THE FORTHCOMING NATIONAL ARBITRATION CENTER

Cambodia’s first National Arbitration Center will be established with the aim of resolving business disputes and enhancing the confidence of private sector investors. The International Finance Corporation, a member of the World Bank Group, and Cambodia’s Ministry of Commerce signed a Memorandum of Understanding (MOU) in August, 2009 to implement a three-year project to set up a National Arbitration Center.

The National Arbitration Center will be the first commercial arbitration body in Cambodia offering the business community an alternative commercial dispute resolution mechanism to the courts. In theory, it will enable businesses to resolve their disputes quickly, inexpensively, fairly, and with certainty. It thus promises to enhance the private sector’s comfort level when engaging in business transactions.

As a form of Alternative Dispute Resolution (ADR), Commercial Arbitration (CA) could act as a catapult for economic growth and creation of wealth in Cambodia. It could do this in such a way as to advertise an enhanced and more reliable business climate, crucial to attracting foreign investment. Predictability is also a valuable commodity given systemic issues in the judiciary. Unlike the court process, CA gives both parties in a dispute the flexibility to choose both the arbitrator as well as the rule that will be followed in deciding the case. Essentially, as the Cambodian economy grows and with it the number of commercial transactions, a streamlined dispute resolution mechanism gives the private sector more comfort to engage in business transactions. These features of a more enticing economic landscape in which to invest are echoed in the legislation itself;

What Employers Need to Know About the Cambodian Labor Law

Recent entrants to the world of business in Cambodia often find it difficult to navigate the sometimes murky waters of the Cambodian Labor Law. Even if an employment contract was negotiated and signed abroad, if the work is performed in Cambodia, the Cambodian Labor Law must be followed. It serves as both a guarantor of minimum rights for employees, and enforcer of regulations for employers. This is not a comprehensive summary of the Labor Law, but it does highlight important areas that may differ from practices in other countries.

Opening Your Organization

There are procedures that must be followed in order to be compliant with the Cambodian Labor Law, and avoid future obstacles. If you are opening a business, a declaration must be made to the Ministry of Labor. The timeframe to make the declaration will depend on the number of workers employed by the organization. It is important to be proactive in making your declaration, as the Labor Inspector can make surprise visits and give you a fine for failure to properly make the declaration.

Cambodian Stock Exchange

The last three years have seen a surge of anticipation for a fully functioning stock exchange in Cambodia. Expected to be established in CamKo City, hopefully by the end of the year, the Cambodian Stock Exchange (CSX) will be a joint-venture between the Korean Exchange and Cambodia’s Ministry of Economy and Finance (MEF). Proponents of the exchange point out the potential benefits of raising much needed capital and thereby facilitating growth in local companies. A less publicized benefit of a well functioning stock exchange in Cambodia may be that it will encourage a more rational allocation of resources, given the current propensity of Cambodian investors to park their money in land for long periods of time.

Until March 1st, the Stock Exchange Commission of Cambodia (SECC) accepted license applications from firms seeking to participate in the future stock exchange. According to press reports, twenty-two national and international firms applied. A qualifying firm must comply with rigorous standards. The legislation states that along with having a sound corporate structure, firms seeking a securities license must have a minimum capital between USD 96,000 to 9.52 million. Prospective firms must also pay a license fee ranging from roughly USD 100,000 to 10 million. The minimum capital requirements and license fees vary depending on the type of securities license sought.

A word from our Managing Director

We are proud to announce several important changes at our law firm. First and foremost, we have completely revamped our BNG brand, including a new logo, website, and publications. We’ve changed our name from BNG Advocates & Solicitors, to BNG Legal, to more simply and clearly define who we are and what we do. We designed our new logo around a globe, to better reflect our international client-base, staff, and standards.