Cambodia is completely open to foreign investment in the education sector and schools may be 100% invested by foreign nationals or foreign registered business entities.
When, in the 1990s, Cambodia began its recovery from civil war and Khmer Rouge social destruction, it was faced with the complete lack of a functioning educational system. With little local capital and a broad need for investment, the nation welcomed the participation of the international community in helping to rebuild its educational foundation and the work continues to today. The population demographics of Cambodia make this an especially important and also challenging task as a high percentage of the total population is of school age (approximately 47% of the total population is under the age of 25).
Regardless of ownership, educational institutions are subject to licensing from the Ministry of Education, Youth and Sports (MoEYS). Curriculum, faculty, and facilities must be approved by MoEYS according to varying standards depending on the target student body and the purpose of the school, which may be early childhood education, primary education, general secondary education, higher education or non-formal education. Vocational training is regulated by the Ministry of Labour and Vocational Training (MoLVT) and training schools or centers are subject to licensing by MoLVT.
While some schools and vocational training centers are organized on a not-for-profit basis under the auspices of a non-governmental organization, the majority of private schools are operated as corporations under the Law on Commercial Enterprises and, therefore, in addition to the need to follow MoEYS regulations, are subject to the same regulations as any other business.
The Royal Government currently extends some tax incentives to “educational establishments” public and private educational institutions which solely provide educational services from early childhood to higher education, as well as technical and vocational training centers. The incentives include some withholding exemptions for interest payments and payments for managerial and technical services as well as a withholding exemption for dividends paid to non-resident shareholders. There are also some exemptions and special treatments allowed for the Value Added Tax.
Extract from Recent Updates and Overview of Foreign Investment in the Education Sector in Southeast Asia, publisher by Mayer Brown. Article, written by partners, David Harrison and Mark Uhrynuk, in conjunction with Axis Legal’s co-founder Peter Burke (Thailand), Blackoak LLC’s directors Ashok Kumar and Darius Tay (Singapore), David Lai & Tan’s partner Dato’ Tan Yee Boon (Malaysia), IAO Asia’s senior partner Joseph Lovell (Cambodia), Roosdiono & Partners’ partner Barryl Rolandi (Indonesia), and VDB Loi’s partner Edwin Vanderbruggen and director My Le (Myanmar).
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