Cambodia – Innovare Group

Expand into Cambodia with Innovare

Explore Cambodia’s unique business landscape effortlessly with Innovare’s comprehensive EOR solutions. From intricate immigration services to seamless payroll administration, we’re your bridge to tapping into one of Southeast Asia’s fastest-growing economies.

Brief Overview

Innovare Cambodia

Cambodia, a Southeast Asian nation steeped in rich history and cultural heritage, offers a captivating destination for business ventures. Innovare empowers your seamless entry into this market, leveraging our expertise and unwavering commitment to compliance. Our comprehensive Employer of Record (EOR) services navigate Cambodia’s business environment, ensuring a smooth and successful operation for your company.

Expert guidance through Cambodia’s legal and regulatory framework.

Streamlined processes for local and foreign worker employment and payroll management.

Unwavering dedication to adhering to local labour laws and tax requirements.

Experienced support for both expatriate and local talent acquisition.

Local Expertise

Country-Specific Solutions

Onboarding

Cambodian law mandates employers to provide written employment contracts outlining key terms of employment to new hires. The contract can be fixed-duration (FDC ) or underdetermined (UDC) in duration written in both English and Khmer. The salary and compensation can be made in Cambodian riel (KHR) or USD.

Here’s a breakdown of the general elements a Cambodian employment contract should encompass:

Job Description: Clearly defined roles and responsibilities ensure a shared understanding of performance expectations.
Work Schedules: The standard work week in Cambodia is 48 hours, 8 hours day with a maximum over time limit of 2 hours per day which is paid at 1.5x an employee’s hourly wage.
Compensation: Minimum wages in Cambodia are determined by two factors: the industry in which an employee works and any collective bargaining agreements so it varies by industry. Cambodian compensation laws are generally specified in CBAs.
Leave Entitlements: Cambodian labour laws provide for various leave allowances, including annual leave, sick leave, and national holidays.

Payroll Services

Cambodia mandates bi-monthly salary payments The first payroll should be run in the 2nd week of the month, and comprise 50% of base salary.

The second payroll should be run in the 4th week of the month, and comprise the remaining amount of base salary, along with any peripheral monthly remuneration and benefits.

The standard workweek is 48 hours, with overtime pay mandatory for exceeding these hours. Employers must also adhere to strict tax filing deadlines. Here’s a general overview of payroll in Cambodia:

Taxes

Here’s a breakdown of the general tax structure in Cambodia:

Leave

Cambodian labour law mandates various leave entitlements for employees. Here’s an overview of some key leave provisions:

National Holidays: There are 22 public holidays in Cambodia per year, with employees entitled to paid leave on these days. Extra holidays could also be announced by the government from time to time.
Maternity Leave: Female employees are entitled to 90 days of maternity leave paid at half the employee’s base salary.
Paternity Leave: No specific paternity leave entitlements are found in the Labour Law. However, a worker may request for up to 7 days special leave for personal reasons that affect his immediate family (marriage of an employee or his/her child, birth of a child, illness or death of an employee's husband, wife, children or parents). If an employee has not taken annual leave, this special leave may be deducted from the annual leave. If an employee has already exhausted his/her annual leave, the employer may require him to work longer hours in order to make up for that leave.

Termination

Termination procedures in Cambodia require adherence to specific regulations and potential severance pay obligations. Here’s a general overview of the termination process:

Probation Period: Cambodian law allows probationary periods of up to three months. Upon termination of the probationary contract, the worker is entitled to wages and indemnity in lieu of annual leave which have not been paid. After probation period, termination must come with just cause with layoff compensation based on tenure and damages caused to employee.
Notice Periods: For employees with indefinite-term contracts, termination requires adherence to notice periods based on tenure. For fixed term contract, minimum 10 days before expiration. The specific notice period may be outlined in the employment contract or company policy.
Severance Pay: Severance pay is mandatory in certain circumstances. Here's a breakdown:
Fixed-Term Contracts: Employees who complete a fixed-term contract are entitled to severance pay of at least 5% of their total contract value.
For early termination, damages equal to the wage and benefit the employee should be entitled to up to the expiration date of the contract
Indefinite-Term Contracts: Employees with indefinite contracts who are terminated without cause:

Cambodia Market Insight

Strategic Location

Cambodia boasts a strategic location in Southeast Asia, offering access to the broader Mekong region and major trade routes. This positioning presents exciting opportunities for businesses seeking regional expansion.

Emerging Economy

Cambodia’s economy is experiencing steady growth, fueled by sectors like tourism, garments, and agriculture. This growth fosters a dynamic business environment with a growing domestic market.