Ly Tayseng, managing partner of HBS Law, addressed a Cambodia-Philippines Business Forum in Phnom Penh on January 22. Yousos Apdoulrashim
Legal experts have emphasised the importance of understanding Cambodia’s legal framework for successful business operations, despite the country’s generally open and pro-business environment.
Speaking at the Cambodia-Philippines Business Forum in Phnom Penh on January 22 – which focused on fostering ties between the two nations through Women in Business – Ly Tayseng, managing partner of HBS Law, explained that Cambodia operates under a civil law system.
However, in practice, the Kingdom’s legal framework is a hybrid of civil and common law, particularly in the business sector.
“Cambodian laws are influenced by various international legal practices, including those from Asia and beyond. As a signatory to many international treaties and agreements, the country’s legal framework is modern and regularly updated. This necessitates expert interpretation and consultation,” Tayseng explained.
He noted that Cambodia’s legal system is evolving rapidly.
“One of the key features is that Cambodian laws are becoming increasingly complex and influenced by global standards,” he said.
“Many of our laws are newly enacted, particularly in 2022 and 2023, and cover crucial business areas. These laws are modern because they align with international norms and best practices,” he added.
Tayseng used the occasion to explain the importance of understanding the Kingdom’s rapidly evolving legal environment, especially for those wanting to do business. Yousos Apdoulrashim
Tayseng also highlighted how legal experts within government institutions are constantly studying foreign legal systems, noting that this contributes to the modernisation of the Kingdom’s legal framework, making it sophisticated accordingly.
Regarding foreign ownership, he pointed out that Cambodia is one of the few countries in the region that allows 100 per cent foreign ownership in businesses, with the exception of land and ground-floor properties, such as houses or apartments. While foreigners cannot own land, they can lease it or invest through mechanisms like economic land concessions.
For business conflict resolution, Tayseng explained that Cambodia offers various options, including mediation, negotiation and arbitration, before resorting to the courts.
He also praised the streamlined business registration process at the Ministry of Commerce, which typically takes just days for approval.
Despite these advancements, Tayseng acknowledged ongoing challenges.
“The Cambodian government is committed to modernising the legal system, but as more laws are enacted, understanding them becomes increasingly complex. Even as an experienced lawyer, I need to continually study new laws,” he said.
Tayseng advised business leaders to seek expert legal counsel to navigate the intricacies of Cambodia’s legal system.
“While the laws are good, thorough interpretation and explanation are often required. Additionally, sub-decrees and prakas play a critical role in legal understanding,” he added.
In a recent report, the UN Development Programme (UNDP) highlighted Cambodia’s strong political and macroeconomic stability, liberal trade and investment policies, and openness to foreign business. However, the report also pointed out weaknesses in institutional capacity and the enforcement of laws and regulations.
When asked about challenges in legal perspective in starting a business in Cambodia, Tayseng cited the complexity of modern laws as a key issue.
“Not all laws are available in English, and even when they are, they often require careful interpretation,” he explained.
Tayseng concluded by reiterating the importance of legal expertise for businesses looking to thrive in Cambodia’s dynamic and evolving economic environment.
