Jesica Anisa Gunawan (180202060) Highlights in Cambodia and Vietnam 1

HIGHLIGHTS ON CAMBODIA

I. a. History
In the late 8th century, a Khmer prince later crowned as Jayavarman II returned to Cambodia
from "exile" in Java, and began to consolidate the kingdom. In 802, in a ceremony near the site we
now call Angkor, north of Cambodia's Great Lake, he declared himself a universal monarch, and
founded a dynasty that lasted until Angkor was abandoned in the 16th century.
In the 13th century, Cambodians converted en masse to Theravada Buddhism, the variant
practiced by the Khmer today. Over the next four centuries, Cambodia became a small Buddhist
kingdom dependent on the goodwill of its neighbours, Thailand and Vietnam, In the mid-19th
century, conflict between these kingdoms spilled onto Cambodian soil, and Cambodia almost
disappeared. In 1863 the Cambodian king, fearful of Thai intentions, asked France to provide
protection for his kingdom. France kept Cambodia from being swallowed up, but the protectorate
developed into a full-scale colonial relationship that the king had not foreseen.
French rule lasted until the 1950s, and was less harsh than in neighbouring Vietnam. The
Khmer elite was treated well and French policies had a relatively light impact on the population,
while improvements in infrastructure strengthened the economy and brought Cambodia to the edges
of the developed world. France's greatest contribution to Cambodia was probably its restoration of
the temples at Yasodharapura. French scholars deciphered Angkorean inscriptions and rebuilt many
of the temples, providing Cambodians with a glorious, precisely dated past that had been largely
forgotten.
After Cambodia gained its independence from France, it entered a short period of peace and
prosperity which many older Khmer now look back on as a golden age. By the late 1960s, however,
Cambodia was drawn inexorably into the Vietnam War. In 1975, Communist forces, known to the
outside world as Khmer Rouge or Red Khmers, overthrew the pro-American regime that had seized
power five years before. In the Khmer Rouge era that followed, at least 1.2 million Cambodians died
of malnutrition, overwork, executions, and mistreated diseases as the Maoist-inspired regime sought
to achieve total communism overnight. Responding to Cambodian attacks, Vietnam invaded
Cambodia in 1979 and established a protectorate there that lasted for 10 years.

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Under peace agreements signed in Paris in 1991, Cambodia came under United Nations
protection for a time in preparation for general elections that were held in 1993. Since then, Cambodia
has been a constitutional monarchy ruled by a coalition government that has accepted large infusions
of foreign aid. In 1999 Cambodia became a member of ASEAN, and became for the first time, after
centuries of isolation, a full-fledged member of the Southeast Asian community.

b. Climate
Cambodia is located in Southeast Asia in the tropical zone, just 10-13 degrees north off the
equator. Like most of Southeast Asia, Cambodia is warm to hot year round and the climate is
dominated by the annual monsoon cycle with its alternating wet and dry seasons.
Cambodia has a tropical climate with warm temperatures throughout the year. There are two
seasons in Cambodia. The northeast monsoon season (December-April), bringing sunny, dry weather
especially in January and February. The rains come when the winds shift into the southwest monsoon
(May-November), with the most precipitation in the months of September and October.

c. Culture
Throughout Cambodia's long history, religion has been a major source of cultural inspiration.
Over nearly two millennia, Cambodians have developed a unique Khmer belief from the syncreticism
of indigenous animistic beliefs and the Indian religions of Buddhism and Hinduism. Indian culture
and civilization, including its languages and arts reached mainland Southeast Asia around the 1st
century AD. It is generally believed that seafaring merchants brought Indian customs and culture to
ports along the Gulf of Thailand and the Pacific en route to trade with China. There is also French
influence as well.
Cambodia is predominantly Buddhist with 80% of the population being Theravada Buddhist,
1% Christian and the majority of the remaining population follow Islam, atheism, or animism.
Cambodia has a single official language which is Khmer. It is spoken by nearly 90% of the country’s
population. The language is used in government administration, imparting education at all levels,
media, etc.
Khmer cuisine is similar to that of its Southeast Asian neighbours. It shares many similarities
with Thai cuisine, Vietnamese cuisine and Teochew cuisine. Cambodian cuisine also uses fish sauce
in soups, stir-fried cuisine, and as dippings.

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d. Ports
The three main international ports in Cambodia are: Sihanoukville on the Gulf of Siam,
Phnom Penh on the Mekong river, and the provincial port of Koh Kong. Sihanoukville is the main
deep-sea port of Cambodia. The Port of Sihanoukville, situated in the Bay of Kompong Som, is the
principal and only deep-water maritime port of Cambodia. Kompong Som's natural advantages
include deep water inshore and a degree of natural protection from storms provided by a string of
islands across the mouth of the bay. The capacity of Sihanoukville port, in its present condition, is
estimated at about 950,000 tonnes per year. Several warehouses are available providing a total
storage area of approximately 6,000 square metres.
Phnom Penh depends on access via the Mekong through the delta area of Vietnam. The
Phnom Penh Port is the country's traditional river port, accessible to vessels from the South China
Sea through Vietnam. The port serves up to 150 ships per year, including 3 Singapore-based cargo
vessels which take 10-12 days for the return voyage.
The Koh Kong provincial port is really a system of three ports. Vessels entering Cambodia
from Singapore, Malaysia or Thailand call first at Paklong, on the Gulf of Siam about 15 km from
the Thai border, for customs clearance and other formalities. Up to 300-tonne capacity boats can be
accepted, or 500 tonnes at anchorage. The 300-tonne boats can then proceed across the bay to Koh
Kong town for unloading or transhipment to smaller vessels if required.
The other river ports, for example Kompong Cham on the Mekong, are in general also used
for domestic traffic only. A small port exists at Kompong Ampil, in Takeo province, where there is
a fair amount of trade with Vietnam via a small river that leads into the Bassac, but most boats are
only of 25-30 tonne capacity.

II. a. Economy Conditions

1. Current Policies
Cambodia’s economy continues to grow at an impressive pace. Growth has benefited from
a stable macroeconomic environment, an open trade and investment regime, as well as the
country’s location in the world’s fastest-growing region and its relatively young population.
The economy of Cambodia at present follows an open market system (market economy)
and has seen rapid economic progress in the last decade. Cambodia had a GDP of $18.05 billion
in 2015. Per capita income, although rapidly increasing, is low compared with most neighbouring
countries. Cambodia's two largest industries are textiles and tourism, while agricultural activities

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remain the main source of income for many Cambodians living in rural areas. The service sector
is heavily concentrated on trading activities and catering-related services.
Currently, Cambodia's foreign policy focuses on establishing friendly borders with its
neighbours (such as Thailand and Vietnam), as well as integrating itself into regional (ASEAN)
and global (WTO) trading systems. Some of the obstacles faced by this emerging economy are
the need for a better education system and the lack of a skilled workforce; particularly in the
poverty-ridden countryside, which struggles with inadequate basic infrastructure. Nonetheless,
Cambodia continues to attract investors because of its low wages, plentiful labour, proximity to
Asian raw materials, and favourable tax treatment.

2. How to Start a Business

For the requirements and administration, there are no restrictions to a business being 100%
foreign-owned in Cambodia, so long as no land ownership is involved. In order to set up a
business in Cambodia, you will need a valid visa, a work permit and a Cambodian bank account
with a minimum balance of US$1,300. Next, you must do an online business registration with the
Ministry of Commerce. After registering your company, you will receive a variety of documents,
including the business license, the certificate of incorporation, and the Articles of Association.
Within 15 days of having registered, you should then register your enterprise with the
General Department of Taxation (GDT), where you will obtain a tax patent and VAT certificate.
You will then be required to visit the Ministry of Labour and Vocational Training (MLVT), which
will register the company under the Labour Law, and provide work permits and employment cards
for foreign workers. If your company has more than eight employees, you will also need to register
it with the National Social Security Fund.

3. Salaries, Expat Packages, Taxes

That said, by law, how much you are taxed on your salary should depend on your residency
status and where you earn your salary, regardless of where this salary is paid (the term salary
includes basic remuneration, bonuses and overtime). A resident is liable to pay taxes on their
worldwide salary, but non-residents are only required to pay tax on any salary they earn in
Cambodia itself.

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You are considered a resident taxpayer if you have a residence or primary abode in
Cambodia or are physically present in the country for more than 182 days in any 12-month period
ending in the current tax year. For a non-resident employee the tax on salary is withheld at the
rate of 20% of the amount to be paid before withholding. This withholding tax is the final tax on
salary for the non-resident receiving the salary, whereas the tax rate varies for residents,
depending on their monthly salary. Those earning under KHR1.2 million (~US$300), do not have
to pay any tax. Residents are then taxed in accordance with the following:
 5% for those earning between KHR1.2 million and KHR2 million (~US$300-US$500)
 10% for those earning between KHR2 million and KHR8.5 million (~US$500-
US$2,125)
 15% for those earning between KHR8.5 million and KHR12.5 million (~US$2,125-
US$3,125)
 20% for those earning over KHR12.5 million (~US$3,125).
Given the lack of options and the difficulty to induce quality people to become expatriates,
international organizations were forced to provide regal benefits to their overseas employees.
Over time, a standard “expat package” was developed that included most or all of the following
benefits:
 Housing for the family (including utility costs)
 Automobile including fuel and maintenance (often with a driver)
 International schooling for children
 Round-trip airfare to the home country for the entire family (at least once per year)
 Relocation for the entire family (before and after the posting)
 Healthcare coverage for entire family

b. Living
1. Banking, Employment Pass, Work Permit, Visa
There are many banks located throughout Cambodia, especially in the capital. ATMs which
are widely available, dispense both US dollars and riel. The Cambodian currency is
nonconvertible, so expats should make sure they have used all their riel when leaving the country.
Popular banks for expatriate include Acleda Bank, Canadia Bank and ANZ Royal Bank.

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Nowadays there are stricter regulations with regards to obtaining the necessary
employment documents. Foreign nationals who wish to work must have a job offer from an
employer who is compliant with relevant regulations; have legally entered the country on a valid
passport; possess a valid residency visa; and have no contagious diseases.
You can then apply for your work permit and your employment card at the same time.
These two documents must be renewed annually between January and March. You can apply for
these online via the Ministry of Labour’s Foreign Workers Centralised Management System. You
will also need to complete a health check at the ministry. In order for your work permit and your
employment card to be issued, several supporting documents will need to be submitted, including
a foreign employee quota approval.
The EB business visa extension covers most Cambodia expats, including those who are
working and their partners and children, freelancers, and volunteers. The current rules (as of
March 2018) require applications to provide a stamped letter verifying their employment with a
Cambodian company). Spouses and children of EB visa holders can submit the visa-holder’s
employment letter plus proof of their relationship to the visa holder to renew their own visa
extensions. This renewable visa extension can last for 1, 3, 6, or 12 months, although only the 6-
and 12-month visa extension allow multiple entries.
Be aware that the EB visa extension does not confer the right to work in Cambodia. In
order to be legally employed, you will need a Cambodian work permit. Once you have the EB
visa extension, at any point in the future the immigration police may ask to see your business
license, work contract, and work permit, or a letter confirming the purpose of your stay.

2. Cost of Living
Depending on the type of lifestyle an expat maintains, the cost of living in Cambodia is
relatively affordable. Expats will find that certain things can be relatively cheap – including street
food, entertainment and public transport – however the cost is usually higher if living in Phnom
Penh. Other things, like internet, toiletries and eating out, can be incredibly expensive. For expats
who choose to 'live like a local' Cambodia is the ideal destination to do so.

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3. Lifestyle
The Cambodian society relies on two main pillars: family and traditions. Unlike European
and American countries which are very modern and where family members are quite scattered,
you are likely to find many generations living under the same roof in Cambodia. Indeed,
Cambodians have managed to preserve these traditions over centuries, whereby the elderly are
considered as the guarantors of the family unity. Besides the family, hierarchy is also very present
in all spheres of the Cambodian society and of everyday life, whether religion, school, work, etc.
Overall, Cambodian, like others Asian countries, families play a very important part in their life.
As a result, 80% of Cambodia population follows the traditional living in the countryside
which means lives on fishing and farming. Cambodians are the hard-working farmers who usually
wake up before the sunrise and come back home after sunset. Like their neighbor Vietnam and
Thailand, the main food is wet rice. Rice always appears in their meals.
Modern lifestyle has a very little impact on the Cambodian living style. Particular, the
majority of Cambodians live in the village and their life cycles are attached to the village. All
important events from birth – marriage – to death happen in the village, which somehow affects
to their shy and conservative characteristics.

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HIGHLIGHTS ON VIETNAM

I. a. History
As early as the Paleolithic times the region that is Vietnam now has already been occupied
by the early civilization of the Phung-nguyen culture. During 1200 BCE, the cultivation of wet-rice
and casting of bronze have developed and the led to the advance of the Dong Son culture. Most
Vietnamese considers the Hong Bang Dynasty as the first Vietnamese state. Vietnam was under the
Chinese regime during the early first millennium.
In 938 CE, Ngo Quyen, a Vietnamese lord crushed the Chinese forces at the Bang Dang
River and attained independence. Vietnam flourished during the 15th century under the Le Dynasty
and expanded south between 11th and 18th centuries to conquer Champa Kingdom and part of the
Khmer Empire.
From 1859 to 1885 the country was successively invaded by French forces and eventually
became part of the French Indochina. During the 1940’s the nationalist liberation movement Viet
Minh emerged under Ho Chi Minh with the purpose of regaining independence from France and to
defy Japanese occupation.
In 1960’s the Vietnam War broke, causing the US to send about 500,000 troops during the
peak of the war in 1965. The US president approved a strategic air command (SAC) bombing
operation in Cambodia and Laos called Operation Menu. The Paris Peace of Accords of January 27,
1973 officially recognized the independence of Vietnam as recognized by the 1954 Geneva
Agreements, by March 29, 1973 all American war forces were withdrawn. South Vietnam shortly
became the Republic of South Vietnam after the fall of Saigon on April 30, 1975 and formally
integrated with the North under communist rule as the Socialist Republic of Vietnam on 1976.

b. Climate
Because of its geography, the climate of Vietnam can be divided a tropical and a temperate
zone. It is characterized by strong monsoon influences, has a considerable amount of sun, a high rate
of rainfall, and high humidity that makes it sometimes feel quite uncomfortable. Regions located near
the tropics and in the mountainous regions have a slightly cooler.

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There are two distinguishable seasons in the southern areas. The cold season occurs from
November to April and the hot season from May to October. The northern parts of vietnam have
essentially four distinct seasons, it can be quite cool in the winter there, but very warm in summer.
The annual average temperature ranges from 22°C to 27°C year-round.

c. Culture
Vietnam’s culture focuses on humanity, harmony, family, and community values through
music, art, dance, and literature. There are hints of French and American influence, but national
symbols like dragons, turtles, bamboo, and lotuses are strictly Vietnamese and can be seen on many
buildings and Buddhist temples throughout the country. Despite efforts at industrialization after
1954, agriculture remains the foundation of the economy. Vietnam imports few basic agricultural
commodities, and the majority of the items people consume are grown or produced in Vietnam.
The Vietnamese government recognizes six official religions: Buddhism, Catholicism,
Protestantism, Islam, and two indigenous religious traditions that emerged during the colonial period,
Cao Dai and Hoa Hao.
Vietnamese is the dominant language, spoken by an estimated 86.7% of the population. It is
a tonal Mon-Khmer language with strong Chinese lexical influences. The six-toned dialect of the
central Red River delta region, particularly around Hanoi, is regarded as the language's standard
form, but significant dialectical variations exist between regions in terms of the number of tones,
accents, and vocabulary. Dialectical differences often serve as important symbols of regional identity
in social life.
As the official language, Vietnamese is taught in schools throughout the country. During the
twentieth century the country's elite have mastered a variety of second languages, such as French,
Russian, and English, with the latter being the most commonly learned second language today.
Polite behavior is highly valued. One of the most important dimensions of politeness is for
the young to show respect to their elders. In everyday life, younger people show this respect by using
hierarchical terms of address when interacting with their seniors and parents regularly instruct their
children on their proper usage.

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d. Ports
For more than 130 years old, Saigon Port has had the highest throughput and productivity
per annum of the country for years. Being in the middle of the busiest city of the nation means ground
transportation to and from the port has to deal with traffic congestion similar to other big Asian cities,
and expansion of the port is not an option regardless of the high throughput. Meanwhile, Saigon port
assumes the role of the major port in the south, where cargos and containers come and go from all
industrial parks in the southern region.
Another largest port in Vietnam is Hai Phong Port. Hai Phong Port has the largest flow of
goods in northern Vietnam with modern facilities and synchronised infrastructure according to
international trade. The wharf has a total length of 1,567 metres with a warehouse area of 52,052
square metres and can handle some 10 million tons of cargo annually. The existing port facilities are
inland located and have a long maritime access channel, 42.8 km counting from the “zero position”
(vessel arriving & waiting point) up to the Main Port Terminal upstream point.

II. a. Economy Conditions

1. Current Policies
The results of Vietnam’s three decades of economic transition are impressive. A range of
factors helped Vietnam to attract investment and boost exports, including: a competitive
investment regime; trade liberalisation; engagement with the international economic system;
political stability; and low labour costs. Its economic planners avoided debates about capitalism
and instead justified the introduction of markets as a way of encouraging greater production and
trade.
Yet, while trade and foreign investment are indispensable features of Vietnam’s economic
success, they have not automatically translated into the creation of a vibrant and competitive
private sector. Export-oriented foreign investment has been attracted by an open trade regime and
stable investment framework, but this has also limited incentives to build linkages to local
suppliers and service providers. Thus Vietnam’s share of impressive exports and some large trade
surpluses is less than might be expected. The productivity and share of domestic value of
Vietnamese firms has actually declined as its economic integration has increased. Addressing this
is the primary economic challenge for Vietnamese policymakers today.

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2. How to Start Business

There are a number of important steps that must be taken in order to ensure proper
compliance with the country’s laws;
 Get legal advice; you have to meet with a local lawyer to get legal advice on which kind
of business type is the most suitable for your situation.
 Find office space and a legal representative of your business; find office space then for
your business not only to have a place to work, but also as a specific office address is
required by the government for the business license application. If you are not the legal
representative of your business, you need to find a reliable partner.
 Apply for a business license; prepare all necessary paperwork and make sure that you
fulfill all necessary requirements prior to applying for the business license. Expect a 15
day waiting period for a Vietnamese-owned company, and 60 day waiting period for a
foreign-owned company.
 Run your business; run your Vietnamese business which is now capable of hiring
employees and committing to business contracts. There are some things you need to do
such as getting a company stamp, registering for a tax code, setting up a company bank
account and publicly announcing the establishment of your company. Recurring tasks
include tax reports, accounting and paying the employees’ insurance.

3. Salaries, Expat Packages, Taxes

According to the survey, expats in Vietnam could earn $103,000 annually on average,
which is above the global level and a quarter less than Singapore's. That is around 50 times higher
than the annual income average for Vietnamese, which was $2,100 last year according to the
World Bank.
To convience people to go abroad, there may be an expat package to help ease the
transition, it would including;
 Relocations benefits; covers the cost of actual move, also help of a relocation agent.
 Accomodation benefits; subsidized housing and a rental agent to help first
accomodations.
 Expatriate family benefits; aid tuition payment for children, obtain visa, a private driver.

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Vietnam personal income tax rates are progressive to 35%. Nonresidents are taxed at a flat
tax rate of 20%. Residents are then taxed in accordance with the following:

Average monthly income Tax rate

Tax to be paid
(VND) (Percent)
Up to 5,000, 000 5 Income * 5%
5,000,000 up to 10,000,000 10 Income * 10% - 250,000
10,000,000 up to 18,000,000 15 Income * 15% - 750,000
18,000,000 up to 32,000,000 20 Income * 20% - 1,650,000
32,000,000 up to 52,000,000 25 Income * 25% - 3,250,000
52,000,000 up to 80,000,000 30 Income * 30% - 5,850,000
Over 80,000,000 35 Income * 35% - 9,850,000

b. Living
1. Banking, Employment Pass, Work Permit, Visa
The banking system in Vietnam is modern and efficient. Most banks in Vietnam have at
least one English-speaking service representative. A number of international banks have a
presence in Vietnamese cities, including HSBC and ANZ. When expats is looking to open an
account with a Vietnamese bank, they will find that Vietcom Bank is a popular choice. All banks
in Vietnam offer a range of banking packages, so it is worth researching which packages best suit
an individual’s needs.
In most cases, a work permit is required when working in Vietnam for more than three
months. Expats can either apply for a work permit from within Vietnam or from abroad with the
help of their employer or a contracted visa agency. Those applying from within Vietnam will need
to do so within 90 days of arrival, as the government only grants a three-month period during
which expats can live and search for job opportunities in the country without a permit.
It is fairly easy to extend a work permit in Vietnam, as long as the applicant is continuing
the job for which they were initially granted the permit. If this is the case then the employer must
apply for this extension at least 30 days before the existing permit expires. Furthermore, certain
conditions must be met in order for an expat to be eligible for extension. Currently, work permits
for foreigners are valid for a maximum of three years.

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Those who wish to live and work in Vietnam beyond the maximum length of stay granted
by their entry visa will need to apply from within Vietnam for an extension of stay and a change
of their visa status. Expats will need to apply for a Temporary Residence Card (TRC), which is
valid for one to three years. This can be applied for within the country and requires a business
visa or valid work permit (which is only issued if an expat has a Vietnamese company as a
sponsor).

2. Cost of Living
Living expenses in Vietnam will differ depending on an individual’s lifestyle. Many expats
manage to enjoy a good life in Vietnam without spending a fortune. The largest dents in an expat's
monthly budget will be in the areas of housing, schooling and Western foodstuffs. Travel, phone
and Internet costs remain low.
Like most countries, Vietnam has its fair share of temptations for an expat's wallet. Being
in Asia, there are lots of electronic gadgets that expats can spend their hard-earned salary on.
However, with a little financial shrewdness, it is easy to live comfortably and save at the same
time.

3. Lifestyle
The lifestyle of Vietnamese people varies from region to region and between the young
and old generation. However, there are some aspects of life remaining unchanged. People in this
Southeast Asian country, especially in rural areas have long had reputation for being kind,
hospitable and hard-working. Family places an indispensable part in Vietnamese life. There still
exist extended families with two or three generations living under the same house.
Traditionally, children are expected to be obedient and respectful toward elders, especially
their parents and to help with household chores. Throughout the country, the lifestyle of
Vietnamese is under a significant influence of age-old Confucian virtues of benevolence which
respect social order, trustworthiness, determination, and the duty to help the less fortunate.
Education is of great importance to Vietnamese people, so Vietnamese children are now given
adequate education since they was at small age.

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