At the 05^th of October 2017, Ministry of Labor and Vocational Training issued an announcement about the determination of minimum wage for employees in textile, garment and footwear sector in 2018.  According to the announcement, the tripartite Labor Advisory Committee consisting of representatives of employees, employers and the royal government of Cambodia had discussed about the minimum wage in 2018 based on the seven determinants. Following the discussion, the representatives of employees set the minimum wage at $170, representatives of employer at $162 and the government at $165. As a result of deliberation, the minimum wage in 2018 is set at $170 effective from the 01^st of January 2018.

Furthermore, the announcement elaborates that other benefits that the employees used to enjoy will remain the same. Plus other benefits, on average, the employee will receive at least $187 to $198. Besides, the government also lessens the burden of the employers by allowing them to suspend the installments of tax on profit for five years (2018 to 2022) and removing export management fee with the Ministry of Commerce.

On the same date, Ministry of Labor and Vocational Training further enforces the announcement by issuing Prakas No. 396 on the Determination of Minimum Wage for Employees in Textile, Garment and Footwear Sector in 2018. Article 1 of the Prakas states that the minimum wage for employees in textile, garment and footwear sector is officially set at $170 per month. According to Article 2, for employees in probationary period, the minimum wage is set at $165 per months and after the probationary period, they will receive $170 per months. In addition to that, other benefits will remain the same and the minimum wage will take effect at 01^st of January 2018 according to Article 3 and 4.

Source: Prakas No. 396 on dated 05 October 2017 on the Determination of Minimum Wage for Employees in Garment and Footwear Sector in 2018

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.

On July 07, 2017, Ministry of Commerce has issued a Prakas No: 172 MOC/PK to modify the Prakas No: 047 MOC/SM dated January 23, 2013 concerning the price tag in Riels currency. This new Prakas was issued to impose all Traders, Venders, and Service Providers in Cambodia to put the price tag in Riels currency on their selling products and services. The Prakas is purposed to promote the transparency of the national currency over the goods, product, and service charged in Cambodia.

However, some business area, called “Duty Free”, which are licensed by the Government to have price tag in foreign currency, they are required to have an approval from Municipal or Provincial Department of Commerce of the place of business. The approval is valid for one year and it is subject to be renewable. The approval shall be submitted with the required documents where consist of Application Form, Certificate of Incorporation, latest Patent Certificate, ID Card or Passport, and three of 4 X 6 photos. All Duty Free Shops who held an approval to have price tags in foreign currency has duty to pay the public free as stipulated in Public Official Fee of Ministry of Commerce.

SRLAW team has extensive experience in assisting clients in negotiations and drafting of civil and commercial contracts and documents and filing them with relevant authorities including as follow:
• Labor Contract
• Lease Contract
• Hypothec/Contract Mortgage
• Loan Contract
• Sale and Purchase Contract
• Shareholders Agreement
• Security Agreement
• Prenuptial Agreement
• Separation or Divorce Agreement
• Guaranty Contract
• Warranty Contract
• Distribution Contract
• Franchise Contract

Ministry of Economic and Finance (MEF) has issued the Prakas No. 559 dated May 25, 2017 on the instruction of the implementation for VAT on non-taxable supplies in accordance with the Article 57 of the Law on Taxation amended by the Law on Financial Management 2017. This Prakas aims to clarify the goods and services those are non-taxable supplies in order to ensure the consistency of VAT implementation.
The Prakas applies to the self-assessment taxpayers in making non-taxable supplies below:

1. Public postal service
2. Hospitals, clinics, medical and dental services, and the sale of medical and dental goods incidental to the performance of such services
3. The services of transportation of passengers by a wholly state owned public transportation system
4. Insurance services
5. Primary financial services
6. The importation of materials for personal use those are exempt from customs duties in accordance with the customs provisions
7. Non-profit activities for serving the public interest
8. Educational service
9. Electric power and clean water
10. Unprocessed agricultural products
11. Solid and liquid waste removal or collection services

The Prakas specifically defined the term of “primary financial services” and includes certain kind of transactions and services which fall under the term as follow:
- The deposition operations and granting loans except fees relating to such granting loans.
- The initial securities public offering in the market, securities trade or other financial instruments, and the clearing and settlement services in the securities market.
- Money Exchange Service
- Security Service
- Trading of Unshaped Gold
NOTE: There was a significant event that the public misunderstand and misinterpreted that this Prakas was issued to impose VAT on above 11 goods and services supplies. Regardless, the Prakas was issued to clarify that the aforementioned goods and services supplies are exempted from VAT and they are called “non-taxable goods and services supplies”.

SRLAW team has extensive experience and provides various services on setting up a new business in Cambodia. Our team assist in the following:

• Company Registration with Ministry of Commerce
• Patent Tax Registration with Tax Administration for Patent Tax and VAT Certificate
• Labor Registration with Ministry of Labor and Vocational Trainings
• Providing Corporate Secretarial Service
• Drafting or Reviewing Memorandum and Article of Association
• Advising on Corporate Governance and Other Compliance Matter
• Others

SRLAW team has extensive experience in applying for any kinds of business licenses, permits and approvals from competent authorities. Our team provides the service the following services:

• Work permits, quota exemption for foreign workers
• Visa extension
• License
• Construction permit
• Construction and Property development license
• Borei license
• Condominium license and service apartments
• Intellectual Property license and Registration
• Banking licenses and other financial operator licenses
• QIP Registration with Council for Development of Cambodia
• Customs Clearance and Approval
• Adoption Approval
• Others

SRLAW team have extensive experience in representation and defense for in litigation proceedings before all levels of Cambodia courts, arbitration and other dispute resolution. With a wide variety of experience in practice, our professionals could serve as follow:

• Represent, negotiate, and defend in civil, criminal and commercial litigations at all levels of courts
• Advise on substantive and procedural laws concerning civil, criminal, commercial litigation, and other concerning family dispute, divorce, adoption, parental authority, child
• Draft, review and submit civil, criminal, commercial, and other complaints
• Apply for preservative reliefs/injunction
• Apply for compulsory execution of judgments and rulings
• Assist in evidence collection
• Visit and advise clients in police custody
• Provide legal translation of evidences or interpretation for foreign clients
• Debt recovery, and enforcement of securities agreements
• Wills and inheritance
• Advise and assist in negotiation, conciliation, arbitration of commercial dispute and any other alternation dispute resolution
• Apply for recognition and enforcement of Foreign Arbitral Award
• Advise, represent, and defend in Labor matter either in court or Arbitration Council

Our practice team provide high quality of service of litigation, arbitration, and other dispute resolution in a widely spectrum from small local matter to complex disputes.

If you need to deal with Court of Justice in Cambodia; please kindly click on Power of Attorney Form, fill it up, and return back to us here.

On May 22, 2017, National Bank of Cambodia (“NBC”) issued an Instruction No. T7.017.420 SJN in purpose to make a caution to all Bank, Financial Institution, and Credit Operator for stop accepting the Identity Card or Family Book or Resident Book as collateral. Last year, on March 11, NBC already issued an Instruction No. T7.016.210 SJN for informing those institutions after NBC observed and found that the Identity Card or Family Book or Resident Book was accepted and taken as collateral to secure the loan in some Bank, Financial Institution, and Credit Operator.

Since now, NBC has acknowledged that several Banks, Financial Institutions, and Credit Operators are still accepting the Identity Card or Family Book or Resident Book in securing and release loan. This action is illegal under the Code of Civil and other regulation in force. Under Instruction No. T7.016.210 SJN, NBC has explained that the Identity Card or Family Book or Resident Book has no any economy value to be the collateral. Those documents are just the legal documents issuing by competent authority to identify a person and population statistic. NBC already warned that if any banks, financial institutions and credit operators fail to comply with laws and regulations in force, that institution shall be punished under the Law on Banking and Financial Institution.

Under the Instruction No. T7.017.420 SJN on May 22, 2017, NBC wants to instruct those Banking and Financial Institution to get more attention for complying with Instruction on March 11, 2016 and Law on Banking and Financial Institution effectively. In its letter mentioned that if any banks, financial institutions and credit operators fail to comply, they would face with penalties such as withdrawal the licenses or the Registration Permit or stop the business activity in accordance with Article 52 and Article 56 of Law on Banking and Financial Institution.

Ministry of Commerce has issued a new Prakas No. 107 MOC/SM on “Filing of Annual Declaration of Commercial Enterprise” on 05th April, 2017 and at the same time nulled Prakas No. 104 MOC/SM dated on 07th April, 2008.

Since the registration system has been available to conduct online, filing annual declaration of Commercial Enterprise is too available and required to file online. All commercial enterprises will be sent a notice to file their annual declaration in the eleventh month and are required to start filing them including other references in the twelfth month counted from the date of their commercial registrations through online system. The duration for filing is provided for three months following from the beginning date of the abovementioned twelfth month
 
In case any commercial enterprise fail to comply with this prakas to file the annual declaration, they will be imposed under penalties set force in the laws and this Prakas. The sole Prakas will penalize 1 Million Riels for such failure.

The Prakas has indicated some particular information to be filled in the online system for all commercial enterprise including Taxpayer Identification Number (TIN), Tax Registration Date, Patent Certificate in the year of filing the annual declaration, number of employees including referenced documents specified on their duties, currently used phone numbers and email addresses of the company. It is, however, important to note that except Public Limited Company is required to submit other additional informations to the above listed which include financial statement and the company’s owner record.