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Select Topics
Relevant legislation and authorities
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  1. Is a merger control regulation in force?
  1. Which authorities enforce the merger control regulation?
  1. Relevant regulations and guidelines with links:
  1. Does general competition regulation apply to mergers or ancillary restrictions?
  1. May an authority order a split-up of a business irrespective of a merger?
  1. Other authorities that also require merger filing or may prohibit transaction
    (Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)
  1. Are any parts of the territory exempted or covered by particular regulation?
Voluntary or mandatory filing
show/hide chapter
  1. Is merger filing mandatory or voluntary?
Types of transactions to file – what constitutes a merger
show/hide chapter
  1. Is there a general definition of transactions subject to merger control?
  1. Is "change of control" of a business required?
  1. How is "control" defined?
  1. Acquisition of a minority interest
  1. Joint ventures/joint control – which transactions constitute mergers?
Thresholds that decide whether a merger notification must be filed
show/hide chapter
  1. Which thresholds decide whether a merger notification must be filed?
  1. Special thresholds for particular businesses
  1. Rules on calculation and geographical allocation of turnover
  1. Special rules on calculation of turnover for particular businesses
  1. Series of transactions that must be treated as one transaction
Exempted transactions and industries (no merger control even if thresholds ARE met)
show/hide chapter
  1. Temporary change of control
  1. Special industries, owners or types of transactions
  1. Transactions involving only foreign businesses (foreign-to-foreign)
  1. No overlap of activities of the parties
  1. Other exemptions from notification duty even if thresholds ARE met?
Merger control even if thresholds are NOT met
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  1. May a merging party file voluntarily even if the thresholds are not exceeded?
  1. May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?
Referral to and from other authorities
show/hide chapter
  1. Referral within the jurisdiction
  1. Referral from another jurisdiction
  1. Referral to another jurisdiction
  1. May the merging parties request or oppose a referral decision?
Filing requirements and fees
show/hide chapter
  1. Stage of transaction when notification must be filed
  1. Pre-notification consultations
  1. Special rules for acquisitions on stock exchanges and public takeover bids
  1. Forms available for completing a notification
  1. Languages that may be applied in notifications and communication
  1. Documents that must be supplied with notification
  1. Filing fees
Implementation of merger before approval – "gun jumping" and "carve out"
show/hide chapter
  1. Is implementation of the merger before approval prohibited?
  1. May the parties get permission to implement before approval?
  1. Due diligence and other preparatory steps
  1. Veto rights before closing and “Ordinary course of business” clauses
  1. Implementation outside the jurisdiction before approval – "Carve out"
  1. Consequences of implementing without approval/permission
The process – phases and deadlines
show/hide chapter
  1. Phases and deadlines
Assessment and remedies/decisions
show/hide chapter
  1. Tests or criteria applied when a merger is assessed
  1. May any non-competition issues be considered?
  1. Special tests or criteria applicable for joint ventures
  1. Decisions and remedies/commitments available
Publicity and access to the file
show/hide chapter
  1. How and when will details about the merger be published?
  1. Access to the file for the merging parties and third parties
Judicial review
show/hide chapter
  1. Who can appeal and what may be appealed?

 
CAMBODIA

Heng Chhay
Partner

heng.chhay@rajahtann.com

Tel: +855 23 963 112 / 113

Hout Sotheary
Partner

hout.sotheary@rajahtann.com

Tel: +855 23 963 112 / 113

Ly Sopoirvichny
Senior Associate

ly.sopoirvichny@rajahtann.com

Tel: +855 23 963 112 / 113

Prom Savada
Senior Associate

prom.savada@rajahtann.com

Tel: +855 23 963 112 / 113

New regulation proposed

There is currently no merger control or general competition regulation in force in Cambodia, but a draft Law on Competition of Cambodia exists. The Draft Law has been in place for quite some time but it is yet to be finalized. There is a commitment from the government on the finalization of the Draft Law in 2020, however, the timeline is not clear. It is currently being reviewed at the Ministry of Justice and will be submitted to the Council of Ministers for discussion.

Relevant legislation and authorities

1) Is a merger control regulation in force?

There is currently no merger control regulation in force. 

The Draft Law on Competition of Cambodia (“Draft Law”) provides for the introduction of merger control. Under Section 3 – Article 15 of the Draft Law, “Business Combinations” (hereafter “Mergers”) which have or may have the effect of significantly restricting or distorting competition in a market in Cambodia are unlawful.

2) Which authorities enforce the merger control regulation?

There is currently no specific merger control regulation in force.

However, under Sub-Decree No. 83 on the Organization and Functioning of the Ministry of Commerce dated 16 March 2020, a department on competition work has been established and vested with the authority to grant approval for mergers as well as to work on competition related matters. Apart from this Sub-Decree, there are neither detailed procedural regulations on how the department will function nor substantial regulations on the matter that the department can base its decision on. As the department has been newly established, there has also not been any precedent on the merger control implementation as of to date. 

It is important to note that the department on competition work has been established at a ministerial level while the Competition Commission of Cambodia under the Draft Law will be established at an inter-ministerial level. Official clarification has yet to be made on the correlation between the department and the Competition Commission of Cambodia once the latter is established; such clarification is expected to be made when the Commission is established. 

To date, in some specific sectors, including but not limited to banking and finance, insurance and telecommunication, the companies are required to seek prior approval of their merger from the relevant supervisory authority(ies).

Under the Draft Law, the Competition Commission of Cambodia will be in charge of enforcing merger control.

Interim measures and orders issued by the Competition Commission of Cambodia may be appealed to a competent court. Note that the Draft Law does not provide for the constitution of a dedicated competition appeal board or tribunal.

3) Relevant regulations and guidelines with links:

There is currently no merger control regulation in force, except that under Sub-Decree No. 83 on the Organization and Functioning of the Ministry of Commerce dated 16 March 2020, a department on competition work has been established and vested with the authority to grant approval for mergers as well as to work on competition related matters. However, it is still unclear whether this department will require mergers to be notified and/or approved before completion. 

The prohibition of mergers that result, or may result, in a significant prevention, restriction or distortion of competition in a market in Cambodia is set out at Article 15 of the Draft Law. The determination of rules and procedures in relation to mergers is left to sub-decrees.

Original Cambodian version

Unofficial English translation

ច្បាប់ស្តីពីការប្រកួតប្រជែង

DRAFT LAW ON COMPETITION OF CAMBODIA (Version 5.7)

(This English version was based on the Draft Khmer Version as of 13 FEB 2018. There is no official website providing the Khmer version.)

4) Does general competition regulation apply to mergers or ancillary restrictions?

There is currently no merger control regulation in force.

Section 1 of the Draft Law prohibits agreements which prevent, restrict or distort competition, whether horizontal or vertical. It is, therefore, possible that transactions that do not qualify as a merger under Section 3 of the Draft Law could fall under Section 1 of the Draft Law.

Under the Draft Law, mergers, i.e. business combinations are defined as “the acquisition of the right of control, voting rights, shares or assets by one Person from any other Persons or the combination of two or more Persons which were previously independent from each other in order to acquire joint ownership of that combined Person”. It is not clear, for example, whether the setting-up of a joint-venture between competitors would fall under this definition and be reviewed as a merger or as a (potentially) anti-competitive agreement.

The Draft Law does not address ancillary restrictions: this may be dealt with in subsidiary legislation.

5) May an authority order a split-up of a business irrespective of a merger?

There is currently no merger control regulation in force.

Under the Sub-Decree No. 83 on the Organization and Functioning of the Ministry of Commerce dated 16 March 2020, a department on competition work has been established and vested with the authority to grant approval for mergers as well as to work on competition related matters. Apart from this Sub-Decree, there are neither detailed procedural regulations on how the department will function nor substantial regulations on the matter that the department can base its decision on. As the department has been newly established, there has also not been any precedent on the merger control implementation as of to date. 

The Draft Law provides that the Competition Commission of Cambodia may issue orders requesting violators to sell specified assets or parts of their business and to take any actions necessary to restore competition. Under the Draft Law, such orders can be issued irrespective of whether the violation results from an anti-competitive agreement, an abuse of dominance or a merger.

6) Other authorities that also require merger filing or may prohibit transaction
(Note that this may not be an exhaustive list and that industry-specific legislation should always be considered. Furthermore, a merger will often require change of registrations with – but not approval from – the companies register, land register and authorities that have issued permits for the activities of the merging parties.)

To date, sectoral regulators with such powers include the National Bank of Cambodia, the Ministry of Economy and Finance, the Securities and Exchange Commission of Cambodia, and the Ministry of Posts and Telecommunications. 

As mentioned in topic 2, under the Sub-Decree No. 83 on the Organization and Functioning of the Ministry of Commerce dated 16 March 2020, a department on competition work has been established and vested with the authority to grant approval for mergers as well as to work on competition related matters. Apart from this Sub-Decree, there are neither detailed procedural regulations on how the department will function nor substantial regulations on the matter that the department can base its decision on. As the department has been newly established, there has also not been any precedent on the merger control implementation as of to date. 

It is important to note that the department on competition work has been established at a ministerial level while the Competition Commission of Cambodia under the Draft Law will be established at an inter-ministerial level. Official clarification has yet to be made on the correlation between the department and the Competition Commission of Cambodia once the latter is established; such clarification is expected to be made when the Commission is established. 

7) Are any parts of the territory exempted or covered by particular regulation?

There is currently no merger control regulation in force.

No.

Voluntary or mandatory filing

8) Is merger filing mandatory or voluntary?

There is currently no merger control regulation in force. Sectoral regulators in topic 6 require mandatory approval on the M&A activities of companies under their supervision.

The Draft Law does not set out the detail of the merger regime, including whether filing will be required or otherwise.

Types of transactions to file – what constitutes a merger

9) Is there a general definition of transactions subject to merger control?

There is currently no merger control regulation in force.

Yes, under the Draft law, mergers are defined as “the acquisition of the right of control, voting rights, shares or assets by one Person from any other Persons or the combination of two or more Persons which were previously independent from each other in order to acquire joint ownership of that combined Person”.

10) Is "change of control" of a business required?

There is currently no merger control regulation in force.

The Draft Law does not specify whether “change of control” is required.

11) How is “control” defined?

There is currently no merger control regulation in force.

The Draft Law does not define “control”.

12) Acquisition of a minority interest

There is currently no merger control regulation in force.

See topic 9. Under the Draft Law, the definition of what would amount to a merger may include the acquisition of a minority interest. 

13) Joint ventures/joint control – which transactions constitute mergers?

There is currently no merger control regulation in force.

The Draft Law does not set out the detail of the merger regime, including whether filing will be required or whether all joint-ventures will fall under the merger regime.

Thresholds that decide whether a merger notification must be filed

14) Which thresholds decide whether a merger notification must be filed?

a) Turnover thresholds

There is currently no merger control regulation in force.

N/A

b) Market share thresholds

There is currently no merger control regulation in force.

N/A

c) Value of transaction thresholds

There is currently no merger control regulation in force.

N/A

d) Assets requirements

There is currently no merger control regulation in force.

N/A

e) Other

There is currently no merger control regulation in force.

N/A

15) Special thresholds for particular businesses

There is currently no merger control regulation in force.

N/A

16) Rules on calculation and geographical allocation of turnover

There is currently no merger control regulation in force.

N/A

17) Special rules on calculation of turnover for particular businesses

There is currently no merger control regulation in force.

N/A

18) Series of transactions that must be treated as one transaction

There is currently no merger control regulation in force.

N/A

Exempted transactions and industries (no merger control even if thresholds ARE met)

19) Temporary change of control

There is currently no merger control regulation in force.

N/A

20) Special industries, owners or types of transactions

There is currently no merger control regulation in force.

N/A

21) Transactions involving only foreign businesses (foreign-to-foreign)

There is currently no merger control regulation in force.

N/A. Note, however, that the Draft Law applies to businesses which activities significantly prevent, restrict or distort competition in any market in Cambodia regardless of whether the activities take place inside or outside Cambodia. This suggests that foreign-to-foreign mergers will not be exempted.

22) No overlap of activities of the parties

There is currently no merger control regulation in force.

N/A

23) Other exemptions from notification duty even if thresholds ARE met?

There is currently no merger control regulation in force.

N/A

Merger control even if thresholds are NOT met

24) May a merging party file voluntarily even if the thresholds are not exceeded?

There is currently no merger control regulation in force.

N/A

25) May the competition authority request a merger notification or oppose a transaction even if thresholds are not met?

There is currently no merger control regulation in force.

N/A

Referral to and from other authorities

26) Referral within the jurisdiction

There is currently no merger control regulation in force.

N/A

27) Referral from another jurisdiction

There is currently no merger control regulation in force.

N/A

28) Referral to another jurisdiction

There is currently no merger control regulation in force.

N/A

29) May the merging parties request or oppose a referral decision?

There is currently no merger control regulation in force.

N/A

Filing requirements and fees

30) Stage of transaction when notification must be filed

There is currently no merger control regulation in force.

N/A

31) Pre-notification consultations

There is currently no merger control regulation in force.

N/A

32) Special rules on timing of notification in case of public takeover bids and acquisitions on stock exchanges

There is currently no merger control regulation in force.

N/A

33) Forms available for completing a notification

There is currently no merger control regulation in force.

N/A

34) Languages that may be applied in notifications and communication

There is currently no merger control regulation in force.

N/A

35) Documents that must be supplied with notification

There is currently no merger control regulation in force.

N/A

36) Filing fees

There is currently no merger control regulation in force.

N/A

Implementation of merger before approval – “gun jumping” and “carve out”

37) Is implementation of the merger before approval prohibited?

There is currently no merger control regulation in force.

N/A

38) May the parties get permission to implement before approval?

There is currently no merger control regulation in force.

N/A

39) Due diligence and other preparatory steps

There is currently no merger control regulation in force.

N/A

40) Veto rights before closing and "Ordinary course of business" clauses

There is currently no merger control regulation in force.

N/A

41) Implementation outside the jurisdiction before approval – "Carve out"

There is currently no merger control regulation in force.

N/A

42) Consequences of implementing without approval/permission

There is currently no merger control regulation in force.

N/A

The process – phases and deadlines

43) Phases and deadlines

There is currently no merger control regulation in force.

The process regarding assessment of mergers and possible filing obligations is not provided for under the Draft Law, but it is expected to be subsequently regulated under by the implementing regulations.

Assessment and remedies/decisions

44) Tests or criteria applied when a merger is assessed

There is currently no merger control regulation in force.

Under the Draft Law, mergers which have or may have the effect of significantly preventing, restricting or distorting competition in a market in Cambodia shall be unlawful. Under Article 4 of the Draft Law to “significantly prevent, restrict or distort” means “the extent or degree of impact on competition for goods or services as determined by the CCC through economic analysis or any other means of analysis”.

45) May any non-competition issues be considered?

There is currently no merger control regulation in force.

N/A

46) Special tests or criteria applicable for joint ventures

There is currently no merger control regulation in force.

N/A

47) Decisions and remedies/commitments available

There is currently no merger control regulation in force.

There is no requirement in the Draft Law to notify or obtain approval of a merger. This will likely be provided for in the subsidiary legislation.

The Draft Law, however, prohibits certain mergers and provides that mergers can be investigated. If the merger is found unlawful, various orders can be issued by the Competition Commission, including orders to pay penalties and orders to remedy the competitive harm, by divesting assets for instance.

Separately, Article 30 of the Draft Law provides for a voluntary resolution that can be reached at the stage of the investigation between the persons under investigation and the Competition Commission: it is possible that such process would mean that commitments may be offered to put an end to an investigation into a merger and a finding that the merger is not a violation.

Publicity and access to the file

48) How and when will details about the merger be published?

There is currently no merger control regulation in force.

Based on the Draft Law, the order of the Competition Commission of Cambodia will be made public; however, the detailed procedure of the issuance of an order will provided for under the implementing regulation.

49) Access to the file for the merging parties and third parties

The merging parties:

There is currently no merger control regulation in force.

Based on the Draft Law, the order of the Competition Commission of Cambodia will be made public. Any  rules on access to the file will most likely be provided for under the implementing regulation.

Third parties:

There is currently no merger control regulation in force.

Based on the Draft Law, the order of the Competition Commission of Cambodia will be made public. Any rules on access to the file will most likely be provided for under the implementing regulation.

Judicial review

50) Who can appeal and what may be appealed?

There is currently no merger control regulation in force.

Any interim measure or order may be appealed within 7 or 15 working days from the date the interim measure or order is received. Whilst Article 33 of the Draft Law suggests that any Person affected by an interim measure can appeal, it is not clear whether this is limited to the merger parties or could include third parties as well, if they feel that they are affected by the interim measure or order.


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