Types of Business Entities in Cambodia

Choosing the right legal structure affects your taxes, liability, and how easily you can raise money or bring in partners.

The main structures

• Sole proprietorship: one owner who is personally liable. Simple to set up. Best for small shops and freelancers.
• General partnership: two or more partners share profits and liability. Suits small family or professional businesses.
• Limited partnership: general partners manage and carry liability, limited partners invest. Used for investment projects.
• Private limited company: a limited number of shareholders, with liability limited to share capital. Best for most SMEs and foreign-owned businesses.
• Public limited company: can offer shares to the public. For large companies and listings.
• Branch or representative office: an extension of a foreign company. Suits foreign companies testing the market.

How to choose

1. Liability: a company protects your personal assets, while a sole proprietorship does not
2. Ownership: consider whether you need partners or foreign shareholders
3. Credibility: banks, buyers and landlords often prefer registered companies
4. Cost and paperwork: a company has more compliance than a sole proprietorship
5. Activity: some regulated sectors require a specific structure

Tip

a private limited company is the usual choice for importers, exporters and service businesses that want to grow.

Rules for each structure are set in the Law on Commercial Enterprises and related regulations. Confirm the current requirements with a lawyer or the Ministry of Commerce.