VLP Legal Press #12
Directors in Cambodia - Key Points to Know (Legal Compliance)
We are often asked by clients about the requirement to become a company director in Cambodia and the legal duties that come with the role.
Cambodia’s Law on Commercial Enterprises 2005 (LCE) sets out the answers to the queries above. In this issue, we highlight some of the key requirements for directorship, and the main duties expected of directors under LCE.
This is not a complete list of obligations, but rather a summary of important points we believe a company incorporated in Cambodia/directors should pay special attention to.
1. Board Composition and Term
Minimum number of directors:
Private limited company: at least 1 director.
Public limited company: at least 3 directors.
Resident director requirement: Unlike many countries, Cambodia does not impose this requirement.
If the company’s articles do not provide a term, each director shall be elected for 2 years and may be re-elected. A director may continue to serve after his term expires until a replacement has been elected.
The board of directors shall elect a chairman from among its members. The name of the chairman is lodged and registered with the authority.
2. Qualifications of Directors
Legally competent natural person over 18 years old.
Doesn’t have to be a shareholder.
3. Power of Directors
To manage the business and affairs of a company.
May designate the offices of the company, appoint officers and delegate their powers to manage the business and affairs of the company.
A director too, may be appointed to any office of the company.
In this update, we’ll also cover two key compliances for director which are mentioned in:
(1) Instruction No. 110 MLVT on Issuance of Work Permit to Foreign Employer dated 28 December 2023
4. Director’s obligation to apply for work permit
A foreign director must:
apply for a work permit if they represent the company on the Patent Tax certificate.
obtain an employment card (in addition to a work permit) if they both represent the company on the Patent Tax certificate and are employed by the company.
Foreign shareholders or directors who do not hold resident visas and do not represent the company on the Patent Tax certificate are not required to apply for a work permit.
(2) Instruction No. 19116 GDT on Tax Obligation of the Board of Directors or Company Director dated 20 June 2025
5. Obligation to pay tax for fees/salary received by a director
Applicable taxes for a director:
Tax on Salary
Withholding Tax
Withholding Tax applies when the director is not an employee but provides services to the company and charges a fee.
Tax on Salary applies when the director is considered an employee, regardless of holding a work permit, including directors temporarily appointed by a foreign head office to work in Cambodia and receiving salary from any entity (local or foreign).
Director is considered an employee if they meet any 2 of the following criteria:
No risk of not being paid when work is performed at a determined location under a general employment contract.
Cannot choose work schedule or location.
Does not need to spend for work tools.
Not performing work for multiple persons at a time.
Exempt from Tax on Salary if the director:
Is not present in Cambodia and does not manage the company regularly.
Only attends board/shareholder meetings.
Does not receive a salary from a Cambodian company.
Stay tuned for our next update, where we’ll continue sharing key insights on directors’ duties in Cambodia.
This is for general reference only and does not constitute legal advice. For further guidance, contact us at: