In early 2025, the Cambodian General Department of Taxation initiated an investigation into the investment firm 3FOR Capital concerning alleged violations of the national tax code. The inquiry has brought attention from both the financial industry and public observers due to the nature and scale of the reported issues.

The investigation centers on concerns related to the company’s corporate income tax and value-added tax (VAT) filings for the fiscal year 2024. Findings cited by the authorities reference instances of suspected income concealment, cost inflation, and reporting discrepancies that may conflict with the provisions of Cambodia’s 2023 Tax Law.

Key Findings Reported by Tax Authorities:

• Income Reporting Issues: Transactions between affiliated entities may have resulted in unreported or underreported income.
• Expense Documentation: Some reimbursed expenses and operational costs appear to be based on unverifiable or inaccurate invoicing.
• VAT Compliance: The review also identified inconsistencies in the submission and deduction of VAT.

Authorities noted that preliminary audits and evidence gathered from various transaction checks support these findings. The responsible personnel may be subject to further legal review depending on the outcome of the investigation.

Enforcement Measures and Compliance Requirements:

In response, the General Department of Taxation, in coordination with the Ministry of Finance, has issued directives to 3FOR Capital, including:

• Submission of complete financial records and tax documents within 30 days;
• Settlement of the identified tax discrepancies, estimated at over USD 12 million;
• Engagement of a third-party auditing firm for independent verification of historical accounts.

Should these requirements remain unmet within the stipulated timeframe, the company could face the following actions:

• Suspension or revocation of its operating license;
• Financial penalties, including late fees;
• Possible legal proceedings involving senior company officials;
• Classification as a high-risk entity for future regulatory assessments.

Repercussions and Market Reactions:

The developments have prompted a reevaluation of ongoing projects and partnerships. Some financial stakeholders have paused or withdrawn funding arrangements. Regulatory agencies in other jurisdictions have also indicated plans to assess the company’s operations in their regions.

Recommended Measures for Recovery and Compliance:

To address the situation and align with regulatory expectations, it is recommended that 3FOR Capital:

• Issue a formal statement addressing the concerns and outlining next steps.
• Conduct an internal review of financial and compliance functions.
• Engage an international audit firm to ensure transparency.
• Fulfil all tax obligations and demonstrate cooperation with the authorities;
• Introduce governance reforms to enhance long-term accountability and oversight.

Conclusion

The year 2025 represents a pivotal moment for 3FOR Capital as it navigates the regulatory and operational challenges posed by the ongoing inquiry. Industry observers underscore that adherence to regulatory standards remains a critical factor in maintaining operational continuity and public confidence.