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Foreign labor rules and laws

A common concern among investors is the difficulty they may encounter in employing

foreign workers. This issue can only be answered by looking at several different


The Labor Law, passed and signed into effect by the National Assembly on August 11,1992

is quite specific about the employment of foreigners.

Any foreigner working for a business must have a labor card and a labor book issued

by the Ministry of Labor, must have entered Cambodia legally and hold a valid passport,

be a legal resident of Cambodia with no criminal record, must have the necessary

physical qualifications for the occupation, and not be suffering from a communicable

disease. The employer must have legal labor cards for their enterprises.

Enterprises are mandated to give priority to Cambodian nationals for employment purposes

and a March 16,1995 decree states that foreign office employees cannot represent

more than three percent of the total number of employees in a branch, specialists

cannot be more than six percent and non-specialists cannot be more than one percent.

If an enterprise will exceed these percentages, it must obtain permission from the

Ministry of Labor in advance of doing so.

Permanent resident foreigners are also addressed in the Immigration Law, enacted

by the National Assembly on August 26, 1994. Under this law, permanently resident

foreigners must: have qualifications relevant to various specialized fields, deposit

sufficient money to guarantee return passage and living expenses while in Cambodia,

have the requisite physical qualifications for their field with a medical certificate

and written employment contract, have a clearance certificate from their home country,

and meet all conditions of national security. The permit to stay granted under these

provisions is two years, although a visit to the Ministry of Interior confirmed that

these visas are normally issued for one year, renewable annually.

For those investors with companies registered solely with the Ministry of Commerce,

foreign employees receive a one year residency permit upon presenting to the Department

of Foreigners, Ministry of Interior, documentary proof that the company is registered

with the Ministry of Commerce and proof of the Ministry's authorizing the company

to do business.

For permanent resident foreigners working for private investors that have received

an investment permit from the Council for the Development of Cambodia, the employee

and his/her family may stay in Cambodia permanently or for the time specified in

the investment permit. A sub-decree to define the procedural enforcement of this

provision has not yet been promulgated and, in practice, the procedure is the same

as for those companies doing business only under the aegis of the Ministry of Commerce.

In the Foreign Investment Law, enacted August 4,1994, one investment incentive available

to investors is the ability to bring in foreign nationals who are management personnel

and experts, technical personnel, skilled workers and their families. Under the Foreign

Investment Law investors can hire foreigners in compliance with the immigration and

labor laws. This does not clearly supersede the Ministry of Labor's Decree regarding

percentages but does offer some flexibility since the Foreign Investment Law also

states that foreigners can be hired provided that their qualifications and expertise

are not available in Cambodia.

Documents and resumes to support this contention may be required. Given the dearth

of highly educated and experienced Cambodians, this proviso does allow investors

the ability to bring in a relatively large number of foreign employees.

However, investors are required to provide adequate and consistent training to their

Cambodian employees and must promote Cambodian employees over time to senior positions.

Finally, some investors are interested in foreign employees who may want to establish

Cambodian citizenship, especially as only Cambodian citizens are allowed to own land.

However, in the absence of a law on naturalization, it is not yet possible to determine

what the requirements will be to establish Cambodian citizenship.

A draft naturalization law provides for citizenship only if: the applicant has a

good attitude and ethics; has never been convicted of a crime; has been living in

Cambodia for five years under proper immigration procedures and is living in Cambodia

at the time of seeking naturalization; speaks and writes Khmer and can live harmoniously

in Khmer culture; and does not have physical or mental disabilities that would cause

a danger or become a burden to Cambodia. In the same draft law, the five year residency

requirement could be shortened to two years for a foreigner born in Cambodia or one

awarded a Cambodian Development Council investment license with a capital of at least


Since this draft law has not yet been acted upon, and there is no reliable way to

know when it will be enacted and what its final form will be, it is currently impossible

to predict what the naturalization requirements will be.
- (Roberta Thami is an attorney associated with Dirksen, Flipse, Doran &

Le, an international law firm with regional offices in Vientiane, Phnom Penh and

Ho Chi Minh City.)



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