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Chapter IV
Investment Guarantees
Article 8
Investors shall be treated in a non-discriminatory manner as set by
law, except for ownership of land as set forth in the Constitution
of the Kingdom of Cambodia.
Article 9
The Royal Government shall not undertake nationalization policy
which shall adversely affect private properties of investors in the
Kingdom of Cambodia.
Article 10
The Royal Government shall not impose price control on the products
or services of investors who have received prior approval from the
Government.
Article 11
In accordance with the relevant laws and regulations issued and
published to the public by the National Bank of Cambodia, the Royal
Government shall permit investors with investments in Cambodia to
purchase foreign currencies through the banking system and to remit
abroad these currencies for the discharge of financial obligations
incurred in connection with their investments. This concerns the
following payments:
1. Payment for imports and repayment of principal and interest on
international loans.
2. Payment of royalties and management fees;
3. Remittance of profits;
4. Repatriation of invested capital in compliance with Chapter 8.
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Chapter V
Investment Incentives
Article 12
The Royal Government shall make available incentives to encourage
investments in such important fields as :
1. Pioneer and/or high technology industries,
2. Job creation,
3. Export-oriented,
4. Tourism industry,
5. Agro-industry and Transformation industry,
6. Physical infrastructure and energy,
7. Provincial and rural development,
8. Environmental protection, and
9. Investments in Special Promotion Zone (SPZ) as shall be created
bylaw.
Article 13
Incentives shall include the exemption, in whole or in part, of
duties and taxes.
Article 14
Incentives shall consist of the following:
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1. A
corporate tax rate of 9% except the tax rate on the exploration and
exploitation of natural resources, timber, oil, mines, gold, and
precious stones which shall be set in other laws.
2. A
corporate tax exemption of up to 8 years depending on the
characteristics of the project and the priority of the government
which shall be mentioned in a Sub-Decree. Corporate tax exemption
shall take effect beginning from the year the project derives its
first profit. A 5-year loss-carried forward shall be allowed. In the
event the profits are being reinvested in the country, such profits
shall be exempted from all corporate tax.
3.
Non-taxation on the distribution of dividends or profits or proceeds
of investments, whether they will be transferred abroad or
distributed in the country.
4.
100% import duties exemption on construction materials, means of
production, equipments, intermediate goods, raw materials and spare
parts used by:
An export-oriented project with a minimum of 80% of the production
set apart for export, and Located in a designated Special Promotion
Zone (SPZ) listed in a development priority list issued by the
Council; Tourism industry Labour-intensive industry, transformation
industry, agro-industry, Physical Infrastructure and energy industry
These 100% exemption of duties and taxes mentioned above shall be in
effect according to the terms of the agreement or requirement book
of the investment projects which will produce goods for export in
minimum of 80% of overall productivities as stipulated in the above
point (4) a and for the investment projects which located in Special
promotion Zone ( SPZ ) as in (4) b.
Beside the kinds of investment projects in the above points (4) a
and (4) b the 100% exemption of duties and taxes shall only be
authorized for an arrangement of construction period of enterprises,
factories, building and the first year of operation of business
production.
5.
100% exemption of export tax, if any;
6.
The permission to bring into the Kingdom of Cambodia foreign
nationals who are:
Management personnel and experts
Technical personnel
Skilled workers
Spouses and dependents of the above persons as authorized by the
Council for Development of Cambodia and in compliance with the
immigration and labour law.
Article 15
The approval and incentives granted by the Council for Development
of Cambodia shall not be transferred or assigned to any third
parties.
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Chapter VI
Land Ownership and Use
Article 16
In accordance with the Constitution and relevant laws and
regulations pertaining to the ownership and use of land:
1.
Ownership of land for the purpose of carrying on promoted investment
activities shall be vested only in natural persons holding Cambodian
citizenship or in legal entities in which more than 51% of the
equity capital are directly owned by natural persons or legal
entities holding Cambodian citizenship.
2.
Use of land shall be permitted to investors, including long-term
leases of up to a period of 70 years, renewable upon request. Upon
such use may include the right of ownership of real and personal
property situated on the land as may be permitted by the law.
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Chapter VII
Employment Practices
Article 17
Investors in the Kingdom of Cambodia shall be free to hire Cambodian
nationals and foreign nationals of their choosing in compliance with
the labour and immigration law.
Article 18
The investors shall be allowed to hire foreign employees who are
listed in Article 14 (6) provided that :
1.
The qualification and expertise are not available in the Kingdom of
Cambodia among the Cambodian populace. In the event of such hiring,
appropriate documentation including the photocopies of the
employee's passport, certificate and/or degree, and a curriculum
vitae shall be submitted to the Council;
2.
Investors shall have the obligation to provide adequate and
consistent training to Cambodian employees,
3.
Promotion of Cambodian staff to senior positions will be made over
time;
Article 19
Foreign employees shall be allowed to remit abroad their wages and
salaries earned in the Kingdom, after payment of appropriate tax, in
foreign currencies obtained through the banking system.
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Chapter VIII
Disputes and Dissolution
Article 20
Any dispute relating to a promoted investment established in the
Kingdom by a Cambodian or a foreign national concerning its rights
and obligations set forth in the Law shall be settled amicably as
far as possible through consultation between the parties in dispute.
Should the parties failed to reach an amicable settlement within two
month from the date of the first written request to enter such
consultations, the dispute shall be brought by either party for:
conciliation before the Council which shall provide its opinion or
refer the matter to the court of the Kingdom of Cambodia, or refer
to any international rules to settle the disputes as agreed by both
parties.
Article 21
In the event a promoted company intend to end its activity in the
Kingdom of Cambodia, it will have to inform the Council through
either a registered letter or a hand delivered letter stating the
reasons of such a decision, which letter shall be signed by the
investor or his attorney-in fact.
Article 22
In the event of a proposal for a dissolution of a company without
judicial procedures, the investor shall provide proofs to the
Council that the company has properly settled its potential
creditors, complainants and claims from the Ministry of Economy and
Finance before the investor is allowed to officially dissolve his
company or enterprise according to the applicable commercial law.
Article 23
Once the investor is allowed to officially dissolve his company or
enterprise either within the judicial procedures or not, the
investor can transfer the remaining proceeds of its assets overseas
or use them in the Kingdom of Cambodia. However, in the event that
the dissolving company had used machineries and equipment which were
imported duty free for less than five years, the company will have
the obligations to pay the duties applicable to those machineries
and equipment.
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Chapter IX
Final Provisions
Article 24
Investments authorized under the previous “Law on Investment” of the
State of Cambodia and its Sub-Decrees shall be subject to the same
benefits and obligations as stated under this Law. This law is not
retroactive.
Article 25
In the case where the promoted company violates or fails to comply
with the conditions stipulated by the Council, the Council shall
have the power to withdraw the rights and benefits granted to him,
in whole or in part.
Article 26
This Law shall be promulgated immediately.
This
law is adopted by the National Assembly of the Kingdom of Cambodia
in Phnom Penh on August 4, 1994 during the extraordinary session of
the first legislature.
Phnom Penh, August 4, 1994
The Acting Chairman of the National Assembly
LOY SIM CHHEANG
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