The “Law on Commercial Enterprise” was adopted by the National Assembly on April 26, 2005, and promulgated on May 19, 2005, as the first comprehensive company law in Cambodia. This Law applies to the “Partnership,” which falls into the category of a General Partnership or a Limited Partnership; “Limited Company,” which is either a Private Limited Company or a Public Limited Company; and “Foreign Business” as well.
A partnership is a contract between two or more persons (Article 8) and the contract of partnership may be verbal or in writing (Article 9).
1- General Partnership
2- Limited Partnership
A limited partnership is a contract of partnership between one or more general partners who are the sole persons authorized to administer and bind the partnership, and one or more limited partners, who are bound to contribute to the capital of the partnership (Article 64).
A foreign business is a legal person formed under the laws of a foreign country where it has a place of business and doing business in Cambodia (Article 270). It may conduct business in Cambodia in the following forms (Article 271):
1- Subsidiary
A subsidiary is a company that is incorporated by a foreign company in Cambodia. A subsidiary may be incorporated in the form of a partnership or limited company (Article 285) and may carry on business the same as a local company except for any act that is prohibited for foreign natural or legal person by laws of Cambodian law (Article 286).
Private Limited Company
A private limited company is a form of limited company with characteristics as follows (Article 86):
Public Limited Company:
A public limited company is a form of a limited company that is authorized by this law (Law on Commercial Enterprise) to issue securities to the public (Article 87).
Remarks:
– Be able to get the tax incentive (QIP from CDC)
– Be able to buy the immovable property (Land & House)
2- Branch
A branch may perform the same acts as a representative office and, in addition, may regularly buy and sell goods and services and engage in manufacturing, processing and construction as a local enterprise as long as it does not perform acts prohibited by law to a foreign physical or legal person (Article 278). The assets of the branch shall be the assets of the principal. The principal shall be liable for any obligation of the branch (Article 279), and a branch may be closed by a decision of its principal (Article 282).
Remarks:
– Be unable to get the tax incentive (QIP from CDC)
– Be unable to buy the Immovable Property (Land & House).
3- Representative Office (Liaison Office)
A commercial representative office or commercial relations office may perform the following acts in Cambodia (Article 274):
Remark:
International Association and Non-Government Organization
Any foreign association or non-government organization wishing to start a project in the Kingdom of Cambodia must register with the Ministry of Foreign Affairs of Original Country and then register with Ministry of Foreign Affair and International Cooperation of the Cambodian country in the form of a memorandum of understanding (MoU) and conjunction with the ministries relevant to the NGO’s sector (Health, Environment, Social Affair, ete…).
Legal Procedures:
Domestic Association and Non-Government Organization
Law on the Association and Non-Government Organization promulgated in August 12, 2015.
Under this law, establishment of domestic associations or non-government organization requires that there be founding members, who are legal persons with Khmer nationality, and at least 3 persons 18 years or older. Domestic associations or non-government organization must register with the Ministry of Interior. The statutes of domestic associations or non-government organization must have substance in conformity with the Constitution and other existing laws.
A domestic association or non-government organization which is not registered will not be allowed to conduct activities in the Kingdom of Cambodia. Domestic associations and non-government organization must notify in writing the information of every account which is to open its operation at a bank in the Kingdom of Cambodia to the Ministry of Interior and the Ministry of Economic and Finance within 30 days from the date of registration at the Ministry of Interior.
Legal Procedures:
