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Introduction: Legal update on E-commerce regulations.
As of November 2020, the Ministry of Commerce (“MOC”) has issued two new regulations to implement the Law on electronic commerce, which was adopted on November 2019; namely:
- Sub Decree No 134 (“Sub Decree”) on the Determination of Types, Formalities and Procedures for Issuing Approvals or Licenses to intermediaries and Electronic-Commerce (“e-commerce”) Service Provider and Exemptions; and
- Prakas No 290 (“Prakas”) on Granting of e-Commerce Permits or License.
The new regulations provide information about the types of business requiring a specific license/permit for the practice of e-commerce, the exemptions, the documents required for such license/permit, the application form, the duration of the license/permit and how to update/amend the information on the license/permit.
Cambodia has established a license and a permit: the permit is valid for individual/sole proprietorship and the license is addressed to legal person/foreign subsidiary.
- Scope of the Law: The new Sub Decree and Prakas govern all e-commerce activities within the Kingdom of Cambodia as well as all cross-border e-commerce activities from the Kingdom of Cambodia to a foreign country or from a foreign country to the Kingdom of Cambodia.
- Governing Business: The Sub-Decree requires the e-commerce owner to apply for the license or permit based on the scale of business as follows:
- To apply for the License: the licensee must be a legal entity or a foreign subsidiary operating a commercial website through an electronic system, online market service, online auction or similar service that uses a computer application or smart device that enhances e-commerce.
- To apply for the permit: the licensee must be a natural person or sole proprietorship that operate a business using social media platforms or electronics systems.
- Exemption for e-commerce Permit: The Sub Decree introduces the exemption that a natural person or sole proprietorship is not required to apply for e-commerce permit if they engage in the following business activities:
- Advertising for the company’s goods and/or services. including adverting for the sale of goods or services that do not constitute an invitation to contract;
- Reservation service with no payment; and
- Family business, private training and religious education or a business with a turnover lower that of the small taxpayer.
However, a natural person/sole proprietorship shall notify its business registration at the MOC or through the website www.ecommercelicensing.moc.gov.kh (Article 4 of Prakas) by providing the following information: transaction type, business name, electronic mean and payment method.
- Application, Procedure and Validity of License/Permit: The competent authority for both License/Permit is the Department of Business Registration, General Department of Business Service of MOC. The license shall be granted in 10 working days and 5 working days for a permit from the date of submitting the completed documents. The License is valid for 2 years while the permit is valid for 3 years and both the license and permit shall be renewed 30 days before expiration.
- Supporting Documents for e-commerce License of Legal Person and Foreign Branch Company: Beside the corporate documents, the applicant must enclose the following documents / information:
- Relevant business objective(s) to conduct business via electronic device(s);
- Online Service Certificate and domain name from the Ministry of Post and Telecommunication (“MPTC”);
- Documents relating to the method of payment provided by a service provider certified by the National Bank of Cambodia; and
- Business Model and User Protection Policy.
Intermediary businesses must provide a model contract between the intermediary and the commercial service provider indicating the minimum information required from the user (Article 5 of Prakas).
- Supporting Document for E-commerce Permit: The supporting documents for a sole proprietorship are as follows:
- Patent Certificate (if any);
- Bank account statement from any financial institution;
- Business Model and User Protection Policy to operate the business through the electronic system; and
- Online Service Certificate and the domain name from MPTC.
For a natural person, the applicant shall provide a Business Operation Permit issued by the Capital-Provincial One Window Service and photo 4*6 of the applicant (taken within 3 months). For Sole Proprietorship, the applicant shall include the Certificate of Incorporation with the relevant business objective(s) to conduct business via electronic device(s) (Article 3 of Prakas).
- The Requirement for E-commerce Oversea business: Under the e-commerce Law and its Sub Decree, the legal obligation to apply for a license/permit also governs e-commerce activities based abroad that provide goods / services in Cambodia. However, as the e-Commerce Law is relatively new in the Cambodian legal system, it is still in the process of being implemented and requires interpretation for actual practice.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations. For more details or any question related to e-commerce, please contact our professionals via [email protected]
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