Logo of Phnom Penh Post newspaper Phnom Penh Post - Tax incentives for firms listing on securities exchange

Tax incentives for firms listing on securities exchange

Tax incentives for firms listing on securities exchange

COMPANIES listing on the Cambodia Securities Exchange will receive temporary tax reductions for the first three years, according to a sub-decree from the Ministry of Economy and Finance, which experts said were intended to provide an encouragement to list.

The exchange is set to launch by July this year, and three-state owned firms have been tapped to list. A number of private companies have also expressed interest.

The April 22 sub-decree shows that for firms that list, the Tax on Profit would drop from 20 percent to 18 percent, while the withholding taxes on interest and dividends would both drop from 14 percent to 7 percent, for the first three years.

DFDL Mekong Director of Regional Tax Practice Edwin Vanderbruggen called the sub-decree a “smart move”, adding it drew on successful regional experiences from Vietnam and Thailand.

He noted that transitioning from a private firm to a publicly listed firm was not always easy, and said the tax reduction will help in this regard.

Vanderbruggen also downplayed concerns that it could result in less revenue for the state, saying that over the longer term listed firms tended to pay more in tax.

“In terms of revenue for the treasury, I don’t think Cambodia will actually lose much,” he said on Friday.

Tong Yang Securities (Cambodia) Managing Director Han Kyung Tae said tax concerns were one of the larger issues for firms considering listing. Although he declined to discuss the details of the sub-decree, he said: “It’s one of the encouragements the government has been considering in order to promote a strong market project.”

Meanwhile, the Securities and Exchange Commission of Cambodia held public consultations on a prakas establishing a code of conduct for securities firms and representatives on Friday.

“This prakas is an attempt to protect investors from licensed firms and licensed representatives on exaggerating the reality of their services or advice to investors for making profits or commissions,” said SECC Director General Ming Bankosal at Friday’s consultation.

Sok Dara, SECC Director of Securities Intermediaries Supervision Department said compliance with the code of conduct would be closely followed.

“If any securities firms or licensed representatives do not follow the code of conduct, they will face legal action. SECC will inform investors to make sure they understand the code of conduct to avoid such mistakes,” he said.

Ming Bankosal also confirmed the exchange was set to launch on schedule.

“Actually, we already have enough regulation to operate our securities market – however, we will implement more supporting rules in order to make it even stronger…” he said.

He added there had been private sector interest in listing, in addition to the three  state-owned firms - the Sihanoukville Autonomous Port, the Phnom Penh Water Supply Authority, and Telecom Cambodia – that were set to list.

MOST VIEWED

  • Government hits back at threats to pull EBA, suspend UN seat

    The spokesman for the ruling Cambodian People’s Party (CPP) has said the government is in no way concerned after the European Parliament gave it three months to reverse what it called the “systematic repression of the political opposition”. Ignoring the ultimatum could mean facing

  • Chinese influx pushing locals, Westerners out of Preah Sihanouk

    Some within the Kingdom’s tourism industry have speculated that the recent influx of Chinese visitors may hinder domestic tourism as the price of accommodations in the coastal city of Sihanoukville continues to rise. Preah Sihanouk province, which has become a hotbed for Chinese investment

  • Sar Kheng: Sokha requested security

    Interior Minister Sar Kheng on Sunday revealed the story behind the transfer of former opposition party leader Kem Sokha from Trapaing Phlong prison in Tbong Khmum province to his house in the capital. Speaking at the ruling Cambodian People’s Party (CPP) headquarters in Prey

  • ‘Dire consequences’ from sanctions, warns AmCham

    American businesspeople in Cambodia have warned that any sanction against the Kingdom would have “dire consequences” that could push Cambodia even further into the arms of China. In a letter to US senators and representatives dated Monday, the American Chamber of Commerce Cambodia (AmCham) said