Cambodia QIP & SEZ Tax Incentives Guide 2026

Overview — Investment Incentives in Cambodia

Cambodia's investment incentive framework is governed by the Law on Investment (2021) and administered by the Council for the Development of Cambodia (CDC) and the Provincial-Municipal Investment Sub-Committees (PMIS). The framework offers tax and non-tax incentives to encourage investment in priority sectors, export-oriented industries, and regional development. The primary incentive mechanism is the Qualified Investment Project (QIP) regime. Special Economic Zones (SEZs) offer additional benefits, particularly for manufacturing and export-oriented businesses. Sihanoukville has been identified as a key area for special investment promotion.

Qualified Investment Project (QIP) — Tax Holiday

The QIP regime provides a tax holiday during a trigger period, followed by reduced CIT rates. Key features:

• Trigger period: 3 to 9 years (varies by sector, investment size, and location)
• CIT rate during trigger period: 0% (full exemption)
• Post-trigger period: 20% CIT reduced by 25–50% for an additional 3–6 years
• Tax on minimum tax: QIPs are exempt from the 1% minimum tax during the trigger period
• Customs duties: Exemption from import duties on capital goods, construction materials, and production inputs
• VAT: Exemption from VAT on imported capital goods and inputs

To qualify, the project must be in a promoted sector (manufacturing, processing, agriculture, tourism, infrastructure, technology) and meet minimum investment thresholds set by the CDC. The project must be registered with the CDC or PMIS before commencing operations.

QIP Eligibility Sectors

Priority sectors eligible for QIP status include:

• Manufacturing: Garments, electronics, automotive parts, food processing, pharmaceuticals
• Agriculture: Processing of agricultural products, rubber, cashews, rice milling
• Tourism: Hotels, resorts, entertainment complexes, eco-tourism
• Infrastructure: Power generation, water supply, telecommunications, logistics
• Technology: Digital services, R&D, innovation centres
• Export-oriented: Any business that exports at least 80% of its production

The CDC maintains a list of promoted sectors and may update it periodically. Projects in non-promoted sectors may still qualify for limited incentives.

Special Economic Zones (SEZs)

Cambodia has established several Special Economic Zones (SEZs) offering additional benefits beyond standard QIP incentives. Major SEZs include:

• Sihanoukville SEZ: The largest and most developed SEZ, focused on manufacturing, logistics, and port-related activities
• Phnom Penh SEZ: Industrial zone near the capital, focused on light manufacturing and assembly
• Poipet SEZ: Border zone with Thailand, focused on cross-border trade and logistics
• Bavet SEZ: Border zone with Vietnam, focused on manufacturing and processing
• Koh Kong SEZ: Coastal zone, focused on tourism and light industry

SEZ benefits include: same QIP tax incentives as non-SEZ QIPs, streamlined one-stop-shop services for business registration and licensing, on-site customs clearance and logistics support, ready-built factory and infrastructure, and preferential access to utilities and services.

Sihanoukville Special Investment Promotion

Sihanoukville (also known as Preah Sihanouk) has been designated as a special investment promotion zone with enhanced incentives. The Sihanoukville Special Investment Promotion Zone offers:

• Extended trigger period: Longer QIP tax holidays than standard (up to 9 years for qualifying projects)
• Additional tax reductions: Post-trigger period benefits are more generous
• Streamlined approvals: Fast-track investment registration and licensing
• Infrastructure support: Government investment in port, road, and utility infrastructure
• Duty-free imports: Expanded scope of duty exemptions for production inputs

Sihanoukville is being developed as a multi-purpose economic hub integrating the deep-sea port, airport, industrial zones, and tourism infrastructure. The government has committed significant resources to developing the area.

SME Incentives and Support

Small and medium enterprises (SMEs) in Cambodia also benefit from specific incentives:

• QIP for SMEs: Reduced minimum investment thresholds for SME QIP eligibility
• Simplified registration: Streamlined CDC/PMIS registration process for smaller projects
• Tax patent exemption: New SMEs may receive temporary exemption from tax patent (business licence) fees
• Technical support: Training and capacity building programmes through the SME Bank and CDC

Application Process

The process for obtaining QIP or SEZ incentives:

• Submit application: File investment application with CDC or PMIS (depending on investment size and sector)
• Due diligence: CDC reviews the project for eligibility, economic impact, and technical feasibility
• Approval: Issuance of Final Registration Certificate (FRC) confirming QIP status
• Incentive registration: Register for tax incentives with GDT
• Compliance: Ongoing reporting and compliance with QIP conditions (export targets, employment, etc.)

The application timeline is typically 20–45 working days. SEZ applications may be faster due to the streamlined process within the zone.

FAQs

What is the minimum investment for QIP status?

The minimum investment threshold varies by sector. For manufacturing, the threshold is typically KHR 10 billion (approx. USD 2.5M) for standard QIPs, with lower thresholds for SME QIPs. Specific amounts should be confirmed with the CDC.

Can a service business qualify as a QIP?

Yes, certain service sectors including tourism, technology, logistics, and R&D may qualify. The CDC determines eligibility based on the economic contribution of the project.

Can foreign investors own 100% of a QIP?

Yes, Cambodia permits 100% foreign ownership of QIPs in most sectors. Certain sectors (e.g., land ownership remains restricted to Cambodian nationals) have specific limitations.

What happens if a QIP fails to meet its conditions?

Failure to meet QIP conditions (e.g., export targets, employment commitments) may result in revocation of QIP status and clawback of tax incentives received, plus penalties.

Disclaimer

This guide provides general information about Cambodian QIP and SEZ tax incentives for the 2026 tax year. Incentive programmes and eligibility criteria may change. Always consult with a qualified Cambodian investment advisor or the Council for the Development of Cambodia (CDC) for advice specific to your situation. InvestmentKit does not provide investment advice.