Share Transfers in a Cambodian Entity – 5 Critical Tax Issues You Need To Know!

DFDL Cambodia

3rd June 2021

Based on our experience with recent share transfer transactions, we have summarized the top five tax issues of which buyers and sellers of shares in Cambodian entities should be aware.

2021 has continued to see steady activity with respect to acquisitions and re-structuring of businesses in the Cambodian market. There are a number of factors at the forefront of this activity, not least the pending capital gains tax implementation date of 1 January 2022, bargain hunting of distressed assets, and internal re-structuring of multi-national organizations, to name a few.

Only a few years ago the transfer of shares in a Cambodian entity was a fairly tax benign process with the primary emphasis of the purchaser being to inherit a Cambodian entity with few historical tax skeletons in the closet whilst for the selling shareholder the tax implications of a share transfer were typically limited to the tax jurisdiction in which they were domiciled.

How things have changed! In the space of a few years, the regulatory tax environment and the practice of the tax authorities in Cambodia has transformed dramatically, and those parties, buyers and sellers of shares, that fail to take the necessary precautions before embarking on a share transfer in a Cambodian entity do so at their peril.

Based on our experience with recent share transfer transactions, we have summarized the top five tax issues that buyers and sellers of shares in Cambodian entities should be aware of.

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DFDL Cambodia

Cambodia
dfdl.com

DFDL established its headquarters in Cambodia in 1995. DFDL is licensed as an investment company by the Council for the Development of Cambodia and the Cambodian Investment Board. We are also registered as a private limited company with the Ministry of Commerce. Under these licenses and registrations, we are permitted to provide business consulting, tax and investment advisory service of an international nature.

On 1 March 2016, DFDL and Sarin & Associates joined forces and established a commercial association and cooperation in order to form a new business transactions platform to serve clients with interests in Cambodia and across the expanding ASEAN marketplace.

DFDL and Sarin & Associates have worked together for over 10 years in Cambodia. Sarin & Associates has long been recognized for providing advice to companies in Cambodia in several sectors, such as telecommunication, energy, retail, real estate, financial services, banking, etc.

Our clients are major international and Asian foreign investors in Cambodia, including large foreign and Asian financial institutions. We have been involved in major projects in Cambodia including electricity projects, aviation, telecommunications, infrastructure projects and large real estate projects.

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Share Transfers in a Cambodian Entity – 5 Critical Tax Issues You Need To Know!

DFDL Cambodia

3rd June 2021

Based on our experience with recent share transfer transactions, we have summarized the top five tax issues of which buyers and sellers of shares in Cambodian entities should be aware.

DFDL Cambodia

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