MLMUPC Confirms Implementation of Special Investment Promotion Program in Sihanoukville 2024

Recently, the Ministry of Land Management, Urban Planning, and Construction issued a notification on the implementation of a “Special Investment Promotion Program in Sihanoukville 2024”.

The announcement states that the Ministry of Land Management, Urban Planning, and Construction will simplify the procedures and reduce the time for applying for and issuing construction permits, construction site opening permits,  construction site closing permits, and construction use certificates for construction owners in Sihanoukville.

In order to effectively implement the above special program, the Ministry of Land Management, Urban Planning, and Construction will assign professional officers to inspect and certify the architectural design project, construction component design project, construction work, and construction quality and safety inspection work in case the construction owner does not have a letter or report from a company that has a construction inspection and certification license.

The Ministry will assign a technical team to be stationed at the Department of Land Management, Urban Planning, Construction, and Cadastral Affairs in Sihanoukville and at the OWSO of the Ministry of Land Management, Urban Planning, and Construction to provide information and services as needed.

It should be reminded that on January 31, 2024, Samdech Moha Borvor Thipadei Hun Manet, Prime Minister of Cambodia, presided over the official launch of the “Special Program to Promote Investment in Sihanoukville 2024,” which provides “special benefits” for three types of investment projects, including:

1. Investment Projects Related to the Unfinished Buildings

- Exemption from income tax, prepayment on income tax, and minimum tax for an additional 3 years;

- Exemption from value-added tax at the rate of zero percent for the completion and improvement of stuck buildings

- Exemption from withholding tax on a real estate lease for 5 years;

- Exemption of property tax and exemption of administrative sanctions

- Exemption from payment of public services and fees in excess of the land use index for construction-related permits;

- Facilitating the procedures and procedures for applying for a permit from the competent authority related to construction work;

- Providing concessions on inspection fees and other certifications related to construction; facilitating investment and business procedures, including applying for licenses, certificates, and permits;

- Establishing policies and facilitation, establishing a real estate market, and providing investor matching services, including a reference price for real estate in Sihanoukville;

- Promoting the use of out-of-court dispute resolution mechanisms in accordance with legal provisions for investment-related disputes.

2. Investment Projects That Are Not Related to the Unfinished Buildings

- Facilitate investment and business procedures, including applying for licenses, certificates, and permits;

- Providing special incentives and incentives such as import tax, patent tax, billboard tax, withholding tax on real estate leases, registration fees, etc. to enterprises that come to invest or do business in Sihanoukville

- Incentives for income tax exemption, prepayment on income tax exemption, and minimum tax exemption for an additional three years for qualified investment projects and tax-registered small and medium enterprises;

- Authorization to apply a zero percent value-added tax for small and medium enterprises registered for the tax purchase of locally produced inputs.

3. Expansion of Investment and Business Projects

- Facilitate procedures, and permits for the implementation of projects or activities to expand investment and/or business;

- Providing incentives and concessions such as import tax, patent tax, billboard tax and withholding tax on real estate lease, etc. to enterprises carrying out projects or activities to expand investment and/or business;

- Permission to take 150% multiplied by the income to be received, income tax exemption as a basis for calculating income tax;

- Three-year income tax exemption incentive based on the ratio of the capital expansion rate and the allowance of 150% multiplied by the income tax exemption to be used as a basis for calculating income tax.

As of September 2023, a total of 965 projects, equivalent to 1,069 buildings, have been approved for construction in Sihanoukville and have a total investment of $4.056 billion.

Currently, 364 buildings have been suspended, 53 buildings are under construction, 177 buildings are completed but not yet in operation, and 475 are completed buildings in operation.