Short answer
A Qualified Investment Project (QIP) is a project registered with the Council for the Development of Cambodia (CDC) under the Law on Investment dated 15 October 2021. QIPs can choose between a tax-based incentive option, with an income tax exemption of three to nine years, and an expenditure-based option. The CDC states that it issues the registration certificate within 20 working days for projects outside the negative list.
What is a QIP?
The Law on Investment was promulgated on 15 October 2021 under Royal Decree NS/RKM/1021/14. It applies to Qualified Investment Projects, Expanded Qualified Investment Projects and Guaranteed Investment Projects registered with the CDC or a Municipal-Provincial Investment Sub-Committee. QIP status is confirmed by a registration certificate issued by the CDC, and only QIPs receive the basic incentives described below (KPMG).
Which activities can qualify?
Article 24 of the Law on Investment lists the sectors and activities eligible for incentives: high-tech industries involving innovation or research and development; innovative or highly competitive new industries or manufacturing with high added value; industries supplying regional and global production chains; industries supporting agriculture, tourism and production chains; electrical and electronic industries; spare parts, assembly and installation industries; mechanical and machinery industries; agriculture, agro-industry, agro-processing and food processing; small and medium-sized enterprises in priority sectors, industrial parks and science, technology and innovation parks; tourism; special economic zones; digital industries; education and vocational training; health; physical infrastructure; logistics; environmental management, protection, biodiversity conservation and the circular economy; green energy and climate adaptation technology; and other activities the Royal Government deems to have potential for socio-economic development.
Article 25 adds the test that decides who actually receives the incentives: a listed activity that is not on the Negative List in the implementing sub-decree receives basic tax and customs incentives, in whole or in part, once the registration certificate is issued.
The negative list and capital thresholds
Incentives are available only if the project falls outside the negative list and meets the minimum investment capital thresholds. These are set out in Annex 1 of Sub-Decree 139, adopted on 26 June 2023 (DFDL). The annex covers four sectors: agriculture, services, industry and infrastructure. Check the annex for the thresholds that apply to your activity.
BDO lists incentive-eligible sectors including high-tech and research and development, electrical and electronics, agriculture and agro-processing, tourism, special economic zones, digital industries, education, health, physical infrastructure, logistics, green energy and environmental protection.
The two incentive options
| Option | What it includes |
|---|---|
| Option 1: tax-based | Income tax exemption for three to nine years depending on sector and activity, from the time the project earns its first income. After the exemption ends, income tax is paid at a progressive rate: 25% of the tax due for the first two years, 50% for the next two, and 75% for the last two. Also prepayment tax, minimum tax and export tax exemptions. |
| Option 2: expenditure-based | Special depreciation of capital expenditure, and a deduction of up to 200% of specified expenses for up to nine years, plus time-limited prepayment tax, minimum tax and export tax exemptions. |
Article 27 adds further incentives for all QIPs: exemption from value-added tax on the purchase of locally made production inputs; a 150% deduction from the tax base for research, development and innovation, vocational training, worker accommodation and canteens, machinery upgrades and worker welfare; and income tax exemption for the expansion of a QIP, as set out in the sub-decree. Export QIPs and supporting-industry QIPs are also entitled to customs duty, special tax and VAT exemptions on imports of construction material, construction equipment, production equipment and production inputs.
How registration works
- The 2021 law replaced the former two-step process with a single registration that produces a registration certificate (DFDL).
- Applicants can file in hard copy or online, and the certificate carries a machine-readable code with initial project data.
- The CDC states a 20 working day timeline for issuing the certificate to projects that are not on the negative list.
- The date the certificate is issued is the project implementation start date.
- The certificate does not replace other operating licences.
After registration
Investors must submit semester and annual reports to the CDC within 20 days after the tax return filing deadline or risk losing incentives, after which the CDC issues a Certificate of Compliance (DFDL).
On change of ownership, Article 29 of the Law provides that the rights and entitlements of a QIP may not be transferred to a third party except through an acquisition, sale or merger of the investment project. Article 30 allows such a transfer to keep incentives, guarantees and obligations if it is done in accordance with applicable law and through a written request to the CDC or the relevant Municipal Provincial Investment Sub-Committee.
Protections for investors
KPMG summarises guarantees under the law, including non-discriminatory treatment, free purchase of foreign currency and repatriation through authorised banks, intellectual property protection, and protection against nationalisation or expropriation except for public interest with fair compensation under legal procedures.
Where Invest Cambodia fits
Through investment advisory we assess whether the incentives fit your project, and through company establishment coordination we coordinate the application with licensed professionals. The CDC decides every application, and we cannot guarantee eligibility.
Questions investors ask
How long does QIP registration take?
The CDC states that it issues the registration certificate within 20 working days for projects that are not on the negative list, according to DFDL and KPMG.
Do I need a QIP to operate in Cambodia?
No. A QIP is registered with the CDC to access incentives. Incorporation and operating licences are separate.
Can a QIP still keep its incentives if the project is sold?
Yes, in principle. Article 30 of the Law on Investment allows an acquisition, sale or merger to keep incentives, guarantees and obligations when it follows applicable law and is made through a written request to the CDC or the relevant investment sub-committee.
Sources
- Law on Investment of the Kingdom of Cambodia, official English text (Royal Decree NS/RKM/1021/14, 15 October 2021)
- KPMG Cambodia: Law on Investment (technical update, 2021)
- DFDL: Cambodia adopts implementing regulation for the 2021 Investment Law, Part One
- BDO: Cambodia new law aims to attract investors (Tax News, May 2022)
General information only, not legal, tax or investment advice. Laws, rules and figures change. Confirm the current position with licensed Cambodian professionals before acting.