Legal and Tax Updates

Issue: No. 011P/25 – 03 July 2025

I. INTRODUCTION

On 06 June 2025, the Securities and Exchange Regulator of Cambodia (“SERC”) has issued a notice on       the  implementation of Prakas No. 046 on the Issuance of Infrastructure Bonds issued by the Non-Banking Financial Services Authority (FSA) which aims to determine the conditions and procedures of infrastructure bond issuance and post-issuance obligations of the issuer in an efficient, effective, accountable and transparent manner.

Along with this Prakas, SERC has issued a Guideline No. 45/25 on Eligible Assets to be Used for Infrastructure Bonds Issuance dated 02 May 2025 which complement to this Prakas by specifying the types of assets in more than 11 (eleven) sectors that are eligible to be used for this infrastructure bond issuance.

This Prakas is applicable to the issuance of:

• Public Issuance of Infrastructure Bonds,
• Private Placement of Infrastructure Bonds,
• Infrastructure Bonds Issuance for Qualified Investors as well as relevant individuals involved in such transactions in the Kingdom of Cambodia.

II.    TYPES, FORMS, ELIGIBLE ASSETS AND USE OF PROCEEDS

         1.  TYPES OF INFRASTRUCTURE BONDS

The Infrastructure Bonds can be:

i. Ordinary Bonds,

ii. Secured Bonds, or

iii. Guaranteed Bonds.

          2.  FORMS OF INFRASTRUCTURE BONDS  

The Infrastructure Bonds may be issued in the form of:

No.	Forms	Definition
1.	Corporate Infrastructure Bonds	Definition: means bonds issued by companies specialized in infrastructure development to finance or refinance the development, construction, operation and maintenance of infrastructure assets. Issued By: – Public Limited Company (PLC.) or – Permitted Entity. Issued Through: – Public Issuance, – Private Placement, or – to Qualified Investors.
2.	Project Infrastructure Bonds	Definition: means bonds issued by companies specialized in infrastructure development which were incorporated as Special Purpose Vehicle (SPV) by a Sponsor specifically with the purpose of holding the project assets. Issued By: Special Purpose Vehicle (SPV). Issued Through: – Private Placement, or – to Qualified Investors.
3.	Infrastructure Securitization Bonds	Definition: means bonds issued by Special Purpose Vehicle (SPV) incorporated by an Originator who specialized in infrastructure development. This Originator is a company that creates or holds the financial assets, such as accounts receivable, loan or other financial assets. Issuance: The issuance of this Infrastructure Securitization Bond shall be governed by separate regulations.

          3.  ELIGIBLE INFRASTRUCTURE ASSETS

The Eligible Infrastructure Assets to be used for the issuance of Infrastructure Bonds shall fall under any of the sectors: (i) Transportation, (ii) Renewable Energy Generation, (iii) Non-renewable Energy Generation, (iv) Energy Storage, Transmission, and Distribution, (v) Energy Generation and Processing, (vi) General Energy Infrastructure, (vii) Social Infrastructure, (viii) Telecommunication, (ix) Water, (x) Waste, (xi) Environmental Infrastructure, or (xii) Other.

SERC may approve any specific asset that is not an Eligible Infrastructure Asset above. This Eligible Infrastructure Assets shall be determined by Guideline No. 45/25 on Eligible Assets to be Used for Infrastructure Bonds Issuance.

          4.  USE OF BOND PROCEEDS

The proceeds from the issuance of Infrastructure Bonds shall be used for:

i. Financing of a new infrastructure project.

ii. Refinancing of existing loans.

iii. Improvement and modernization of existing infrastructure assets.

iv. Maintenance and operation of infrastructure assets.

v. Expansion of infrastructure system.

vi. Environmental and sustainable initiatives.

vii. Public-Private Partnership Projects.

viii. Enhancing the effectiveness of infrastructure projects.

ix. Other uses approved by SERC.

III.    ISSUANCE REQUIREMENTS

          1.  ISSUANCE APPLICATION

Persons who wish to issue Infrastructure Bonds are required to submit application to the SERC and fulfill the requirements under the existing regulations with respect to bond issuance in Cambodia.

          2.  SPECIFIC REQUIREMENTS

• For Corporate Infrastructure Bonds Issuance:

Type of Issuance	Requirements
Public Issuance	Comply with Clause 6 (for Plain Bond), 7 (for Secured Bond) and 8 (for Guaranteed Bond) of Prakas on Public Bond Issuance.
To Qualified Investors	Comply with Clause 7 (for Plain Bond) and 8 (for Secured and Guaranteed Bond) of Prakas on Bond Issuance to Qualified Investors.
Additional Requirements
1.       Comply with Eligible Assets and Use of Proceeds requirement of this Prakas. 2.       Experience in managing the same or similar assets to the Eligible Infrastructure Asset to be issued. 3.       Viability and Feasibility of Infrastructure Project. 4.       Credit Rating Report by a Credit Rating Agency.

 

• For Project Infrastructure Bonds Issuance:

Type of Issuance	Requirements
To Qualified Investors	1.    Comply with Clause 7 (for Plain Bond) and 8 (for Secured and Guaranteed Bond) of Prakas on Bond Issuance to Qualified Investors, and 2.    Forecasted Financial Report for the tenor of the bond.
Additional Requirements
From Issuer (as SPV): 1.       Comply with Eligible Assets and Use of Proceeds requirement of this Prakas. 2.       Viability and Feasibility of Infrastructure Project. 3.       Credit Rating Report by a Credit Rating Agency. 4.       Incorporated by at least 1 Sponsor and fulfill all requirements under Clause 10 of this Prakas. 5.       SERC may require the SPV to provide security or guarantor for the issuance. From Sponsor: 1.       Audited Historical Financial Statements and/or Audited Consolidated Historical Financial Statements for the last 2 years of the last accounting year prepared in accordance with Cambodian laws and regulations for Sponsor in Cambodia and in accordance with international standard or similar for Sponsor outside of Cambodia. 2.       Quarterly Financial Statements if submitted application later than 45 days after the end of a quarter. 3.       Encourage to practice Corporate Governance in accordance with existing laws and regulations.

For the issuance of Green, Social and Sustainable Bond for Corporate Infrastructure Bonds and Project Infrastructure Bonds, Issuer shall comply with additional requirements in accordance with Guideline No. 003/22 on the Issuance of Green Bond, Social Bond and Sustainable Bond of the SERC.

          3.  DOCUMENT REQUIREMENTS

The Issuer shall submit the following documents to the SERC:

i. Application Form,

ii. Disclosure Document, and

iii. Supporting Documents.

These Supporting Documents are specified in Clause 12 of this Prakas.

          4.  DISCLOSURE DOCUMENT

The Disclosure Document shall disclose information as specified in Clause 12 and 22 of Prakas on Public Bond Issuance and Clause 11 and 12 of Prakas on Bond Issuance to Qualified Investors.

The Disclosure Document shall disclose:

• use of proceeds as required under Clause 12 of this Prakas by specifying the amount for each target.
• stages/phases for the application and use of proceeds.
• term of agreements with third parties (if proceeds are to be used in those agreements).
• investment plan (if the bond issuance is related to such plan of the company). If there is more than 1 investment plan, each plan shall be fully disclosed separately.

For Project Infrastructure Bond Issuance to Qualified Investors, the Disclosure Document shall include additional information as required under Clause 13 of this Prakas.

IV.    POST-ISSUANCE REQUIREMENTS

          1.  CORPORATE DISCLOSURE

• For Public Issuance: Issuer shall comply with:
  • Chapter 4 of this Prakas,
  • Prakas on Corporate Disclosure, and
  • Clause 41 of Prakas on Public Issuance.

• For Issuance to Qualified Investors: Issuer shall comply with:
  • Chapter 4 of this Prakas, and
  • Chapter 5 of Prakas on Bond Issuance to Qualified Investors.

The Issuer shall disclose the Development Report on the use of proceeds as attachments to the Annual Report.

          2.  ADDITIONAL OBLIGATIONS FOR TIMELY DISCLOSURE REQUIREMENTS

For Project Infrastructure Bond Issuance to Qualified Investors, in addition to the Timely Disclosure requirements under Clause 27 of Prakas on Corporate Disclosure, the Issuer shall also timely disclose the following events:

• Update to the project development financed by the bonds including material events such as the construction, development and issues or risks to the project.
• Material events that could affect the value of the projects include the change of financial conditions of the Issuer, delay of significant projects, development of regulations or events where it could affect the Issuer in performing its obligations.
• Credit Rating Report updated by the Credit Rating Agency.
• Change to Corporate Governance including change of structure, board members and remuneration of directors and senior officers.
• Trend in the infrastructure sector, change in economic conditions, and other factors that could affect the infrastructure market.

We hope that the above legal update is helpful for your investment and helps you to invest more confidently.

 

DISCLAIMER

The article is merely for general information purposes. It does not constitute as a legal advice on the subject matter. If you have any questions or need any assistance, please feel free to contact us:

	NOEUM Sokvichhai, Partner, Managing Director sokvichhai.noeum@sithisak-lawoffice.com +855 12 826 785	Mr. Sokvichhai has more than 8 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advises and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transactions. He also has experience in advising collective investment fund and trust business, initial public offering, bond issuance, investment incentives & qualified investment project, and labour & employment related issues. Sokvichhai also assists major business in preparing various complex commercial agreements.
	TONG Lin, Senior Legal Advisor, Head of Banking, Finance and Capital Markets tong.lin@sithisak-lawoffice.com +855 98 888 293	With over five years of experience in the legal field, Lin legal practices concentrate on corporate, commercial, banking, finance and capital markets-related matters. Currently, Lin actively provides legal services to both local and international financial institutions including legal advice, preparation of complex financing documents, security documents and other legal documents and matters. Lin also actively advises numbers of renown large corporations and several growing SMEs regarding their proposed equity and debt securities, public funds issuance under collective investment scheme, trust and project financing arrangements.

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