Tax incentives to encourage listings in bourse

Companies listed in the local bourse are entitled to a 50 percent deduction in income tax, according to a sub-decree issued earlier this month.

Sub-decree No. 01 on Tax Incentives for the Securities Sector, which was signed by Prime Minister Hun Sen on Jan 4, also establishes exemptions of the withholding and value-added taxes, among others, for companies that launch an initial public offering (IPO) at the Cambodia Securities Exchange (CSX) in the next three years.

“Companies and enterprises launching initial public offerings approved by the Securities and Exchange Commission of Cambodia are required to complete an application with the General Department of Taxation (GDT) within 3 years of the effective date of the sub-decree to obtain a 50 percent income tax relief,” the law notes.

Jong Weon Ha, vice-chairman and COO of CSX, told Khmer Times that with the sub-decree the government seeks to encourage more companies to join CSX, as well as incentivised companies already listed in the bourse.

“I think these incentives will really help companies that are listed in CSX. We need strong government policies like this to support our stock exchange and to encourage more companies to list,” Mr Weon Ha said.

Huot Ieng Tong, president and CEO of Hattha Kaksekar Limited (HKL), the first company in the Kingdom to issue corporate bonds, was of the same opinion.

“It is the right time for this type of measure,” he said. “I believe that with these incentives more and more companies will be lured to CSX in the near future, which will, in turn, attract more investors,” Mr Ieng Tong says.

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