Friday, April 6, 2012

Importing a Vehicle

I got a response on one of my posts dealing with cars in Cambodia. This poster mentioned he is planning to import cars from the U. S. to Cambodia. I can only say, ‘Good luck.’

The way I see it the field is not exactly undercrowded. There is practically a used-car dealership on every corner. Now if somebody wanted to import a car on his own because they just don’t want to drive another Toyota or Lexus, here is a look at what awaits them.

First you need to get an import company to do all the customs clearances, import license, etc. If you do it on your own a ‘penalty’ fee of 20% on the import duty becomes due. Seeing that most import companies charge only 2% of the cargo value or a minimum of $150, I found this very reasonable. Plus who can negotiate with the customs officers? Certainly, not an in these matters ignorant foreigner. One may drive a good bargain at the market but with these people you are lost.

First you need to find out the assessed value of the car you are planning to import. The customs code does not do this by make, mileage and market value but uses an ‘arbitrary’ value as the basis for their computation of any duty and tax due on the vehicle. This may sound pretty simplistic but in essence is the only practical way of dealing with the high potential of rigged invoices. The customs code uses the engine displacement and the year. Here is the schedule:


The ad valorum duty and tax can be found in this schedule. The 35% is the import duty, the 45% is the excise tax (I call it the luxury tax), and the 10% is the added value tax. These rates are compounded so that the total will be 115.325%.


But, of course, this is not all. You will have to pay for shipping the car wherever it comes from. If it is only one car this is extremely expensive. There are no roll-on/roll-off services available to Cambodia. So most cars are shipped in containers. This can run anywhere from $4500 to $5,500 for a single car from the West Coast of the U. S. It’s not a whole lot cheaper from Europe but there are plenty of RO/RO services to Singapore. Let’s just use $1500 as an average. Your importer may hook up with another shipment so that 4 cars can be shipped in one 40’-container.

So here is the tally for a 2006 Audi A6 2.4ltr., which is officially listed at $12,800 (though you will be lucky to get one for this kind of money. They are around $15,000 to $20,000 depending on mileage).

Shipping $ 1,500
Misc. shipping fees (bunker adjustment, THC, etc. $ 500
Import duty/tax $14.760
Customs clearance $ 350
Customs permit $ 250
Camcontrol $ 15
Use of import license of the import company $ 256

For a total of $ 17,631
If you just use the customs value of the car $ 12,800

You end up paying $ 30,431

Now you understand where those high used-car prices come from. 115.325 % is steep; but governments of poor countries that have to import most of their goods always levy high import duties as their primary revenue. Originally Cambodia used a flat rate of $2500 per car; but when they came in in bigger numbers they quickly raised it based on market values – Sam Rainsy was the initiator of that back when. The customs people at that time sat there poring over French and U. S. classified ads in car magazines and newspapers.

Finally they arrived at more varied tax rates, very high ones that goes without saying, but the World Bank mandated a set schedule not to exceed 35%, which will eventually come down to 10% in 4 or 5 steps until 2020, if I am informed correctly. But the government being no slouch quickly instituted the ‘luxury’ tax of 45%, which will most likely stay forever.

On the whole the car values are pretty decent in my view. Last year I bought a 2006 Prius for $17,500. I was amazed it was so cheap. In the U. S. that car still went for around $14,000 but in the duty schedule it is listed at a mere $7,720 because the gasoline engine only has 1.5 ltr., never mind that the combined HP output is something like 150.

Now after all, perhaps you don’t really need that Audi, BMW, or Mercedes you fancy and can do with a nice Toyota Camry, although a 2007 model will still set you back something like $27,000. But seeing the benefit of cheap service and repairs, it certainly makes economic sense.

31 comments:

Ran said...

Thanks for great information you write it very clean. I am very lucky to get this tips from you.


Import Customs Clearance

Anonymous said...

Very interesting article. However, I'm a slightly confused about the figures. You stated that the customs value of the Audi is $12,800. That seems to be the Ad Valorem duties amount (2nd image). The customs value (from the first image) appears to be $14,760. This would throw your calculations off a bit. Granted, I can't read Khmer. So I might be wrong about this.

Also, occasionally I see cars for sale in Cambodia where the seller states that the import taxes have not been paid. How is this tracked?

KJE said...

5:08
You are exactly right. I mistakenly switched the schedules; it's the other way around as you point out.

Kyoko Nitori said...

Yeah, too sad that the price of importing cars from other country not so cheap! If you just have the money it’s not a big deal after all.

Unknown said...

You're the beacon of light that shines in Cambodia. Thanks for sharing valuable information about car import duties, prices and process.

Anonymous said...

Latest I heard is that you're not allow to import in the used car if it is a Toyota. Today, only Cambodia Toyota being the brand owner is allow to import Toyota cars into Cambodia. This was not the case before. Sometime this year, the influential folks at Cambodia Toyota influenced the parliment to pass a special decree allowing them to be the only party authorised to import Toyota vehicles, both new or used. On what basis, the explanation given to me was unclear.

Can you shed some light on this? Thanks in advance.

KJE said...

4:40
I cannot confirm this. There was no report that the Toyota dealership got that right. The parliament certainly did not pass such a decree. The Assembly passes laws. The government issues decrees. Such a decree would cause a revolt. One large used-car dealership is owned by Hun Sen's daughter. I seriously doubt there would be any interference into her business. That company imports high-end used cars and trucks.

Anonymous said...

Thz 4 your mention but now if i want to buy a used car( toyota camry 2008 at price 9.555 usd) from japan. This how much does it cost it cambodia after shipping import tax ect.....

KJE said...

The import duty and tax is 115.325% on the price listed in the official tax code. The lists above are outdated but they are a good guide anyway. A ballpark figure is about $12,000. You would need a customs broker to take care of the clearance, etc. That is about $1000. You are better off buying a car here from a used car dealer. They offer cars fresh from a container, so not used in Cambodia. Their profit margins are very low due to the stiff competition.

Abdibali uulu Anarbek said...

hey how are you. We was looking someone who knows more information about custom clearance, can we contact through skype and discuss about cambodian car market, because we are planing to export cars from south korea.
Anarbek

KJE said...

11:25
I am not an importer. For basic info check the post above. The import duty and tax is $115.325% on the listed customs value. The schedule changes every year, of course. You need a customs broker who can also give you an import license for Cambodia for a nominal fee of 2%. If you have buyers lined up already they would be the importers. Send an email with your specific questions. I can give you a good customs broker.

Anonymous said...

Sorry im not getting it,
If I was to export a car into cambodia, say the car is a 2000 Toyota Altezza, what procedures do I need to take to get the vehicle road worthy in cambodia and how much will this cost me, excluding the vehicle price and the shipping as ill sort that out my end.
please get back to me by email if you can chros_kev@hotmail.com

Cheers
Chros

Sokha said...

Interesting, can you send me a contact of good customs clearance booker? My email is: meas.sokha@gmail.com

Артур Заборянский said...

Hello guys!
I want to ship my lovely classic russian car, 18 years old, engine 71 hp, to Cambodia.
This car costs around 150$ in Russia(very cheap)
price of shipping nearby 1500$.
Buying same in disgusting condition in vietnam,and 5 -10 years older costs nearby 1500 - 2000$, and i have not seen similar in sihanouk and Phnom Penh
Does anybody know price of registration and what taxes do i need to pay to get local number plates?
And do i need to remove it from register before shiping?
Thank you)

KJE said...

I believe you can't bring this car in. The import duty and tax applies only for cars made after 2000. The government wanted to impose a ban on all cars older than that. They did not pass a law - so they just don't have an appropriate tax schedule any more.

I am not quite sure, though. You might check with one of the import agents here. Check the yellow pages or look for Camfreight Services. They will be able to help you with all the information you need. What make is it - Lada Jeep, Moskvich?

Olga van Doorn said...

Hi,
I need an advice on importing Korean car, 2007, 0.8L. Could you please give an updated tax scale for this type of vehicle or should I just go 3 steps back on the scale you posted?
After 3 years since you posted if there any changes in the procedure?
I am moving to PP end of July and thought importing the car I mentioned from one of the Japanese sale websites (I bought all my vehicles from this company while stayed in Africa).
What do you think is it an easy and less expensive way or should I buy vehicle from the local car dealer?
thanks,
Olga

KJE said...

Olga,

The procedure is the same but the Tax Department issues a new schedule every year and the set values change to what they believe is correct. The overall tax and duty is still the same at 115.325%. With a small car like this it is not really worth the trouble to import it yourself. There are many Korean small cars for sale here; the prices are competitive as dealers work on very small margins. Just make sure it is a fresh import and hasn't been driven in Cambodia.

mondol k said...

HI,

I'm looking to ship my car from USA to one of my family member in Cambodia. Can you send me a good customs clearance booker in Cambodia? thank you

KJE said...

CFS - Cam Freight Services Co., Ltd.
Business Listing
No. 85C, St. 313, Sangkat Boeung Kak II, Khan Toul Kork, 12152 Phnom Penh
Tel +855 23 6538 888
Tel +855 23 883 901
Tel +855 23 883 902
Fax +855 23 889 888
E-Mail

Dinesh Balram said...

Hi KJE, I have been scouring the internet and came across you blog which I have found to be very informative. I am a used vehicle dealer based in Japan dealing in cars, trucks and heavy machinery. Basically I am looking to start importing cars to Cambodia to Cambodian vehicle dealers as a business and would like to ask whether this is worth it? Also would you happen to know what the regulations and processes are for doing this type of business in Cambodia. Thank you and I am definitely looking forward to your reply.

PS i sent an earlier comment but dont know if it went thru.

KJE said...

12:03

There a lot of car dealers importing cars, SUVs, vans from everywhere - Japan, Europe, USA, Middle East. This is very competitive market with small profits. If you are able to find a dealer to work with you you won't have to worry about the market here as he will do the marketing. But I personally wouldn't go into it as you wouldn't know who you are dealing with; they also like to make down payments with the balance due on arrival of the vehicle - many things could go wrong here.

However, the heavy machinery is possible a market as the construction industry is the no. 1 industry in terms of GDP contribution in the country right now. The problem here, though, is to find an importer. You should come here and to take a look and find out yourself.

Anonymous said...

Hi KJE, First I'm sorry that my question is not related to the car.
I would like to import cosmetic product from Thailand, could you please advise for the import procedure?

Thank you.

KJE said...

You just use a freight forwarder/import broker. They will take care of everything. It's not worth the hassle doing it yourself. Further up I listed a broker. They do a good job.

Pitt Stop Auto Sales said...

Very interested in selling used cars like highlanders Camry RAV4 and Lexus RX GX LS LX models from USA. I'm based in Texas. Willing to work wholesale. Whatsapp or viber at 0019039209023

KJE said...

@Pit Stop
There are too many importers for used cars/vans etc. already. It's not a good business anymore. Margins are just too low.

pisey meas said...

Dear All ,
I have problem something no understand ! If i want buy car from Swiss country to Cambodia, How to payment Tex car ? Have problem with Tex or not ! Due to i not too buy !

Thanks so muck for support me.

KJE said...

You need to use an agent. Address above.

Unknown said...


Hi KJE!

I am working on an international marketing paper. The concept is to import local transport vehicle in the Philippines called jeepney. Its a bus-like mass transportation vehicle known in the Country. I am wondering if you have any idea on the cost of shifting this item from manila to phom pehn? Is there a direct route? or need to pass through singapore? You think its ok to ball park 1500 USD/ unit?

KJE said...

Hi,
Shipping will definitively be through Singapore. Freight could be either on-board or in a container. Ball park figures are about $1000 onboard, and $2000 in container. New Jeepneys aren't around here at all. I have seen a couple old ones and have no idea about pricing. I am not sure whether they would catch on.

Anonymous said...

For a develping country trying to compete in the ASEAN, import duty and tax 115.325% is outrageous.

SK said...

The tax now is 165%. But anyone could advise how I suppose to do the import? Any custom broker to recommend? The brand new car value in Cambodia now is blood sucking. No one control!

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