Insights for Doing Business in Cambodia: 10 Key Factors to Consider

1. Cambodia's 54 Special Economic Zones

As of 2019, Cambodia boasts 54 Special Economic Zones (SEZs), primarily located in four zones: the Phnom Penh Zone, Sihanoukville Zone, Manhattan Zone, and Tai Seng Bavet Zone, according to the Council for the Development of Cambodia. These SEZs are predominantly privately owned and managed. The Cambodian Special Economic Zones Board (CSEZB), a government organization, facilitates investment project registration and export-import approvals for business owners.

The primary objective of Cambodia's Special Economic Zones is to establish economic connections between urban and rural areas. Consequently, these SEZs promote nationwide urbanization through such economic linkages. Cambodia offers relaxed regulations and policies to assist business owners in enhancing their export competitiveness and reaping the benefits of international trade.

2. High Corruption Levels

Cambodia's ranking in the Corruption Perceptions Index (CPI) published by Transparency International in 2020 stood at 160th out of 180 evaluated countries. The CPI gauges the perceived levels of corruption in Cambodia's public sector. The prevalence of corruption necessitates businesses planning to establish themselves in Cambodia to navigate through extensive red tape when acquiring business permits and licenses.

Such a ranking indicates a higher risk of corruptive activities, which can undermine investor confidence in the nation's political stability.

3. Work Culture

Cambodia is a collective society with a strong emphasis on selflessness. Individuals prioritize their families, neighborhoods, and companies. The country maintains societal harmony through adherence to etiquette and protocol guidelines.

Traditional greetings in Cambodia involve a bow with hands folded together at chest level. However, Cambodians often greet foreigners with handshakes. Displaying emotions, particularly anger, impatience, or frustration, is viewed negatively and should be kept private to avoid causing a loss of face.

In business settings, individuals are expected to maintain a professional image at all times and speak formally. Clear and slow speech is encouraged, avoiding slang, adages, or colloquial expressions.

4. Business Practices

With a strong emphasis on hierarchy in Cambodian culture, it is essential to adhere to appropriate protocols in business interactions. Respect and deference should be shown to individuals with higher seniority within a company. Similarly, if a delegation meets a local group of hosts, the most senior member of the visiting delegation should initiate greetings.

Punctuality is crucial for important settings, such as initial business meetings or meetings with Cambodian authorities.

To avoid causing offense, individuals are advised to adopt subtle communication styles. While handshakes are commonly used, firm handshakes may be perceived as hostile. Men should only shake hands with women if the women extend their hands first. Additionally, minimizing eye contact is recommended.

Exchange of business cards typically follows an initial interaction.

5. Working Hours

In Cambodia, offices generally operate for 40 hours per week. However, many individuals work on Saturday mornings to fulfill a 45-hour workweek due to numerous public holidays. While efforts are being made to reduce the number of holidays, compromises have been necessary. Some businesses have added one workday per month to make up for the "lost time" caused by public holidays.

6. Insects as Delicacies

In Cambodia, insects are considered delicacies, owing partly to their consumption during the famine created by the Khmer Rouge regime in the late 1970s. The United Nations Food and Agriculture Organization recognizes insects as a futuristic solution to combat hunger worldwide. Examples of edible insects in Cambodia include maggots, tarantulas, crickets, cockroaches, red ants, grasshoppers/locusts, and giant water bugs. Insects are incorporated into the Cambodian diet as an affordable and abundant source of protein, amino acids, and micronutrients.

7. Abundance of Temples

Cambodia is home to over 4,000 discovered temples, with many more hidden temples yet to be unearthed. Among them, Angkor Wat is the largest religious complex in the world. Constructed during the 12th century under the Khmer Empire, Angkor Wat comprises ancient tombs, pagodas, and bridges within its walls. In 1992, it was recognized as a UNESCO World Heritage site and stands as an architectural masterpiece representing Khmer culture.

8. Dual Currency System

Although the Cambodian Riel is the predominant currency, Cambodia has assimilated the US dollar, and both currencies are widely accepted. Locals often accept payment in US dollars, and many shops quote prices in dollars. ATMs dispense both currencies.

9. Buddhism as the Dominant Religion

Buddhism holds the status of the official religion in Cambodia, with over 95% of the population practicing Theravada Buddhism. The presence of Buddhism in Cambodia dates back to at least the 5th century AD, and Theravada Buddhism has been the state religion since the 13th century AD, except during the Khmer Rouge period.

10. Tuk Tuks as the Main Transportation Mode

Tuk Tuks are a common sight on the busy streets of Siem Reap and Phnom Penh. Typically, a Tuk Tuk consists of a motorbike pulling a separate trailer where passengers ride. While the ride may quicken your heartbeat, it is a convenient and efficient way to navigate through the streets. Negotiating the fare with the driver before getting on board is advisable.

Registering a company in Cambodia can be a hassle-free process if you are familiar with the entire incorporation process. Tetra Consultants strives to provide our clients with a seamless experience when setting up a company in Cambodia. Our team of experts ensures your Cambodian company can become operational as soon as possible.