Use It or Lose It: CDC's Three-Year Deadline for Manufacturing QIPs to Invest Their Minimum Capital

What did the CDC issue?

The Instruction directs the relevant CIB departments to strengthen their review and monitoring of manufacturing QIPs, to check that projects receiving incentives have implemented the investment the framework requires. Its core rule is simple: actual investment capital must be equal to or more than the applicable Negative List minimum.

The Negative List names investment activities that cannot qualify as QIPs. For many manufacturing activities it does this by excluding projects whose investment capital is below a stated amount. For example, the list excludes the manufacture or assembly of motor vehicles with investment capital of less than USD 2,000,000, and the manufacture of parts or accessories for motor vehicles with less than USD 1,000,000. Each project's threshold depends on how its activity is classified in Annex 1.

Which three-year period applies?

For existing manufacturing QIPs, the period therefore ends three years from 27 August 2026, which is 27 August 2029.

What counts as "investment capital"?

Sub-Decree No. 139 already defines Investment Capital as "an investment value indicated in a local currency or foreign currency excluding the land value and working capital." Published summaries of the Instruction apply the same exclusions. In practice, the capital that counts toward the minimum is the investment in the project itself, such as buildings, plant and machinery. It does not include land or the funds used to run day-to-day operations.

This matters most for projects with large land purchases or heavy working-capital needs. A project whose total reported investment exceeds the threshold may still fall short once land and working capital are taken out.

How is actual investment evidenced?

The published summaries of the Instruction do not set out a specific list of evidence. The existing framework, however, already provides the main channels through which CIB sees a project's investment:

• Semi-annual and annual reports (Article 11, Sub-Decree No. 139): Within 20 working days of the closing date for submitting a tax return, investors must report to the CDC or the provincial/municipal investment sub-committee on the actual implementation of the project. The report must cover Investment Capital, number of workers, production status, market status and social and environmental compliance. CDC then issues a certificate of compliance. Failing to report properly can itself cause the loss of incentives, guarantees and protections.
• Inspections (Article 10): CDC must inspect project implementation regularly or as necessary, including progress and the actual existence of the project.

Investors should keep a clear audit trail: capital remittances, audited financial statements, fixed-asset registers, and invoices and customs records for construction materials and production equipment. All of this should match the figures in their CDC reports.

What happens if a QIP misses the deadline?

Published summaries describe the consequences differently. One describes possible withdrawal of the QIP Registration Certificate. Others refer to measures by CDC that may include the loss of investment incentives. Separately, Sub-Decree No. 139 lets CDC nullify an investment project where the investor fails to comply with the requirements of its Registration Certificate, excluding cases of force majeure. Either outcome removes the economic case on which many manufacturing projects were built.

What this means commercially

• Phased investment: Projects that registered at or near the threshold, then planned to build capacity in phases, should check whether the qualifying spend will be in place within the three-year period. They may need to bring capital expenditure forward.
• Financing plans: Where machinery or construction is to be financed in later rounds, lenders' drawdown schedules and shareholder funding commitments should match the deadline. Delayed financing becomes a regulatory risk as well as a commercial one.
• Restructuring and scaling back: Any change to a registered project requires a written request to and approval from CDC (Article 12). A project planning to reduce scope should take advice before changing its plan, rather than simply under-investing.
• M&A due diligence: A buyer of a QIP takes on all existing rights and obligations of the project (Chapter 5, Sub-Decree No. 139), and an acquisition not registered with CDC causes the purchaser to lose incentives. Diligence should test the target's qualifying capital, its compliance certificates and its remaining time, and the transaction documents should allocate the risk of a shortfall.

What should manufacturing QIPs do now?

Key takeaways

• Instruction No. 1555/26 CIB (27 August 2026) requires manufacturing QIPs to actually invest at least the Negative List minimum.
• The deadline is three years from 27 August 2026 for existing QIPs, and three years from registration for new ones.
• Land value and working capital do not count toward the minimum.
• CDC reporting under Article 11 of Sub-Decree No. 139 is the main way actual investment is reported, so records must match.
• Shortfalls risk the loss of incentives and possibly withdrawal of QIP status.

How MLV Law Group can help

MLV Law Group advises foreign investors on Qualified Investment Projects throughout their life cycle. Our investment team can confirm your Negative List classification and deadline, review qualifying capital and CDC reporting, prepare Article 12 change requests, engage with CDC on compliance, and run QIP-focused due diligence and documentation for acquisitions, mergers and restructurings.

To review your project's position, contact our team at legal@mlvlawgroup.com or +855 71 777 4168. For more context, see our Invest in Cambodia / QIP guide and our practice area on Ongoing Compliance, Aftercare & Project Lifecycle Support.