Cambodia is an open market economy with excellent economic growth over the past decade. Even now, at a time when many economies all over the world are struggling due to the impact of the 2019 novel coronavirus disease (COVID-19) the Cambodian economy is still projected to grow by 2.5% in 2021.

Cambodia's most dominant industry is textiles, with garment factories an important pillar of its economic growth. The tourism industry is also a significant sector, and has seen huge growth during the large decade and the agricultural industry also plays a major part in the Cambodian economy.

The population of Cambodia is estimated to be just under 17 million. The national language is Khmer.

In general Cambodia has a conservative business culture. There are various business etiquettes to be aware of, such as punctuality, showing respect to those that are more senior, and the fact that bargaining is usually expected.

The general business hours in Cambodia are 8am to 5pm, Monday to Friday, often accompanied by a half-day on Saturday morning.

There are 21 public holidays in Cambodia, the most important of which being Khmer New Year in April and Pchum Ben, which falls in either September or October each year.

From 2014 to 2019 (excluding 2020 and the effects of COVID-19), Cambodia's GDP growth rate has been stable at 6.8% to 7.5% and is expected to continue at the same rate in 2022.

The upcoming commune (sangkat) election is unlikely to affect business activities because maintaining political stability is one of the main goals of the shared political agenda. In addition, stability is one of the main priorities embedded in the national development strategy.

The new investment law was adopted on 15 October 2021 and this law is to amend the old investment law which is more than 20 years old. The new investment law aims to attract more investors by creating transparency, promoting investment within priority sectors, for small and medium enterprises, and setting out the procedure and competent authority for registration. Under this new investment law, the approval on the QIP registration is only within 20 working days, which is ten days shorter than the old law. To guarantee the investor's interest and to comply with the principle in the international law, this new law also includes those international investment principles.

In recent years, the government has extensively reinforced public management, financial, and decentralisation reforms to ensure good governance principles in all public sectors. These reforms increase transparency, accountability, efficiency, and effectiveness in the business sphere. Current securities and banking laws have opened opportunities for investors to enter the capital markets in Cambodia.

The Cambodian legal system is a hybrid system of:

There are a few restrictions on foreign investment and shareholders. Foreign investment is also prohibited in the following areas:

Cambodian law permits 100% foreign ownership of a company (see Question 5).

There are no restrictions on doing business with certain countries and jurisdictions. Cambodia has access to regional and global markets through being a member of international and regional trade organisations. Cambodia has most favoured nation (MFN) and/or generalised system of preference (GSP) status in various markets, including:

Cambodia has also signed investment protection agreements with many countries around the globe. Further information can be found at the Council for the Development of Cambodia's website (www.cambodiainvestment.gov.kh/).

Foreign exchange operations are generally not restricted, provided they are conducted through authorised intermediaries; however, banks must report transfers (or suspected transfers) equaling or exceeding USD10,000 to the National Bank of Cambodia (NBC). Cambodian residents are free to hold foreign currencies.

The Foreign Exchange Law (Forex Law) permits NBC to issue temporary restrictions on the activities of authorised intermediaries in times of economic or financial crisis.

Cambodia's anti-money laundering provisions are set out in the Law on Anti-Money Laundering and Combatting the Financing of Terrorism, of June 2020. There are not any registration requirements under this law, reporting entities, such as banks, finance institutions and lawyers, must not keep anonymous accounts and must undertake customer due diligence (KYC) before opening accounts to avoid potential money laundering activities.

There are a number of incentives under Cambodian investment law available to foreign investors, including:

The Law on Commercial Enterprise dated 19 June 2005 (LCE) provides three options for foreign investors to register their business in Cambodia from offshore:

If foreign investors want to do business directly in Cambodia, the LCE permits the registration of the following entities:

A private limited company is the most advisable form of entity for foreign investment because there are only a few incorporation requirements:

On 15 June 2020, the Cambodian Government launched the single portal, a new online business registration portal through which investors can register their businesses with all relevant ministries.

A private limited company is incorporated at the Ministry of Commerce (MOC), the General Department of Taxation (GDT), and the Ministry of Labour and Vocational Training through one process on the single platform.

Other relevant ministries/institutions whose involvement is required for specific licence may become involved at a later stage (if any).

The entire process takes around eight working days from the date of submitting all required documents to obtaining the digital certificates from the following ministries:

The name of a private limited company must:

Information about registration can be found on the MOC website (www.moc.gov.kh).

Any amendment of the articles of incorporation must be filed with the MOC not later than 15 days from the notarisation date of the relevant company resolution.

Any change to the relevant information of a company during a calendar year must be reported annually to the MOC by filing an annual declaration within three months from the anniversary date of the company's online registration.

Whether or not the company transacts business, it must still submit monthly and annual compliance reports to the GDT. Monthly reports usually cover monthly taxes, such as salary tax, VAT, and other relevant taxes, while annual reports usually cover income tax and renewal of patent tax certificate. By law, after setting up the business with the GDT, each registered entity will receive a patent tax certificate and this certificate must be renewed annually. The Patent Tax Certificate is categorized based on the scale of the business and the company's profit.

The minimum registered capital required is KHR4 million. There is no maximum capital restriction.

Shares can be issued for non-cash consideration with pecuniary value, such as immovable property, movable property, and tangible and intangible property.

Restrictions on Rights Attaching to Shares. Shareholders can transfer their shares to a third party, only with the endorsement of a majority of the shareholders representing three-quarters of the total capital. Shareholders can be liable for unpaid company taxes. If so, the GDT can withhold the shareholders' property.

Automatic Rights Attaching to Shares. Unless otherwise expressly set out in the articles of incorporation, rights attaching to shares include:

A private limited company is led by one or more directors, who can be, but are not required to be, shareholders. The directors manage the business and affairs of the company. The articles of incorporation provide for the rights of the directors to manage the business and affairs of a company.

A director can be removed with or without cause by a majority of the shareholders entitled to vote for the director.

The board of directors must elect a chairman from among its members. The chairman can be removed from the office of chairman, but not from his or her position as a director, by a majority vote of the directors.

The board of directors may, as deemed necessary, establish committees to facilitate its affairs. Committees of the board of directors can be established by a majority of the board of directors in a written resolution.

There are no restrictions on foreign managers in commercial and company law or on the maximum number and nationality of the director(s). However, a director must be a legally competent individual aged 18 or above who has never been convicted of a crime.

Directors or officers can be civilly and criminally liable for both their intentional and unintentional acts. They are liable for unpaid taxes of a company if they had knowledge that tax was due but did not report the liability to the tax administration. They can also be civilly liable if they do not disclose in writing their interest in another company regarding contracts with that other company, or their material interest with regards to any person who is party to a contract or proposed contract with the company.

A parent company is responsible for all liabilities of branch offices, because branch offices are simply an extension of the parent company.

The parent company is not liable for the actions of subsidiary offices, because these have a separate legal personality from the parent company.

(See Question 8.)

The main environmental laws and regulations are as follows:

The Cambodia Labour Law (1997) regulates all employment contracts performed in Cambodia regardless of the place where the contract was made, or the nationality or residence of the contracted parties. The law does not apply to the following employees:

The provisions of the Labour Law are mandatory: the parties cannot agree to terms or conditions that are less beneficial to the employee than those of the Labour Law.

Since 2018, the following laws and regulations have amended and supplemented the Labour Law (1997):

Law on the Amendment of Articles 123, 138, 162, 300, 343, 350, 363, and 367 of the 1997 Labour Law, dated 5 October 2021.

An employment contract can be written or oral (Labour Law). In practice, the majority of employment contracts are made in writing.

Employment contracts in Cambodia consist of: fixed duration contracts (FDC); or undetermined duration contracts (UDC).

A written FDC must contain the following:

A written UDC must contain the following:

Besides these obligatory terms, there are currently no terms imposed by collective agreements. Employers and employees can agree to include further terms in the contract.

Foreign employees must hold a valid business visa and a work permit to work in Cambodia. The application fees are:

The application fee for foreign work permits is currently KHR520,000. It takes 20 working days from submission of the application to receipt of work permits from the Ministry of Labour and Vocational Training.

However, prior to applying for a foreign employee's work permit, the company hiring the foreign employee must first request a quota approval to use foreign labour. The application fee for a quota request is KHR200,000, and the process takes 20 business days from the date of submission.

The following regulations govern foreign employees:

An employer must inform workers' representatives in writing for suggestions on layoffs before the commencement of the layoffs, in order to minimise effects on affected workers.

The termination of employment contracts is regulated differently depending on the type of contract (that is, whether it is an FDC or UDC).

An FDC generally terminates at the specified expiration date. However, it can be terminated prior to the expiration date if both parties consent in writing and the agreement is signed by the two parties to the contract.

If both parties do not agree, a contract of specified duration can be cancelled before its termination date, only in the event of serious misconduct or Acts of God. Serious misconduct is:

(Article 83(B), Labour Law.)

An employer who unilaterally terminates the contract before the specified ending date for reasons other than serious misconduct must pay damages to the employee in an amount at least equal to the remuneration that the employee would have received until the end of the term of the contract.

The employer must also pay severance indemnity to employees that is proportional to the wage and duration of the contract (at least 5% if there is no collective bargaining agreement) and other benefits provided by Labour Law.

Any employee with a UDC can terminate his/her contract at will by submitting prior notice in written form to his/her employer(s).

The unilateral termination by an employer has two possibilities, as follows; justified and unjustified termination:

Justified Termination. It is considered to be fair or justified if the employee commits serious misconduct and/or an act of God occurred (see above).

In such event, the employer(s) has no obligation to give prior notice of termination and pay any seniority indemnity to the employee(s).

Unjustified Termination. It is considered to be unfair or unjustified by labour law, if employee has not committed any serious misconduct or the act of God has not occurred during or prior the termination period.

If unjustified termination has occurred, the employer(s) are obligated to give the employee:

Since the Labour Law and Prakas 443 came into effect, this Prakas has stipulated clearly that the employees who work under UDCs will receive the seniority indemnity from their employer(s), whilst the employees who have FDCs will receive the severance pay.

The seniority indemnity must be regularly paid to employees every six months, in June and December, and must be equal to seven and a half days' wages and fringe benefits. The New Labour Law and the Prakas 443 have a retroactive effect, as employers must also retroactively pay for the seniority indemnity before 2019 in relation to their existing staff. The maximum indemnity cannot exceed six months' net wages (other fringe benefits are not taken into consideration for the calculation of the back paid seniority indemnity).

For unjustified termination, the employer must pay employee(s) a back paid seniority indemnity (for the period before January 2019), if any, and new seniority indemnity (from January 2019 onwards).

Pay in lieu of notice and other benefits are based on the employee's basic salary at the time of termination. Unused annual leave and pro-rated bonus will be paid on termination.

The minimum period of prior notice is as follows:

During the notice period, the employee is allowed two days' paid leave per week to look for new employment.

Additionally, the labour law also allows each employee to claim for unused annual leave, payment of damages and other benefits provided by law.

Redundancies and mass layoffs, resulting from a reduction of the company's activities or an internal reorganisation that is foreseen by the employer, are regulated by the Labour Law, and must follow the following procedure:

Firstly, an employer must decide the order of the layoffs in light of workers':

The first workers to be laid off will be those with the least professional ability, then the workers with the least seniority. The seniority has to be increased by one year for a married worker and by an additional year for each dependent child. The employer must inform workers' representatives in writing for suggestions on layoffs before the commencement of the layoffs.

The labour inspectors must also be informed of mass layoffs. Dismissed employees have priority to be rehired for the same position in the enterprise during the next two years.

An individual is considered as a tax resident if they:

Tax resident employees must pay tax on salaries from both Cambodian and foreign sources. The tax is withheld by the employer. The rates on the gross monthly taxable salary are:

Salary from Cambodian sources is subject to tax at a flat rate of 20%. The tax is withheld by the employer.

Employers must withhold the tax due before the salary payment, and pay this source tax to the tax administration on or before the 25th day of the month following the salary payment.

For fringe benefits, employers must withhold and pay taxes every month to the tax administration at the rate of 20% of the total value of fringe benefits given to employees, on or before the 25th day of the month following the month in which such payments were made.

In addition, the Law on Social Security imposes three types of social charges related to these three issues:

In practice, only occupational risk and health care apply to employers with at least eight employees. Both employers and employees must also register with the National Social Security Fund.

To establish a company under Cambodian law, the entity must register and receive the following documents from the MOC and Tax Administration:

The company will eventually be liable for tax compliance after the completion of registration.

(See also Question 9.)

Since 2016, all companies are taxable under the Cambodian tax regime, which is a self-assessment system. Taxpayers are classified into three categories, depending on their level of anticipated annual revenue.

Since the single portal system was launched, The tax registration for newly-established businesses can be undertaken at the same time as the establishment of a new business (see Question 8).

A company must pay an annual patent tax, which will depend on its annual revenues:

Under the single portal system, newly-established companies, branches or representative offices are exempt from stamp tax. A registration tax is levied on legal documents, at a fixed amount of KHR1 million for a merged company or dissolved company. This registration tax is also applicable to the:

The tax rate for immovable property and vehicles value (in the form of sale, exchange, donation, transfer to business asset) is 4%.

The tax rate for transfer of shares is 0.1%.

Transfers from grandmother/father to grandsons/daughters, parent to sons/daughters and between spouses are exempt from taxes.

Transfers of property of the state, government transfers, public utilities, charitable organisations are exempt from taxes.

Tax on profit is payable by resident taxpayers that are subject to tax on worldwide income/profits. Non-residents are only taxed on Cambodia sourced income/profits.

The tax rates regarding the tax on profit for legal persons are listed as follows:

The enterprise must pay a prepayment tax which is calculated on the base of 1% of the company's annual turnover. This tax must be paid by or before the 20th day of the following month, and it will be accumulated to be deducted against the tax on profit at the annual declaration. The taxpayer is exempt if within the period of PPT holiday.

The minimum tax is a separate and distinct tax from the tax on profit. It is imposed at the rate of 1% of the annual turnover (inclusive of all taxes with the exception of VAT) and is payable along with the tax on profit. An exemption has been provided for QIPs.

Any resident taxpayer carrying on business and who makes any payment in cash or in kind to a resident taxpayer or non-resident taxpayer must withhold, and pay as tax, a specified amount (to be applied to the amount paid before withholding the tax). The tax must be paid no later than the 25th day of the following month. 14% tax is due on the following payments to a non-resident:

(Article 26, New Law of Taxation.)

Tax payments for resident taxpayers are as follows:

(Article 25, Law of Taxation.)

Taxpayers must charge VAT on the supply of goods or services. The VAT declaration is issued monthly and must be submitted to the tax administration by the 20th day of the following month. Taxable supplies include the:

The following goods and services are exempt from VAT:

The VAT rates are as follows:

Taxes are not creditable in relation to VAT invoices for the following goods and services:

The Law of Taxation defines dividends as any distribution of money or property that a legal person distributes to a shareholder with respect to the shareholder's equity interest in that legal person (other than share dividends and distributions on the liquidation of the company). Whether a distribution is a dividend is determined regardless of whether the legal person has current or accumulated income, profits or earnings. The taxpayer must withhold tax from a non-resident on the payments of dividends at the rate of 14% according (Article 26, Law of Taxation).

Dividends received from foreign companies are subject to the tax on profit. However, Cambodia unilaterally provides a simple tax credit to the taxpayer for any tax paid on foreign-source income.

Any resident taxpayer carrying on business who makes payments of interest to a non-resident taxpayer must withhold and pay as tax 14% of the amount paid (Article 26, Law of Taxation).

Any resident taxpayer carrying on business who makes payments of royalties from the use or right to use intangible property to a non-resident taxpayer must withhold and pay as tax 14% of the amount paid (Article 26, Law of Taxation).

On 10 October 2017, the Ministry of Economy and Finance issued Prakas No. 986 MEF.PrK. Under this Prakas, a "related party" is one of the following:

For taxation purposes, an interest payment is considered as an expense to be deducted from the income generated by an enterprise for calculating taxable profit and the payment of tax on profit.

The GDT has issued regulations regarding interest rates. Instructive Circular No. 151 dated 22 January 2014 on the Record of Interest Expense of Enterprises stipulates that an interest payment to be considered as an expense can be up to 120% of the market interest rate, where the loan is between related parties. If the loan is not between related parties, the ceiling market interest rate is applied. However, the total annual interest expense is subject to a limit set by the Law of Taxation. The market interest rate is determined by the GDT, according to the average interest rates on loans set by major banking and financial institutions. In 2020, the GDT set the market interest rate for a loan in USD and KHR as 8.45% in USD and 8.92% in KHR per year (Notification No.1005, dated 19 January 2021).

According to Instruction No. 11946 dated 21 August 2018, taxpayers that lend to, or borrow money from, related parties must apply the rate of interest to those loans in conformity with the "arm's length principle" as set out in the Prakas No. 986 dated 10 October 2017.

A taxpayer who enters into "related party" loan transactions does not need to notify the GDT of the specific transaction within 30 days. However, the taxpayer must still complete the related party transactions annex attached to the annual tax on income return, and list all the existing and new related party loans into which the taxpayer has entered during each tax year. Taxpayers who enter into loan transactions with "third parties" must still notify the GDT within 30 days, in accordance with Circular 151.

There is no specific restriction on loans from foreign affiliates. Article 18 of the Law on Foreign Exchange Control states that loans, including trade credits, can be freely contracted between residents and non-residents, provided that the loans disbursements and repayments are made through an authorised intermediary (licensed bank).

In the banking sector, the National Bank of Cambodia imposes some restrictions on loans between a bank and its related parties. The Prakas No. B7-01-137 dated 15 October 2001 (as amended by the Prakas B7-02-146 dated 7 June 2002) on Loans to Related Parties provides that the total loan that a bank provides to a related party cannot exceed 10% of the bank's net worth. In addition, a loan to a related party must be made under normal conditions with regards to the interest rate, collateral and term of payment.

There is no specific provision in the Law of Taxation regarding controlled foreign company rules.

The Tax Administration has powers to allocate income and deductions among taxpayers (Article 18, Law on Taxation). Where there are two or more enterprises under common ownership, whether incorporated or organised in or outside Cambodia, the tax administration can distribute gross income, deductions or other benefits among the enterprises and their owners to prevent the avoidance or evasion of taxes, or to clearly reflect income. Generally, two or more enterprises are held to be under common ownership if a single person owns 20% or more in the value or the equity interests of each enterprise.

More detailed regulation on transfer pricing is currently being drafted by the Ministry of Economy and Finance.

Prakas No. 986 MEF.PrK. provides rules and procedures on income and expense allocation among related parties (transfer pricing rules). Introduced in 2017, it represented one of the most important developments in the Cambodian tax regulations in the last 20 years, aligning Cambodia's regulation with global tax frameworks on transparency and combating tax avoidance. It defines the transfer price as "the price of goods, services, or property charged between related parties". Transfer pricing refers to setting the value of transactions (that is, comparable uncontrolled price, resale price, cost plus, transactional net margin, and profit split methods) between related parties using the most appropriate transfer pricing methodology. If the transactions are not at arm's length, the tax authority can adjust the deemed value and impose taxes accordingly.

The purpose of transfer pricing rules is typically to make sure related entities compensate each other appropriately in an amount that is commensurate with the value of property transferred or services provided, and to prevent entities from manipulating profits between related parties to minimise tax exposure. The taxpayer who has transacted with related parties must prepare and maintain transfer pricing documentation and methodologies used to justify an arm's length value. Documents regarding related party transactions must be kept for ten years from the tax year end.

Under Cambodian law, an enterprise's fiscal year ends on 31 December, and the annual corporate tax filing deadline is the 31 March of the following year. These deadlines apply in relation to the transfer pricing form and documentation. A failure to comply with these requirements would lead to:

Duties and taxes are levied on any imported and exported goods before they are released from customs. This is except for goods that qualify for special privilege under the relevant laws and regulations where their duties and taxes are exempt. The Customs tariff book 2017 provides the different types of duties and taxes that are collected by customs.

Importation. The following types of duties and taxes apply at the following different rates:

Exportation. Export tax is taxed at rates of 0%, 5%, 10%, 15%, 20% and 50%.

As a member of the Association of Southeast Asian Nations (ASEAN), Cambodia has reduced its import duties in compliance with the Common Effective Preferential Tariffs programme.

Qualified institutional placement projects approved by the Council of Development of Cambodia are exempted from import duty.

Under Article 89 of the Law on Taxation, international treaties related to taxation ratified by the National Assembly prevail over the provisions of the Law on Taxation.

The Cambodian General Department of Taxation (GDT) has formally announced the following Double Tax Agreements (DTAs):

These double taxation agreements follow the model agreement of the Organization for Economic Co-operation and Development and mainly focus on income taxes.

The standard withholding rate on payments made by a resident taxpayer to a non-resident taxpayer is 14% (Article 26, Law on Taxation). However, under the DTAs that withholding tax can be reduced to 10% in relation to payments of dividends, royalties, interest, or technical services. Resident taxpayers must obtain pre-approval from the Department of Legal Affairs, Taxation Policy and International Tax Co-operation of the GDT to enjoy the tax benefit provided by the DTA.

The Competition Law was adopted on 5 October 2021 and the Competition Commission of Cambodia is established under this law to fulfill the related work. This law substantively prohibits acts such as anti-competitive agreements (such as price-fixing agreements, bid rigging, customer allocation) abuse of dominance and anti-competitive mergers.

The Cambodian Constitution allows state intervention to protect the market and consumers. The state is empowered to:

(Article 62, Constitution.)

Under the Trade Mark Law (2006), Article 22 defines unfair competition and Article 23 lists examples of it, which include:

The state bans and severely punishes those who import, manufacture and sell illicit drugs and counterfeit and expired goods that affect the health and life of the consumers (Article 64, Constitution). Currently, there is no specific body with authority over competition matters as a whole. However, some bodies, such as the Ministry of Post and Telecommunication, the MOC, the Economic Police and the Counterfeit Committee, have competencies with regard to activities under their authority.

The Competition law defines "horizontal restrictive agreement" and "vertical restrictive agreement" as follows:

The Competition Law clearly prohibits either direct or indirect horizontal restrictive agreement that may impact the following (Article 7):

The Competition Law also clearly prohibits either direct or indirect vertical restrictive agreements that may impact the following (Article 8):

In addition, the Law on Telecommunication also bans some unfair competition agreements and practices in the sector. All telecommunication operators must abide by the principles of fair, free, equal, and effective competition, and all activities against those principles are prohibited. Prohibited activities include:

The Competition Law defines the term as the circumstance that the person has the power on the market without interference of the competitor. The following unilateral conduct is prohibited (Article 9):

The unilateral conduct is also covered by the concept of unfair competition.

The Law on Trade Marks and Unfair Competition prohibits unfair competition in the creation and use of marks and trade names. The law broadly defines acts of unfair competition as any act of competition contrary to honest practices in industrial, commercial or service matters. Article 23 sets out a non-exclusive list of acts specifically considered as acts of unfair competition for IP:

Cambodia is in the final stage of implementing an exhaustive competition law (see Question 28). Therefore, merger control does not exist.

However, company mergers and acquisitions are regulated by the LCE. The LCE allows companies to merge into one company or to consolidate to form a new company. The merger or consolidation agreement must be approved by the board of directors of each company involved and is subject to the vote of the shareholders of each company. A merger must be approved by a special resolution of the shareholders representing at least two-thirds of each constituent company (Article 245, LCE).

As with the process of incorporating a company (see Question 9), the directors of the surviving company must submit an application for registration of the merger with the MOC. The MOC issues a certificate of merger, the date of which is the effective date of the merger.

The LCE does not set out a turnover test, substantive test or any specific foreign exemptions. However, mergers or acquisitions in regulated sectors are subject to specific requirements of authorisation from the relevant authorities. Regulated entities include, among others:

Article 15 of the Draft Law on Competition Law forbids any business combination that has or may have the effect of significantly preventing, restricting or distorting competition in a market. Such business combinations (or mergers) will be subject to examination, monitoring, and evaluation by the Competition Commission of Cambodia.

The giving of gifts, or providing something that is intended to induce performance, or refrainment from any act will be determined as proffering of a bribe. Article 605 of the Criminal Code determines this as unlawfully proffering (directly or indirectly) any gift, offer, promise or interest, in order to induce a public official or a holder of public elected office:

The offence is punishable with imprisonment of between five and ten years.

Definition and Legal Requirements. Cambodia's Law on Patents, Utility Models and Industrial Designs provides a set of exclusive rights to an inventor or their assignee for a fixed period, in exchange for the disclosure of an invention, utility model or industrial design. The Law defines an invention as "an idea of an inventor, which permits in practice the solution to a specific problem in the field of technology."

To be patentable, an invention must be new, involve an inventive step, and be industrially applicable. Certain inventions are excluded on public policy grounds as:

Registration. Patent applications are filed with the Department of Industrial Property of Ministry of Industry Science Technology and Innovation (MISTI). An agent residing and practicing in Cambodia must represent foreign applicants. The laws and regulations, as well as guidance on the application procedure, are available on the MISTI website (www.misti.gov.kh/).

PCT Applications. Cambodia is now a contracting party of the Patent Co-operation Treaty (PCT), accepts PCT applications, and applies PCT Regulations. The time limit for entering a national phase application (that is, a one-time submission to apply for a patent through a PCT member state) is 30 months. An international application for a patent can be converted into a utility model (the system of protection for more minor inventions) and vice versa, after the applicant has complied with the requirements for entry into the national phase. Conversion can be requested at any time up to the grant or refusal of the patent or utility model.

To accelerate the process of grants of patent protection, Cambodia has signed bilateral agreements with other countries/trading blocs, such as Singapore, Japan, the EU, China, South Korea and the US.

Enforcement and Remedies. The owner of a product patent has the right to exclude others from making, importing, selling, offering for sale, or using the product, and from stocking the product for the purpose of sale or use. For process patents, the owner has the right to prevent others from using the process and from doing any of the acts covered by a product patent where the product is obtained directly by means of the process. The patent owner can institute court proceedings against anyone who performs such acts, or who makes such acts more likely to occur. A patent owner or a licensee can bring a civil infringement suit against a patent infringer.

The court has wide discretion to award monetary damages and order injunctive relief. The penalty for the infringement is from KHR5 million to KHR20 million, or one to five years' imprisonment, or both.

Repeat offenders are subject to up to double the fine and imprisonment term.

Length of Protection. The term of a patent is 20 years from the application filing date. Although the law states that payment of an annual maintenance fee begins one year from filing, the Prakas on Public Services Fees requires payment from the second year. There is a six-month grace period for late payment of the annual fee, with an additional surcharge. Failure to pay the annual fee results in the withdrawal of the patent application or lapse of the patent.

Definition and Legal Requirements. A mark is defined as any visible sign capable of distinguishing an enterprise's goods (trade mark) or services (service mark). Such signs include words, names, letters, numerals, logos, devices, labels, signatures, slogans, colours, shapes, three dimensional signs, and holograms. A mark cannot be validly registered if it is:

Protection. The MOC's Department of Intellectual Property Rights (DIPR) registers trade marks. Guidance on the application procedure is available on the Department of the Intellectual Property website (http://cambodiaip.gov.kh/Default.aspx).

Enforcement and Remedies. A trade mark owner has the right to prevent others from infringing on their mark. To enforce a trade mark, the trade mark owner can:

Length of Protection and Renewability. Registration is valid for ten years from the application filling date, and is renewable for successive ten-year terms. In the sixth year of the initial term, and of each renewal term, the mark owner must submit an affidavit of use or non-use and pay an official fee.

Definition. Any composition of lines or colours or any three-dimensional form, or any material, whether or not associated with lines or colours, is deemed to be an industrial design, if it gives a special appearance to a product of industry or handicraft, can serve as a pattern, and appeals to and is judged by the eye. The design must be novel, meaning it has not been disclosed to the public by publication in tangible form by use or in any other way before the filing or priority date, and must not be contrary to public order or morality.

Registration. Industrial designs must be registered with the Department of Industrial Property of the MISTI. Guidance on the application procedure is available on the MISTI website (www.MISTIH.gov.kh).

Cambodia and Singapore entered into Memorandum of Understanding on the Cooperation in Industrial Property between the MISTI and Intellectual Property Office of Singapore (IPOS) in 2015, under which both bodies co-operate and assist each other on technical issues. If the same application is filed in Cambodia and with IPOS, and IPOS grants the design certificate, then the MISTI registrar will also, through the reciprocal arrangement, grant that design certificate.

Enforcement and Remedies. The owner of an industrial design can exclude others from making, importing, selling, stocking, and using infringing products, and can bring a civil suit for monetary damages and injunctive relief.

Length of Protection and Renewability. Industrial design registration lasts for a period of five years from the filing date, renewable for two further consecutive five-year terms, for a total of 15 years.

There is no protection for unregistered designs in Cambodia.

The Copyright Law protects the following subject matter:

Protection. Although every work is automatically protected, authors or their rights holders can register their works at the Ministry of Culture and Fine Arts. The Ministry issues a certificate of registration. Registration is purely voluntary but the registration certificate is strong evidence of ownership.

Length of Protection and Renewability. Copyright protection begins the moment the author creates the work. Moral rights last forever and extend beyond the life of the author and pass to their heirs. The term of the economic rights depends on the type of authorship:

In 2020, Cambodia ratified the Berne Convention; under this, as a developing country, Cambodia can benefit from compulsory licences to translations and reproductions of works in connection with educational activities.

Geographical indication (GI) protection is available where the quality or reputation of the goods is essentially attributable to its place of origin. It is valid permanently, unless cancelled. To date, the following have been accepted for GI protection in Cambodia:

Cambodia also plans to submit six products for GI registration in the EU:

Integrated circuit layout design protection is also available. It is valid for ten years and is not renewable.

Besides tax considerations, agency agreements are not specifically regulated.

The Draft Law on Commercial Contracts regulates distribution agreements. However, it has not yet been adopted.

The Prakas on Procedure for Recordal and Filing of Letters for Imported Goods Bearing Exclusive Trade Marks provides that a trade mark owner or distributor must register their exclusive distributorship with the Department of Intellectual Property (DIP) to enforce their rights against third parties. Exclusive distributors must provide the following information to the DIP:

The Trade Mark Law and the Law on Patents, Utility Models, and Industrial Designs stipulate that only franchise or license agreements shall have no effect against thirty parties unless such agreements have been successfully recorded with the competent authorities.

Under the Trade Mark Law any licence/franchise agreement must provide for quality control over the licensed/franchised goods or services. It this is not provided for, or is not effectively carried out, the franchise/licence agreement is considered void.

The Draft Law On Commercial Contracts regulates franchise/licence agreements in detail, but has not yet been adopted (see above).

The following regulations are those relevant to e-commerce:

The Cambodian E-Commerce Law governs all activities, documents, and electronic commerce and civil transactions undertaken via electronic systems (Article 3, E-Commerce Law), regardless of whether the e-commerce activity is within Cambodia or is cross-border between foreign countries and Cambodia (Article 2, Sub Decree No. 134).

"Electronic system" refers to electronic devices (or a set of devices) that are interconnected or interacted via electronic programs, leading to the automated processing of data, information or documents, including electronic devices for saving that data, information, or documents (Annex of E-Commerce Law).

The Ministry of Post and Telecommunications (MPT) is the competent institution governing the security procedures for electronic records and electronic signatures (Article 23, Law on E-Commerce). E-commerce businesses must obtain a licence or permit from the MOC.

Sub-Decree 246 on Digital Signatures seeks to manage the use of digital signatures in a secure and efficient way. The General Department of information and communication technology at the MPT is the body in charge of managing, issuing, and monitoring certificates for digital signatures in Cambodia.

Based on the Scope of the Cambodian E-commerce Law, the online platforms doing the business with trader are governed under the E-commerce Law and, therefore shall apply for the permit/licence.

However, an individual/natural person or sole proprietorship is not required to apply for a permit if it operates for the advertisement of goods and services of the business including advertisement on the selling of goods or services that are not an invitation to contract. Some other exemptions are applicable for the e-commerce business licence and permit.

Advertising and marketing are regulated by:

To provide marketing services, an advertising agency must register its business with the MOC and acquire a licence from the Ministry of Information.

All forms of commercial advertising are prohibited if they are deceitful, misleading, false, or likely to cause confusion as to the quality and safety of products, goods or services.

Some products that are harmful to the health and safety of consumers are subjected to a prohibition on advertising. For example, the Law on Tobacco Control prohibits the advertising of tobacco products and imposes restrictions on product packaging. In addition, the Notification on Advertising of Alcohol prohibits any advertising of alcohol that encourages consumers to consume more alcoholic products, uses women or children for advertising, or provides any kinds of rewards to consumers.

To guarantee the health and safety of consumers, mass media advertising must have an approval from the Ministry of Information. The approval letter is valid for three months to one year, and is renewable. For billboards or similar advertisements, the applicant must acquire an approval from the municipality where the billboard is to be located.

On 2 November 2019, the Consumer Protection Law was enacted. It contains several provisions regarding advertising in relation to unfair practices and misleading information, such as:

There are currently no regulations governing sales promotions in Cambodia. However, the business trading must comply with the Law on Competition and other provisions governing the fair trading (see Question 39).

There is no comprehensive legislation that regulates the protection of data in Cambodia.

Cambodia's constitution provides for citizens' rights to privacy.

The Civil Code recognises the personal right to identity, dignity, privacy, and other personal interests of an individual.

Under the Criminal Code, the disclosure of secrets and the interception of private communications or mishandling of data are criminal offences.

The Law on E-Commerce imposes basic disclosure and data protection requirements for commercial activities, such as providing the name, address, contact phone number, a description of the goods being sold, and the basic terms and conditions of the transaction.

Product liability and product safety are regulated by general laws such as:

Product liability and product safety are further regulated for specific kinds of products, such as:

Overall, these laws regulate the manufacturing process, product design and labelling or warnings on products.

The Law on MQSPS requires manufacturers or importers or service providers to submit a declaration and seek authorisation from the competent authorities before placing products and goods that could harm the health or safety of consumers on the market in Cambodia. Manufacturers, importers and service providers are liable for product defects that could harm the health and safety of the consumers. Liability is imposed by the Camcontrol Directorate General of the MOC and the Institute of Standards of Cambodia.

Main Activities. The Competition Law was adopted on 5 October 2021. A Sub-Decree in accordance with the Law on Competition will enact The Competition Commission of Cambodia. This commission will be the regulatory body for competition, and will be led by the Minister of Commerce. Its duties will include establishing policies and plans regarding competition, issuing decisions, interim measures and fines, preparing the requirements and procedures of business combinations and activities related to competition, and co-operating with national ministries, institutions, foreign states and international agencies relating to competition.

Main Activities. The Ministry of the Environment is the main body governing environmental issues, and the ministry contains several departments which act as the relevant regulatory bodies. The General Department of Environmental Protection regulates business activities related to their impact on issues ranging from solid waste management to environmental impact. There is the General Department of Nature Protection and Conservation Administration which regulates conservation in various areas, such as the Mekong, freshwater wetlands and marine and coastal conservation. The General Department of Local Community regulates environmental provisions related to community livelihood, heritage areas and ecotourism. Each of these departments have their own inspection and enforcement department.

Main Activities. The Non-Bank Financial Services Authority (NBSFA) came into existence on 14 July 2021. This body regulates all non-banking financial services and includes the Insurance Regulator of Cambodia, the Securities and Exchange Regulator of Cambodia, the Social Security Regulator, the Trust Regulator, the Accounting and Auditing Regulator, the Real Estate and Pawnshop Business Regulator and the Internal Audit Regulator. For banking related financial services, the National Bank of Cambodia (NBA) remains the regulatory body, and enacts regulations related to issues such as impairment regulations, credit policy and specific requirements for submitting financial statements.

W www.nbc.org.kh/

There is nothing else important relating to doing business in Cambodia.