FWCMS)
  • Apply for the EB extension at the Department of Immigration for either 1, 3, 6 or 12 months

Documentation for E Class Visa

  • Completed online application form with passport-sized photo attached
  • Passport with six months validity and two blank pages with no damage or missing pages
  • Plus, copy of passport bio data page
  • Visa Fee US$35, money order or cashier cheque
  • Letter of invitation from employer on letterheaded paper with all details from employee and company plus any contact information from within Cambodia *
  • Health Insurance US$50,000 recommended
  • Contract of employment signed by both parties (or proof of business)
  • Employer’s company registration certificate and most recent tax certificate

Process takes between seven to 10 days. Documentation may differ depending on how applicants apply.

* Note: Staff coming from a parent company to work in its subsidiary, require an invitation from home company. Self-employed having a registered business can submit a letter confirming their employment including a business stamp. Self-employed without a company e.g., freelancers, may be able to purchase a named stamp and endorse a letter confirming they are self-employed.

Documentation for Work Permits and Employment Card

Applied for by the employer through the Foreign Workers Centralised Management System (FWCMS) of the Ministry of Labour and Vocational Training (MLVT).

From employee:

  • Personal details such as full name, date of birth, gender, height
  • Passport copy
  • E Class Visa copy
  • Address in Cambodia
  • Educational qualifications required for the job position
  • Photographs (3) along passport guidelines
  • Medical report showing good health with no contagious diseases
  • Job position details offered and accepted

From employer

  • Incorporation certificate with company seal
  • Business address of registered company
  • Latest tax patent certificate with company seal
  • Details of all foreign and local employees which should be no more than 10% foreigners
  • Company’s Articles of Association stamped by the Ministry of Commerce

Process can take between 15 to 20 days, valid for one year until December 31, it is renewed between January 1 and March 31 the following year.

Documentation for EB Visa Extension

  • Valid passport and photograph
  • Proof of address in Cambodia
  • Contract of employment or proof of business
  • Work Permit
  • Medical insurance
  • Screenshot of FPCS registration

Applicants need to be on the Department of Immigration’s ‘Foreigners Presence in Cambodia System’ (FPCS) to apply for the Extension.

Overview of Taxes in Cambodia

Figures are given in Cambodian riel (KHR) with equivalents in euros and US dollars, as of January 2023.

  • Salary Tax: (Collected from those who derive cash income from employment and equivalent to Personal Income Tax). Up to KHR 1,500,000 (€340, US$364) 0%. Four further bands up to 20% on income over KHR 12,500,000 (€2,830, US$3,030). Non-residents are taxed at a flat rate of 20%, as their final tax
  • Corporate Income Tax (CIT): Imposed at 20% through self-assessment, with businesses classified small, medium or large according to turnover and other criteria. Rates range from 0% to 20% for companies classified as small. Oil, gas and some mineral extraction operations are subject to 30% CIT
  • Minimum Tax: This is a 1% tax separate from CIT and based on all turnover excluding VAT, applying to taxpayers who do not keep proper accounting records. There is no clear indication from the GDT as to what are considered improper records
  • Withholding Tax (WHT): Resident companies’ WHT is 15% on interest, royalties and fees for technical services, and 14% for non-resident companies. There is no tax on dividends for resident companies, but 14% applies to non-residents
  • Capital Gains Tax (CGT): Implementation delayed until January 2024
  • Value Added Tax (VAT): 10% applies to goods, services and sale of fixed assets. Companies that support export activities can qualify for zero VAT
  • Customs and Excise Duties: Tax rates on imports and exports vary up to 35%
  • Other taxes: These include SPT tax on certain merchandise and services; Accommodation Tax at 2% on the accommodation fee; TPL tax applied to local and foreign produced alcohol and tobacco; taxes on immovable property and unused land; Stamp Duty

Salary Tax in Cambodia

Figures are given in Cambodian riel (KHR) with equivalents in euros and US dollars, as of January 2023.

Monthly tax rates for resident individuals.
Income | Percentage Tax on Excess
Up to KHR 1,500,000 (€340, US$364) | 0%
Excess up to KHR 2,000,000 (€452, US$485) | 5%
Excess up KHR 8,500,000 (€1,923, US$,2062) | 10%
Excess up to KHR 12,500,000 (€2,830, US$3,033) | 15%
Above KHR 12,500,000 | 20%

Note: Non-residents are taxed at a flat rate of 20% on their income sourced in Cambodia. Residents are taxed on their worldwide income

Individual Tax Rules in Cambodia

  • The tax year runs from January 1 till December 31
  • Individuals whose salary is taxed at source by their employers do not have to file a return
  • Salary Tax also includes bonuses, fringe benefits and all other remuneration
  • Individuals’ due taxes are forwarded to the GDT by their employer by the 20th of the month following payment
  • Individuals taxed independently must file returns by March 31 of the following year
  • Taxpayers are considered to be residents if they live in Cambodia for more than 182 days in any 12-month period
  • Residents are taxed on their worldwide income; non-residents on income earned in Cambodia

Employers’ and Employees’ Social Security and Statutory Contributions in Cambodia

Contributions are deducted from payroll by the employer for remittance to the National Social Security Fund (NSSF).

International companies moving operations into Southeast Asia who have targeted Cambodia’s economy as part of their vision for expansion, must establish a subsidiary in the country to be able to efficiently and legally hire staff and run the payroll for their new entity.

Cambodia’s economy has a strong foundation from textiles and tourism, but the priority now is attracting Foreign Direct Investment (FDI) into upgrading the logistics infrastructure, by improving roads and rail networks and its ports on the Gulf of Thailand. Cambodia is still a mainly agricultural society, with around two-thirds of the population living in rural areas and depending on crops, forestry and fisheries for their livelihoods. FDI is essential for improving the infrastructure that links countryside to the major urban centres.

Alongside these developments, Cambodia’s drive towards developing a knowledge-based middle-income economy is supported by a rapidly-developing service sector that has recovered strongly post-pandemic. Banking, insurance and financial services have seen startling growth – partly outstripping regulatory procedures in some instances – alongside business services, real estate, healthcare and education.

Companies that are ready to face the challenges in unlocking this potential usually take the option of opening a private limited company as a subsidiary, operating under the Law on Commercial Enterprises. There is a simpler option, however, into making that move.

The fastest, simplest and most efficient route into the Cambodian economy avoids the hassle of opening a subsidiary. Bradford Jacobs has the expertise to remove all potential obstacles. Our Professional Employer Organisation (PEO) teams and Employer of Record (EOR) consultants will be by your side from day one – from recruiting staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you and your staff can be up-and-running in days … and your employees always remain under your daily operational control.

How to set up a Cambodia Subsidiary

Incorporation and registration procedures to set up a limited liability company in Cambodia typically include the following:

  • Access the government portal through which companies can register with the relevant authorities – the General Department of Taxation (GDT); the Ministry of Labour and Vocational Training (MLVT); the Ministry of Commerce (MOC)
  • Register the Articles of Association, Certificate of Incorporation and the Company Seal with the MOC. The company name must contain the suffix ‘Ltd’
  • Register company with the GDT to obtain tax instruction letter; tax ID card; patent tax certificate and VAT certificate
  • Register company and employees with the National Social Security Fund (NSSF) within 30 days of commencing operations
  • Confirm opening business and register employees with the MLVT
  • Apply to the MLVT for the permitted quota of foreign workers and for work permits for any foreign employees
  • Register internal work rules with the MLVT if employing more than eight workers
  • Deposit minimum share capital of four million riel (approx. €900, US$970) in corporate bank account, which must be opened within 15 days of registering with the GDT
  • Register between two and 30 shareholders, although a single individual can form a limited liability company. There must be a at least one director and a legally competent registered agent who is resident in Cambodia

What are the Benefits of setting up a Subsidiary in Cambodia?

The subsidiary operates in Cambodia as a legal entity formed under the Law on Commercial Enterprises (LCE) and is entirely independent from the foreign parent company, which has no responsibility for any losses or liabilities of its subsidiary. Similarly, shareholders are generally liable only for the value of their contribution, although they can be held liable for unpaid company taxes and have their shareholding or property withheld. If a foreign company chooses to open a branch, in contrast to a subsidiary, it will be responsible for all liabilities, including legal issues.

Opening a subsidiary in Cambodia provides the parent company with the opportunity to explore new markets outside its regular economic sphere and enter into other business fields. The subsidiary opens the potential to conclude agreements with other registered companies in Cambodia, and further afield throughout Southeast Asia. Also, the permanency of a subsidiary has greater credibility with clients and suppliers compared with branches, whose operations in Cambodia are restricted to one particular business activity.

But … setting up a subsidiary in Cambodia is still a long journey compared with taking the most efficient and financially prudent route to starting operations.

Here is the best solution … let Bradford Jacobs locate top-rated talent for your company in Cambodia through our in-country Professional Employer Organisation (PEO) specialists. Employees will be working at their desks and screens in days … not weeks, or even longer. We remove all concerns regarding employment laws and compliance. Our Employer of Record (EOR) teams handle the hassle … you stay in control of your workforce on a daily basis.

Subsidiary Regulations in Cambodia

Procedures applying to a limited liability company typically include:

Registration and Documentation:

  • Registration is required during the incorporation process with the Ministry of Labour and Vocational Training (MLVT); the Ministry of Commerce (MOC) and the General Department of Taxation (GDT), which can be actioned via the government portal
  • The company name must contain the suffix ‘Ltd’ and is registered with the MOC, with the Articles of Association, Certificate of Incorporation and the Company Seal
  • The company must register with the National Social Security Fund (NSSF) and register its employees within 30 days of starting operations
  • Declare the company has started operations with the MLVT and register employees with the authority
  • The MLVT must be provided with internal work rules if company employs more than eight staff

Accounts and Taxation:

  • Register with the GDT to obtain the tax ID card, tax instruction letter, VAT certificate and the patent tax certificate
  • Open corporate bank account to deposit minimum capital of four million riel (approx. €900, US$970) within 15 days of registering with the GDT
  • Provide monthly and quarterly compliance reports to the GDT, covering all relevant taxes

Management:

  • A single individual can incorporate the company
  • Register between two and 30 shareholders
  • Company must have at least one director
  • Appoint a legally competent Cambodian resident, registered agent
  • The MOC must be informed of any change to the Articles of Incorporation within 15 days of the notarised confirmation of the change
  • Shareholders can transfer their shares only with the agreement of a majority of shareholders who hold between them at least 75% of the company’s share capital

International companies eyeing expansion into the Kingdom of Cambodia will be entering a Southeast Asian nation with the potential to climb the region’s economic ladder. The textile industry and tourism are the key elements of the economy, which had a Gross Domestic Product of US$89 billion in 2022.

Cambodia, known in the official Khmer language as Kampuchea, was historically important to the region. Between the 11th and 13th centuries the Khmer state (now Cambodia) included large tracts of what are today Vietnam, Laos and eastern Thailand and Khmer influence spread throughout Southeast Asia. It is impossible to divorce its ancient history from the consequences of the Khmer Rouge regime which, between 1975 and 1979, is estimated to have cost one-and-a-half million lives through overwork, starvation, disease and executions as detailed in the 1984 film, ‘The Killing Fields’.

Economically, Cambodia has made huge strides. According to the World Bank, tourism and textiles made Cambodia one of the fastest-growing markets worldwide in the 20 years up to 2019. Annual growth averaged 7.7% during that period and Cambodia is hoping to achieve middle-income status by 2030. Foreign Direct Investment is key to achieving this, targeting not just tourism and textiles and clothing, but also to broaden the nation’s potential to become a skills and knowledge-based economy.

Starting your business in Cambodia

Foreign companies starting business operations and hiring staff in Cambodia must take the first step of establishing a legal entity in the country. The Law on Commercial Enterprises (LCE) allows the registration of sole proprietorships, partnerships, limited and public limited companies, public enterprises, branches and representative offices. The most popular choice is to open a private limited company as a subsidiary, as this absolves the parent company from any joint responsibility for debts or liabilities, along with its shareholders.

In June 2020, the government introduced a portal through which companies can register their business with the relevant authorities; the Ministry of Commerce (MOC); the Ministry of Labour and Vocational Training (MLVT) and the General Department of Taxation (GDT). Procedures for establishing a private limited liability as a subsidiary generally include the following:

  • Register Certificate of Incorporation, Articles of Association and Company Seal with the MOC
  • The company name must be unique and include the suffix ‘Ltd’
  • Register company with the GDT and obtain the VAT certificate; patent tax certificate; tax registration identification card; tax instruction letter
  • Register employees with the National Social Security Fund (NSSF) within 30 days of starting business
  • Declaration of opening the business must be lodged with the MLVT
  • Employers must register employees with the MLVT
  • Obtain work permits for any foreign employees from the MLVT, and apply for the permitted quota of foreigners each year
  • If employing more than eight workers, employers must lodge internal working regulations with the MLVT
  • Minimum share capital is four million riel (approx. €900, US$970) to be deposited in a corporate bank account, opened within 15 days of registering with the GDT
  • Register between two and 30 shareholders, although a single individual can form a limited liability company
  • Appoint a minimum of one director
  • Appoint a legally competent registered agent who is resident in Cambodia

This exhaustive incorporation process underlines the importance of exploring the alternatives to opening a subsidiary. By making the right choice now, you can steer a course around these time-consuming procedures by working alongside Bradford Jacobs. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) experts will recruit the staff and undertake every step of compliance to have them up-and-running in the shortest possible time. Instead of waiting weeks to complete the process for opening a subsidiary, you can be operational in days.

Expanding your business into Cambodia

Expanding operations into Cambodia will access a country that is intent on climbing the ladder from its current eighth place among Southeast Asian economies, on the way to achieving middle-income status by the target date of 2030. Textiles and tourism are the foundation of the economy, while moves towards diversification provide other options for Foreign Direct Investment (FDI).

Increased consumer demand post-pandemic is fuelling expansion of the services sector, with rapid growth in banking, finance and insurance. Connecting infrastructure and logistics between rural and urban regions is another key area for FDI. E-commerce, start-ups and ICT lag behind Asian neighbours, but since 2019 government initiatives have attracted increasing numbers of investors, venture capitalists and private-public partnerships.

Companies expanding into Cambodia can open these potential avenues to success. Even so, issues will arise for those investors intending to establish their own entity in the country. Incorporation, recruitment and contracts, company and employment legislation are among the items on a long list of requirements. By working with Bradford Jacobs as your Professional Employer Organisation (PEO) and Employer of Record (EOR), we deal with everything on that list. We can ensure that the only item on your agenda is … ‘global expansion’.

Advantages and Challenges when entering the Cambodia Market

Some Advantages:

  • Strategically helpful location, bordering the strong Southeast Asian economies of Vietnam and Thailand and membership of the Association of Southeast Asian Nations (ASEAN)
  • Access to global sea routes through the Gulf of Thailand, although limited by the only international seaport at Sihanoukville
  • Tourism sector recovering strongly since the pandemic
  • Robust textiles, apparel and footwear sector
  • Predominantly young workforce
  • Regionally competitive labour and production costs

Some Challenges:

  • High levels of corruption in finance, government institutions and regulatory procedures
  • Insufficient governance of banking system
  • Over-reliance on Chinese funding and concessionary loans
  • Dependent on tourism and textiles
  • Under-developed infrastructure and unreliable electricity supply
  • Large agriculture sector vulnerable to extreme climatic conditions

Under the Labour Law, open-ended contracts need not be in writing, but this is strongly advised as they must meet the minimum requirements of the Labour Law and supplementary regulations. Mandatory categories that must be in the contract include: working hours, conditions and breaks; night work arrangements and paid vacations. Any such provisions not explicitly covered by the contract will be considered to be part of the agreement by default. Fixed-term contracts must be in writing.

Different types of Employment Contracts in Cambodia

Open-ended employment contracts:  Also known in Cambodia as Unfixed Duration Contracts (UDCs). These have a start date but no end date and can be in writing, or agreed orally.

Fixed-term employment contracts:  Also known in Cambodia as Fixed Duration Contracts (FDCs). These must be in writing and specify an end date. The initial contract cannot exceed two years and can be renewed once for a further two. If employment exceeds the full fixed term the contract automatically becomes open-ended.

Probation Periods:  These can be covered in the contract and vary according to category of employee: One month for unskilled; two months for skilled; three months for other employees. Once successfully completed, the probationer receives final employment contract. In the textile industry there must be one week’s notice during the trial period, but not in other cases.

Part-time, temporary and agency employment contracts:  The Labour Law has no specific regulations regarding these. Workers in these categories should have the same rights as permanent workers, although benefits are likely to be adjusted pro rata.

Collective Bargaining Agreements (CBAs): The Labour Law enforces the terms of a collective agreement if its terms are better than those offered in an individual employment contract. CBAs are binding on the employers who sign agreements with trade unions or workers’ representatives. There are no specific agreements setting out terms for all workers in a particular sector.

  1. Laws that regulate the labour relationship in Cambodia

The employment relationship is primarily governed by the Labour Law and the Law on Social Security, with supplementary legislation issued by the Ministry of Labour and Vocational Training (MLVT).

  1. General requirements for Contracts

Open-ended contracts can be in written or oral form, but fixed-term contracts must be in writing. Contracts must meet the minimum requirements for benefits and entitlements as set out by the Labour Law and the Law on Social Security. Cambodia’s Civil Code requires that contracts must at least detail the salary, working hours and working conditions. Written contracts for foreigners are required for their work permit.

Workers’ entitlements and guarantees in Cambodia are governed by the Labour Law and the Law on Social Security, implemented by the Ministry of Labour and Vocational Training (MLVT). Employers with more than eight employees must register internal ‘work rules’ with the MLVT after agreeing them with workers’ representatives. The rules must cover hiring terms and employee’ responsibilities; salary calculations, salary-related benefits and benefits in kind; working hours, breaks and holidays; notice periods; disciplinary procedures; occupational health and safety measures. Companies employing more than 50 must have an in-house infirmary, first aid room and at least one nurse present during working hours. Companies with more than 100 female employees must have a nursing room and day care centre on-site or close to the office.

What are the Compensation Laws?

National Minimum Wage (NMW): The minimum wage in Cambodia is set by the Labour Advisory Committee, a tripartite organisation comprising government, trade union and employer representatives. In general, the minimum monthly wage is KHR 818,800 (€186, US$200) as of January 2023, although a slightly reduced minimum may apply to probationary workers in textiles and garments production. The Cambodian Constitution dictates equal pay between men and women without discrimination on the grounds of gender, origin, caste or age

Working Hours and Breaks: The Labour Law restricts working hours to eight per day and a maximum 48 a week. Workers on permanent shift work between 10pm and 5am receive 130% of the normal rate for daytime work. The normal working day of eight hour includes one hour for lunch, which is usually covered in internal work rules

Overtime: Employees must volunteer and consent to working overtime, which applies to hours worked over the normal working week and must be agreed with the MLVT. This can be done online. Overtime can be a maximum two hours per day. Rates are 150% of usual hourly pay for overtime on a regular working day; twice the normal hourly pay for overtime between 10pm and 5am, or those working on a public holiday

Sick Leave and Benefits: The Labour Law offers little guidance on short-term sick leave, which is therefore covered in internal work rules or contracts. Typically, employers allow the first month of long-term sick leave on full pay; the second and third month on 60% of normal pay. Pay ceases from the fourth month and employment may be suspended after the sixth month of sick leave. Employers cannot recover sickness benefit from the state

Paid Vacations: Under the Labour Law, the minimum entitlement is one-and-a-half days for each completed month’s work, totalling 18 days annually. Entitlement increases by one day for each year of seniority

Public Holidays: The MLVT issues a list of paid public holidays for each year; in 2023 for example there were 21.

Probation Periods: These should be covered in the employment contract, with length dependent on type of role. Non-skilled employees – one month; skilled employees – two months; all other employees – three months

Notice Periods: Notice periods depend on type of contract and length of service. Fixed-term contracts – up to six months, no notice; six months to one year – 10 days’ notice; one year, 15 days’ notice. Notice is required for open-ended contracts unless dismissal is for serious cause. For all other reasons, the following apply: Up to six months’ service – seven days’ notice; six months up to two years – 15 days; two years up to five years – one calendar month; five years up to 10 years – two calendar months; more than 10 years – three calendar months

Termination, Severance and Redundancies: Fixed-term contracts can be terminated only if both parties agree, as verified by an MLVT inspector, due to force majeure or due to serious misconduct, which must be proved by the employer. Where a fixed-term contract is terminated without cause, the employee is paid to the end of the contract, or compensation in lieu of an insufficient notice period. Open-ended contracts can be terminated with cause for the following reasons: Poor performance; force majeure; gross misconduct, which would not require prior notice. Severance pay also applies. Fixed-term employees receive a minimum 5% of total salary and benefits due during the contract. Since 2018, severance for open-ended contracts has been replaced by seniority indemnity payments, equating to 15 days of monthly salary and paid twice yearly in June and December. Collective redundancies are allowed under the Labour Law, based on individuals’ seniority or family situation. Labour unions and the MLVT must be given prior notice. Those made redundant, have prior claim to be rehired by the company for the next two years

Maternity / Paternity Leave and Benefit: The Labour Law specifies 90 days’ maternity leave paid at 50% of salary by the employer, once the employee has one full year of service. The Law does not specify pre- or post-natal periods. Additionally, the MLVT allows 70% of their daily average wage for 90 days before and after birth, plus a one-off payment from the National Social Security Fund (NSSF) depending on the number of births. Pregnant employees who have not completed one year’s service have unpaid maternity leave. Fathers are permitted one day of paid paternity leave

13th Month Bonus: Not mandatory, but commonly paid

Pensions: Since April 2021, all employers must register their employees with the NSSF pension scheme, and jointly make contributions with their workers from the company payroll. Contributions are set for the first five years of employment, increased for the next five and then increased again for every subsequent 10-year period. The scheme will establish seniority, invalidity, funerary and survivor’s benefits for employees. The NSSF began implementing the scheme in October 2022. Employers need not make contributions for employees over 60 years old, but those who were 60 or older as of July 1, 2022 can make voluntary contributions. Employees must be at least 60 to take benefits

Healthcare and Insurance: Cambodia’s Health Equity and Quality Improvement Project (H-EQIP) between 2016 and 2021 set out to establish a financially sustainable health system, improve access for targeted population groups, the vulnerable and the poor. The government partnered with the World Bank and authorities from Australia, Germany, Japan and South Korea. The Health Ministry’s Health Equity Fund (HEF) reimburses regional and municipal authorities for services they provide for the under-privileged. The next stage of H-EQIP aims to accelerate development in all these areas, to offset that only a quarter of the population live in cities, where the vast bulk of public and private facilities are located. The NSSF administers compensation for members, including benefits for: Medical treatment, temporary and permanent disablement, nursing and attendance

Foreign companies expanding operations into Cambodia must hire staff quickly to be up-and-running from day one. The problem is finding staff with the skills to match requirements. Cambodia has a relatively small workforce of nine million, where 60% of the population live in rural areas and work in agriculture, forestry and fisheries for their livelihoods. Further, the International Labour Organisation estimates that more than 90% of the workforce are employed to some degree in the informal economy.

Cambodia has employment potential from a young workforce ready to adapt to new technologies and the growth of the digital economy, but this promise is undermined by an education and vocational training system that fails to produce candidates with sufficient qualifications.

For employers, the recruitment treadmill does not end with hiring staff. Onboarding staff means complying with the Labour Law, which lays down strict regulations on the legal rights of their employees and their own responsibilities as employers.

These considerations add to an unwanted burden for employers who need to focus on developing their business in a new territory. There is a far simpler option … a straightforward, speedy and economical alternative that will have your new staff operational in just a few days, removing the hazards surrounding recruitment and other aspects of employment.

Bradford Jacobs has the contacts on the ground to provide a direct route into the Cambodian economy. The global reach of our Professional Employer Organisation (PEO) networks will locate the perfect recruits for your company. Then, our Employer of Record (EOR) consultants step in to have your new employees sitting at their desks and screens in the shortest time possible. This guide highlights the essentials of recruitment and onboarding in Cambodia. You can trust Bradford Jacobs to put the brightest talent in position for your company – today!

Recruiting in Cambodia

A relatively small workforce of around six million and a huge percentage of workers in the informal economy restrict the options for foreign companies moving into the Cambodian economy and needing to recruit staff. With virtually all major companies located in urban centres such as Phnom Penh and Siem Reap, competition is fierce to find the best talent. The Skills for Competitiveness Project aims to train 18,000 qualified technicians for manufacturing, electronics and construction to fill the gaps left by an underperforming vocational training sector.

Employers seeking large numbers of low-skilled or junior staff use the variety of job boards or go to recruitment agencies, which have a Code of Conduct if they are registered with the Association of Cambodian Recruitment Agencies and the Manpower Association of Cambodia.

Employers face other issues if they intend importing staff from abroad to sidestep skilled labour shortages. The Labour Law requires all foreign workers to have a work permit and employment card issued by the Ministry of Labour and Vocational Training (MLVT), which must be extended annually. The MLVT also imposes a Foreign Workforce Quota which generally applies a 10% limit on the number of foreigners that can be employed.

This highlights why the global experience and local know-how of Bradford Jacobs is essential. Our Professional Employer Organisation (PEO) platforms will bridge the gap between the skills you need and finding the best-qualified talent for your company. We locate the best available talent … and you are quickly operational in Cambodia.

Employees’ pre-hire checks in Cambodia

General:  There are no specific laws on background checks, but employers must be aware that any personal information collected could contravene data privacy regulations. In general, it is safest to obtain the applicant’s permission and this also applies if checks are carried out by third party agencies.

Criminal Record Checks: These can be carried out where required by the role. Police Clearance Certificates are obtained from the Ministry of Justice (MoJ). Since February 2023 the application process can begin online via the MoJ website, but applicants must still appear in person to have fingerprints taken.

Medical Record Checks:  Employees must undergo a medical examination at the Medical Labour Department of the MLVT.

Reference and Educational Checks: These can be carried out with the permission of the applicant.

Basic requirements when recruiting in Cambodia

Drawing up and agreeing employee contracts is a crucial element of the recruitment process. The Labour Law recognises two main contract types – fixed term and open-ended. Fixed term contracts must be in writing and have a start and end date, although the end date need not be specified if the type of work precludes that. An initial contract cannot be for more than two years, and the MLVT has ruled that one renewal can take the contract up to four years, although interpretations are not consistent.

The open-ended contracts need not be in writing, but this is strongly advised as they must meet the minimum requirements of the Labour Law and supplementary regulations. Mandatory categories that must be in the contract include: working hours, conditions and breaks; night work arrangements and paid vacations. Any such provisions not explicitly covered by the contract will be considered to be part of the agreement by default.

There are no statutory language requirements for contracts, which are generally in Khmer although the parties can agree to dual language contracts. In the case of disputes, the Khmer version will be used.

Under the Civil Code, contracts should at least cover the following:

  • Salary and payment schedule
  • Working hours and breaks
  • Working conditions of the role

The Basics of Cambodian Culture

Cambodians’ ability to rebuild their nation after the atrocities of the Khmer Rouge regime is a testimony to their resilience. The Buddhist religion, culture and tradition has created a majority of caring, compassionate and gentle individuals among the population. Society is based on large, extended families who rejoice in celebrations and festivities such as Pchum Ben and the Khmer New Year. Self-improvement is important, particularly in rural areas where access to education is patchy. Despite half of Cambodia’s population being aged under 30 it is still a traditional culture, where modest behaviour is expected by locals and foreigners.

Cambodia Work Culture

Hierarchy: Respect is shown to the most senior member of the Cambodian team and that individual will dictate the agenda and pace of negotiations. It is important to understand the hierarchy to appreciate the dynamics of the group.

Punctuality:  Show respect by being on time, as this is valued in the Cambodian business world.

Introductions/Greetings:  Start with a brief handshake, not too firm to avoid seeming aggressive; wait for a female member of the other team to offer their hand first.  Introductions may also be made by bringing the palms together, accompanied by a slight bow. Men are generally addressed as Mr and women as Madam; in Khmer as ‘Lok’ for males and ‘Lok Srey’ for women. Avoid prolonged eye contact.

Language:  English is becoming more common in business, but check first whether an interpreter is needed.

Gift Giving:  Modest gifts can be offered, with both hands, and wrapped in bright paper such as green or red – not white, which is the colour of mourning. Gifts should not be opened at the meeting.

Business Cards:  Offer and receive cards with the right hand and take time to read the received card carefully, as this is considered respectful and an indication as to how you view the other party.

Dress Code: Conservative and formal for men and women, with the female members of the team covering their knees and shoulders.

Negotiations and Meetings:  Face-to-face contact is preferred and be prepared for small talk at the start of the meeting. Rank is important so introduce the most senior member of the team first. It is essential to maintain harmony and avoid heated discussion. Be prepared for long and unstructured meetings, with agendas acting only as a guideline until all issues have been covered. ‘Yes’ does not always mean agreement has been reached, so don’t jump to the wrong conclusion. Even in the boardroom haggling is not uncommon. Decisions may be delayed until discussed throughout the company’s hierarchy. Showing impatience may be met with a chilly silence.

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