b2b cambodia nov 2014

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BUSiNESS2BUSiNESS

2014/15 - IVFREE COPYYour tool to

doing business in Cambodia

2014-15 FOU

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SiNESS2BU

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Welcome to B2B Cambodia, your guide to business services in Cambodia, and the result of ongoing research involvingin-depth interviews and surveys conducted with more than 200 of the countrys leading business practitioners andindustry insiders.

ABOUT B2B CAMBODiA

Tim Gibbons Philippe Janowski

Dean Lennox

The Master Media Directors

Welcome to B2B Cambodia, your guide to doing businessin the Kingdom!

B2B Cambodia is your one-stop guidebook to everything you needto know about setting up and operating your business, with marketinsights and the nitty-gritty details truly unique to Cambodia.

Printed bi-annually, B2B Cambodia is the result of ongoing research involving in depth interviews with more than 200 ofthe countrys leading business practitioners and industry insiders.

Although many recommended practices and procedures remainunchanged, in each issue we aim to present the latest market information within the dynamic Cambodian business landscape.

However this handbook is not to be used in isolation, as we alsomaintain a website at www.b2b-cambodia.com - full of feature stories with industry insiders, the latest business news, details of networking events and all you need to know about business in Cambodia as it changes and develops.

We encourage you to access this online resource for the most up-to- date developments in the Cambodian business sector.

Dont forget to like us on Facebook either:www.facebook/cambodiab2b

We hope you fi nd this fourth edition of B2B useful and informative.If you wish to contribute to the next issue of the publication, to our web content, or just to drop us a line, please feel free to email us at [email protected]

www.b2b-cambodia.comVisit the website for updated articles, news, directory listings, events, classifieds, forum & more...

CONTENTSFROM THE PUBLiSHERS 4

PHNOM PENH CiTY MAP 10

BUSiNESS STARTUP 12For readers planning to establish a new business in Cambodia

BANKiNG & FiNANCE 20A brief overview of the banking sector and available services

CONSTRUCTiON & MAiNTENANCE 30A look at the construction market, together with details of whos operating

HOSPiTALiTY & TOURiSM 42A summary of tourism in Cambodia, and the various facilities available

iT & COMMUNiCATiONS 54Ever-improving services have made telecommunications ever more present

LEGAL & ACCOUNTiNG 64A summary of available services such as company registration and due diligence

MARKETiNG & MEDiA 72An overview of the marketing services available, including market research

MEDiCAL & PHARMACEUTiCAL 86A look at the range of medical, dental, pharmaceutical and veterinarian services

PEOPLE & SKiLLS 92A look at the labour market, and advice for those needing to recruit and train staff

EDUCATiON 102A brief summary of educational facilities and what to look out for

PROPERTY & ACCOMMODATiON 110A summary of the market, and advice on finding, buying, and leasing property

B2B Handbook

SAFETY, SECURiTY & iNSURANCE 122An overview of security issues, services available, and the insurance industry

TRANSPORTATiON & LOGiSTiCS 128A look at the transportation infrastructure, relocation services, customs, and more

KEY iNDUSTRiES 138An overview of some of the key industries driving Cambodias growth

OUTSiDE PHNOM PENH 142A look at some areas outside Phnom Penh: Siem Reap, Battambang, Sihanoukville and Kep

ROYAL GOVERNMENT MINiSTRiES 145A brief guide to the roles of Cambodias twenty-six Royal Government ministries

EMBASSiES & CONSULATES 147Directory listings

iNFRASTRUCTURE & UTiLiTiES 148Information on transport, power, communications, and natural resources

BUSiNESS CHAMBERS & ASSOCiATiONS 150A summary of individuals and businesses working together for a common goal

NETWORKiNG 154Ways to help you promote your business and be introduced to potential clients

NON-GOVERNMENT ORGANiSATiONS 156Since 1992 and the entry of UNTAC there has been a large NGO presence

THE BACK PAGE 158Thank you to all our contributors and contact details for the publisher

B2B Handbook

CONTENTS

www.b2b-cambodia.comVisit the website for updated articles, news, directory listings, events, classifieds, forum & more...

PHNOM PENH MAP

BUSiNESS STARTUP

Cambodia is a great place to do business

Soben Phanof Ben Elderson CompanyIt took us two years of marketing to achieve the necessary market share to be awarded this sole license.

CONTRIBUTORS TO THIS ISSUE

Carlo Fig Talamancaof Sustainable Green Fuel EnterpriseYou have to find smart entrepreneurs who understand the value of your collaboration.

Ben Siddonsformerly of Audi CambodiaAs the rules become more solidified, its vital to find a professional firm that knows exactly what theyre doing.

Sokhun Prokof Restore One CafYou need locals onside with experience. This is crucial. Your local cook will pay local prices and a local manager will organise all purchases.

This section is aimed primarily at readers planning to establish a new business in Cambodia, and outlines the various types of business classifications as well as the necessary licences and permits.

The latest figures released by the Ministry of Commerce as B2B went to print reveal the country granted 2,424 new operating licenses to companies in the first seven months of 2014 - up 44% compared with 1,688 firms during the same period in 2013. Foreign companies accounted for 1,076 of the total, an increase of 32% while local registrations saw a 54% rise to 1,348. Foreign firms are mostly operated by Chinese, South Koreans, Japanese and Vietnamese who are carrying out business in the garment, footwear, agriculture, agro-industry, tourism, construction and real estate sectors.

Jim Swander of Guinness Gallagher International If youre a foreign investor and will create jobs, the government wants you to invest in Cambodia.

Q&A...Q: Why should I set up my business in Cambodia over

neighbouring countries?A: In a bid to rebuild the country after years of civil war, the Cambodian government sought to attract foreign investment by adopting a business-friendly approach. It boasts a simple tax system that offers several incentives, especially in select industries and those operating from a Special Economic Zone. Companies can also be 100% foreign-owned, offered duty-free avenue into the US and EU, has a high and cheap workforce, a dollarised currency and businesses can move money in and out of the country with ease.

Q: What do I need to officially open a business in Cambodia?

A: Setting up a business in the Kingdom is fairly straight -forward. A valid visa and work permit must be obtained first and a bank account with a minimum balance of $1,000 (4 million riel) opened - this can be withdrawn when the business has been officially established. Business owners also need a certificate of good health and, potentially, a police report from their home country identifying them as person(s) of good standing with no history of criminal activity.

Q: How do I go about opening a business in Cambodia and how long does it take?

A: An application form for a Memorandum and Articles of Association (MAA) must be obtained from the Ministry of Commerce (MoC). This must be signed by all share-holders and directors in front of the MoC, a public notary or Cambodian lawyer. Once the MoC recognises a company, it issues a Certified MAA, MoC business licence and commercial registration certificate. To register a company, the name must also be registered with the MoC. The whole process usually takes about 85 days.

Q: What licences are needed to operate a business in Cambodia?A: Newly established businesses also need to obtain the necessary licences in order to operate. Licenses are issued by the relevant ministry. For example, a publishing company

would need a licence from the Ministry of Information whereas a business aimed at tourists would need to apply to the Ministry of Tourism. Licenses are renewed annually. The Ministry of Labour must also be contacted and given a Declaration of the Opening of Business before operations start or within the first 30 days if the business has less than eight employees.

Q: What taxes do I have to pay and how often?A: Within 14 days of registering with the MoC, businesses must register with the Ministry of Economy and Finance (MEF) Department of Taxation to receive a taxpayers identification number (TIN). When registering for a TIN, the company must also pay an annual business registration tax, known as a Patent Tax, for its first year of operation. Various taxes are also payable each month, usually on the 15th.

Q: What do I do if I want to close my company?A: The temptation may well be there to flee into the night but this is not a recommended move. The CDC states companies must declare themselves bankrupt or formally dissolve or face legal action and hefty fines. To close, a letter must be sent to the Department of Taxation informing of its intention of closure. Within two months, an auditor will address outstanding taxes. A certificate of closure is then issued, which must be taken to the MoC, who issue a Certificate of Closure.

Q: Cambodias first Business Confidence Index was recently launched. What does this show?

A: ANZ Royal and global research company TNS compiled the index based on data collected from key industries, including the agriculture and services industries. Between May and August , a measurement of 82/100 showed that confidence remains high in the most recent quarter. Grant Knuckey, ANZ Royal CEO, says, This shows businesses remain very confident in the future and have a clear growth bias.

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PSokhun Prok,Restore One Cafe

Carlo Fig Talamanca,Sustainable Green

Fuel Enterprise

STAY CURRENT WITH THE LATEST DEVELOPMENTS THROUGH OUR SOCIAL NETWORKS.

www.facebook/b2b-cambodia linkedin/b2b-cambodia

1Experts Top TipsHere we call on our panel of experts to share what they have

learnt about setting up shop in Cambodia. Cambodia is a great place to do business, says Country

Director of Guinness Gallagher International, Jim Swander, but there are many pointers that can help make starting your business smooth flowing.

GET HELPSeeking the help of local experts is top of our business insiders

to-do list and choosing a professional business advisory firm to manage the process is a worthwhile consideration though the costs may be significant for smaller businesses. Ben Siddons, former Audi Cambodia Sales Director, says, As the rules become more solidified, its vital to find a professional firm that knows exactly what theyre doing. When setting up their franchise earlier this year, Audi recruited the expertise of legal, accounting and real estate firms.

Calling on the help of experts is not only to bridge the language barrier when dealing with officials but also to ensure transactions run smoothly, as few problems as possible arise and the best prices and quality of goods are secured. You need locals onside with experience in Cambodia, Sokhun Prok, General Manager of Cafe Restore One, says. This is crucial. Your local cook will pay local prices and a local manager will organise all purchases.

BUILD RELATIONSBuilding a good relationship with suppliers and distributors,

as well as partners and other businesses is important, claims Carlo Fig Talamanca, CEO of environmental organisation Sustainable Green Fuel Enterprise (SGFE). It took me a while but when you build a relationship with them then you can count on them and develop the business together, he advises. Learning to recognise who is in it for the long haul and who is just after making a quick buck is another important element of doing business here, he adds. You have to find smart entrepreneurs who understand the value of your collaboration. You have to avoid those that just want to get the one sale or most amount of money straight away.

RESEARCHProspective investors should keep

in mind that we are still talking about a frontier market, warns Sheila Scopis, former Executive Director of EuroCham Cambodia. Scopis adds she has noticed a spike in the number of companies failing to carry out feasibility and market entry studies ahead of setting up in the Kingdom. A considerable amount of background research is needed before taking major investment decisions, she adds. This is a sentiment echoed by Andrew Tay, Director of Himawari and shareholder of Himawari Brewery. Dont rush into the market, he advises. You must understand the market, culture and people, and undertake wide and innovative market research.

BRING BENEFITSWhile Cambodia offers an investor-

friendly market to foreigners, it is advisable to bring something of value to this developing country. Lee Tien Poh, CEO of Maybank Cambodia, says foreign investors should not just be looking to

make a quick buck in Cambodia. Someone coming here has to ask themselves what is it they do to help the country? he says. You dont come here and expect to make a hefty profit and then move out. There has got to be something that you do to help the country and help sustain your business.

And, of course, if you are bringing with you employment opportunities for locals, then you will be welcomed. If youre a foreign investor and will create jobs, the government wants you to invest in Cambodia, states Swander.

SUCCESS STORYSoben Phan launched the Ben Elderson Company, distributing Corona beer. The business went on to become Cambodias sole importer of the drink after demand increased towards the end of

2010. He was able to gain a sole license from the Indochina distributions office in Vietnam by maintaining 10 to 15%

annual growth in sales in the Kingdom. Soben says, It took us two years of marketing to achieve

the necessary market share to be awarded this sole license. He adds every day challenges include opportunists smuggling

Corona over the Thai and Vietnamese borders - estimated to be as much as 1,000 cases a month. Despite filing a complaint regarding

the issue to the Vietnamese head office, he adds it is difficult to increase border policing.

SUCCESS STORYThrough the initiative of Mrs. Tanya Lawrence and Mr. Greg Allen,

the NGOs founders and directors, The Restore One Caf opened in March, 2014, and Sokhun Prok was hired as a general manager.

It gained NGO status five months later after receiving support from the Global Development Group, which enabled registration

as a charity with the Ministry of Interior. A one-off payment of $1,500 was paid, allowing it to operate as a non-

profit, tax exempt organisation. Another step to become an official NGO was to sign a Memorandum of Understanding with

the government pledging to assist in development projects across the country.

BUSiNESS STARTUP

Seek the help of local experts when setting up your business

Jim Swander,Guinness Gallagher

International

14 BUSiNESS2BUSiNESS CAMBODiA www.b2b-cambodia.com

Hurdles the organisation has experienced include officials continuing to demand tax at the premises despite

having charity status. You need to make sure you can display proof, he says. Id also recommend seeking the help of an experienced local to handle these situations. He adds that receiving and storing

receipts is essential but is a system that is not always used in Cambodia. You need a local who understands the importance and

can get official receipts at all points of transaction, he says.

SUCCESS STORYInnovation is the key to success, states Fig Talamanca.

The company was born as a join project between two NGOs in 2008 with the aim of providing alternative clean fuel instead of traditional charcoal. However, with no business experience, it failed to take off

the ground until in January 2012, entrepreneur Fig Talamanca took over. The NGOs had a good idea and set it up but, of course, an NGO doesnt have the expertise or know-how to run a business.

With his business brain, he breathed new life into the business and within three years it had grown tenfold, with business

expected to double again by the end of 2014. The recipe to make it is to be as efficient as possible with innovation, accurate operations management and cut costs where you can - keeping however fundamental social business standards - to increase

profit margins, he recommends.

1Visas & Work PermitsBefore you can begin work or set up a business you will need

the appropriate personal paperwork. The ordinary visa can be purchased upon entry to Cambodia

for $35. It is valid for one month and can be renewed indefinitely on a 3, 6 or 12 monthly basis (most local travel agencies can arrange this, costing about $280 for a year). Note that you can only gain a multiple entry visa when applying for a six-month or 12-month E class visa.

In July, the Ministry of Immigration announced a law stating foreigners must have a valid work permit in order to work in the country would be enforced. The permit costs 400,000 riel, or about $100, and must be bought separately from a work visa. It is issued by the Ministry of Labour and is valid for one year.

The obligation is on the employer to register employees, arrange work permits and even withhold and pay their income taxes. The same is true for contracts with freelancers or consultants, which are subject to a withholding tax of 15%.See the Legal & Accounting section for further information.

1Business ClassificationsWe recommend reading the Handbook on Commercial

Registration developed by the Ministry of Commerce in association with the Asian Development Bank.

This has detailed accounts of different types of business entities and the characteristics of each. Other very useful resources are the Guide to Business in Cambodia and Establishing a Business in Cambodia, both produced by BNG Legal, and Doing Business in Cambodia by Grant Thornton.

There are several classifications of business including: SOLE PROPRIETORSHIP - all of the assets of the business are

owned and operated by a single person, who is entitled to the entirety of any profits and is also liable for any losses and debts. This is a popular option for many small owner-operated businesses (restaurants and bars for example), and offers tax advantages as the business does not have to register for VAT if turnover remains below a certain threshold. Such businesses usually pay their local tax department based on an estimate of their turnover.

GENERAL PARTNERSHIP is similar to a sole proprietorship but involves two or more people combining their efforts and/or assets and who carry the same legal liabilities when it comes to debts and obligations. Partnerships are a popular type of business entity for professionals such as doctors.

LIMITED PARTNERSHIP - here one or more of the partners merely contributes capital to the business while the other partners retain the general designation. In doing so the limited partner is liable only to the extent of the capital they have contributed. If you are seeking to have, or to be, a silent partner, then a limited partnership may be the most appropriate option for you.

As its name suggests, a LIMITED LIABILITY COMPANY offers limited liability for you and your shareholders, which can number up to 30. In this way you can protect yourself from personal liability for any debts that the business may incur, as it has its own distinct legal identity and exists independently of its shareholders.

If you run the business on your own you may opt to classify it as a SINGLE MEMBER LIMITED COMPANY.

Now that the Cambodian Stock Exchange is operative, a PUBLIC LIMITED COMPANY (PLC) has become a possibility, which are authorised by law to issue securities (shares) to the public.

iNSiDERS ADViCE : Have patience: Dont expect things to run as smoothly as in developing countries and always add a few extra weeks into your schedule. Stay legal: Stick within the law to avoid any problems along the way. It may take a little longer but it will be worth the wait in the long run. Get advice: Recruit the help of experts to ensure all paperwork is filled in correctly and licences are obtained. Research well: do your research before setting up shop to make sure theres the right market out there for your idea.

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Ben Siddons, formerly of AUDI

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Soben Phan,Ben Elderson

BUSiNESS STARTUP

1LicencesAs well as obtaining the relevant licences to operate your

business, companies expanding their activities into new areas must also apply.

Prices vary considerably but as an example you might pay from $150 to $300 for a restaurant licence. Licences are generally renewed annually. There are 26 ministries in the Royal Government of Cambodia (see pages 142-144 for details), which collectively regulate a broad range of industry sectors and other activities. It is the responsibility of the business owner to obtain the licences, Failure can result in fines or the business being closed.

1Tax Registration & ObligationsCertain types of business entity (Limited Companies and

Limited Partnerships among them) are deemed to fall within what is known as the real tax regime.

New businesses have 14 days after registering with the MoC to also register with the Department of Taxation to receive a TIN and to register to pay Value Added Tax (VAT). When registering for the TIN, the company must also pay an annual business registration tax, known as a Patent Tax, for its first year of operation, though the figure is halved if the business is registered after July 1.

If the business is planning to engage in multiple activities, individual taxes are due on each separate business activity, as well as for each of the companys locations. The tax is due thereafter on a yearly basis every January. A newly established company, branch or representative office is also required to register with the Tax Departments local tax branch office and pay the stamp duty within 15 days of registration at the Ministry of Commerce.

Following registration at the MEF, the company is liable to pay various taxes each month, usually payable by the 15th of the following month. Payments must be accompanied by a signed declaration, together with copies of all invoices either issued or received by the company during the tax period.

Taxes include the following:VALUE ADDED TAX (VAT)

Any VAT invoiced by the company during the taxable period (typically 10% of net invoice value) is payable to the tax department, net of any VAT paid by the company to its suppliers during the same period.PREPAYMENT OF PROFIT TAX

An amount equal to 1% of turnover is payable, also known as the minimum tax. Any such tax paid is deducted from the profit tax bill at the end of the year.

Before a company can be considered for flotation on the stock exchange, it must show it adheres to various financial and accounting standards, and must demonstrate that it has set out the corporate structure in a memorandum and articles of association.

Foreign companies wishing to set up operations in Cambodia have three main options available to them, as outlined below. In each case the business will need to be registered with the Ministry of Commerce.

A SUBSIDIARY is a limited and locally incorporated company with at least 51% of the shares held by the foreign parent company. In order to create a subsidiary, a memorandum and articles of association must be provided thus ensuring the limited liability of the parent company.

A BRANCH OFFICE is an extension of the parent company thus maintaining liability with the parent company. A branch office may conduct business activities in Cambodia in the sectors in which it is registered.

It can buy and sell goods, sign contracts, build things, render services, and generally do everything that a regular Khmer business can do. In this case the parent company is liable for all the branchs debts and obligations.

A REPRESENTATIVE OFFICE is not allowed to buy and sell goods or offer paid services to customers. It can, however, gather information for the parent company and enter into contracts on its behalf, and source but not purchase local goods and services. A representative office is a more tentative step into the Cambodian market, often used by investors to test the waters.

1Company RegistrationThe Ministry of Commerce (MoC) provides a Memorandum

and Articles of Association (MAA) for use by any corporation. An application form is needed and the process generally takes

30 days after it has been signed by all shareholders and directors before the MoC, a public notary or a Cambodian lawyer.

Once the MoC recognises a company it will issue a Certified MAA, an MoC business license and a commercial registration certificate.

To register a company one must also register the name with the MoC, where you can check to see if the name you want is available.

Note that knowing who to approach within the relevant ministries will shorten your application time. Approaches to any government department are more productive if you use a local liaison intermediary who can speak Khmer and has a relationship with the particular department.

Bear in mind, however, that the payment of facilitation fees to shorten the time frame, while for many years regarded as a common practice, is now a contravention of Cambodian law.


Rami Sharaf,RMA CAMBODIA

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WITHHOLDING TAXTaxpayers are required to withhold tax from payments made

for services purchased from non real-regime entities, and in certain other circumstances. The amount to be withheld varies according to the particular situation, and can be as much as 15% for consulting or management service fees.TAX ON SALARY

The company must pay taxes on any salaries paid to resident employees. Tax rates vary from 0-20% with the top band coming into effect at a monthly salary of KHR 12.5m (approximately US$3,125). Non-resident employees are taxed at 20% of any salary sourced in Cambodia, and fringe benefits are also taxable at 20%.TAX ON PROFIT

This is the debt of a resident taxpayer on income from Cambodian sources as well as from foreign sources. For a non- resident taxpayer, this tax is assessed on income from Cambodian sources only. The profit tax is payable annually and is imposed at a rate of 20% in most circumstances, though the tax rate varies for certain industries such as oil and mineral exploration and insurance. Smaller business entities such as sole proprietorships and general partnerships are usually deemed to fall into the estimated tax regime and instead pay tax to the local commune.

1FranchisesAs an emerging market that is home to a growing population

with a more expendable income, Cambodia is quickly becoming an attractive destination for franchise businesses.

The market in Cambodia is still relatively immature but industry insiders generally agree that it is ripe for further exploitation, particularly in the food service and hospitality industries, though some international clothing brands are also involved.

A growing middle class is starting to show the means to afford international brands, as well as the perception of quality and trendiness that attaches to them. The first franchise to operate in central Phnom Penh was Thailand-based The Pizza Company, which was started in 2005 by EFG (Express Foods Group), followed by Swensens, BBQ Chicken, Dairy Queen and Costa Coffee.

Other international names include KFC, Gloria Jeans Coffees, Burger King and the countrys first Hard Rock Cafe, which opened in Siem Reap in June 2014, with more expected to start up in the next few years. Phnom Penhs Aeon Mall which opened in June, brought with it a string of international brand names in both the retail and food and beverage industries.

2013 also saw Mazda and BMW break into the Cambodian market and a further wave of luxury car brands were gearing up to enter the market in 2014, including Porsche and Audi.

Franchises typically come with a well-documented guide to operations, together with training from the franchising company, enabling the business to perform at international standards of quality and service. The franchiser may also provide support in areas such as management of accounts, sales, advertising and so forth.

Rami Sharaf, CEO of RMA Cambodia, which oversees EFG, says Cambodia should expect to see more and more franchises opening as the countrys middle-class, with a much more expendable income, continues to grow.

It is also possible to sub-franchise or create a joint venture such as ANZ Royal Bank, a joint venture between ANZ Bank and local conglomerate the Royal Group of Companies; and Cambodia Angkor Air, a joint-venture between the Royal Government of Cambodia and Vietnam Airlines.

1Timeframe to Open a BusinessIts hard to be specific on the time frame, as there are many

variables involved, such as the size of an operation, licenses required, construction and equipment needs, and so on.

Its hard to be specific on the time frame, as there are many variables involved, such as the size of an operation, licenses required, construction and equipment needs, and so on.

Research conducted in 2012 by the World Bank in conjunction with the International Finance Corporation revealed it takes an average of 85 days to go through the nine procedures required to incorporate and register a new firm in Cambodia, and costs on average $834. Many business owners have said the process can be quicker - from just one week to a month, especially for small and mid-sized companies where there is less paperwork involved.

The process can go very smoothly if youre prepared. Like in any country, you need a good plan, Swander adds. Walking everything through yourself might save you costs, but having professional advice, an attorney to review your documents, and a Khmer speaker can simplify the process.

1Company ValuationPutting a valuation on an existing business can be a tricky

proposition. Looking at assets is a good starting point, such as machinery, fixtures, inventory, etc.

But also consider intangible assets such as customer relationships and the employees. A potential buyer should also estimate a companys earning potential. Is the market saturated, or is there still a niche to be filled and can the business grow and develop? How strong is the competition? If the business has an earnings track record, its easier to project the likely future revenue stream.

1Closing a BusinessTheres more involved to closing down a business than many

people think. Its probably the same amount of work to wind a business down as it is to start, says Swander.

If bankruptcy is not declared or the business formally dissolved, they leave behind a legal entity, a ghost company that can be sued even though there might not be any remaining assets.

There are two steps that must be taken to officially close down a business. The first is to send a letter informing the Tax Department that the business is planning to close. Within one or two months, an auditor is sent to the company and this is when any pending tax issues will be addressed.

Once the Tax Department has issued a certificate, the company must formally close the business down at the Ministry of Commerce (MoC), where they will receive a Certificate of

facebook: cambodiab2b BUSiNESS2BUSiNESS CAMBODiA 17

Closure. A company can face court supervision of the liquidation if it does not properly satisfy all its obligations. Those include paying employee salaries, outstanding debts and due taxes. The legal entity continues to exist until the date shown on a certificate of dissolution, issued by the MoC.

1Special Economic ZonesSpecial Economic Zones (SEZs) are self contained, fully

serviced areas possessing special economic regulations, which are generally market-oriented and conducive to foreign direct investment, including tax incentives and lower tariffs.

The government created and introduced SEZs in 2005. They offer facilities such as roads, power generation and distribution, water supply, sanitation and sewage systems, telecom networks and so forth. Each zone contains a production and service area and may include a residential area for workers.

SEZs offer a one-stop service for imports and exports, with government officials stationed on-site to provide administrative services. Applications to establish factories are dealt with on-site, as are clearances, permits and authorisations. More details can be found at www.cambodiainvestment.gov.kh

1UKTI - UK Trade and InvestmentIn January, 2013, UK Trade and Investment (UKTI) opened

its doors at the British Embassy in Phnom Penh. The UKTI was launched in recognition by the embassy in

response to the increased demand for assistance in Cambodia from British companies. This was a reflection of the increasing amount of opportunities here.

So says Jeffrey Lamb, Head of UKTI Cambodia, adding that this highlights the economic growth between the UK and Cambodia as bilateral trade has increased by fivefold in five years to US $751.5 million in 2012, up 25.1% from 2011 and that new British companies are entering the market all the time.

BUSiNESS STARTUP

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INFLATION

Dont rush into the market, you must understand the market, culture and people!

Jeffrey Lamb,UKTI

1 Council for the Development of Cambodia

In 1994, the government passed the Law on Foreign Investment in the Kingdom of Cambodia with the aim of streamlining the foreign investment regime and providing generous concessions and incentives for such investment.

The law also established the Council for the Development of Cambodia (CDC), and made it the highest decision-making level of the government for private and public sector investment.

The CDC has two operational arms: the Cambodian Investment Board (CIB) and the Cambodian Special Economic Zone Board (CSEZB), which together act as one-stop service mechanisms to evaluate and approve applications for Qualifying Investment Projects. The CIB deals with investment projects outside of special economic zones (SEZs) and the CSEZB takes charge of projects within the SEZs themselves.

1Qualifying Investment ProjectsThe MoC and the Council of the Development of Cambodia

(CDC) are collectively responsible for overseeing foreign direct investment (FDI) and business development in the country.

FDI projects eligible for business incentives are known as Qualified Investment Projects (QIPs) and must be registered with the CDC. Projects such as these require an initial investment of at least US$1 million. QIPs fall into four main categories: contracts, transfers, ownership, and state management, within which various separate schemes are possible including: Build, Operate & Transfer (BOT), Build, Lease & Transfer (BLT), Build, Own, Operate & Transfer (BOOT), and Build, Own & Operate (BOO).

To qualify as a QIP, the project must first obtain a Conditional Registration Certificate (CRC), after which a Final Registration Certificate (FRC) will be issued. The CRC should be issued within three days of receipt of the proposal (if the initial decision of the CDC is favourable). The CDC then has a further 28 days to obtain the required approvals, authorisations, licenses, permits and registrations on behalf of the investor, and issue the FRC.

As indicated earlier, only projects over a certain size can apply for QIP incentives, though very large projects with investment capital over $50 million, or those involving the exploration and exploitation of mineral and natural resources, will also require approval from the Council of Ministers. Certain other kinds of projects will also need to gain approval.

In terms of incentives, QIPs can select between a profit-tax exemption (eliminating any tax on profit for a specific number of years) or a depreciation allowance of 40% on the value of the properties used in the production or processing.

With certain exceptions, imported production equipment and construction materials are tax-exempt, as are goods manufactured for export.


This section provides a brief overview of the banking sector in Cambodia, the different types of banking institutions operating here and the various services they offer to corporate customers.

Competition within Cambodias banking sector is fierce, with 36 commercial banks, seven specialist banks and 44 registered MFIs as B2B Cambodia went to print. As the sector embraces the countrys aging young population and the technology they use, there has been a rise in online and mobile banking - areas that look set to grow into the future. As does the use of credit and debit cards in both business and personal banking.

CONTRIBUTORS TO THIS ISSUE

Grant Knuckey,of ANZ Royal BankThe overarching development is that competition is now very intense.

Muny Samreth,of PricewaterhouseCoopersThere are more overseas banks interested in expanding in Cambodia.

Askhat Azhikhanov,of ABA BankMobile banking is still a novelty for the Cambodian market despite the rapid growth in number of smartphone users.

Matthew Tippetts,of M InvestMid-sized companies & start-ups seem to have limited financing alternatives....

BANKiNG & FiNANCE

In this edition of B2B Cambodia, we find out more about the countrys rapidly expanding and developing mobile banking sector, the rising availability of technological banking systems and how banking is becoming easier for businesses in Cambodia. We also take a look at the increased use of credit and debit cards as Cambodia slowly switches from cash-centric to a more electronically motivated money scene. And we examine how the countrys banking system has developed from its infancy through to the modern day.

Customers want banking to be as accessible and easy as possible...

Q&A...Q: How has banking evolved in Cambodia?A: In 1998, the National Bank of Cambodia (NBC) was established and under the Governorship of H.E. Chea Chanto ever since, resulting in a significant overhaul and improvement in how banking is conducted. Since then, Cambodia has seen many developments including the classification of banks, the requirement to issue annual reports, the establishment of a credit bureau, the creation of a stock market, the requirement of external auditors and increased minimum capital requirements. These significant developments have seen the countrys banking system come more in line with international institutions.

Q: What major developments have taken place in the banking and finance sector during the last two years?

A: The degree of competition in the industry has grown with there now being 36 commercial banks, seven specialist banks and 44 registered MFIs. Knuckey says, The major outcomes of this are that at a customer level, the cost of credit is cheaper, and there is availability of more channels to do banking business through. This means more ATMs and branches, and a wider range of available products, such as insurance being sold through banks. The overarching development is that competition is now very intense, Knuckey summarises. Muny Samreth, of PricewaterhouseCoopers, one of the countrys leading accountancy firms, says another major change in the financial sector is the increase in active emerging market acquisitions. For example, there are more overseas banks interested in expanding in Cambodia by way of acquiring whole or part of shares in existing banks, he comments.

Q: How do I set up a bank account in Cambodia?A: Opening a bank account in Cambodia is easy, provided you bring the correct documents. These vary but generally include a minimum of a copy of the applicants ID card or passport, proof of address and proof of income. Corporate accounts require more documents, ranging from Certificate of Corporation and Memorandum and Article of Association to Certificate of Good Standing and Board Resolution. Business customers can enjoy an additional range of services, such as payroll, letters of credit and foreign exchange.

Q: How stable is Cambodias banking sector?A: An annual NBC report revealed the organisation fulfilled its mission as the countrys central bank in maintaining price stability with the 2013 inflation rate standing at about 4%. Cambodias foreign reserves under the NBC management increased from $378 million 15 years ago to more than $4,100 million at the start of 2014. NBC says this is enough to cover more than four months of the countrys import, reaching the height of wealth Cambodia as a nation has ever achieved. The report also reveals lending at the Kingdoms commercial banks rose by 26% to $7.4 billion in 2013 from $5.88 billion in 2012. In terms of deposits, the banks received a total of $7.74 billion last year, up 14% from $6.8 billion in 2012.

Q: What are the preferred forms of payment in Cambodia?A: Cambodia still operates on a predominantly cash-based system, although credit and debit cards are becoming increasingly common. Cards are now accepted at many large hotels, restaurants and other retail outlets. Grant Knuckey, CEO of ANZ Royal, says, The usual evolution is from cash to cheques and then cards, and finally e-payments. Cambodia is still predominantly with cash. Cheques are used, but sparingly. Card-based payments are still very small but I think this will change over the next 1-2 years. However, he adds, for this to happen, the technological framework to support electronic payments needs to be properly in place.

Q: What options are available if I want to seek additional finance?A: There is a lack of equity or bond markets in the country meaning alternative investment must often be sought through alternative avenues. This includes venture capital and private equity firms for finance, although the industry remains fairly undeveloped and these options are rare. Banks will only usually lend with collateral, such as land, pushing most Cambodian SMEs out of the picture. The micro-finance sector provides funding to small companies. Matthew Tippetts, Managing Partner of M Invest, says, Mid-sized companies and start-ups seem to have limited financing alternatives. We believe there is an opportunity for banks as well as private equity funds and angel investors to address these financial needs. This sector is vibrant and should experience significant growth opportunities.

Grant Knuckey,ANZ Royal Bank

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Matthew Tippetts,M Invest

1Banking ServicesCommercial banks offer a range of services for individual

and corporate customers. Individual services include chequing and savings accounts

and foreign exchange services. Some also offer credit cards, overdraft facilities and personal loans. Credit card allowances usually have to be offset by cash funds held in a separate account, and loans will require collateral typically in the form of a land title.

Several banks now offer a payroll management service, saving customers time by allowing them to process payments directly to employees, creditors or other parties with a bank account to which funds can be sent. Online banking is another relatively recent development in Cambodia and is offered by an increasing number of banks.

Retail businesses can also take advantage of EPOS services such as ANZ Royals Blue Spot whereby customers can pay for goods and services bills using credit and debit cards.

1Classifications of BanksThere are three types of banks in Cambodia Specialised,

Commercial and Micro Finance Institutions (MFIs).Each of these operates under the umbrella of the National Bank

of Cambodia (NBC), which registers, licenses and regulates them. The top four banks, which together have a combined market

share of around 65% (based on loans outstanding) are ACLEDA, ANZ Royal, Cambodia Public Bank (CAMPU) and Canadia Bank, with the rest of the market shared between the other banks, of which there were 43 at the time of writing.SPECIALISED BANKS

A Specialised bank, according to the Law of Banking and Financial Institutions (LBFI), carries out one of the following three activities: the collection of deposits from the public that are considered non-earmarked; credit operations such as leasing, commitments and guarantees under signature, all of which are deemed valuable considerations; COMMERCIAL BANKS

Commercial banks offer a broader range of services, catering to the requirements of individual and corporate customers. Local incorporated banks are required by the NBC and LBFI to have a minimum of $37.5m of capital or a shareholder with a rating of investment grade from an independent rating agency. MICRO FINANCIAL INSTITUTIONS

MFIs service poor and low-income families, individuals and small institutions by providing micro-credit in the form of loans and other financial support. The sector has grown rap-idly in recent years, with a 44% increase in loans in 2013. The total loans from the 38 MFIs operating in Cambodia hit more than $1.17 billion last year.

Christophe Forsinetti, Director of private equity and investment consultancy company Devenco and CEO of GL Finance, the first financial leasing company in Cambodia, says, MFIs are vital in providing low income Cambodians with a means to start a business or get access to investment.

BANKiNG & FiNANCE

Cambodia still operates on a predominantly cash-based system

1MoneyCambodia has its own currency (the riel) that comes in various

denominations of paper bills ranging from 50 to 100000. When the United Nations entered Cambodia in 1993 the economy

became dollarised with the injection of a large amount of the US currency. Consequently most banks offer accounts in both riel and dollars, with the exchange rate having fluctuated in recent years in a narrow band around US$1 to R4000.

In recent months, there has been talk of wiping out dual currency and allowing Cambodia to operate solely using the riel. Knuckey says, I think eventually Cambodia will de-dollarise, but it necessarily needs to be a lengthy process. He adds that it is important in terms of the control of monetary policy for a country to be able to use its own currency. The downside to using someone elses currency is that you have to import monetary policy and you have no control over that.

Knuckey argues there have been substantial benefits from the dollarisation, partly in the form of currency stability. Thats important, he adds. From an investors point of view, currency risk is a huge risk. Here, it more or less doesnt exist. However, in the longer term, would you want to stay in a dollarised situation? He notes that if the de-dollarisation process was to come into play, the process would need to be well monitored over a long period of time.

Large transactions are generally conducted in dollars with riel the equivalent of cents as there are no coins in use. In rural areas the riel is the dominant currency. Despite having been non -existent as recently as 2005, ATMs are now widespread in Cambodia, with more than 685 machines in place at the end of 2013, according to the National Bank, although the majority are in urban areas or provincial capitals.

Many small shop owners and vendors will not take bills larger than $20 for small purchases. Restaurants, shops and hotels will generally accept larger bills. Damaged or torn dollar bills are rarely accepted but can be exchanged at the local money changers for a small fee.

1Moving MoneyMoving money in and out of Cambodia is relatively easy. The Foreign Exchange Law 2007 states money can be freely and

reliably transferred in and out of the country through an authorised intermediary via a licensed bank. Most banks can transfer money internationally, though funds over a certain amount may take longer to process and require central bank approval.

Transfers from overseas accounts transit through a correspondent bank in the USA so can take a couple of days, and the correspondent bank may charge a processing fee, as may the originating bank for incoming transfers, or the destination bank in the case of outgoing payments.

Western Union and MoneyGram services are available but are comparatively expensive. For relatively small amounts, ATM withdrawals from an international account can be a cost-effective method of transferring money into Cambodia, especially if you choose an ATM service where the local bank makes no charge.

Domestic money transfer can be arranged through commercial banks, or the local money changers found at the markets, for a small fee. Mobile payment services are now also operating in Cambodia, with WING being the leading electronic money transfer system - transfers are straightforward to make and cost just 6000 riel ($1.50) regardless of the amount transferred.


Its not there yet and will take time but the system is definitely moving that way and I think it will gradually get quicker.

Cheques made out in foreign currency can be deposited at banks providing they offer accounts in that particular currency, for example US dollars, Vietnamese dong or Thai Baht. Bounced cheques are not particularly prevalent in Cambodia, which is due to banks ensuring their customers are reliable and well educated about taking due care when receiving cheques from third parties, experts claim.

1Borrowing MoneyCommercial banks offer various solutions to their customers

borrowing requirements, in the forms of overdrafts, business loans and so forth.

In the absence of a commercial credit rating system, access to credit is usually secured by land or fixed cash deposits. If you want a $10,000 overdraft you may need to set up a fixed deposit of the same amount, especially if you have no land to use as security.

Consequently many small businesses face borrowing money from unlicensed lenders, a risky strategy. Where a land title is used as security against a loan, the bank will generally lend up to 50% of the lands assessed value.

1Online BankingWhile online and mobile banking are common concepts across

the more developed world, Cambodia is slowly catching up.During the last few years, the majority of the countrys main

players in the banking world have launched online services to customers. Offering a varying level of transactions, such as overseas and domestic money transfers, payroll payments and requesting a draft, which are all offered by ANZ Royal.

Canadia Bank Chief Executive Officer, Michael Lor, says, Mobile and internet banking are the future and it is important we offer our customers that, he says. At the end of 2013, Canadia Bank launched online and mobile banking services to customers after months of tight security testing, and by the end of this year, ACLEDA Bank will roll out an enhanced online service, offering both individual and corporate a variety of functions.

As Dr. In Channy, CEO of ACLEDA Bank explains, Customers want banking to be as accessible and easy as possible and that is what we want to provide. This is the way many banks are going, and in Cambodia, the internet is popular for all generations.

1ATMsMost commercial banks have ATMs, ACLEDA and ANZ Royal

having the two largest networks with more than 685 ATMs collectively throughout the country as of the end of 2013.

Many ATMs also offer international access for withdrawals at a fee, which varies considerably so its wise to shop around. ATMs offer additional services including mobile phone top ups and payment utility bills. ACLEDA has the most branches of any bank in the country and concurrently has the largest number of ATMs, having established their network into the remote areas of the country.

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iNSiDERS ADViCE : Research: The vast number of banks means more competition. Compare interest rates, setup fees, withdrawal fees and other costs. Get Online: An increasing number of banks offer mobile and internet services, making banking in the Kingdom even easier. Credit Cards: A surge in credit and debit card use across Cambodia has led to them being more accessible. See if you can get signed up. Lending: More finance options are becoming available in Cambodia, so take the time to see what is out there.

Michael Lor,Canadia Bank

1Bank ChargesThe charges incurred when setting up and operating a business

bank account in Cambodia vary depending on the bank, the type of account being opened and features offered.

Interest charges vary, with standard transactions being capped at 18%. Each bank has a fee schedule outlining all charges, which is available to customers.

Knuckey comments, Most of those charges will be cost-recovery for provision of some kind of service. Its not really something that could be described as net revenue to a bank, but rather recovering costs of service infrastructure such as branches or e-banking.

As well as set-up fees, there can also be costs to run the account depending on the type being opened and other various factors, such as whether it has an overdraft facility. Some accounts also carry a fee for dropping below the minimum balance or for credit cards, Knuckey advises.

Overdraft facilities are available in Cambodia. We see that over-drafts, particularly in more mature markets, are much less prevalent because they are not the most effective form of financing, Knuckey says. They are not normally the cheapest and dont have a specific purpose so are not as effective a solution as trade finance.

He adds, We do less of them than other banks here. We tend to do financing thats a little more solution driven, say trade finance for example we would always do before an overdraft. Cambodia is an easy market to do business and is a relatively easy market to open a bank account in compared to some others

1Cheque ClearanceThe cheque clearance system in Cambodia continues to develop.

Currently, it takes between two and three working days to clear a cheque in Phnom Penh and longer in the provinces.

This is some way behind developed markets, which now take around one working day. During the last few years, the National Bank of Cambodia has introduced a series of national clearing and payment systems, which has helped to make it more reliable and quicker. As Knuckey explains, Over time, Cambodia is getting to a point where clearing cheques becomes a same day activity.

facebook: cambodiab2b BUSiNESS2BUSiNESS CAMBODiA 23

1Mobile BankingMobile banking has dramatically risen in Cambodia in recent years.With the rise in use of smart phones across the Kingdom comes with it a

need for banking institutions to adapt to consumer needs. This has led to a rapid rise in the use of mobile banking across the country. The interesting thing here is that Cambodia has leap-frogged, Knuckey notes. Most banking systems have been through a series of stages over decades, where they start with branch banking being the main method used. He adds that internet banking then swept across the globe, followed by mobile banking, which is still globally in its infant stage.

Cambodia has been through a compressed version of this evolution, he notes. There has been branch banking here since 1993, internet banking has been around for about eight years but has never become entrenched. Most people here go straight from branch to mobile banking. He adds that traditional branch banking continues to play a big role in Cambodia as cash is still the most predominantly used form of payment. Electronic payment needs to me more accepted before we see branches becoming less used.

ABA Bank CEO Askhat Azhikhanov says, Mobile banking is still a novelty for the Cambodian market despite the rapid growth in number of smartphone users. This is primarily because the active part of the population has started to follow the modern ways of running a business, as well as use the financial services just a few years ago.

ABA Bank was one of the first banks in the country who introduced Internet banking services in 2008. At the same time, we have noticed that the number of active users of this service started growing only four years after the launch, in 2012. We believe the number of those who prefer to bank remotely will rapidly grow from year to year.

He believes the future of banking lies in internet and mobile banking, especially with Cambodia being home to a young population. Given that Cambodia is a country with a very young population, 60% of which is below 30 years old, we can already observe how the young and educated actively try to establish their own businesses. That, in turn, means their need in secure and convenient banking services is also increasing. That is why we are actively developing the mobile banking application and plan to introduce it in the future.

1Official

The Ministry of Economics and Finance as well as the National Bank of Cambodia (NBC) regulate banks and banking services. The Association of Banks in Cambodia (ABC) represents the banking sector to the Royal Government of Cambodia and the ASEAN Bankers Association. The association includes international, local and government owned banks. The International Monetary Fund (IMF) and World Bank also operate in Cambodia. Banking is legislated by the Law on Banking and Financial Institutions (LBFI).

1Credit and Debit CardsAn increasing number of Cambodians are

switching from cash to cards as Visa and other companies continue to spread across the country.

Visa is the main player in Cambodia and since the payment systems were introduced to Cambodia in 2005, more than 20 banks are now licensed with the company. And as the countrys middle-class continues to grow, Visa expects more locals to convert to cards. As Lorijon Bacchi, Visa Country Manager for Vietnam, Cambodia and Lao, explains, Theres a strong debit market here. As more people in the economy become employed, they have a more expendable income and greater aspirations.

In November 2013, ACLEDA launched its first credit card to keep in line with Cambodias developing needs. We felt it was the right time to start offering credit cards, comments In Channy. By 2020, Cambodia is expected to have gone from a developing country to a lower-middle income country and this is what they want.

Despite the rise in issuing debit and credit cards, Knuckey says because of the predominant use of cash in Cambodia, cards are still not widely used across the country. He adds that, as with internet and mobile banking, Cambodias evolution with regard to cards also differs from the norm.

It is predicted that the Kingdoms use of credit and debit cards will rapidly increase in the next two years as more people switch from cash, moving in line with the rest of the devel-oping world.

Criteria for accessing credit cards also vary from bank to bank, with ACLEDA offering them to clients whose income is as little as $200. Some banks require customers to load credit cards with money to spend, and not all banks are yet offering the service. Maybank has yet to issue credit cards to the market mainly due to the low usage of credit cards in the country. However, the landscape is fast changing and the usage of credit card will be a necessity to facilitate payments moving forward.

Lee says, In certain markets, during the early years of our operations, we may delay going into issuance of credit card business based on the peoples readiness to manage their personal finance. We would want to ensure that the population is ready to accept this mode of payment.

It is also important that they are fully aware of how to manage credit cards and can avoid ending up going into debt. Whenever we introduce products or services, we would like to ensure that they bring benefits to the community or consumer and are not solely driven by the profit we can make.

BANKiNG & FiNANCE

Askhat Azhikhanov,ABA Bank


BANKiNG & FiNANCE

Muny Samreth,PWC

1The Credit BureauA credit bureau was launched in 2012 to promote transparency

and help prevent credit risks associated with excessive lending to one borrower by different institutions.

The bureau facilitates the development of new services that banks can offer their customers, and loans should steadily become more widely available without the requirement for borrowers to offer land or other items as security. Although still in its infancy, the bureau has already made a huge impact on the economy, with tens of thousands of reports being made daily.

As CEO of the Credit Bureau of Cambodia Garry Wood explains, In 2005, micro-financing started to come into Cambodia and there was a lot of borrowing. People started over-extending themselves and non-performing loan rates went up. In 2006, the Government recognised they needed a form of control to reduce non-performing loan rates and protect customers against themselves.

The bureau is a partnership between the NBC, all banks and MFIs, and Veda Advantage, a leading global supplier of credit system technology. Maintaining a central database of credit data enables banks and MFIs to share information relating to their customer repayment histories. It also allows the bureau to assist lenders in making accurate loan decisions.

Since launching, it has been hailed a hit, and is making between 11,000 and 12,000 credit reports a day, Wood says. Interest rates have also fallen, with bank rates dropping from about 20% to 10% and MFIs even further, according to Wood.

A credit bureau is a staple of any developed country, Tippetts notes. It creates more understanding of loaners and the risks they represent for lenders. The bureau also brings with it greater transparency throughout the financial market, Tean Ly, Executive Director of M Invest, adds.

1Alternative Forms of FinanceThere are limited options available for those seeking

alternative forms of finance in Cambodia. The industry in Cambodia is still relatively immature and

start-up investment companies, venture funds or early angel investors are rare. Access to finance is a major issue for Cambodian companies, says Forsinetti. Banks almost exclusively lend with immovable collateral, such as land or buildings. Only large companies can provide these collaterals. However, SMEs are the vast majority of businesses in the country.

He adds, The micro-finance sector, which is well developed in Cambodia, provides funding for very small companies but the others, the missing middle, does not have access to finance. Investors, business angels or venture capitalists are almost non-existent in Cambodia. There are a few investment funds

looking for mature projects but for venture capital, there are only a few initiatives in the whole country.

Banks will at times provide loans to businesses if there is a guarantee from a relations company or another Cambodian company, or the company can provide collateral, such as property, to secure funds. Samreth says there has been a recent growth in private equity firms setting up in Cambodia specifically targeting both foreign and local SMEs but there remains a gap in the market.

1The Stock ExchangeAs part of the implementation of the Financial Sector

Development Strategy 2006-2015, the Cambodian Securities Exchange (CSX) opened in July 2011.

The exchange is regulated by the Securities and Exchange Commission but is owned by the Ministry of Economics and Finance which has a 55% share and the Korean Stock Exchange which has the remaining 45% share. Trading in one stock, the Phnom Penh Water Supply Authority (PPWSA), began in April 2012. In January 2013, it was announced a second player was to enter the stock exchange in the form of Taiwanese garment factory, Grand Twins International.

In order to trade, an investor must register with the SECC to receive an Investors ID then they may open a securities trading account or trade via a securities firm. Foreign investors who have held residency in Cambodia for at least 182 days are eligible to receive tax breaks on any trades. For any conflicts that may arise between investors and securities firms the SECC will arbitrate.

1Money LaunderingIn response to mounting concerns from the international

business community that Cambodia is vulnerable to money laundering, the Government has tightened up its laws.

In March 2014, the Council of Ministers approved a sub-decree freezing assets of terrorist organisations and supporting institutions in compliance with UN resolutions. In 2004, Cambodia joined the Asia/Pacific Group on Money Laundering, meaning the country must meet international standards to fight financial crime. In 2007, a law on money laundering and terrorist financing was passed. The next year, a Financial Intelligence Unit was established in the National Bank of Cambodia.

The move comes as the US State Departments annual International Narcotics Control Strategy Report, states that Cambodia has significant money laundering vulnerability. Reasons stated include the cash-based and dollarised economy, limited regulations and slack border control.

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WHICH BANK DO YOU USE FOR YOUR BUSINESS ACCOUNT?


COMMERCiAL BANKSACLEDA Bank61, Monivong Boulevard, Phnom Penh 2 023 430 999! www.acledabank.com.kh u [email protected] country's largest bank, with 252 offices across Cambodia, offering a full range of commercial banking services including loans, deposits, money transfer, cash management and othe trade finance services.

ADVANCED BANK OF ASiA (ABA BANK) 148, Sihanouk Boulevard, Phnom Penh2 023 225 333 ! www.ababank.comu [email protected] one of the leading banks in Cambodia, ABA Bank provides a wide range of financial services to individuals, SMEs, and corporate entities. ABA is a winner of Euromoney financial magazine Best Bank in Cambodia 2014 award. On July 15th, 2014, A+/A rated National Bank of Canada (www.nbc.ca) became a new shareholder of ABA Bank.

Borei Keyla Corner Steet 134 & 169 2 098 203 869 Central 443A, Preah Monivong Blvd 2 098 203 199Mao Tse Toung 151, Mao Tse Toung Blvd 2 098 203 809 Stade Chas 26A, Street 70 2 098 203 819Toek Thla A39-A41, Russian Blvd 2 098 203 849 Toul Kork 10A, Street 289 2 098 203 859Stung Mean Chey 21B, Monireth Blvd 2 098 203 889Chom Chao 824, Street National Road 4 2 098 203 939Chbar Ampov 601, Street N. road 1 2 098 203 929Sothearos 167, Street Samdech Sothearos Blvd 2 098 203 891Battambang 205-207, Street 3 2 098 203 839Siem Reap A1-A2, Sivutha Street 2 098 203 829Kompong Cham 31, Monivong Street 2 098 203 879Sihanouk Ville 131, Ekreach Street 2 098 203 899Takeo 1782, National Road 2 2 098 203 901Takhmao 530, Street 107/21 2 098 203 919/3Kampong Speu 346, National road 4 2 098 203 949Kampot Branch 14, Road Ek Reach 2 098 203 959Pursat Branch 637-638, National Road 5 2 098 203 979Kampong Thom 019, National Road 6 2 098 203 969Kampong Chnang E614, National Road 5 2 098 203 039Paoy Paet A092, National Road 5 2 098 203 019Svay Rieng 20, National Road 1 2 098 203 029

ANZ ROYAL BANK 20, Street 114 (Kramoun Sar), Phnom Penh2 023 999 000 ! www.anzroyal.comu [email protected] on the connections that we provide to 28 markets in Asia Pacific. We have the experience and the network to put our individual, corporate and institutional customers in touch with the right products, the right opportunities and the right people to help you to reach your goals.

Ind Monument 100, Sihanouk Boulevard 2 023 999 000Olympic 361-363, Sihanouk Boulevard 2 023 999 000Riverside 265, Sisowath Quay 2 023 999 000Phsa Doem Thkov 616AB, Street 271 2 023 999 000Pet Lok Sang 1AB, Street 271 2 023 999 000Toeuk Thla 1E, Street 110A 2 023 999 000Stung Mean Chey 23-25A, Monireth Boulevard 2 023 999 000Chbar Am Pov 35, National Road #1 2 023 999 000Chaom Chao 1B-3B, National Road #4 2 023 999 000Takhmao 1E, near Takhmao Roundabout 2 023 999 000Toul Kok 95C, Street 289 2 023 999 000For branches outside Phnom Penh please call 2 023 999 000

Bank of ChinaCanadia Tower, 315 Monivong Blvd, Phnom Penh 2 023 988 886! www.boc.cn/kh u [email protected] of China provides full range of financial services in China's mainland, Hong Kong, Macau and 31 other countries. It provides corporate banking, personal banking and financial market business.

Bank of IndiaICON Building, 216 Norodom Boulevard, Phnom Penh 2 023 219 108! www.bankofindia.com.kh u [email protected] Bank of India offers a full range of consumer and commercial banking services to a broad base of Cambodian and Indian customers.

Bank for Investment & Development of Cambodia370, Monivong Boulevard, Phnom Penh 2 023 210 044! www.bidc.com.kh u [email protected] as a link between Cambodian investors and Vietnamese enterprises, the bank provides multiple services for all customers.

Booyoung Khmer Bank86-88, Norodom Boulevard, Phnom Penh 2 023 222 900! www.bkb.com.kh u [email protected] Khmer Bank has been established to aid indeveloping, stabilising and increasing the Cambodian economy.

Cambodia Asia Bank439, Monivong Boulevard, Phnom Penh 2 023 220 000 ! www.cab.com.kh u [email protected] offers a wide range of intsrnational standard banking and financial services including deposits, credit facilities and trade finance.

Cambodian Commercial Bank26, Monivong Boulevard , Phnom Penh 2 023 426 145! www.ccb.com.kh u [email protected] owned bythe Siam Commercial BankofThailand, CCB operates four branches in Cambodia serving a variety of business customers.

Cambodia Mekong Bank1, Street 114, Phnom Penh 2 023 217 112! N/A u [email protected], efficient and cost effective processing of financial transactions with four branches in Phnom Penh, one in Sihanoukville and one in Siem Reap.

Cambodian Public Bank23, Street 114, Phnom Penh 2 023 222 880! www.campubank.com.kh u [email protected] branches in Cambodia, offering an extensive range of commercial banking services including trade financing and internet banking.

CANADIA BANK

Canadia Tower, 315 Monivong Blvd, Phnom Penh2 023 868 222! www.canadiabank.com.khu [email protected] its privatisation in 1998, Canadia has become the largest local bank in Cambodia. With a worldwide network of correspondent banking relationships, and a solid base of local and international customers, the bank offes a full range of corporate banking services including trade finance, money transfers, SME loans and commercial loans.

Head Office 315, Ang Duong Street 2 023 868 222Chbar Ompov 570, National Road #1 2 023 720 068Charles De Gaulle 126, Charles de Gaulle Blvd 2 023 214 868Chen La corner Mao Tse Tung & Monireth Blvds 2 023 880 619Heng Ly 27B, Street 271 2 023 880 316Kbal Thnal 23AB, Street 271 2 023 222 768Olympic 394, Sihanouk Boulevard 2 023 218 397Pochentong 327, Russian Boulevard 2 023 890 805 Sorya corner Street 63 & 142 2 023 220 311Sovanna 307-309, Street 271 2 023 214 129Stat Chas A15, Streets 93-70 & 900 2 023 427 217Suon Ouksahakam Chomchao Street 2 023 865 257Tuol Kork 101F, Street 289 2 023 880 492Kambol National Road #4, Khan Dangkor 2 023 968 787Santhor Mok 741, Kampuchea Krom Boulevard 2 023 885 717Tuol Svayprey 772, Street 360 2 023 216 238Tuol Tumpoung 108CD, Mao Tse Tung Boulevard 2 023 212 779Chak Angre 1515, National Road #2 2 023 425 277Vimean Ekareach 138D, Norodom Boulevard 2 023 212 737Prek Leap National Road #6, Khan Rousey Keo 2 015 941 617Toek Thla Northbridge Road 2 023 883 300 For branches outside Phnom Penh please call 2 023 868 222

Cathay United Bank68, Street 214, Phnom Penh 2 023 211 211! www.cathaybk.com.kh u [email protected] SBC Bank, offering deposit accounts, credit facilities, credit cards, merchant and payroll services, cash-in-transit services and more.

CIMB BANK

20AB, Norodom Boulevard, Phnom Penh 2 023 988 388 ! www.cimbbank.com.kh u [email protected] Bank is a subsidiary of CIMB Group, a leading ASEAN universal bank, the largest Asia Pacific (ex-Japan) based investment bank and one of the worlds largest Islamic banks. In Cambodia, CIMB Bank has 11 branches in Phnom Penh, Siem Reap, Sihanoukville, Battambang and Kampong Cham, offering a wide range of banking products and services for individuals, businesses and corporates. Norodom North Branch 20, Norodom Boulevard 2 023 988 388Norodom South Branch 216, Norodom Boulevard 2 023 988 388Sihanouk Branch 57F, Sihanouk Boulevard 2 023 988 388Mao Tse Toung Branch 187, Mao Tse Toung Blvd 2 023 988 388Olympic Branch 201, Jawal Nehru Boulevard 2 023 988 388Toul Kork Branch 150F2D, Street 289 2 023 988 388Phsar Heng Ly Branch 127, Street 271 2 023 988 388Krong Sihanouk Branch 90, Ekareach Street 2 023 988 388Siem Reap Branch 38, Sivatha Street 2 023 988 388Krong Kampong Cham Branch Village 4, Veal Vong 2 023 988 388Krong Battambang Branch 98-99, Prek Mohatep 2 023 988 388

First Commercial Bank66, Norodom Boulevard, Phnom Penh 2 023 210 026 ! www.firstbank.com.tw u [email protected] offices in Phnom Penh, as well as support from a regional network of offices in Japan, China, Hong Kong, Vietnam, Singapore and Thailand.

Foreign Trade Bank of Cambodia3, Street 114, Phnom Penh 2 023 724 466! www.ftbbank.com u [email protected] joint private/government venture that has been providing customers with safe and reliable banking services for more than 33 years.

Hong Leong Bank (Cambodia)28, Street 214, Phnom Penh 2 023 999 711 ! www.hlb.com.my u [email protected] accounts, current accounts, remittance and basic treasury facilities, along with business and mortgage loans.

Kookmin Bank55, Street 214, Phnom Penh 2 023 999 302 ! www.kbsg.co.kr u [email protected] branch of South Koreas largest bank. With branch offices in Cambodia it provides an innovative range of corporate products and services.

Krung Thai Bank149, Street 215, Phnom Penh 2 023 882 959! www.ktb.co.th u [email protected] modern technology and comprehensive services, it provides all a customer needs at one stop, for maximum customer convenience.

Maruhan Japan Bank83, Norodom Boulevard, Phnom Penh 2 023 999 010! www.maruhanjapanbank.com u [email protected] global standards of service, Japanese hospitality, staffed by experienced banking professionals with proven track records in Asia.

MAYBANK 4B, Street 114, Phnom Penh2 023 210 255! www.maybank2u.com.kh u [email protected] Established in 1993, the preferred financier of many Malaysian and Singaporean businesses investing in infrastructure development and service sectors. The bank provides a full range of banking services for the mass market, local SME and the commercial and corporate sectors.


ASSOCiATiONS & RELATED BODiESAssociation of Banks in Cambodia10, Street 242, Phnom Penh 2 023 218 610! www.abc.org.kh u [email protected] ABC promotes constructive dialogue among member banks and serves as an industry voice to the public and the Government. It also provides networking opportunities, social events, educational programs and industry updates for banking professionals in Cambodia.

Credit Bureau of Cambodia5th Floor, 22, Street 242, Phnom Penh 2 023 967 001 ! www.creditbureaucambodia.comu [email protected] provides credit services to individuals and commercial enterprises. Through the maintenance of a data base of potential customers borrowing history, the bureau helps to reduce credit risks while improving access to credit for individual borrowers and businesses in Cambodia.

National Bank of Cambodia22-24, Norodom Boulevard, Phnom Penh 2 023 722 563! www.nbc.org.kh u [email protected] the countrys central bank, the National Bank determines monetary policy objectives; formulates and implements policies; issues licences to, and regulates, banks and other financial institutions; issues national currency and sets interest rates. In addition to its Phnom Penh HQ, the bank has 21 branches in 21 provinces across the country.

Securities and Exchange Commission of Cambodia99, Street 598, Phnom Penh 2 023 885 611! www.secc.gov.khu [email protected] regulates the securities industry in Cambodia. The organisations stated missions is to contribute to socio-economic development through capital mobilisation from the public and securities investors to meet the demand of financing for investors.

Main Branch 4B, Street 114 2 023 210 123Chbar Ampov 27 & 29 National Road #1 2 023 720 586Mao Tse Toung 158BCD, Mao Tse Toung Boulevard 2 023 216 436Olympic 323-325, Sihanouk Boulevard 2 023 993 154PP Special Econ Zone A6-A8, National Road #4 2 023 729 857Steung Meanchey 144, Monireth Boulevard 2 023 424 482Teuk Thla Attwood Business Center, Street 110A 2 023 866 052Toul Kork 93A1-A2, Street 289 2 023 999 205Battambang 136, Street 3 2 053 731 207Kampong Cham 58, Preah Monivong Street 2 042 210 572Siem Reap 13-15, Tep Vong Street 2 063 761 062Sihanoukville 212, Ekareach Street 2 034 935 051

Phnom Penh Commercial Bank 767-769, Monivong Boulevard, Phnom Penh 2 023 999 500! www.ppcb.com.kh u [email protected] joint venture of Hyundai Swiss Savings Bank of South Korea, and SBI Group of Japan, the bank offers a wide range of corporate services.

PhillipBank 61-64, Norodom Boulevard, Phnom Penh 2 023 218 866! www.phillipbank.com.kh u [email protected] HwangDBS Commercial Bank and acquired by PhillipCapital Group in March 2014, offering a range of corporate financial services.

RHB Indochina Bank263, Street 110, Phnom Penh 2 023 992 833! www.rhbgroup.com u [email protected] OSK Indochina Bank, offering an array of financial, advisory and investment services, with a reputation of professionalism and integrity.

Sacombank60, Norodom Boulevard, Phnom Penh 2 023 223 422! www.sacombank.com.kh u [email protected] subsidiary of Sacombank Group, one of the leading commercial banks in Vietnam that currently operates in Vietnam, Laos and Cambodia.

Shinhan Khmer Bank277, Norodom Boulevard, Phnom Penh 2 023 727 380! www.shinhan.com u [email protected] of a major Korean banking institution, offering international trade services, trade financing, deposits, loans, remittances, ATMs and more.

Union Commercial Bank61, Street 130, Phnom Penh 2 023 427 995 ! www.ucb.com.kh u [email protected] full range of business banking services to help companies succeed, whether looking to expand, improve cash flow, borrow funds or more.

Vattanac Bank89, Norodom Boulevard, Phnom Penh 2 023 212 727! www.vattanacbank.com u [email protected] bank operates to international standards and provides an honest, efficient and courteous customer service, generating growth across Cambodia by offering solutions to meet its customers business needs.

MiCROFiNANCE iNSTiTUTiONS The Cambodia Microfinance Association represents 33

MFIs that are licenced by the National Bank of Cambodia, and are also members of the national Credit Bureau. Below

are details of the four largest MFIs which account for almost 50% of employment in the sector. Further

details can be found online at www.cma-network.org

AMRET35BA, Tchecoslovaquie (Street 169), Phnom Penh 2 023 999 033! www.amret.com.kh u [email protected] offers various financial products and services, especially small scale loans for people in rural areas and medium scale loans for SMEs.

PRASAC MFI212, Street 271, Phnom Penh 2 023 999 911! www.prasac.com.kh u [email protected] offers a range of services relating to credits, deposits, money transfer and foreign exchange. They also operate an ATM network.

Sathapana831C, Monivong Boulevard, Phnom Penh 2 023 223 561! www.sathapana.com u [email protected] financial services including SME loans, agricultural loans, passbook and fixed deposit savings accounts, and local money transfer.

Hattha Kaksekar606, Street 271, Phnom Penh 2 023 994 304! www.hkl.com.kh u [email protected], savings, local money transfers and other financial services nationwide, in particular to women and low-income rural families.

iNVESTMENT MANAGEMENTDevenco270-274, Kampuchea Krom Boulevard, Phnom Penh 2 023 218 580! www.devenco.com.kh u [email protected] of the first venture capital and investment consulting companies created in Cambodia, providing corporate finance, project management and business advisory services. The company also acts as an equity investor in specific projects selected on strict criteria of profitability, market potential and management capabilities.

Emerging Markets InvestmentsPhnom Penh Tower, 445, Monivong Blvd, Phnom Penh 2 023 964 410! www.emergingmarkets.asiau [email protected] identifies, evaluates and supports investment opportunities in Cambodia and Lao PDR, and makes equity and equity-related investments across multiple sectors in growing businesses that need additional financing to capitalise on market opportunities.

Leopard Capital Cambodia33, Sothearos Boulevard, Phnom Penh 2 023 212 228 ! www.leopardcapital.comu [email protected] firm focuses on venture, expansion, and buy-out opportunities in the Cambodian mid-market, working closely with the investee companies management teams on strategic and operational issues.

M INVEST

Phnom Penh 2 023 880 651! www.m-invest.asia u [email protected] Invest is an investment and advisory firm focused on the Greater Mekong region, with presences in Cambodia and Myanmar. At the core of the firms services are equity and debt raising, M&A transaction structuring and execution, business and real estate development, corporate finance advisory, and principal investing.

MiSCELLANEOUSCambodian Securities Exchange Canadia Tower, 315 Street 110, Phnom Penh 2 023 958 888! www.csx.com.kh u [email protected] exchanges purpose is to facilitate the raising of capital by Cambodian companies and to establ

b2b cambodia nov 2014

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