Royal Government Ministries

by:

Official Business

The executive branch of the Royal Government of Cambodia consists of 26 ministries that are collectively responsible for the management of the country's economy. The following is a brief guide to the roles of the various ministries as well as practical guidance for how to ensure the best outcome of any interaction that your business may have with them.

Introduction

If opening and operating a business in Cambodia then familiarising yourself with therelevant ministries is a must. Registering, licensing and gaining work permits for staff is an essential step in starting any business in Cambodia and it may be worth recruiting the skills of a translator if you do not speak Khmer.

Summary

The Council of Ministers is the equivalent of the Prime Minister’s cabinet and is made up of the ministries and their relevant heads.

The remaining 25 ministries are all headquartered in Phnom Penh and in the majority of cases have departmental offices in the various provincial capitals.

In some cases the ministries are responsible for the oversight of a particular industry sector, for instance Agriculture and Fisheries, Posts & Telecommunications, Tourism and so forth. Others, such as the Ministry of Environment, play a broader role and will interact within various industries.

During the process of establishing operations in Cambodia, it will be necessary to register with, and seek licences from, various ministries. In every case the business will need first to be registered with the Ministry of Commerce, after which (in the case of a “real regime“ business), it will need also to register with the Ministry of Economy & Finance to receive its tax identification number.

The Ministry of Labour & Vocational Training will need to be notified of the opening of a new business. All employees, including foreigners must be registered and receive an employment book, and a health check will also be carried out.

Foreign employees must be registered at the ministry and their employment book acts as a work permit. Many foreigners do not comply with this requirement, believing a business visa to be sufficient, whereas this does not in fact comply with the regulations.

The ministry also conducts workplace inspections and requires proper registration of all employees, a process which should be updated monthly. The National Social Security Fund is administered by the Ministry of Labour and all businesses are required

to enter their Cambodian employees into the fund. The cost is roughly 0.85% of the employee’s salary, with contributions payable monthly. The fund gives employees access to free medical treatment at designated government hospitals, for working-hours accidents and injuries, also covering them to and from work.

Depending on the areas in which the business plans to operate, other ministries may need to be contacted to apply for the appropriate licences. Publishing companies, for example, require a licence from the Ministry of Information, businesses involved in construction projects will require permits from the Ministry of Land Management, Urban Planning & Construction, and those engaged in the tourism and hospitality trade will require licences from the Ministry of Tourism.

Knowing which licences and permits to apply for can be troublesome, especially for those embarking on new ventures in the country. It’s worth contacting the local industry association if there is one, as well as your national business chamber. Alternatively there are many business and legal advisory firms that can assist with obtaining the required authorisation.

If you choose not to use the services of a business advisory firm when dealing with the ministries, it’s r ecommended that you use the services of a local, Khmer -speaking, intermediary, as the majority of the necessary paperwork will be written in Khmer and in many cases there will be no English language translations available.

If possible this should be someone who has connections within, and familiarity with the workings of, the particular government department, which should ensure the process is completed in a timely manner. Keep clearly in mind that the payment of any facilitation fees, commonly referred to as “tea money“, now contravenes Cambodian law and could also potentially create problems for you in your home country.