spot_img
spot_img

New company naming rules highlight Cambodia’s business registration development

By Pang Socheneath

The Ministry of Commerce has announced new company naming rules now allowing the use of “Holding” or “Group” in the last of a company’s name for corporations with at least three majority-owned subsidiaries.

The changes were announced via a Prakas last month and follow on from previous company naming laws in 2016. The new announcement was issued with a total of 10 chapters. while the previous announcement had an overall of 7 chapters.

Three additional chapters include chapter 4 is for a sole proprietor to put “sole proprietor” before the company’s name and chapter 5 is for the local branch, foreign branch, and commercial representative office to put their own company’s type before the company’s name.

H.E. Penn Sovicheat, spokesperson and Undersecretary of State of the Ministry of Commerce told Cambodia Investment Review that the issuance of the announcement’s purpose is to create a form of agreement to identify the name of various company’s types.

He added that this form of agreement is more detailed than what has been published before.

Regarding this additional chapter in the new announcement, it aims to give clear explanations in using “Holding” or “Group” after the requests received by the ministry from some companies.

“In the past, there are requests from big companies especially foreign companies to use “Holding” or “Group” by their company’s names as they’d had used those words when registered the licenses at their countries,” Sovicheat said.

“All in all, this announcement is to reserve the agreement of word usage at the end of company’s name to identify legally of the company’s types in accordance to law on commercial enterprises,” he added.

The “Law on Commercial Enterprise” was adopted by the National Assembly on April 26, 2005, and promulgated on May 19, 2005, as the first comprehensive company law in Cambodia.

Sreypeou Chaing, Managing Attorney at CSP & Associates Law Office told Cambodia Investment Review that the addition of the article 4 and 5 in the new announcement is to specify more clearly what has been stated in the law on commercial enterprises.

“Based on my observation throughout the past implementations, even though the previous announcement in 2016 didn’t state about the word identification to be used for the local branch, foreign branch, and commercial representative office, we still have the Law on Commercial Enterprise 2005 specifying those requirements already. That is why we can observe that those words used before the company’s names have been identified through business registration,” she said.

“What is new I think is regarding the explanation in using Holding or Group after company’s name,” Sreypeou Chaing said.

Sreypeou added that in the past we noticed that the word “Holding” or “Group” could be requested to use by the company as long as they can comply with legal requirements of the name approval and procedure of registration. 

Besides, the specific name usages for various types of companies provide the ministry a part to determine the economic progress in the country.

“It has significance in controlling the number and types of companies in order to conclude economically on the progress of private businesses. If we observe that there are many private enterprises, we can determine the development of SMEs in the country,” Sovicheat said.

Moreover, the increasing number of public limited companies gives a sign to the thrive of the economy in the country and even attracts stock sales among foreign investors, he added.

As part of a larger business registration agenda, in 2020, the Cambodian government launched a single window, online business registration platform as a way to improve access to the formal economy for business owners.

The online platform allows companies to operators to register with multiple ministries at the same time, reducing onboarding costs and simplifying the complicated compliance procedures that often discourage informal operators from entering the formal economy.

The portal has now expanded its scope with four more ministries joining the platform with business owners now able to apply for eight more professional licenses through registrationservices.gov.kh.

There are now 10 ministries involved with the portal covering the majority of small and medium-sized business activities.

It is hoped this new portal will improve the ease of formally registering a company in Cambodia. In ‘Doing Business 2020’, a World Bank Group flagship publication listed Cambodia as 187 out of 190 countries for Starting a business which was defined as Procedures, time, cost and paid-in minimum capital to start a limited liability company.

spot_img

Related Posts

Telegram Channel

Cambodia's best investment news & views direct into your Telegram account.