You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 8, 2020

Cambodia Offers Additional Assistance to Businesses and Workers Impacted by COVID-19

Subscribe to Updates

In the wake of the COVID-19 pandemic, the Royal Government of Cambodia has introduced new measures to help mitigate the impacts of the pandemic on the country’s businesses and economy. In particular, the new measures introduced in the government’s May 26 press release, Additional Measures to Support the Private Sector and Workers Seriously Impacted by the COVID-19 Pandemic and to Recover and Promote Economic Growth after the End of this Pandemic, support businesses by extending the validity of previous measures and by introducing new provisions to increase access to financing, to allow loan restructuring, and to reduce tax burdens.

Increased Access to Business Finance

To enable businesses to better access financing, the Ministry of Economy and Finance (MEF) has introduced an additional USD 200 million into the Credit Guarantee Fund, which guarantees loans through financial institutions so that enterprises that may have previously faced difficulty accessing loans have the ability to obtain working capital.

The government has also previously provided capital to small businesses through low-interest loans granted by the Agriculture Rural Development Bank (ARDB). Following the pandemic, the ARDB has dropped interest rates on loans for working capital from 6% to 5%, and on loans for investment capital from 6.5% to 5.5%, to help make capital financing more accessible. The maximum term of ARDB investment loans has been shortened to five years (from seven years), and working capital loan terms remain capped at a two-year maximum tenure.

Businesses that have not been officially registered with the government may apply for loans before completing registration so long as they fulfill the registration conditions within one month after obtaining the loan. The government recently launched the online Business Registration Platform to cut registration time to eight days (from three months) by streamlining the registration procedures—previously handled by several ministries, the Tax Department, and the Council for the Development of Cambodia—into a single process.

In addition to the credit guarantee fund and the reduced interest rates on ARDB low-interest loans, the MEF has also prepared additional financing of USD 300 million to promote growth in primary sectors during and after the crisis.

Loan Restructuring and Changes to Co-Financing Scheme Loans

Building off the previous directive to all banks and financial institutions to restructure loans, the government has made adjustments to some requirements and conditions and has also begun allowing restructuring of loans taken out through the Co-Financing Scheme for Small and Medium Sized Enterprises. 

Under this USD 100 million scheme, which was launched this year, SMEs in certain priority sectors can borrow up to USD 200,000 for working capital and up to USD 300,000 for investment capital. The maximum interest rate on these loans is 7% per year, and the repayment period has now been lengthened to seven years (from four).

While originally SMEs could only access the loans if they planned to create job opportunities for at least five people with the loan funding, now SMEs are only required to create new job opportunities (number unspecified) using the loan. Businesses in the medical device and pharmaceutical sectors may also be eligible for the loans in addition to the priority sectors outlined in Sub-Decree No. 124 S.E., dated October 2, 2018, on Tax Incentives for Small and Medium Enterprises in Priority Sectors.

In allowing restructuring of loans that had been taken out through this program, repayment schedules for qualifying loans may be changed from monthly to quarterly or semiannual repayments.

Reducing Tax Burden

The government’s measures to reduce the tax burden on many businesses include various tax reductions, waivers, and exemptions. The withholding tax on new loans from foreign and domestic sources has been reduced to 5% for 2020 and 10% for 2021, with the normal rate of 14% resuming in 2022. For existing loans, the withholding tax has been reduced to 10% for 2020, with the normal rate resuming in 2021. In addition, the government has continued tax exemptions for all monthly taxes paid by hotels, guesthouses, and travel agencies, as well as for tourism license renewal fees for 2021. In addition, tourism enterprises that have been unable to resume operations will continue to be exempt from making monthly contributions to the National Social Security Fund. All airlines registered in Cambodia will be exempt from their obligation to pay a minimum tax and prepayment tax on income for the duration of two more months (June–July 2020).

Additional Social Support Measures

Finally, the government has granted an extension of the cash-for-work program, which provides cash-based compensation for short-term labor projects in target areas, through 2020. The government has also introduced a social protection program to support the daily livelihoods of poor and vulnerable families across the country.

Related Professionals
Cassandra Allen
Email

Practices

Banking and Finance

Corporate/M&A

Employment

Tax

Location

RELATED INSIGHTS​ 

January 14, 2026
Employers operating in Thailand can enforce post-employment noncompete covenants, but success depends on precise drafting and strong evidentiary support. Thai courts will uphold restraints that protect legitimate employer interests and are fair and reasonable in duration, geographic reach, and substantive scope. Overbroad covenants, however, draw judicial skepticism and may fail unless they are drafted in severable, defensible components tied to the employee’s actual role. This article synthesizes recent trends in Thai case practice, explains how Thai courts assess reasonableness in employment restraints, and provides a practical litigation-focused framework for drafting enforceable covenants, preparing evidence, and pursuing relief through the Labor Court. The Legal Framework and Its Practical Implications Thai courts evaluate noncompete covenants under general principles of contract enforceability and public policy, with particular focus on whether a restraint is necessary to protect a legitimate employer interest and proportionate to that objective. In employment matters, this analysis is shaped by the employee-protective tenor of Thai labor law and by the Labor Court’s equitable discretion in determining appropriate remedies. The practical takeaway is that standardized or broadly drafted covenants rarely survive scrutiny. Courts look for a demonstrable nexus between the employee’s actual exposure to confidential information, trade secrets, or customer relationships and the scope of the restraint. Where that nexus is weak or the restraint operates as a blanket prohibition, courts are inclined to decline enforcement or limit relief to a narrowly tailored prohibition. The employer interests most commonly recognized as legitimate in Thai practice include the protection of trade secrets, confidential business information, and goodwill tied to identifiable customer segments or territories. Courts are more likely to enforce restraints where employers can clearly document what information is at risk, why particular customer relationships matter, and how the employee was involved with those assets. Judges also look closely at the
Read More
January 9, 2026
On January 7, 2026, the Central Bank of Myanmar (CBM) announced a further relaxation of foreign exchange regulations through Notification No. 2/2026, with an effective date of January 1, 2026. This notification reduces the mandatory conversion requirement for exporters’ earnings in foreign currency into Myanmar kyat (MMK). Under the new notification, exporters are required to convert only 15 percent of their foreign currency export earnings into MMK at official CBM reference exchange rates, down from the previous required minimum conversion level of 25 percent. The adjustment provides exporters with more flexibility to manage foreign currency, improving liquidity for international transactions and reducing cash flow pressure. However, companies must still comply with the foreign currency conversion procedures and timelines set out in the CBM’s Notification No. 12/2022.
Read More
January 6, 2026
Among the eight implementing decrees issued on December 18, 2025, to provide the legal framework for Vietnam’s new International Financial Centers (IFC), Decree No. 323/2025/ND‑CP serves the core function of officially establishing the IFC as a unified entity in two locations—Ho Chi Minh City and Da Nang—and setting out a plan for its development and governance. The key contents of the decree are summarized below. Location and Focus of IFCs The Vietnam International Financial Center in Ho Chi Minh City (VIFC‑HCMC) and the Vietnam International Financial Center in Da Nang (VIFC‑DN) are designed to attract capital, fintech, and international market participants under a dedicated regulatory framework. The IFCs will host functional zones for financial trading, banking, securities and commodities exchanges, offices, dispute resolution (via specialized court and international arbitration center), and related activities as set by the executive authority of each IFC. VIFC-HCMC, with a total area of 898 hectares in central Ho Chi Minh City, is oriented to develop a comprehensive and diverse financial ecosystem, providing traditional and specialized financial services, and leveraging synergies between financial services such as capital mobilization, investment, payment services, issuance and trading of financial products, asset management, fintech, and green financial services. VIFC-DN, with a total area of 300 hectares, is oriented to develop as a modern IFC, closely integrated with the innovation ecosystem, digital technology, and sustainable finance. VIFC-DN will establish a controlled testing platform for new financial models, taking the lead in the deployment and scaling of digital-asset products, digital payments, and specialized trading platforms and exchanges, while promoting supply chain finance, third-party services, and non-bank financial intermediaries to complement and support the traditional financial market, developing specialized, flexible, and innovative financial products. Near‑Term Priorities and Review Timeline In 2026, the government will prioritize completing the essential infrastructure and ensuring adequate
Read More
January 6, 2026
Thailand is developing new legislation on responsible business conduct that would impose statutory obligations on large enterprises to manage human rights and environmental risks throughout their operations and supply chains. The Draft Act on the Promotion of Responsible Business Conduct, commonly referred to as the Human Rights and Environmental Due Diligence (HRDD) Bill, has been developed through extensive consultation involving a wide range of stakeholders, with the Ministry of Justice playing a leading role. If enacted, the HRDD bill would reshape how certain large businesses operate and manage their supply chains, reflecting a recognition of international standards and global concerns regarding human rights and environmental protection. By introducing legally binding due diligence obligations, the draft aims to ensure that businesses operating in Thailand are held accountable for adverse impacts throughout their operations and supply chains, in line with emerging global legal frameworks. Who Will Have to Comply? The HRDD bill primarily targets large enterprises based on their annual revenue thresholds: Manufacturing businesses with annual revenue exceeding THB 500 million Wholesale, retail, or service businesses with annual revenue exceeding THB 300 million The draft would also cover state-owned enterprises and foreign businesses operating in Thailand if their operations meet the applicable revenue thresholds. What Does Human Rights and Environmental Due Diligence Involve? Under the HRDD bill, due diligence is not a one-time checklist but an ongoing process with several key requirements: Adopt and publicly disclose a sustainability policy. Businesses must commit publicly to respecting human rights and protecting the environment, and must integrate this policy into corporate governance and risk management systems. Identify and assess risks. Companies must identify and assess risks of human rights violations and environmental harm across their operations and value chains. Prevent or reduce risks. Businesses must implement effective and proportionate measures to prevent or mitigate
Read More