Legal update: Rules for Governing, Managing and Operating of Trust IssuedSithisak Law Office
Issue: No. 003P/22 – 21 February 2022
After the promulgation of Trust Law by Royal Decree № NS/RKM/0119/002 on 02 January 2019, Trust sector has become an important part in the econmic growth of Cambodia.
A Trust is a legal relationship whereby someone (the trustor) entrust property or fund to someone (the trustee) to manage and maintain for the benefit of someone (beneficiary).
Since the Sub-Decree on 2 August 2019 on the Trust Registration, to provides the rules and procedures for such Trust registration, the Non-Banking Financial Services Authority has recently issued a Prakas No. 003 on 26 January 2022 on the Rules to Control, Manage and the Functioning of Trust aiming to further detail the rules, conditions and procedures for trust establishment, trust registrations, and its processes, as well as the licensing and approval on trust operator. This Prakas reinstates that all the establishment and operating of Trust must be obtain the approval from the Trust Regulator in accordance with the Law on Trust, other relevant Regulations in force and the Provision of this Prakas.
Under this Prakas, no person shall appear, or act as a Trustee or represent a Trust in Kingdom of Cambodia unless the person obtains a license and/or approval from the Director General of Trust Regulator. The Trustee can be a legal entity (trustee company) or individual trustee (independent individual trustee or individual trustee of a trustee company). The rules and procedures of obtaining the license and/or approval for the Trustee has been stipulated in details within the provision of this Prakas.
Please be cautioned on the following points:
- All Trustees that have been registered and operated before this Prakas in force, shall apply for license and/or approval from the Trust regulator in accordance with rules and procedures of this Prakas within the period of 6 (six)month from the date of this Prakas
- All Trustees of CIS and custodians in the securities sector which have acquired the license/approval from Securities and Exchange Regulator of Cambodia, shall apply for registration with the Trust Regulator within the period of 6 (six) months from the date of this Prakas
- All the Trustors who have established the Trust but have not registered with the Trust Regulator shall apply for registration, following the rules and procedure determined by Trust Regulator in accordance with the this Prakas within the period of (6) six months from the date of this Prakas.
In case of non-compliance with above newly issued Prakas, the penalty can be both a financial penalty, ranging from KHR 400,000 to KHR 200,000,000 and relevant criminal charge.
We hope that the above legal update is helpful for your investment and help you to invest more confidently.
The article is merely for general information purposes. It does not constitute a legal advice on the subject matter. If you have any question or need any assistance, please feel free to contact us:
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|Sokeng has more than 8 years of professional experiences in corporate, commercial, investment and capital market sector in Cambodia. He advised and assisted various companies in various legal compliance issues, major investment projects and in conducting legal due diligence for major M&A and IPO projects. He has led many legal counsel teams to advise and assist ACLEDA Bank Plc., Phnom Penh Autonomous Port and other SMEs in the process of listing and proposed listing on the Cambodia Securities Exchange (CSX).|
Head of Corporate, Commercial and Investment Practice Group
+855 12 826 785
|Sokvichhai has more than 6 years of experiences in labour, corporate, commercial and investment advisory in Cambodia. He actively advices and assists various businesses in commercial, tax, and labour registration, business licensing, products registration & distribution, business recapitalization & restructuring, and mergers & acquisitions transaction. He also has particular experiences in advising collective investment fund and trust business, investment incentives & qualified investment project, and labour & employment related issues. Sokvichhai also assists major business in preparing various commercial agreements. Currently, Sokvichhai is also leading Sithisak’s Investigation Team to investigate any labour related misconduct within client’s company.|
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