On 31 January 2024, the Cambodian government launched a special program to Promote investment in Preah Sihanouk Province. This program is part of the broader Pentagonal Strategy aimed at developing specific regions as economic growth drivers. The program offers targeted tax incentives for three categories of investment projects: unfinished building restarts, new projects, and expansions of existing businesses.
- Investment projects/business activities relates to unfinished buildings re-starting in 2024.
- Investment project/business activities not related to unfinished building starting in 2024.
- Expansion of existing investment projects/business activities starting in 2024 based on specific criteria.
The tax incentive include:
- An additional three years of corporate tax exemption for existing Qualified Investment Project (QIP) and tax-registered SMEs.
- A three-year corporate tax exemption for registered taxpayers that do not qualify as QIP.
- An exemption of Value-Added Tax on local supplies.
- An exemption of withholding tax on rental property for five years.
- An exemption for unpaid immovable property Tax and associated penalties for the period 2016-2025.
Key Point:
- Tax Incentive Introduced: Cambodia’s Government introduced tax incentive in 2024 to stimulate investment in Sihanoukville, part of the Pentagonal Strategy.
- Unfinished Buildings: Incentives target completing over 360 unfinished buildings, costing an estimated $1 billion.
- Long-term Investment Uncertainty: Current incentives may not provide enough long-term certainty to attract cautious investors.