On June 20, 2025, Cambodia’s Ministry of Economy and Finance issued Instruction No. 19116 to clarify when board members and company directors must receive salaries and pay payroll taxes.

Board members and company directors who are not considered employees are subject to a withholding tax. This category consists of people who complete services for a nonresident individual and people who perform independent work for a company in Cambodia.

Board members and company directors who are considered employees, including those appointed by a foreign head office to temporarily manage a company in Cambodia, must pay payroll taxes on any salary they receive, regardless of whether they are paid by a local or foreign branch of the company.

The above obligations apply regardless of whether the person has a work permit.

Board members and company directors are exempt from paying payroll tax if they:

• Are not present and not performing a regular management role at the company despite being registered on the company’s statutes or patent tax card;
• Participate only in board meetings and occasional shareholder meetings; and
• Do not receive a salary from a company in Cambodia.

Overall, this instruction provides an important clarification regarding the tax obligations of board members and company directors. Companies should pay attention to the classification of their board members and directors and be mindful of the exemption.

This article was written with the assistance of Tilleke & Gibbins interns Amelia Gemma Erickson and Amrin Keat.