Legal Update: Prakas on the Declaration of Opening and Closing of Enterprises and Establishments

Posted on July 16, 2025

On 5 May 2025, the Ministry of Labour and Vocational Training (“MLVT”) issued a Prakas No. 110/25 on the Declaration of Opening and Closing of Enterprises and Establishments (“Prakas”). This Prakas repeals Prakas No. 288 dated 5 November 2001 and provides further clarification and updates to the obligations of all enterprises falling within the scope of Article 1 of the Labour Law. Specifically, it requires all owners and directors of enterprises to submit applications to the MLVT to open, restructure/change, or close its business operations.

The key requirements imposed under this Prakas are as follows:

Key Requirements	Details
Registration Requirements with the MLVT	Newly established enterprises must apply for the Declaration of Opening the Enterprise from the MLVT via https://registrationservices.gov.kh. Upon receipt of this declaration, the enterprise owner or director must create an account on the Labour Centralized Management System (“LACMS”) at https://lacms.mlvt.gov.kh within 30 days to comply with the legal requirements under the Labour Law. Existing enterprises that are already in operation but have not yet obtained the Declaration of Opening the Enterprise must create an account on LACMS at https://lacms.mlvt.gov.kh within 30 days from the effective date of this Prakas.
Display Requirement	The Declaration of Opening the Enterprise must be visibly posted at the enterprise’s premises and shall follow the sample format annexed to this Prakas.
Mandatory Updates for Business Changes	The enterprise must update to the MLVT within 30 days on any of the following changes: name of the enterprise or establishment; shareholder, representative or director of the enterprise; transfer of shares, detailed information of the director or change of memorandum and articles of association; registered address; structure of the enterprise or establishment; business objectives or activities; tax identification or update to its patent tax certificate; business suspension; permanent closure; contact of the head of administration, personnel responsible of human resources matters, designated contact for labour-related matters; bank account information; contact information of the enterprise (i.e. email, phone number, and personnel handling the MLVT online portal); and other general information of the enterprise or establishment such as number of workers, key products, trademark, information on purchase orders and import/export activities conducted by the enterprise.
Enforcement and Sanctions	Violations of this Prakas are subject to fines and penalties under Chapter 16 of the Labour Law. Enforcement of these penalties falls under the authority granted by Article 359, while Article 360 provides the formula for calculating fine amounts. Article 369 stipulates fines ranging from 61 to 90 times the base daily wage, or imprisonment for a period of 6 days to 1 month, or both, for failure to comply with procedures relating to the declaration of opening or closing of the enterprise. Article 382, any person who obstructs or attempts to obstruct labour inspectors or medical labour inspectors from carrying out their duties may incur significantly more severe penalties. These include fines ranging from 120 to 360 times the base daily wage, or imprisonment from 1 month to 1 year, or both. Obstruction may include actions such as denying access to the premises, withholding or falsifying information, or interfering with the inspection process. *** The base daily wage, used solely for determining legal fines and distinct from the minimum wage, is currently set at 40,000 riels, as established by Joint Prakas No. 377 dated 14 September 2015.

This legal update is brought to you by Davies SM Attorneys-at-law.

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