Tuesday, December 18, 2007

Legal environment : Investing in Cambodia

Investors can set up 100% foreign-owned projects and repatriate funds freely. There is contractual freedom and investors are afforded protection against nationalisation. The Law on Commercial Enterprise (2005) offers a range of enterprise structures, all for a duration of 99 years. The Law on Public Enterprise (1996) provides for mergers and acquisitions, including of State-owned entities. There is no limitation on the nationality of the shareholders or on the proportion of shares held by each partner, with the exception of real property where foreign holders are limited to a 49% stake. (This may change shortly in repect to foreign purchase of condominiums). Licencses are required for investment in insurance, minerals (including oil and gas), tourism, and telecommunications. Incentives are available to foreign investors under the Law on Investment (1994, amended 2003). Benefits can include, inter alia, waivers on import and export duties and tax holidays. Special Economic Zones were legislated in 2005. Foreign investors are expected to comply with regulations and laws concerning taxation, labor, and licensing. Cambodia is a member of WIPO and intellectual property rights are protected. The legal system is still developing and contracts normally contain provision for foreign arbitration of commercial disputes.

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