Article Cambodia: Ministry of Commerce Launches New Licensing Regime for E-commerce Businesses

On May 26, 2021, Cambodia’s Ministry of Commerce issued Notification No. 1143 to launch its new licensing regime for electronic commerce business operations. In the notification, the ministry announced that individuals, sole proprietorships, legal entities, and branches of foreign companies in Cambodia may now apply for appropriate e-commerce permits and licenses as required by law. Notification No. 1143 notes that any person who fails to comply with the regulatory licensing requirements may be subject to forced closure and applicable fines and penalties. (See Prakas No. 316.)

Background to the Licensing Regime

The new e-commerce licensing regime was established by the Law on Electronic Commerce of 2019 (E-Commerce Law) enacted in November 2019. The law became effective in May 2020. This six-month grace period allowed the relevant governmental authorities to prepare necessary implementing regulations and the public to familiarize themselves with these new legal requirements.

E-Commerce Law

Cambodia did not have any comprehensive legislation specifically on e-commerce until the adoption of the E-Commerce Law, making Cambodia the last member of the Association of Southeast Asian Nations (ASEAN) to pass such legislation.

Under the E-Commerce Law, e-commerce service providers and intermediaries must obtain e-commerce permits or licenses from the Ministry of Commerce in addition to the general business registration. (E-Commerce Law art. 26, ¶ 1.) The E-Commerce Law broadly defines e-commerce service providers and intermediaries, and specifically states that the licensing requirement and exemptions will be clarified in subsequent regulations. (Annex; art. 26, ¶ 4.) Therefore, when the law was enacted, it was not clear whether a completely offshore business providing services on the internet to Cambodian people would be subject to the newly imposed licensing requirement.

Under the E-Commerce Law, the new e-commerce licensing regime has two categories: (1) an e-commerce permit (for individual persons and sole proprietorships) and (2) an e-commerce license (for legal persons and branches of foreign companies). (Art. 26, ¶ 2.) The E-commerce Law, however, provides little guidance on the differences between the two and delegates the guidance to a sub-decree. (Art. 26, ¶ 4.)

Sub-Decree No. 134

On August 27, 2020, Cambodia issued Sub-Decree No. 134 on the Classifications, Formalities, and Procedures for the Issuance of Permits and Licenses to Electronic Commerce Intermediaries and Service Providers, and Exemptions, an implementing regulation of the E-Commerce Law.

Sub-Decree No. 134 clarifies that the new licensing requirement under the E-Commerce Law also applies to offshore e-commerce operations without local presence or permanent establishment in Cambodia. The sub-decree states that the law applies to (1) e-commerce activities and operations within Cambodia, (2) e-commerce services provided from Cambodia to other countries, and (3) e-commerce services provided from other countries to Cambodia. (Art. 2.)

Sub-Decree No. 134 also clarifies types of business operations requiring an e-commerce license (e.g., e-commerce web services and e-commerce platforms) and those needing an e-commerce permit (e.g., selling goods or services via social media). (Art. 5, ¶¶ 1–2.) It also lays out the types of business that are exempted from the licensing requirement (e.g., family-owned businesses or seasonal sale of goods or services). (Art. 5, ¶ 3.) The sub-decree, however, notes that those exempted must still notify the Ministry of Commerce of their business operations (such as name, electronic means of business and payments, and contact information) so that the ministry can keep proper records and ensure sufficient consumer protection. (Art. 5, ¶ 4.)

Sub-Decree No. 134 provides that required application documents and procedures be determined by the Ministry of Commerce in a type of ministerial regulation known as a prakas. (Art. 6, ¶ 5.)

Prakas No. 290

On October 9, 2020, the Ministry of Commerce issued Prakas No. 290 on the Issuance of Electronic Commerce Licenses and Permits. Prakas No. 290 sets forth the required documents to apply for e-commerce license and permits, as well as detailed procedures and time frames for the Ministry of Commerce to review the applications. The regulation also stipulates the timelines and procedures to renew the permits and licenses, among other things. (Arts. 3–8.)

Prakas No. 315

Prakas No. 315 was issued jointly by the Ministry of Commerce and the Ministry of Economy and Finance on May 12, 2021, and took effect on May 26, 2021. In relevant parts, Prakas No. 315 provides fees, application processing time, and terms of permits and licenses. E-commerce permits for individuals and sole proprietorships are valid for two years, while e-commerce licenses for legal entities or branches of foreign companies are valid for three years. (Annex 1.)

Prakas No. 316

Prakas No. 316 was jointly issued by the Ministry of Commerce and the Ministry of Economy and Finance on May 12, 2021, and took effect on May 26, 2021. Prakas No. 316 imposes a fine of 10,000,000 Cambodian riels (approximately US$ 2,500) on any person operating an e-commerce business without a necessary license or permit. (Art. 2.)

Prepared by Pichrotanak Bunthan, Law Library intern, under the supervision of Sayuri Umeda, Senior Foreign Law Specialist

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Cambodia: Ministry of Commerce Launches New Licensing Regime for E-commerce Businesses. 2021. Web Page. https://www.loc.gov/item/global-legal-monitor/2021-08-29/cambodia-ministry-of-commerce-launches-new-licensing-regime-for-e-commerce-businesses/.

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(2021) Cambodia: Ministry of Commerce Launches New Licensing Regime for E-commerce Businesses. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2021-08-29/cambodia-ministry-of-commerce-launches-new-licensing-regime-for-e-commerce-businesses/.

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Cambodia: Ministry of Commerce Launches New Licensing Regime for E-commerce Businesses. 2021. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2021-08-29/cambodia-ministry-of-commerce-launches-new-licensing-regime-for-e-commerce-businesses/>.

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