Obtaining Long-Term Source of Fund
When designing a business expansion plan, companies will almost always face the problem of funding for its investment and working capital. Companies usually have various sources of funding from different financial institutions, yet most of them are short-term funding that may be a barrier for them to develop their long term business plan. In contrast, on the stock market, those companies can have a long term funding by way of issuing and selling their shares to the public, and use it to implement their long-term business plan while they need to pay back only dividend based on actual company’s profit and cash availability.
Obtaining Tax Incentive
This is a primary incentive for companies that are looking for raising fund by way of issuance of securities and listing on the CSX. According to Anukret on Tax Incentive in Securities Sector issued on January 08, 2015, all companies going public and listed on the CSX will enjoy 50% reduction on corporate income tax over a period of three years after listing, and this “tax holiday” period will end in January 2018. At the same time, companies will be waived all corporate income tax liabilities for the last 10 years, found by external auditors after auditing by General Tax Department. In addition, a monthly prepayment of 1% profit tax will also be suspended during a period of three years.
Improving Corporate Profile and Visibility
A listed company generally draws attention from domestic and foreign investors, the news media and the public, and its financial or operational affairs are reported on the newspaper and TV and communicated within and outside the country. This enhances the visibility and profile of your company, which further improve the awareness of your company’s products and services.
Sustaining Business with Stronger Corporate Governance and Internal Control
To establish a business entity, one needs to overcome many issues; yet, make it sustainable is even harder and a big challenge for business owners. Companies are usually subject to concerns over corporate governance and internal control practices. But with the status of listed company, once they stand out in the public, they will be able to improve their corporate governance by having clear structure of board of directors, who will oversee the performance of the management. In addition to this, business owners can enhance internal control in the company that will help prevent misconducts or fraud in daily business operations. As a result, good corporate governance and internal control will help companies grow sustainably. Furthermore, the adoption of good corporate governance practices should better prepare Cambodian business entities to face the arrival of other ASEAN competitors with an introduction of ASEAN Economic Community at the end of 2015.
Proactive to Government Regulations
All companies are being scrutinized by the government on their compliance with regard to tax practices, accounting records and audit etc. This shrinking “freedom” shall be in favor of an early adoption of compliance standards and getting the status of a listed company.
