Global PEO in Cambodia
Cambodia is a Southeast Asian nation more often thought of for it’s breathtaking temples, unspoilt beaches and colonial townscapes, than it’s workforce.
However, Cambodia is among the fastest growing economies in the world, clocking in an average growth rate of 8% from 1998 to 2020. The country is also home to a huge number of international workers creating a diverse and mutliskilled workforce. One of which might be the perfect candidate for your business.
With a professional employer organization (PEO) such as Skuad, it’s simple to dip into the Cambodian talent pool and expand your business. Read on to find out how.
What is a PEO?
PEOs partner with companies to provide a comprehensive suite of services that help businesses manage their employees —- this includes hiring, onboarding, payroll, benefits, and compliance with labor laws and regulations. Think of a PEO as your outsourced HR team, a one-stop-shop for managing employees, either in your home country, or further afield.
They are valuable for businesses expanding into new markets as they help companies navigate the complexities of hiring talent in a new country, such as Cambodia.
In addition, this turnkey solution makes it easy for businesses to operate without the hassle of setting up their own HR infrastructure. As a result, they are a great option for businesses looking to expand their global footprint.
Get in touch with Skuad today to understand how a PEO can benefit your business — we can work with you to find the best solution for your hiring needs.
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What are the benefits of using a PEO provider in Cambodia?
As you expand your workforce into Cambodia, you’ll quickly realize why a PEO such as Skuad is an essential component to steady and successful business growth.
Let’s take a look at the benefits.
Get to hire the best talent
Hiring the best talent no longer means hiring the best talent within 10 miles. Thanks to the boom of remote working, global hiring is not only feasible, but essential to give your business a competitive edge.
If you’re looking to hire the best talent, they may be located in Cambodia. These are highly skilled workers that you may not be able to find in your own country, or even other neighboring countries at the moment.
Using a PEO in Cambodia means you too can access the country’s top talent.
Become a competitive employer
As you expand, your company’s name will be recognized on a worldwide basis, with a global talent pool competing to be employed by you.
In return, your PEO can set them up with unrivaled benefits packages that go beyond statutory requirements to attract and retain the most qualified workers.
A PEO can be a valuable partner to help you navigate the Cambodian a labor market. Why not arrange a demo today?
Avoid setting up your own legal entity in Cambodia
If you were to forgo using a PEO in Cambodia to hire international employees, you would be responsible for setting up your own legal business structure within the country. This can be incredibly time consuming and costs can quickly add up.
You would also have to physically be there to set up your entity, which means paying for travel, accommodation and any other unforeseen costs.
Using a PEO means you get to skip all of the frustration as PEOs in Cambodia generally have their own legal entity already established. This is what allows them to act on your behalf when it comes to international hiring, management, and more.
Become culturally aware
When looking to hire in Cambodia, it's important to be aware of local customs and traditions. As with any country you look to expand your business into, there will be cultural differences to that of your own country.
For example, when doing business in Cambodia, there’s a huge emphasis on professionalism. This means that you need to build strong relationships with your business partners, and be conscious of being respectful of those you work with. It’s very professional — punctuality and respect for seniority are valued principles that are held dear.
Remain compliant in Cambodia
When expanding your business into Cambodia, it's important to comply with all statutory requirements —- failure to do so can lead to hefty penalties.
All businesses in Cambodia are required to have a business license. This can be obtained from the Ministry of Commerce.
In addition, a companies will need to comply with local tax laws and regulations. Failure to comply with these requirements can result in severe penalties, including imprisonment. Some specifics you need to know include:
Payroll in Cambodia sees employers being responsible for calculating and deducting taxes, social security contributions, and other deductions from their employees' wages.
- Staff are paid in the Cambodian Riel. However, US dollars are also widely accepted.
- Bonuses are common in Cambodia. They are typically paid twice a year — at the end of June and December —- and are based on an individual's performance.
- The standard working week in Cambodia is 48 hours.
- Overtime must not exceed 12 hours per day or 60 hours per week. Overtime rates are 1.5 times the employee's normal rate of pay.
- Cambodia has a Social Health Insurance system that is paid for by both employees and employers.
- Cambodia has a national pension system in place and some employers also offer private pension schemes to their employees.
- Annual leave in Cambodia is determined by an employee's length of service.
- Employers must give annual paid leave to an employee of 1.5 days for each month, up to 18 days a year. For three years of continuous service, they get an extra day of leave for every year worked, up to 20 days.
- There are 21 public holidays in Cambodia including Khmer New Year, International Workers' Day, and National Independence Day.
- Maternity leave in Cambodia is 90 days, after the mother has worked for one year. There is no paternity leave but can request up to seven days of ‘special leave’.
- The guidelines for sick leave in Cambodia are that employees will receive one month paid at 100%, up to three months paid at 60%, and no pay thereafter.
- Employers have a legal obligation to pay redundancy and severance pay, including the employee's last wage.
Employers are responsible for deducting tax from employees in Cambodia. The income tax rates in Cambodia are as follows:
Tax rate Monthly salary (KHR*)
0% 0 to 1,300,000
5% 1,300,001 to 2,000,000
10% 2,000,001 to 8,500,000
15% 8,500,001 to 12,500,000
20% Over 12,500,000
Employers in Cambodia also must make the following payroll contributions:
- Health Insurance - 2.6%
- National Social Security Fund - 0.8% (up to a maximum contribution of 1,200,000 KHR).
The Cambodian corporate tax rate is a standard 20%, with a sliding progressive rate of between 0% and 20% for smaller firms. For gas and oil companies –- and those involved with mineral exploitation — it is 30%.
This is a lot, we know. But you don’t have to do it yourself. Learn more about how Skuad’s PEO services can help your business stay compliant by booking a demo today.
What does it cost to build a team in Cambodia?
The cost of setting up a business in Cambodia varies depending on the type and size of the business. For example, a small company with fewer than 10 employees can expect to pay around $1,500 USD for company registration. A larger company with more than 50 employees can expect to pay around $5,000 for its registration.
The cost of setting up a business in Cambodia also depends on the location of the business. For example, businesses in Phnom Penh can expect to pay more for company registration than businesses in Siem Reap. No matter where, it’s going to be pretty expensive when you also factor in your legal costs.
Or, you could partner with a PEO provider in Cambodia.
PEO in Cambodia
When it comes to hiring globally, price is often one of the deciding factors. At Skuad, we believe that you shouldn't have to break the bank to access the talent pool in Cambodia.
That's why we offer a free plan for businesses that are just getting started, and our prices start from just $19 USD per employee per month. We also offer employer of record services, which start from $199 per month.
If you’re ready to start growing your business in Cambodia, book in for a demo of Skuad’s global PEO solution right away.