Right to left: British ambassador Dominic Williams, Seng Cheaseth, director of the GDT’s tax police department, Steven Solomon, partner & head of M&A Tax Deal Advisor KPMG in Vietnam and Cambodia, Conrad Turley, tax partner (China Tax Centre), KPMG in China, Casey Barnett, AmCham president and Andrea Godfrey, partner and head of Integrated International Tax at KPMG Cambodia. Hong Raksmey
Cambodia’s once-booming appeal as a destination for foreign investment appears to be facing growing turbulence as US trade pressure intensifies and tax compliance becomes a make-or-break issue for businesses, industry leaders warned this week.
Casey Barnett, president of the American Chamber of Commerce in Cambodia (AmCham), said that while Cambodia still offers “fantastic opportunities for investment” — including a “growing market” and “limited competition” — the environment is shifting fast.
He shared his insights with the attendees of the “UK-Cambodia Joint Trade & Investment Forum Deep Dive Series”, organised by BritCham Cambodia and the British Embassy in Cambodia Department for Business & Trade, on April 29 at KPMG Cambodia’s head office.
To secure strong returns, Barnett stressed that investors must focus on full compliance with the Kingdom’s tax laws.
“Companies may start out on the wrong foot, misunderstand the tax regulations or even be dismissive of the consequences,” he warned, adding that “In Cambodia, there is a 1.5% per month tax on reassessments, and over a few years, that can really build up.”
Barnett pointed to the larger forces reshaping the market: Global tax reforms under the Global Anti-Base Erosion Model Rules OECD’s Pillar 2 rules, pressure on Cambodian tax incentives and most alarmingly, a recent 3,500% US tariff on certain Cambodian solar panel exports.
The unexpected ‘reciprocal’ tariffs announced by convicted felon and US President Donald Trump have caused widespread uncertainty in international markets. Supplied
“This 3,500% tariff is a bad sign for the future of Cambodian exports to the US,” he said.
“It shows that the US Department of Commerce is taking a very hard line. Given that Cambodia doesn’t have much to offer the US as a market, we should prepare for the worst-case scenario — higher tariffs than many other countries,” he continued.
The tensions stem partly from US perceptions that Cambodia is being used as a transit point for Chinese goods to dodge American tariffs — an accusation Barnett and Cambodian officials pushed back against.
Seng Cheaseth, director of the Department of Law, Tax Policy and International Tax Cooperation at the General Department of Taxation (GDT), acknowledged that the US trade crackdown could impact Cambodia’s economy but defended the country's policies.
“We do not discriminate between US, Chinese, or any other companies,” he said.
“We provide the same public safety system, the same incentives to all sectors. It's not about targeting or favouring one over another,” he added.
He offered sharp criticism of US trade tactics.
“No judges at the WTO dare to go against the US because they’ll freeze your assets from entering the country. The US already eliminated the possibility of the WTO finding a solution before they started doing this kind of thing,” he explained.
Highlighting Cambodia’s broader industrial ambitions, Cheaseth pointed out the country’s efforts to attract advanced manufacturing, including recent investments from companies like BYD, Toyota and Ford.
“We want the technologies here,” he said. “If they come, they invest. That’s good for Cambodia.”
Still, Barnett urged investors to brace for a more complicated playing field.
“The GDT is taking a more risk-based approach to audits now, which is a positive development,” he said.
“But with global tax reforms and ongoing US negotiations, uncertainty is the new reality,” he acknowledged.
Cambodia is stepping up efforts to strengthen its investment climate by establishing a Special Tax Audit Unit (STAU) under the GDT. The unit oversees audits for foreign investors and taxpayers, aiming to ensure fairness and transparency across the system.
James Roberts, head of advisory at KPMG Cambodia, emphasised the importance of the new body.
“The law introduces a separate audit process for international companies that meet compliance standards, ensuring they are treated with utmost transparency and fairness,” he noted.
Cheaseth explained that STAU staff were selected from Cambodia’s enterprise and large tech sectors to handle the complexities of international auditing.
“The new system guarantees that eligible companies will undergo a single, standardised audit — preventing confusion and undue complexity,” he said.
Importantly, only certified, compliant companies will be selected for audits, ensuring that businesses are not subject to multiple reviews — a major step toward streamlining the tax environment.
Foreign investors have responded positively. Steven Solomon, partner and head of M&A Tax Deal Advisory at KPMG in Vietnam and Cambodia, noted that Cambodia’s approach stands out in the region.
“Most countries focus on offering tax incentives, but Cambodia is prioritising fair tax treatment, which is just as critical for investors,” he observed.
According to Cheaseth, the new initiative signals Cambodia’s growing commitment to providing a stable, transparent environment to support its Vision 2050 economic goals.
