Cambodia is rapidly developing and now is the best time to start an e-commerce business in Cambodia. As there are already e-commerce laws in place, Dr. Sok Siphana believes that e-commerce is prime for a good take-off.
Governing legislation/ framework
The laws that would apply are as follows:
- Law on E-commerce (2019)
- Sub-Decree No. 134 on Classification, Formalities, and Procedures on Granting of Permit or License to Intermediary and E-commerce Service Provider, and Exemptions, dated 24 August 2020
- Prakas (Ministerial Declaration) No. 290 on Granting of Permit of License to E-commerce Service Providers, dated 9 October 2020.
Under the Law on E-commerce, the Ministry of Commerce and Ministry of Posts and Telecommunications are the competent authorities governing on the E-commerce sector. The Ministry of Commerce is in charge of issuing the E-commerce permit/license to the service providers, while the Ministry of Posts and Telecommunications regulates the technological side of the sector, such as the security and safety procedures regarding the storing of data and information, and the issuance of online service certificate.
Licensing & market entry requirements
- Under the Law on E-Commerce, the following persons are permitted to operate E-commerce in Cambodia:
- natural person;
- sole proprietorship;
- legal person; and
- branch of foreign company.
- The E-commerce licensing requirement is regulated as follows:
- natural person and sole proprietorship are required to obtain the E-commerce permit.
- legal person and branch of foreign company are required to obtain the E-commerce license.
In applying for the E-commerce permit/license, the applicant is also required to obtain the Online Service Certificate from the Ministry of Posts and Telecommunications.
Foreign equity restrictions
Foreign entities can set up a company operating E-commerce in Cambodia and there are no foreign equity restrictions on such company.
Payment solutions, foreign exchange administration and merchant acquiring services
- Payment solutions: there are numerous payment solutions on E-commerce platforms in Cambodia, including cashless/e-wallet, cash on demand, and credit card. In June 2020, the government officially launched the Bakong System (see response below) to incentivise the use of electronic money in payments by the public.
- Foreign exchange administration: to the best of our knowledge, as of the date of this response, there is no regulation issued on whether the local currency (Khmer Riel) can be used for E-commerce platforms which do not have a local presence in Cambodia.
- Merchant acquiring services: to the best of our knowledge, we are not aware of any specific laws or regulations on merchant acquiring services as currently there is a regulatory framework on third-party payment processors.
- The Law on Consumer Protection (2019) (“CPL”) provides protection of consumers in Cambodia. It is applicable to all persons conducting business (for profit or not) which provide or offer goods or services, in all sectors, to consumers in Cambodia. The Law sets out a number of prohibited activities including false, misleading, and/or baited advertisement and misrepresentation regarding the quality of the offer products, as well as supplier’s liability for any health and safety impact of consumers caused by the supplier’s “unfair” practices. The law also grants the consumers the right to complain and claim compensation for any violation of their rights.
- The Law on Management of Quality and Safety of Products, Goods, and Services (2000) (“LMQS”) requires entities, including manufacturers, importers, exporters, merchants, service providers, and advertisers, to submit their products, goods, and/or services to the relevant authorities for quality check and inspection. The LMQS also put civil and/or criminal liabilities on the abovementioned entities for any falsified, tampered and/or modified products post-inspection, as well as any contaminated or counterfeited products.
The Law on E-commerce provides general requirements on data processing and storing for E-commerce service providers. It should be noted that there is no specific law or regulation governing data protection in Cambodia. Generally, under the Law on E-Commerce, the E-commerce service providers are required to obtain express consent for any usage or storage of the other person’s personal data and information. In addition, the service provider storing such personal information, shall use all means to ensure that the information is safely protected in all reasonable circumstances.
The Law on E-Commerce and CPL provide that the E-commerce service providers (except those operating in securities and insurance sectors) are required to provide consumers with correct, clear, and sufficient information, which contain the following points at the minimum:
- person’s name or legal corporate name, registered business address, and electronic means of contract or phone number;
- form of contact, which is fast, convenient, and effective between the consumer and seller;
- terms and conditions, and the cost of the goods or services related to the business transactions, especially the terms and conditions, payment methods, and details related to removal or cancellation of purchase order, stoppage, delivery, and replacement of goods and refund; and
- goods and services which are put on sale.
Such information shall be in Khmer.
For more information about e-commerce across ASEAN, download the comparative guide, ASEAN Insiders: Electronic Commerce in ASEAN.