What are the stand-out issues particular to the practice of corporate law in Cambodia?
Cambodia’s legal and regulatory framework is dynamic and rapidly evolving in almost all substantive areas, including corporate law. As such, the biggest challenge at present for us as practitioners is to remain cognisant of changes to the law and on-the-ground realties and practices.
In almost all areas of corporate law and practice, from company formation, to legal and tax corporate structuring, to transactional structuring, implementation and monitoring, 2012 has been a watershed year of development and change heralding new products and structures, greater sophistication, internationalisation and transparency than we have ever previously seen. Given the remarkable changes to the legal and regulatory framework, some of which are touched on in my answer below), this has heralded and is expected to continue with a new era for Cambodia to help move it out forever from the shadows of its difficult past.
Are there any key recent or imminent regulatory changes in Cambodia in-house counsel should be aware of?
Anti-corruption in Cambodia has been a topic of considerable discussion, debate, and press coverage over the last 18 months, since the promulgation by the King, effective 2 August 2011, of an amendment to the Law on Anti-Corruption. This amendment brought into effect more than forty articles of the Criminal Code in the area of corruption offenses. Among other things, the Law on Anti-Corruption prohibits unofficial payments to government officials for public services, commonly referred to as facilitation payments.
In response to the Law on Anti-Corruption, and other implementing regulatory instruments, government ministries began undertaking a process to formalise and regularise their fees for public services. As of January 2013, the Ministry of Commerce, the Council for the Development of Cambodia, the Ministry of Labor, (sic) and other governmental entities have begun issuing, for the first time, official schedules of fees for public services, and requiring the issuance of receipts for such services. This represents a significant step towards transparency and raising the confidence level of foreign investors looking to undertake business in Cambodia. Counsel should remain informed about the issuance and implementation of such fee schedules.
• There is a draft Commercial Contract Law which is expected to be finalised and come into force this year. It will reflect specific provisions on franchise laws which have to date been absent in Cambodia. The new law is also expected to include substantial provisions on commercial sales contracts, agency contracts, and contracts for carriage. As such, we think it will represent a significant development in the area of commercial contract laws generally, and likely be the subject of ongoing debate and interpretation by relevant authorities and judicial bodies.
• The Civil Code of Cambodia came into force in December 2011, and has had a significant impact on various legal relationships and generally on Cambodia’s legal framework. The Civil Code is a broad-ranging body of law, a decade in the making. Essentially, it replaces and greatly expands upon, the former contract and other civil laws, and includes new far-reaching provisions on agency, leases, personal guarantees, and security interests. The Civil Code fills a number of gaps in the law and has helped move Cambodia in the direction of an international-standard legal environment, providing a greater degree of certainty to those wishing to invest and enter into transactions.
• The Civil Code is new, and many of its provisions remain untested by the courts and relevant authorities. Legal practitioners should closely monitor the continuing implementation and interpretation of this landmark body of law.
What are the most common types of billing arrangement in Cambodia? How negotiable are fees?
Generally speaking, there is no standard, or commonly accepted type of billing arrangement for legal services given the relative dearth of law firms and the developing nature of the legal market.
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