News (9)

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Ministry of Labor and Vocational Training has issued a Prakas on the registration of enterprise and employee in National Social Security Fund (NSSF) for all persons who are under the scope of the Labor Law of Cambodia. The Prakas aims at determining formality and procedure for registering enterprises, establishments and employees with Working Risk and Health Care Section of NSSF. It also obligates employers and owners of enterprise or establishment to register their entities with NSSF. Furthermore, employers and owners of enterprise or establishment have obligation to register employees with NSSF three days after the date of commencement of the work unless the employees have already possessed NSSF membership card. Non-compliance with this Prakas will result in penalty stipulated in Chapter five of Law on Social Security Fund.

Source: Prakas No. 448 on the Registration of Enterprises/Establishments and Employee in the National Social Security Fund (NSSF), dated the 10th of November 2017.

On 15th of November 2017, the Ministry of Economy and Finance (MEF) issued a Prakas to reduce withholding tax on interest from local microfinance institutions (MFIs) from 14 percent to 10 percent. The new Prakas aims at shrinking the expendable interest rates that MFIs take on loans from abroad to ensure the sustainability of microfinance sector. Also, the withholding tax rate reduction applies only on loans acquired abroad. It is known that the remaining 4 percent will be paid by the government.

Experts said that “This Prakas is clearly intended to provide benefits to the people by reducing the cost of microfinance loans and MFIs on which these savings will be passed on to clients to be ensured.” This reflects the fact that the government has understood the MFIs’ Operations burden and the timeline for the reduction which will finish by the end of 2018, another expert said. He added that this period of time will give the MEF enough room to amend the fiscal policy, especially if a new government is formed after next year’s election. 

Source: The Phnom Penh Post, 15 November 2017

Last modified on Monday, 27 November 2017 07:12

Prakas on Management of Payment Transactions Services Institution

The National Bank of Cambodia (“NBC”) has issued a Prakas on Management of Payment Transactions Services Institution dated 14th June 2017. The Prakas is made to determine the procedure for licensing Payment Transactions Services providers, to encourage fair competition and innovation and to gain public trust.

The Prakas governs both Payment Transactions Services providers and Banks. However, services such as information technology support, data storage and processor, payment transactions using bank’s location and so on are excluded from the Prakas’s purview.

Unlike Third Party Processor, which is a service provider or processor to facilitate bank’s payment transactions services and operations, Payment Transactions Services provider is independent. The Prakas has stipulated the scope of business of Payment Transactions Services provider in Article 6 and 7 that it can engage in businesses such as deposit and withdrawal in payment account service, money transfer service, payment transaction service, providing short term credit, issuing electronic currency, money changer and so on. However, money that Payment Transaction Services providers have received from payment transaction and issuing e-currency is not deemed to be deposit.

To operate as Payment Transactions Services provider, legal entities must obtain license from the NBC. Legal entities need to fulfill numbers of conditions to obtain license from NBC. For example, legal entities need to describe the type of payment transaction service that it will operate, business plan, evidences of capital sufficiency and so on. On top of that, the Prakas requires the legal entities to have minimum capital of 8,000 million Riel (around USD2 million) in cash and 5% of the minimum capital must be deposited with NBC. Nevertheless, the license to operate as Payment Transactions Services provider is valid in six years but it is renewable.

With regard to fee, legal entities need to pay 500,000 Riel (around USD125) for application form plus inquiry and 2,000,000 Riel (around USD500) for having the documents reviewed. Also, legal entities are required to pay annual fee of 20,000,000 Riel (around USD5000).

The Prakas also states about merger and acquisition in Article 24 that Payment Transactions Services providers must gain approval from NBC if it intends to merge with other institutions, transfer or be acquired in part or whole of its business or cease its business operation. Besides, NBC has right to delicense or suspend any Payment Transactions Services providers’ operation that fail to operate within six months, engage in fraud or forgery, be non-compliance with NBC’s supervision and so on.

Last modified on Friday, 13 October 2017 08:33