Cambodia

Introduction Mergers and acquisitions (“M&A”) are increasingly used by investors to expand business operations, restructure their business, and enter new markets. In Cambodia, M&A transactions are regulated through a combination of corporate, competition, investment, and taxation regulation rather than a single comprehensive statute. This article provides an overview of the legal framework governing M&A transactions in Cambodia and highlights key regulatory requirements and compliance considerations that investors should take into account when considering or undertaking M&A transactions in Cambodia. Key Legal Framework Governing M&A in Cambodia Corporate restructuring and ownership transfers in Cambodia are primarily governed by the Law on Commercial Enterprises promulgated by Royal Kram No. នស/រកម/0605/019 dated 19 June 2005 (as amended). This law establishes the legal forms of commercial enterprises operating in Cambodia and provides rules governing company formation, management, shareholder rights, and corporate governance. In practice, most M&A transactions involve the acquisition of shares in a limited liability company. Share acquisitions allow investors to obtain ownership, control or equity in a company while maintaining its existing legal and corporate structure. Corporate changes resulting from M&A transactions must also comply with registration obligations under the Law on Commercial Rules and Commercial Register promulgated by Royal Kram dated 26 June 1995 (as amended). Article 12 requires merchants and commercial companies to register their business information with the commercial register maintained by the Ministry of Commerce (the MoC), while Article 14 requires merchants to register their business before commencing operations. Following the completion of an M&A transaction, companies must update their corporate information with the MoC, including changes in shareholding, board of directors, capital, and company structure. Competition Law and Business Combination Regulation Competition law plays an important role in regulating M&A transactions in Cambodia. The Law on Competition, promulgated by Royal Kram No. នស/រកម/1021/013 dated 5 October 2021 establishes a framework to prevent business practices that may significantly prevent, restrict, or distort competition in the Cambodian market. Under Article 3 of the Law on Competition, a “business combination” includes the acquisition of control or voting rights through the purchase of shares or assets by one person from another person, or the combination of two or more persons to acquire joint ownership of an existing or newly created legal entity. The law also establishes the Cambodia Competition Commission (CCC) as the authority responsible for regulating competition matters. Under Article 4 of the Law on Competition, the CCC has the authority to review business combinations that may significantly impact market competition. Sub-Decree on Requirements and Procedures for Business Combinations To implement the competition law framework, the Royal Government of Cambodia issued Sub-Decree No. 60, dated 6 March 2023 on Requirements and Procedures for Business Combinations. According to Article 1 of the Sub-Decree, the regulation aims to establish procedures for reviewing business combinations, in order to monitor and evaluate their impact on competition. Article 2 provides that the Sub-Decree applies to business combinations that may significantly prevent, restrict, or distort competition in the Cambodian market, regardless of whether the transaction occurs inside or outside Cambodia. Article 4 introduces a pre-notification requirement for certain business combinations. Where the financial thresholds determined by the CCC are met, parties proposing a business combination must notify the CCC before completing the transaction. Transactions subject to pre-notification cannot be completed unless approval is granted by the CCC. Notification and Registration Requirements Implementing regulations issued by the Ministry of Commerce clarify the notification procedures for business combinations. The Prakas on Requirements and Procedures of Registration of Completion of Business Combinations Subject to Pre-Notification requires notifying parties to register the completion of the business combination with the CCC. One of the notifying parties is required to submit the registration form within thirty working days after the substantive completion of the business combination.[1] For transactions that do not meet the thresholds for pre-notification but still fall within the scope of competition monitoring, the Prakas on Procedures for the Post-Notification of Business Combinations establishes a post-notification regime requiring submission to the CCC within thirty working days after completion of the transaction. Investment Law Considerations Where M&A transactions involve companies benefiting from investment incentives, the Law on Investment of the Kingdom of Cambodia promulgated by Royal Kram No. នស/រកម/1021/014 dated 15 October 2021 may also apply. Article 29 provides that the rights and incentives granted to a Qualified Investment Project (QIP) may only be transferred through acquisition, sale, or merger of the investment project. Article 30 further states that such transactions must comply with applicable laws and may require approval from the Council for the Development of Cambodia (CDC) or the relevant Municipal-Provincial Investment Sub-Committee. Tax Implications of M&A Transactions Tax considerations represent another important aspect of M&A transactions in Cambodia. The Law on Taxation[2] governs the determination of corporate tax liabilities arising from business activities. Key provisions include Article 20, which governs the determination of corporate income tax liability, and Article 11, which sets out rules regarding allowable deductions when calculating taxable income. Depending on the structure of the transaction, M&A activities may trigger capital gains tax arising from share transfers, transfer tax obligations for asset transfers, and other corporate tax liabilities. Key Compliance Considerations for Investors Investors planning M&A transactions in Cambodia should carefully evaluate regulatory requirements before completing a transaction. Important considerations include competition law compliance where transactions meet notification thresholds, corporate registration requirements with the Ministry of Commerce, investment approvals where companies hold QIP status, and tax compliance related to share transfers or asset transfers. Conducting comprehensive legal due diligence is essential to identify regulatory risks and ensure compliance with Cambodian law. Conclusion The legal framework governing M&A in Cambodia continues to evolve, particularly with the introduction of the competition law regime and regulatory requirements for business combinations. Investors considering or undertaking M&A transactions must therefore carefully assess applicable corporate, competition, investment, and taxation regulations to ensure full compliance with governing laws and and regulations. ILAW Cambodia Law Office stands ready to assist investors and enterprises in navigating the legal and regulatory requirements associated with mergers and acquisitions in Cambodia. Our team provides comprehensive legal advisory services, including transaction structuring, regulatory compliance review, preparation of legal documentation, and coordination with relevant authorities to support efficient and successful M&A transactions. Governing Regulations: Law on Taxation, Royal Kram No. នស/រកម/0523/004 dated 16 May 2023. Law on Investment of the Kingdom of Cambodia, Royal Kram No. នស/រកម/1021/014 dated 15 October 2021. Law on Competition, Royal Kram No. នស/រកម/1021/013 dated 5 October 2021. Law on Commercial Enterprises, Royal Kram No. នស/រកម/0605/019 dated 19 June 2005 (as amended). Law on Commercial Rules and Commercial Register, Royal Kram dated 26 June 1995 (as amended). Sub-Decree No. 60 on Requirements and Procedures for Business Combinations dated 6 March Prakas No. 177 dated 14 June 2023 on Requirements and Procedures of Registration of Completion of Business Combinations Subject to Pre-Notification. Disclaimer This article is prepared for general informational purposes only and does not constitute legal advice. The legal frameworks and regulations referenced in this article are not exhaustive and may not cover all applicable laws or regulatory requirements related to mergers and acquisitions in Cambodia. Additional laws, regulations, sub-decrees, prakas, or administrative guidance may also apply depending on the specific circumstances of each transaction. Readers are encouraged to seek professional legal advice for specific transactions or situations to ensure full compliance with applicable Cambodian laws and regulations. Author: Vicheka Lay, Partner Kham Songheng, Legal Clerk Keyword: M&A, Mergers and Acquisitions, Corporate [1] Article 3 of Prakas No. 177, date 14th June 2023 on Requirements and Procedures of Registration of Completion of Business Combinations Subject to Pre-Notification [2] Law on Taxation, Royal Kram No. នស/រកម/0523/004 dated 16 May 2023.

[20 May 2025] — ILAWASIA is pleased to announce the appointment of Tanadee Pantumkomon as the firm’s new Partner in ILAWASIA’s Cambodia Office, ILAW Cambodia Law Office. This strategic addition further enhances our leadership team and reinforces our commitment to delivering exceptional legal services across the region and the global. In addition to his new role, Tanadee will serve in an additional leadership capacity at the Cambodia office, where he will oversee strategic initiatives, support cross-border collaboration, and contribute to the firm’s long-term development in Cambodia. With a distinguished background in international legal practice and extensive experiences more than a decade, Tanadee brings valuable expertise and insight to the firm. His appointment reflects ILAW Cambodia Law Office’s commitment to nurturing leadership that bridges legal systems and cultures across Southeast Asia. “Tanadee’s expanded role is a reflection of his outstanding contributions and our confidence in his ability to lead,” said Somphob Rodboon, Managing Partner of ILAW Cambodia Law Office. “His experience and vision will be instrumental in driving our growth and delivering exceptional service to our local and international clients.” Tanadee has played a pivotal role in advancing the firm’s regional initiatives, particularly in corporate advisory, regulatory compliance, M&A, cross-border investment, and energy, power and major projects. In his new capacity, he will focus on enhancing client engagement, mentoring legal professionals, and expanding the firm’s presence in Cambodia. “I am honored to take on this expanded role and contribute to the continued success of ILAW Cambodia Law Office,” said Tanadee Pantumkomon. “I look forward to working with our Cambodian team to support our clients and strengthen our position in the country to the region, and to the global.” This appointment underscores ILAW Cambodia’s ongoing commitment to legal excellence, innovation, and leadership across the ASEAN region.   About ILAW Cambodia Law Office ILAW Cambodia Law Office ("The Firm") was established in March 2023 and registered with the Bar Association of the Kingdom of Cambodia under registration number LO 016/23. The firm is located in Phnom Penh and was founded by Somphob Rodboon and Vicheka Lay. The firm is a branch office of its parent company, ILAWASIA CO., LTD., which has been based in Bangkok, Thailand for over a decade. The firm is in well placed to provide professional advisory services primarily in domestic and international disputes which include civil cases, criminal cases, labor disputes, international trade, debt collection service, legal due diligence, and any legal issues appropriate for any business transactions. Our partner and local attorneys were recently recognized and listed in the Asia-Pacific Legal 500 series. Furthermore, from 2021 to the present, ILAW Cambodia Law Office has been ranked as a "Firms in the Spotlight" in the Legal 500.  

Beginning from 1st March 2025, Cambodia launches the Accessing Office of WIPO’s digital access service. This integration will facilitate applicants in providing priority documents and all other IP-related documents between the participating IP offices. Definition: Accessing office is defined as an office of second filing – allows the applicant to request that a priority document be retrieved through WIPO DAS rather than filing a certified copy.[1] WIPO DAS stands for WIPO Digital Access Service, which is an electronic system allowing priority documents and similar documents to be securely exchanged between participating IP offices. The system enables applicants and offices to meet the requirements of the Paris Convention for Certification in an Electronic Environment. KEY TAKEAWAYS Some of the benefits of using WIPO DAS include reducing the need to prepare, check or scan certified documents, removing the need to deal with different transmission and document formats, and removing the need to establish secure connections to multiple offices. As the services are hosted and administered by WIPO, it also ensures documents being exchanged via secured channels and automating the exchange of documents with other participating offices. Applicants in Cambodia could now obtain new services at a low cost for filing applications in other countries. Digital Access Service (DAS) provides a secured, trusted mechanism which allows offices both to transmit and to access unpublished documents with confidence that the transmission has been permitted by the applicants or other authorized persons. CONCLUSION The Launch Accessing Office of WIPO is a significant step underscoring Cambodia’s growth in IP services. The Accessing Office is intended for use with documents related to patents, utility models, industrial designs and trademarks. As a regional leader in IP legal services, ILAW Cambodia Law Office is well-positioned to support businesses in navigating Cambodia’s evolving IP framework. With our expertise in intellectual property law and strong presence in Thailand, Laos, and Myanmar, we have been assisting clients in registering, protecting and enforcing their IP rights in compliance with international standards. Our team is dedicated to ensuring that businesses can fully leverage the opportunities, presented by WIPO’s Accessing Office while securing their innovations in the global market. Author: Vicheka Lay, Partner; and Makara Um, Associate They can be reach at [email protected] [1] https://www.wipo.int/en/web/das/participating-offices/search.

Introduction Following the Royal Government’s decision in the Special Statement on “One Year Achievement of the 7th Legislature” on August 22, 2024,and the directive of Samdech Thipadei Prime Minister of Cambodia on September 26, 2024, regarding Letter No. 10571 MEF dated September 24, 2024, from the Ministry of Economy and Finance, aimed at reducing the tax burden on housing developers and immovable property owners, the Ministry of Economy and Finance announces the continuation of Notification No. 001 (issued on January 4, 2024) and additional tax incentives for the real estate sector, as outlined below. Key provisions The 2025 tax incentives for the real estate sector include exemptions on (A) Tax on Stamp Duty of Transferring Ownership or Possession of Immovable Property, (B) Tax on Capital Gain, (C) Tax on Immovable Property, and (D) Tax on Unused Land, as detailed in following: A. Tax on Stamp duty for Transferring Ownership or Possession of Immovable Property. (The tax rate is 4%[1]) Tax on stamp duty is exempt for transferring ownership or possession of all types of Borey housing valued at USD 70,000 or less until the end of 2025. For all type of Borey housing valued over USD 70,000, the stamp duty tax is calculated by subtracting USD 70,000 from the base value. This also applies to houses purchased in development projects and Borey housing that have a valid real estate business license and are properly registered, until the end of 2025. All ownership or possession transfers with the above exemptions and tax concessions must comply with these conditions: Acquisition of ownership or possession of immovable property with a value of less than or equal to or more than USD 70,000 at the actual market value stated in the contract of sale-purchase from February 25, 2020, to the end of 2025 and to declare stamp duty during this period; Acquisition of ownership or possession of immovable property (all types of housing) from a housing developer registered with the Ministry of Economy and Finance (Now as Real Estate Business and Pawnshop Regulator of Non-Bank Financial Services Authority) or Provincial Department of Economy and Finance; and All housing developers must make a proper sale-purchase contract based on the actual market price. If necessary, the General Department of Taxation under the Ministry of Economy and Finance may review housing developers who have taken the opportunity to reduce the sale and purchase price from the actual market, affecting tax revenue. The taxpayer must enclose the actual sale-purchase contract between the housing developer and the buyer (as original documents) in addition to the application for stamp duty on the transfer of ownership or possession of immovable property.  B. Tax on Capital Gain. (The tax rate is 20%[2]) The tax on capital gain of immovable property for individuals is postponed until the end of 2025. Tax on the other five asset types—leases, investment assets, business reputation, intellectual property, and foreign currency—will commence in 2025. C. Tax on Immovable Property (The annual tax rate is 1%[3]) Tax on immovable property, including administrative penalties (additional tax and interest), is exempt for immovable property or any part of immovable property classified as agricultural land, where crops are being cultivated, or constructions directly and permanently support agricultural activities. This applies to land in the capitals and provincial cities, if the land documents confirm it as agricultural, without needing a permit letter or certificate from the competent authority. However, if any part of the land is used for construction houses, buildings, or other structures unrelated to agricultural activities, that portion will not qualify for the tax exemption. Immovable property with a title deed as a residential land in the capital or provincial cities used for cultivation qualifies for immovable property tax exemption, but it requires a permit letter or certificate of agricultural land use from the local authority. Immovable property that was previously registered and declared but has an incorrect tax basis is exempt from re-taxation and administrative penalties (additional tax and interest) from the year of tax implementation until 2024. From 2025 onward, current laws and regulations will apply. Immovable property (with or without a title deed) not previously registered and declared for immovable property tax can still be registered and pay taxed starting from the year of possessed or last use. For immovable property previously registered but with gaps in tax declarations, administrative penalties (additional tax and interest) are waived until the end of June 2025. D. Tax on Unused Land (The annual tax rate is 2%[4]) Tax on unused land is suspended until the end of 2024, so owners, possessors, or beneficiaries are not required to declare the tax on unused land during this time. In 2025, the Ministry of Economy and Finance will introduce a new unused land tax policy with significant changes as follows: Land classified as unused refers to land outside taxable immovable property areas; Deduction Allowance: Each plot of land will have a 5-hectare tax-free allowance; and Land over 5 hectares can be exempt from taxes if it meets any of the following conditions: actively cultivated agricultural land, used for registered economic activities, leased land, government-owned land, state-leased land for economic use, land in Special Economic Zones (SEZs), or land registered for educational purposes. Conclusion To ease the burden on housing developers and property owners, the Ministry of Economy and Finance has introduced tax incentives, including exemptions on the 4% Stamp Duty Tax for Borey housing valued at $70,000 or less until 2025, postponed 20% Capital Gains Tax for individuals until 2025, and 0.1% immovable property tax exemptions for agricultural land actively used for cultivation or related structures, with penalties for incorrect tax bases waived until 2024 and gaps in declarations forgiven until June 2025. Additionally, the 2% Unused Land Tax is suspended until 2024, with a 2025 policy offering a 5-hectare tax-free allowance and exemptions for specific uses, such as agriculture, economic activities, and education. These measures promote real estate growth while ensuring compliance, excluding retroactive application to taxes already paid. If you are looking for reliable tax advice in Cambodia, ILAW CAMBODIA offers expert legal guidance and comprehensive regulatory support to ensure your business stays fully compliant while efficiently managing tax risks. With our deep knowledge of Cambodia’s tax laws and regulations, we help you navigate complexities with confidence. Let us be your trusted partner in turning challenges into opportunities and driving the success of your business in Cambodia. Author: Tanadee Pantumkomon and Hort Lypheng Footnotes [1] Article 158 Point 1 of the Law on Taxation 2023. [2] Article 168 of the Law on Taxation 2023. [3] Article 150 of the Law on Taxation 2023. [4] Article 176 of the Law on Taxation 2023.