E-Commerce License and Permit Fees in Cambodia
Companies and individuals engaging in e-commerce in Cambodia must now apply for relevant permits and licenses, or risk fines for non-compliance.
On May 12, 2021, Cambodia’s Ministry of Commerce and Ministry of Economy and Finance jointly released Prakas 315 and Prakas 316, which describe fees and penalties associated with e-commerce licenses and permits. Prakas 315 and Prakas 316 both came into effect on May 26, 2021.
The two prakas follow the promulgation of the Law on Electronic Commerce, more commonly known as the e-Ecommerce Law, on November 2, 2019. Together, these laws and regulations are part of a new framework governing e-commerce in Cambodia, which the data provider Statista projects to be valued at US$222 million in 2021.
Foreign investors engaging in e-commerce and other electronic transactions in Cambodia must comply with the new requirements to avoid penalties and take advantage of the sector’s rapid growth trajectory.
Who needs to get e-commerce licenses and permits?
The e-Commerce Law is a far-ranging law that regulates both domestic and cross-border electronic transactions. The law goes beyond the standard retail e-commerce, as it also applies to all commercial and civil transactions that are done electronically.In addition to the requirements delineated in the e-Commerce Law, the Cambodian authorities released further details on licenses and permits in Sub-Decree 134, issued on August 27, 2020, and Prakas 290, released on October 9, 2020.
Among other provisions, the e-Commerce Law and associated regulations require individual persons, sole proprietorships, legal persons, and branch offices of foreign companies that conduct e-commerce within Cambodia to acquire relevant permits and licenses. This includes entities based in Cambodia exclusively using e-commerce to sell overseas, as well as overseas entities selling to Cambodia.
There are two categories for e-commerce licenses and permits: one for individuals and sole proprietorships, and one for legal persons and branch offices. The law exempts some business activities from licenses and permits, but they still must report their activities to the Ministry of Commerce, which manages the permit and licensing process.
What are the fees for e-commerce permits and licenses?
The fees to acquire a permit or license depending on whether the applicant is an individual person, a sole proprietorship, a legal person, or a branch office of a foreign company, as described in Prakas 315.
Individuals must pay 200,000 riel (US$50) for an e-commerce permit, sole proprietors must pay 400,000 riel (US$100) for one, and legal persons and branch offices must pay 1,000,000 riel (US$245) for a license. Permits for individuals and sole proprietors are valid for two years, while licenses for legal persons and branch offices are valid for three years..
Entities that conduct e-commerce activities without acquiring the relevant permit or license face fines of up to 10,000,000 riel (US$2,450).
Prakas 316 sets out fines for e-commerce-related infractions, as follows:
Besides fines relevant to e-commerce registration, Prakas 316 lists fines for other business and commercial violations, such as for late re-registration of trademarks, brands, and other intellectual property.
Building an e-commerce strategy in Cambodia
The Cambodian government has emphasized the importance of e-commerce for the country’s development in recent years.
In November 2020, the Cambodian government launched the e-Commerce Strategy, a 10-chapter document putting forth the country’s strategy to develop, integrate, and regulate the sector. A key factor in the strategy document is integrating Cambodia’s small and medium-sized businesses with e-commerce value chains to promote the development of the country’s digital economy.
The e-Commerce Strategy is one of several policies and regulations that the Cambodian government has released since passing the e-Commerce Law in late 2019. Another major change was Sub-decree 65, which changed how Cambodian authorities implement value-added tax for e-commerce transactions.
Given the various changes to Cambodia’s e-commerce landscape, foreign investors would do well to not just ensure they comply with new regulations, but to create updated strategies for capturing new growth opportunities presented by the sector’s development.
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