Cambodia's Government News Agency recently published a release on Cambodia's new Investment Law, which was enacted on 15 October 2021, replacing the 1994 Investment Law as amended in 2003. As part of the new law, new investment incentives are introduced for qualifying investment projects, including two basic incentive options:

• Income tax exemption and reduced rates, which provides an exemption for 3 to 9 years depending on the sector/activity, followed by reduced rates for 6 years, including a 5% tax rate for the first 2 years, a 10% rate for the next 2 years, and a 15% rate for the last 2 years; or
• Increased deductions, including a 200% deduction for capital depreciation and certain significant expenses for 9 years.

Qualifying projects are also eligible for exemptions from customs duty, excise tax, and VAT on imports of construction equipment and materials, production equipment and materials, and production inputs.

In addition to the above basic incentives, qualifying investors are also eligible to receive additional incentives, including a VAT exemption on the purchase of locally produced production inputs, and a 150% deduction for certain expenses incurred for certain expenses, including R&D and human resource development. Investment projects with high potential for contribution to national economic development may be granted additional special incentives as well, with the types of projects and special incentives to be established.

The new Investment Law also provides additional investment guarantees and protections as compared to the prior investment law. This includes, among others, no restrictions on foreign exchange control and profit repatriation, and protections for intellectual property. The new Investment Law also establishes improved procedures for registering an investment project and other aspects of the investment regime.