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​ 

August 20, 2026
Vietnam’s Law on Bankruptcy and Rehabilitation No. 142/2025/QH15, passed by the National Assembly on December 11, 2025, does something many regional counterparts do not yet attempt: it instructs parties and arbitral tribunals on exactly what happens to an arbitration once a debtor becomes insolvent. Together with the Law on Commercial Arbitration No. 54/2010/QH12, the new law improves upon what used to be an uncertain area of practice, now providing an explicit, mandatory sequence of procedures. Suspension and Termination of Arbitration Proceedings Under article 40(2) of the law, once a Vietnamese court accepts a bankruptcy petition, any arbitration that concerns the debtor’s financial obligations must be temporarily suspended as soon as the tribunal receives the court’s notification. If the court subsequently issues a decision commencing bankruptcy proceedings, article 59(2) takes a further step: the suspended arbitration is terminated outright, and the underlying case file is transferred to the court handling the insolvency for resolution. The two provisions work as a sequence: first suspension, then termination and transfer, rather than as independent triggers. Meanwhile, article 60(4) reinforces this effect by vesting the bankruptcy court with exclusive jurisdiction over all claims against the debtor from the date the petition is accepted. Notably, this mechanism operates automatically, without the need for the insolvency court to issue a separate anti-arbitration order. The tribunal simply suspends or terminates the proceeding by operation of law once notified; however, Vietnamese law currently provides no procedure by which a party can apply to the insolvency court for permission to continue the arbitration despite the statutory effect. Practitioners with a Vietnamese counterparty in arbitration should treat notification of a bankruptcy filing as something to flag to the tribunal immediately since continuing to arbitrate a claim that has become subject to article 40(2) or 59(2) risks producing an award vulnerable
Read More
August 20, 2026
Thai law contains no provision that speaks directly to what happens to an arbitration when one of the parties becomes insolvent. The interaction between arbitration and insolvency is derived instead from the general operation of two separately drafted laws: the Bankruptcy Act B.E. 2483 (1940) and the Arbitration Act B.E. 2545 (2002). Because Thai courts have had few opportunities to interpret how these two statutes apply together, the practical answer to many questions, such as who represents an insolvent party in arbitration, whether an award will be enforced, and what happens to a foreign proceeding, depends on inference from general principles of insolvency, arbitration, and procedural law rather than on settled rules. Liquidation and Restructuring The Bankruptcy Act governs both liquidation, which winds up a debtor’s affairs, and restructuring (rehabilitation), which aims to preserve a business. The consequences for arbitration differ accordingly. In liquidation, the debtor’s assets vest in the official receiver, who alone can conduct or continue any arbitration affecting the estate; the debtor loses the authority to act on its own behalf. In restructuring, the plan preparer or administrator takes over that role, but there is more room for the debtor to remain involved, since the objective of rehabilitation is to keep the business operational. Restructuring carries an automatic stay that takes effect once the Bankruptcy Court accepts the restructuring petition. This stay can halt an arbitration regardless of where it is seated. In contrast, liquidation does not work through a stay; instead, the debtor’s loss of authority over its own assets and disputes is what constrains the arbitration. Neither proceeding provides a party a formal route to apply for permission to continue arbitrating—the Bankruptcy Act contains no such mechanism—though in restructuring cases the Bankruptcy Court may allow proceedings to continue where doing so will not prejudice
Read More
August 20, 2026
As part of its membership in Lex Mundi, Tilleke & Gibbins has released the latest edition of its Guide to Doing Business in Thailand, providing an overview of the legal, regulatory, and commercial considerations for companies establishing or expanding operations in Thailand. The 2026 edition offers practical insight into the country’s business environment, investment framework, and operational requirements. The guide covers a wide range of topics relevant to foreign and domestic investors, including: Investment incentives and promotion schemes Financial facilities and banking regulations Exchange controls and money transfers Import and export regulations Business structures and incorporation options Requirements for establishing a business Operational and compliance considerations Business cessation and insolvency procedures Employment and labor laws Taxation Immigration and visa requirements Prepared by Tilleke & Gibbins lawyers across multiple practice areas, the publication outlines key aspects of doing business in Thailand, including foreign investment restrictions, regulatory compliance obligations, corporate structures, employment requirements, and recent legal and economic developments affecting investors. The publication forms part of Lex Mundi’s Country Guides series, a global collection of jurisdiction-specific reference materials prepared by member firms around the world. Together, these guides help companies evaluate opportunities, compare regulatory environments, and plan international business activities across multiple markets. The full Guide to Doing Business in Thailand 2026 is available through the button below.
Read More
August 18, 2026
The Bank of Thailand (BOT) is seeking public comment on proposed amendments that would significantly expand know-your-customer (KYC) and customer due diligence (CDD) requirements for cash-related transactions at financial institutions (FIs) and specialized financial institutions (SFIs). Released on August 5, 2026, the proposed regulation would supersede BOT Notification No. 16/2569, which focused primarily on cash withdrawal transactions. The public comment period is open through September 3, 2026. The amendments reflect concerns that FIs and SFIs may be used to facilitate the movement, concealment, and conversion of criminal proceeds, potentially damaging institutional operations and public confidence in the financial system. Expanded Scope of Covered Transactions The most significant change is the broadening of the definition of “cash-related transactions.” Previously, the regulation covered only cash withdrawals and uncrossed check withdrawals. The amended regulation extends coverage to include: Cash deposits, check deposits, or receipt of funds from the public not in the form of deposit accounts; Thai baht (THB) banknote exchange (different denominations); Receipt of cash for issuing checks and drafts; and Purchase, sale, or exchange of foreign banknotes. Mandatory Identity Verification and Risk Management For all cash-related transactions, FIs and SFIs must require customers, or authorized or delegated persons, to present identification or verify their identity before every transaction, including one-time (walk-in) transactions. Specific identification requirements vary by transaction type, customer nationality, and channel (branch vs. electronic). FIs and SFIs must also establish comprehensive risk management processes and procedures for cash-related transactions. These requirements include identifying customers or authorized representatives in accordance with transaction-specific verification standards, analyzing customer behavior, implementing risk-management measures proportionate to the customer’s risk profile, and recording abnormal behavior in relevant systems. The BOT also encourages institutions to proactively guide customers toward transaction channels that offer greater traceability than cash. For corporate customers in high-risk business sectors—including foreign
Read More