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​ 

November 12, 2025
Thailand has amended the Labor Protection Act to significantly expand family leave benefits and strengthen employment protections, effective December 7, 2025. The Labor Protection Act (No. 9) B.E. 2568 (2025), published in the Government Gazette on November 7, 2025, provides enhanced maternity and paternity benefits, introduces new childcare leave provisions, and extends labor protections to certain public sector contractors. Key changes introduced by the amendments are detailed below. Extended Maternity Leave Female employees are now entitled to up to 120 days of maternity leave per pregnancy, increased from 98 days. Employers must pay full wages for 60 days, increased from the current 45 days. New Childcare Leave for Health Complications Female employees who have taken maternity leave are entitled to an additional 15 days of leave to care for newborns with health complications, disabilities, or conditions that could lead to future medical risks. This leave requires a medical certificate and is compensated at 50% of the employee’s regular wage. New Paternity Leave Male employees are now entitled to 15 days of paid paternity leave to support their spouse or partner during childbirth. This new leave allowance may be taken before or within 90 days after childbirth, with employers required to pay full wages for all 15 days. Protection for Public Sector Contractors The law extends protection to individuals engaged under service contracts with government agencies, including central, regional, and local administrations, state enterprises, and public organizations. When such workers are supervised or controlled in a manner similar to employees, the contracting government agencies must provide them with rights and benefits equivalent to those under the Labor Protection Act, including remuneration, weekly holidays, public holidays, annual leave, sick leave, regulated working hours, and rest periods. New Annual Reporting Requirement All employers with 10 or more employees must now submit an
Read More
November 7, 2025
Thailand and the United States signed a memorandum of understanding (MOU) titled “Cooperation to Diversify Global Critical Minerals Supply Chains and Promote Investments” on October 26, 2025, signaling a new strategic alignment aimed at developing Thailand’s mineral sector, particularly in rare earth elements (REEs). The MOU has implications for investments in technology, manufacturing, and other related sectors. This update outlines the key provisions of the MOU and the potential opportunities and legal navigating points for businesses. Objectives The primary driver of this agreement is the US initiative to diversify global supply chains for critical minerals and reduce reliance on current market leaders, particularly China. For Thailand, it represents a major opportunity to attract high-tech investment and develop its downstream processing industries. The cooperation is set to focus on five main areas: Technical knowledge: Exchange of technical expertise and international best practices to strengthen Thailand’s mining and processing sector. Joint cooperation: Establishing workshops, seminars, and scientific collaboration to boost innovation. Regulatory practice: Promoting good governance and streamlining regulatory and licensing procedures. Information sharing: Sharing data on potential projects and global market prices. Full-value chain: The MOU covers the entire mineral lifecycle, from exploration and extraction to processing, refining, and recycling. “First Opportunity to Invest” Clause The most debated provision within the MOU states that “participants expect to have the first opportunity to invest . . . in critical minerals assets that may be sold in Thailand.” Business implications: This clause is widely interpreted as granting US companies a first look or preferential access to investment opportunities in Thailand’s critical minerals sector. This could be a significant advantage for US-based or affiliated companies in mining, technology, and energy seeking to secure a foothold in a developing REE supply chain. Thai government position: Thai officials, including the prime minister, have publicly clarified
Read More
October 31, 2025
On September 29, 2025, Thailand’s Office of the Personal Data Protection Committee (PDPC Office) published its Regulations on the Review and Certification of Binding Corporate Rules B.E. 2568 (2025) (the Regulations). The Regulations provide clarity on the PDPC Office’s approach to reviewing and certifying binding corporate rules (BCRs) under Section 29 of the Personal Data Protection Act B.E. 2562 (2019) (PDPA), and aim to facilitate international data transfers within a group of undertakings or enterprises (a “corporate group”). In conjunction with this development, the PDPC Office also approved BCRs for two companies operating in Thailand on September 30, 2025. This milestone represents the first concrete progress since the PDPC’s Notification on Criteria for the Protection of Personal Data Sent or Transferred to a Foreign Country pursuant to Section 29 of the PDPA B.E. 2566 (2023) came into effect in March 2024. Some key features of the Regulations are set out below. Categorization of BCRs BCRs are classified into two types: (1) BCRs for Controllers (BCR-C) and (2) BCRs for Processors (BCR-P). The category must be clearly specified when submitting the BCRs to the PDPC Office. Documentation Requirement The applicant must prepare and submit the application (a standard template may be provided by the PDPC Office in the future) along with supporting documents for review and certification in the Thai language. If the supporting documents are in a foreign language, a certified Thai translation should be provided. The translation must be notarized by a notary public or qualified person. Supporting documents may include, among others, a binding instrument such as an intra-group agreement, or a list of entities subject to the BCRs. Expedited Process Requirement Organizations with existing BCR approvals under the EU or UK GDPR, or from countries announced by the PDPC under Section 28, may apply through an
Read More
October 30, 2025
Recent events at a Thai listed company, where a proposal to remove the director was not successful, amid claims that a competitor was attempting to gain control of the company, illustrate how disputes over corporate control can unfold differently at the board level and shareholder level. At the board level, removing directors of a listed company mid-term to gain corporate control is not an easy task under Thai law, as it requires a higher threshold than appointing a new director, which typically only requires a simple majority vote in a listed company. At the shareholder level, Thailand’s tender offer and competition regimes add complexity where different shareholder groups act in concert to remove opposing board representatives or otherwise influence control. In this article, we will explore why the attempted removal of a director may fail, and how the tender offer regime may apply. Key Issues at a Glance Shareholder groups may seek to convene meetings to propose changes to board composition or company authority. Such proposals can be delayed or complicated by regulatory requirements and the need for additional disclosures. Regulatory authorities and minority shareholders may raise concerns when major shareholders coordinate to influence board control, especially if such actions could trigger tender offer or merger control obligations. Companies often respond by seeking further information on shareholder relationships and potential conflicts before proceeding. Why the Director Removal Failed Under Section 76 of the Public Limited Companies Act B.E. 2535 (as amended), the early removal of a director requires two conditions to be satisfied at the same meeting of shareholders: Headcount test: At least 75% of shareholders attending and entitled to vote must vote in favor. If multiple shareholders appoint the same person as proxy, each proxy is counted as a separate head for the purpose of the headcount test,
Read More