This article covers the availability and regulatory framework for sole proprietorship status in Cambodia for 2025. The information below details the registration process, tax obligations, and conditions for individuals seeking to operate as sole traders or similar business types within the country.
Overview of Sole Proprietorship Status in Cambodia
In Cambodia, there is no specific business status directly equivalent to a simplified sole proprietorship or micro-entrepreneur regime. Individuals can register a business as an “individual enterprise” or sole proprietorship, but this must be done through a formal procedure. Every business—regardless of size or individual ownership—requires official registration with both the Ministry of Commerce and the General Department of Taxation. There are no exemptions or alternative simplified schemes exclusive to individual entrepreneurs.
Key Features of Sole Proprietorship Registration
Operating as a sole proprietor in Cambodia involves the following conditions in 2025:
| Requirement | Description |
|---|---|
| Business Registration | Mandatory with Ministry of Commerce and the General Department of Taxation |
| Legal Status | Individual enterprise treated as a legal entity for all regulatory and tax purposes |
| Simplified Regime | Not available; no micro-entrepreneur status exists in Cambodia |
| Tax Compliance | Must comply with standard business taxation, including Patent Tax, VAT (if applicable), and income tax based on turnover or profits |
| Invoicing | Cannot invoice as an individual without first registering a separate legal entity |
Tax Obligations and Compliance
Regardless of business size, all individual enterprises in Cambodia are subject to the country’s standard tax regime. This includes the following main tax obligations:
- Patent Tax: Required annually for all businesses, with details dependent on type and business size.
- Value Added Tax (VAT): Mandatory if the business meets the registration threshold.
- Income Tax: Calculated on turnover or profits as determined by Cambodian tax authorities.
There are no lower, preferential, or reduced rates specific to small individual businesses. All companies—including sole proprietors—must maintain full compliance with tax reporting and legal requirements.
What Is Not Available?
For professionals looking for a streamlined or simplified process similar to what other countries might offer to freelancers or micro-businesses, Cambodia does not provide this option as of 2025. The only route is through standard business registration and compliance channels.
Relevant Government Sources
- General Department of Taxation – Business Registration
- Ministry of Commerce – Business Registration
- General Department of Taxation – FAQ
Pro Tips for Navigating Sole Proprietorship Registration in Cambodia
- Consult the Ministry of Commerce and General Department of Taxation official portals for the most current registration guidelines before applying.
- Prepare all required documentation in advance, including proof of address and identification, to minimize registration delays.
- Be aware that annual tax filings, even for small businesses, are compulsory and subject to audit by Cambodian authorities.
- Consider engaging a licensed local accountant or tax consultant familiar with current Cambodian regulations to streamline your compliance process.
In summary, Cambodia’s process for setting up a sole proprietorship or similar business status in 2025 is formal and uniform for all business types, without a simplified regime for individual entrepreneurs. All sole proprietors must complete full registration and comply with standard tax obligations. Careful preparation and an understanding of the local legal environment are key to staying compliant with Cambodian authorities.