1. Introduction

The process of dissolving a company in Cambodia is important and requires just as much preparation as opening a company and, for legal and tax reasons, this process must be completed with care. Indeed, those who fail to properly dissolve a company expose themselves to lawsuits and liability for back taxes, fines and other penalties. This report explains the proper procedures for dissolving a corporation in Cambodia.

2. Liquidating a Company

Liquidation (also referred to as dissolution) is the process whereby a company is brought to an end and the property and assets are redistributed. There are various reasons why the corporations’ shareholders might want to dissolve a company including, for instance, financial difficulties¹. With shareholder approval, a company may request dissolution in accordance with the Ministry of Commerce’s dissolution and tax liquidation procedures.

3. Tax-related Matters

In the case of a voluntary dissolution, before notifying the Tax Office, a company needs to liquidate assets and liabilities that are subject to the Value Added Tax (VAT). A company also needs to write off or recover receivable balances and pay offsecured and unsecured creditors. Companies also need to file final salary and fringe benefit taxes for employees, VAT, withholding taxes, prepayment of profit taxes, and annual taxes on profi ts (including capital gains). Finally, companies must write offany expenses and recover the VAT input balance if any input credit is to be carried forward².

Within 15 days of the cessation of business, companies must submit a request to the Tax Offi ce to dissolve its business. Th e request must take the form of a letter the appropriate Tax Branch Offi ce providing 1) the reason for dissolution, 2) two copies of the business dissolution application form, 3) an original copy of the latest Patent Tax Certifi cate, 4) a copy of the latest monthly tax and annual tax returns, and 5) the original VAT Certifi cate for audit purposes³. Finally, a stamp duty of one million KRW (approximately USD 250) must be included with the request⁴.

Next, the Head of the Tax Office issues a tax audit notification letter specifying the date of the audit, the names of the auditors handling the audit, and identifying for the taxpayer any specific documents that must be prepared for an audit. Documents identified by the Tax Office for the audit generally include monthly and yearly tax returns, lease agreements, and any other tax-related documents. After the audit, the Head of the Tax Office issues a Tax Reassessment Notification Letter, explaining whether or not any taxes are owed.

In case no taxes are owed, the taxpayer must nevertheless submit a letter to the Tax Office formally acknowledging the findings of the Tax Office, after which the Head of the Tax Office will issue a Tax Clearance Certificate for processing at the Ministry of Commerce (MOC).

In case taxes are owed, the taxpayer must also submit a letter to the Tax Office acknowledging and/or rejecting (either in whole or in part) the tax liabilities assessed. The letter must be sent within 30 days of receipt of the Tax Reassessment Notification Letter. If no response is made, the company shall be deemed to have accepted the tax reassessment. When a company accepts the results of the reassessment without challenge, the Tax Department will issue a fi nal tax reassessment notification letter. The taxpayer must then pay the total amount within 15 days. Upon payment, the Head of the Tax Branch will issue a Tax Clearance Certificate for processing at the MOC.

When a company rejects a tax reassessment it must submit a letter to the Tax Offi ce within 30 days of receipt of the reassessment putting forward a clear explanation, accompanied by evidence, of any alleged error. Taxes are due regardless of the merits of the taxpayer’s appeal and will be refunded only after a resolution has been reached between the auditors and the taxpayer or a final decision has been made by a court. At the conclusion of the process, the Head of the Tax Branch will issue a Tax Clearance Certificate for processing at the MOC.

1. Introduction

In the context of current growing international interest in the reforming economy of Myanmar and the continuing revision of its antiquated regulatory structure, international brands looking to enter this market must face the issue of how to best protect their valuable trademarks.

Complicating the matter, however, is the fact that Myanmar is poised to shift its trademark protections from its existing fi rst-to-use system based on colonial British statutes and case law to a brand-new fi rst-to-fi le system draft ed in cooperation with the World Intellectual Property Organization (WIPO). Th e change was initially expected to occur in 2013 but is now set for the summer of 2014.

Th is newsletter will explain in brief what these changes mean for foreign companies and investors and alert clients to what should be done before the shift takes place.

2. Signifi cant benefi ts for registering trademarks now under existing regime

Under the new Trademark Law any trademarks registered under the old regime will automatically continue to receive protection during a three-year transition period, which begins from the date the new Trademark Law comes into force. While trademark holders should re-register their trademarks under the new Trademark Law as soon as possible aft er it goes into eff ect, those trademark holders who have already registered their marks under the old regime will receive priority under the new system.

Under the system currently in place trademark holders have traditionally availed themselves of protection under Section 18(f ) of the Registration Act (Direction 13) by creating a “Declaration of Ownership,” which must be registered with the Offi ce of the Registry of Deeds and Assurances. Once a Declaration of Ownership has been registered it is customary for trademark holders to then publish a “Cautionary Notice” of the mark in a Myanmar newspaper of broad circulation.

Perfecting the above procedure establishes prima facie evidence of ownership of the mark, however, actual use of the mark in trade is still required for protection against infringement. Myanmar’s Constitution grants IP rights and refers explicitly to “[i]ntellectual property such as . . . trademarks,” Myanmar’s Penal Code both defi nes trademark (Section 478 & 479) and provides penalties against infringement (Section 482), while Myanmar case law off ers remedies for civil actions. Indeed, there are several recent cases where Myanmar Courts have provided remedies for major international brands such as Kentucky Fried Chicken (“KFC”), Pizza Hut, HBO, Marriot, and Dr. Scholl’s. Th erefore, while better protection is expected under the new law, the current regime is not without remedies for trademark infringement.

1. Introduction

1.1. Until recently1 , media articles drew the attention of national and international professionals to cases relevant to Cambodian maritime law, to be more specifi c, cases of fi shing vessels fl ying Cambodian fl ags. In the legal arena, there have been certain cases of maritime liens and of vessel transfers as well.

1.2. In general, maritime activities, transactions and cases are of a very particular nature, oft en requiring in-depth analysis of all related elements. Unfortunately, Cambodia’s maritime legal framework is still far from being comprehensive; it is very much in its early stages of development which opens a path to research – but which does not enable us to undertake such an in-depth analysis at the moment.

Th is newsletter highlights some recent topics of: classifi cation of vessel, ship registration, ship transfer and maritime lien.

2. Classifi cation of vessel

2.1. Classifi cation of vessel is not the most debated topic. But if we look a little more carefully, it is the fi rst key question in the way that determination of applicable law starts with providing a satisfactory answer to whether a vessel is movable or immovable property. Some ships navigate, some others do not.

2.2. Despite the fact that there are at least six applicable laws and regulations in this area, those laws oft en time do not provide for an undoubted classifi cation of the vessels. Using unclear language, some laws tend toward the classifi cation of “movable”, while some others have a tendency toward the classifi cation of “immovable” for vessels. As an example, the 1992 Land Law considers ships with capacity of more than 30 tons as immovable, while a 2003 Prakas2 stipulates that vessels constitute a particular class of movable.

2.3. With such uncertainty, there is a need to weigh both sides. Time-wise, the 2007 Civil Code is the latest legal text applicable (being implemented in 2012). While this code does not provide for a clear distinction, it tends to apply immovable rules on the vessels.