Cambodia's New E-Commerce License and Permit Fees Guide

[ASEAN NOW]

 

Companies and people involved in e-commerce in Cambodia must now apply for the necessary licences and licenses, or face fines if they do not.

Prakas 315 and 316, which define taxes and penalties related with e-commerce licenses and permits, were jointly announced by Cambodia's Ministry of Commerce and Ministry of Economy and Finance on May 12, 2021. Both Prakas 315 and 316 went into effect on May 26, 2021.

 

The two prakas follow the November 2, 2019 promulgation of the Law on Electronic Commerce, often known as the e-Ecommerce Law. These laws and regulations are part of a new framework governing e-commerce in Cambodia, which is expected to be worth $222 million in 2021, according to data provider Statista.

 

To avoid penalties and take advantage of the sector's strong growth trajectory, foreign investors operating in e-commerce and other electronic transactions in Cambodia must comply with the new standards.

 

Who needs e-commerce permits and licenses?

 

The e-Commerce Law is a broad piece of legislation that governs both domestic and international electronic transactions. The law applies to all business and civil transactions conducted electronically, in addition to normal retail e-commerce.

In addition to the requirements outlined in the e-Commerce Law, Cambodian authorities issued Sub-Decree 134 on August 27, 2020, and Prakas 290 on October 9, 2020, which provided more information on licenses and permits.

 

The e-Commerce Law and related rules, among other things, require individuals, sole proprietorships, legal entities, and foreign company branch offices conducting e-commerce in Cambodia to obtain the necessary licences and licenses. This includes both Cambodian businesses using e-commerce to sell internationally and foreign businesses selling to Cambodia.

 

E-commerce licenses and permissions are divided into two categories: one for individuals and single proprietorships, and another for legal entities and branch offices. Some company activities are exempt from licenses and permits under the legislation, but they must nevertheless disclose their actions to the Ministry of Commerce, which oversees the permitting and licensing process.

 

How much do e-commerce permissions and licenses cost?

 

The fees for obtaining a permission or license, as defined in Prakas 315, vary depending on whether the applicant is an individual, a single proprietorship, a legal person, or a branch office of a foreign corporation.

 

Individuals must pay 200,000 riel ($50) for an e-commerce permit, sole proprietors 400,000 riel ($100), and legal entities and branch offices 1,000,000 riel ($245). Individuals and sole proprietors' permits are valid for two years, whereas legal entities and branch offices' licenses are valid for three years.

 

Fees-for-e-Commerce-Permits-and-Licenses-in-Cambodia

 

Fines of up to 10,000,000 riel ($2,450) are imposed on entities that engage in e-commerce activities without first obtaining the necessary licence or license.

 

Fines for e-commerce-related offences are set down in Prakas 316 as follows:

 

Prakas 316 contains fines for additional business and commercial infractions, such as late re-registration of trademarks, brands, and other intellectual property, in addition to e-commerce registration fines.

 

In recent years, the Cambodian government has stressed the relevance of e-commerce to the country's development.

 

The Cambodian government released the e-Commerce Strategy in November 2020, a 10-chapter document outlining the country's plans to expand, integrate, and regulate the sector. Integrating Cambodia's small and medium-sized businesses with e-commerce value chains is a significant aspect in the strategy document's development of the country's digital economy.

 

Since the e-Commerce Law was passed in late 2019, the Cambodian government has released a number of policies and regulations, including the e-Commerce Strategy. Sub-decree 65, which changed how Cambodian authorities execute value-added tax for e-commerce transactions, was another significant shift.

 

Given the multiple changes to Cambodia's e-commerce scene, international investors would be wise to establish updated plans for harnessing new growth prospects given by the sector's expansion, rather than simply complying with new regulations. Briefing on Asean