Cambodia Legal Alert: New Work Permit Requirements for Foreign Patent Tax Holders

On 28 December 2023, the Ministry of Labour and Vocational Training (“MLVT”) issued Instruction 110/23 on the Provision of Foreign Work Permit for Foreign National Employers (“Instruction”) to clarify the on-going issue as to whether in certain circumstances foreign nationals need to apply for work permits.

The Instruction clarifies the following:
(1) a foreign national employer whose name appears on the patent tax certificate of a Cambodian enterprise must have a valid work permit;

(2) a foreign national employee whose name appears on the patent tax certificate of a Cambodian enterprise or who is self-employed must have a work permit; and

(3) a foreign national who is a shareholder or a member of the board of directors, as provided in a Cambodian company’s articles of incorporation, and who does not hold a Cambodia visa, is not required to apply for a work permit.

In short, based on the Instruction above, an individual whose name appears on the patent tax certificate of the Cambodian enterprise must have a valid work permit regardless he/she works or not in Cambodia.

The work permit must be applied for via the MLVT’s online portal at Under the MLVT’s online portal, a work permit can be applied for under two options: (1) option for an employee; and (2) option for a self-employed person. There are different legal and tax implications arising from each function. It is highly advisable that you clearly understand the implications of each function before applying for a work permit (with the deadline of the application being the end of March 2024).

We would like to highlight that failure to obtain a valid work permit for a foreign employee may give rise to a fine of up to KHR 12.6 million (approximately USD 3,150) per employee by the MLVT capped at KHR 63 million (approximately USD 15,750). Additional sanctions, as imposed by the Labour Law, include terms of imprisonment from six days to one month and, in the case of repeat offences, from one to three months.

Further, based on Joint Prakas 498 on the Monetary Fines for Those who Violate the Labour Law dated 31 July 2023, a foreign national who conducts business in Cambodia including self-employed person without a work permit is subject to a monetary fine of KHR 50.4 million (approximately USD 12,600). A foreign person appearing on the patent tax certificate who is not declared as an employee by the Cambodian enterprise and does not hold a work permit may potentially be subject to a fine of USD 12,600. The MLVT will likely impose this fine on the relevant Cambodian enterprise.”

For further detail, please refer to our article on annual labour compliance obligations: Annual Labour Compliance Obligations.

Should you need any further information or support, please contact us at [email protected]. Our team will be happy to provide you with a consultation call or a short note on the legal and tax implications on the above requirements.