A Business Law Conclave event was held at the start of 2023 by the American Chamber of Commerce in Cambodia to highlight and discuss the key developments for new legal legislation and regulation relevant to businesses operating in the Kingdom.
This article covers the key questions answered at the event. If you want to know more about laws relevant to business in Cambodia or more important insights into the Kingdom’s business sphere, you can view our services or contact us directly here to use our broad network of in-market contacts and expertise.
What do leading figures in Cambodia say about the importance of new law regulations?
H.E Chiv Songhak, Secretary of State at the Ministry of Justice, said Cambodia has taken the opportunity through the pandemic of turning a negative into a positive. In 2021, the government introduced a new investment law, providing more incentives for foreign investment.
“We have also promoted the implementation of key policy documents, in areas such as electronics, tourism, energy, and agriculture. We have also become involved in the RCEP and increased our trade with FTAs with China & Korea, among others. These have required important new laws and their implementation will be key to the further development of our country.”
“In the last two decades prior to COVID-19, Cambodia achieved an average growth rate of over 7 percent per year which has transformed the Kingdom. Following COVID, we aim to resume that growth rate in line with our ambitions to be a high-income country by 2050. New laws will help effectively facilitate that growth,” he added.
How has Cambodia taken advantage of its growth with new laws and regulations?
“The royal government has approved a total of over 100 investment projects, meaning over 1 billion in investment, across multiple sectors including infrastructure and tourism. The growth in foreign investment and the relationship between the US and Cambodia have also improved, 4.2 billion USD, an increase of over 50% compared to 2021.”
He said that however, as international trade and investment flow increases, disputes can also escalate, which requires a comprehensive, transparent and fair resolution process.
“We have established a court specifically for international affairs and a corporate committee, with me as chairman. This committee is responsible for preparing all legal documents for the lower and higher courts, organising trade procedures and our action plan and key concepts related to formulating the provision on the procedure.”
“We have raised several proposals for the establishment of a commercial court in PP which will extend across the country for international trade, intellectual property, and so on. There are lots of challenges, such as a lack of human resources, and a lack of current decision-making processes and procedures, which is why we are starting with a single commercial court, which will deal separately with lower and higher-level courts.”
“We aim to expand the commercial courts to be in other provinces, such as in Sihanoukville, where there is a demand for commercial resolutions. However, we will start with one court which will serve the whole country.”
What do foreign chambers of commerce say about laws in Cambodia?
AmCham president, Anthony Galliano, said that they have established a Legal Advocacy Committee because of strong demand from stakeholders to better understand the laws and regulations of the Kingdom of Cambodia.
He said, “Laws which promote economic and social prosperity are critical to a country’s growth, but they are also the foundation of civil, safe, and peaceful society and community.”
What do government advisors say about commercial law in Cambodia?
Speaking about the commercial court, H.E Ly Tayseng, Advisor at the Ministry of Justice, said, the law on commercial arbitration was promulgated in 2006 and a national commercial arbitration centre was established and is still operating.
“Cambodia recognises the regulatory challenges for business due to the lack of an effective dispute resolution mechanism for commercial disputes, and there is a need for establishing more effective dispute resolution systems including a commercial court.”
“Even though the commercial courts were established by the LOC in 2014, they have not yet commenced their operations. This is because, under the LOC, the operation of specialized courts must be made by a Prakas from the Ministry of Justice.”
“We have made progress with the creation of the Commercial Courts Committee (CCC), consisting of sitting judges, senior officials at the MoJ and experienced lawyers. They are currently preparing the legal frameworks necessary for the creation of the court.”
What is the progress on the development of commercial law in Cambodia?
H.E Ly Tayseng, Advisor at the Ministry of Justice, said he is now advising the Ministry of Justice to create an independent commercial court outside/separate from the current system, which will be independent, transparent, fair, efficient, user-friendly and free of corruption.
He said, “We will need to do lots of amendments within the commercial procedure current law, in order to create a separate and independent court. We need to decide what will be defined as a commercial matter, such as bankruptcy, in a common law approach or having a code model.”
Next was a number of presentations followed by a round-table discussion on various topics with key speakers.
What are the new 2023 E-commerce laws in Cambodia?
Mr. Jay Cohen, Partner & Director at Tilleke & Gibbins (Cambodia), started with a presentation on e-commerce and website law.
“All logally registered companies must use a .com.kh domain name and e-mail address, which should be provided to the Moc. However, you still have the right to use other domain names in their commercial operations.”
“Starting from January 2023, all companies must provide the MOC with the above when submitting their annual declaration of commercial enterprise. This can be obtained at www.domain.gov.kh, for automated registration.”
“In addition to creating the .com.kh, you can also get other variations such as org, and so on. The fees are around 100 USD, with annual renewal being 30 USD. This is a reasonable cost, and the validity is a year-long with a 60-day renewal allowance. Your local website can be in any language.”
“Another interesting development is whether your website needs a license or permit, which at the moment you do not need anything for. However, websites are now considered a form of advertisement, which means there is a prohibition on certain things, such as commercial websites affecting national security.”
Regarding e-commerce, he said there has been a big push to regulate e-commerce.
“The two things I want to highlight are the law on e-commerce, in 2021 an application was launched to facilitate applications for this license. This is regulated by two main partis. Firstly, intermediaries, such as telecom services, network services, the internet, online payment systems and so on. Secondly, e-commerce service providers, such as e-commerce platforms and so on.”
“The scope of the e-commerce law is managing e-commerce in Cambodia with other countries. If you’re an overseas company you also fall under these regulations above a certain threshold of business.”
“To license, as a company or brand you need to first go to the MPTC and get an online service provider certificate. Secondly go to the MOC and get and e-commerce license. If you’re a sole propritor, you just need to get a E-commerce authorisation with the mOC”
“Your turnover must be 62,500 USD per year to apply, however, you are obligated to notify the MoC,”
“Regarding tax obligations, important ones are Prakas No. 98, Sub-Decree No. 65, Prakas 542 and instruction No. 2520.”
“Locally incorporated companies just need to register with the GDT. However, if you’re a non-resident then Sub Decree 65 is an aggressive interpretation of e-commerce, so even sending emails can be under e-commerce. Therefore, off-shore companies to non-vat registered person in Cambodia (B2C) you need to pay VAT by the 20th of each month. B2B would be the responsibility of businesses.
Ms. Sok Vanessa, Managing Partner at Sethalay Law Office, then delivered a presentation on the Prakas on Unfair Contract Clauses, including the types of contracts, procedures for raising a dispute, consumer protection and law on commercial competition.
How has Cambodia updated its laws on advertising in 2023?
The major changes to laws on advertising which came in affect In 2022 were Sub Decree No. 232, on the management of advertising on products and services and Prakas No. 249.”
Mr. Matthew Rendall, Managing Partner at Sok Siphana & Associates. said, “these new regulations/laws mean that every advertiser must get a license to advertise any commercial goods and/or services in Cambodia. You will need a specific license based on the product from the relevant authority, such as for those that advertise alcohol or pharma.”
“These laws are designed to confirm the accuracy and appropriateness of the articles or contents of an advertisement, to make sure they are in compliance with the law on consumer protection and other regulations.”
“There is then a detailed list of actors who can apply for a certificate, and the required documentation, which is a big update on the previous laws surrounding advertising in Cambodia.”
“There are also new obligations for advertisements with rewards, under Sub Decree 232. You will need further permission before you run your ad.”
What are the new laws for using Khmer language in advertising in Cambodia?
As per new laws in Cambodia, from 2023 advertisements must now be in Khmer language or dual language, and the Khmer has to be double the size of the foreign language and placed above any foreign script. Websites do not come under this rule.
“Sub-Decree 232, article 17, also delivered a list of new prohibited content for advertising, such as saying your product is the best or anything to that effect, anything that adversely affects the historical values of the country,” said Mr. Matthew Rendall, Managing Partner at Sok Siphana & Associates.
“Article 19 of the same sub-decree outlines penalties, which at worse could end up in the cancellation of your business. However, compliance certificates will offer protection against these circumstances.”
Do you need a license or certificate to advertise in Cambodia?
Companies that advertise products or services must obtain advertising licenses, and you may apply for a certificate of compliance from the Ministry of Commerce.
“You need to use the Khmer language at all times except for foreign literature that is unable to be replaced by Khmer. Additional regulations apply for adverts with added value, such as getting something for free with the advert.”
“One big issue for the ministry is the placement for the advert. If I am advertising an event on Facebook do I need to go to the MoC or is it Facebook’s responsibility? You need to be careful that your advertisement doesn’t break any of the new regulations. The current understanding is that you are not an advertiser by posting an online advert. This is not clear, especially regarding enforcement, but the law has been made to be followed,” he added.
What are the updates on contract law in Cambodia?
In Cambodia, there has recently been an Prakas on Unfair Contract Term. Speaking at a recent law conference in Cambodia, Managing partner at Sethalay Law Office Ms. Sok Vanseka said the law requires the business operators not to put any unfair contract clause in their standard form of contract based on the abuse of circumstances that the consumers cannot negotiate or request for making any change on such form of contract.
She said that the unfair contract clause consists of any clause that provides an excessive advantage to the business operators or provides an excessive disadvantage to the consumers.
“Furthermore, such standard form of contract shall be prepared in the Khmer language in a clear and precise manner as the consumers may demand further explanation on terms and any change on material terms shall be subject to prior consent from the consumers.”
What is the new cooling off period concerning contact law in Cambodia?
Ms. Sok Vanseka also highlighted new ‘Cooling Off Period’ regulations, which mandates the business operator to grant the right to the consumers to return any goods and services (except for certain goods and services as excluded by the Prakas) in 7 days upon receipt without any justification for any distance sales or door-to-door sales of goods and services.
Also mentioned were the enactment of the new law on food safety and the Prakas on Minimum Information Standard, which permits of the use of QR codes for complying with the labeling requirements. Finally, she highlighted the recent issuance of regulations on investigation and negotiated settlement under the Law on Competition on any horizontal agreement, vertical agreement, market dominance, and merger and acquisition that negatively impact competition in Cambodia.
How do I find out more about new laws in Cambodia?
You can stay up to date with new laws in the Kingdom with Aquarii, through our business resources section or on individual laws in our library of laws section, both right here on our website.
We also recommend using our trusted law partners, RHTLaw, for more detailed enquiries regarding all laws and regulations in the Kingdom, to make sure your business or investment is protected.
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