Corporate Law at Cambodia
Sure! Here’s an overview of Corporate Law in Cambodia:
Corporate Law in Cambodia
1. Legal Framework
Corporate law in Cambodia is primarily governed by the following key pieces of legislation:
Law on Commercial Enterprises (LCE), 2019 — the main law governing the formation, operation, and dissolution of companies.
Law on Commercial Registration, 2005
Law on Investment, 2021 — governs foreign investment and provides incentives.
2. Types of Business Entities
Cambodia allows for several types of business entities, the most common being:
Private Limited Liability Company (LLC)
The most common form for both local and foreign investors.
Requires a minimum of 1 shareholder.
Liability is limited to the capital contribution.
Public Limited Company (PLC)
Suitable for larger businesses.
Allows the issuance of shares to the public.
Requires at least 3 shareholders.
Partnerships
General and limited partnerships are recognized.
Sole Proprietorship
3. Incorporation Requirements
Companies must register with the Ministry of Commerce (MoC) and obtain a commercial registration certificate.
Key documents include the Memorandum and Articles of Association, and information on shareholders and directors.
Foreign investors must comply with the Law on Investment and may need an investment license from the Council for the Development of Cambodia (CDC) for certain sectors.
4. Corporate Governance
Companies must have at least one director and one shareholder (may be the same person).
The Board of Directors governs companies with multiple shareholders.
Annual general meetings (AGMs) are required for PLCs and recommended for LLCs.
Financial statements must be prepared and, depending on size and sector, audited.
5. Capital Requirements
There is no fixed minimum capital for LLCs unless specified by sector regulations.
For PLCs, a minimum capital is typically required but depends on sector-specific rules.
Shares may be issued with or without nominal value.
6. Foreign Investment
Cambodia is generally open to foreign investment.
Some sectors require a special license or are restricted.
Foreign investors can own 100% of companies in most sectors but certain strategic sectors may have limitations.
7. Compliance and Reporting
Companies must file annual returns with the Ministry of Commerce.
Tax registration and compliance with the General Department of Taxation is mandatory.
The Law on Accounting and Auditing requires companies to maintain proper accounting records.
8. Other Aspects
Cambodia is a member of ASEAN, and often harmonizes business regulations with ASEAN standards.
The legal system is based on civil law with influences from French and customary law.
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