Cambodia Counsel

Company Due Diligence

Pre-transaction investigation of Cambodian companies — registration, shareholders, and compliance.

It is possible to perform an online search of companies registered in Cambodia via the Ministry of Commerce website. In addition to an online search of MoC records, for proper due diligence we recommend requesting a copy of the registered Articles of the company currently on file with the MoC.

As for material licenses, permits, registrations, and approvals, there is currently no unified method for confirming the validity of these with relevant Ministries in Cambodia. In our due diligence of Cambodian companies, it is our practice to request the target company to execute a Certification Letter confirming the current validity and status of its licenses, permits, etc.

From a copy of the registered Articles filed with the MoC, we are able to determine the shareholding structure and identify the registered shareholders. However, such information reflects only the latest company Articles on file, and it is possible that the company has made changes (replaced directors, amended capital, etc.) that have not been notified or registered with the MoC by filing an amendment — which is the formal procedure for registering such changes in Cambodia.

If a company is registered with the Council for the Development of Cambodia (CDC) as a Qualified Investment Project (QIP), this adds an additional layer of due diligence. QIP registration imposes ongoing compliance conditions on the company, and the status of CDC registration, compliance certificates, and investment license conditions should be reviewed as part of any acquisition or transaction involving a CDC-registered entity.

The MoC does not currently issue any certificate or confirmation of the good standing of a particular company beyond the information available through a search of its online filing system. An official search with the Ministry of Commerce will only reveal whether a company has completed dissolution but will not indicate whether an initial filing for dissolution has been submitted. It may be possible to make an inquiry with Ministry of Commerce officials to check the file of a company for any notice related to its dissolution.

Documents Commonly Requested from the Target

The documents most commonly requested of the target entity for review by a potential purchaser are the following:

  1. Memorandum and Articles of Association, in English and in Khmer;
  2. Certificate of Incorporation;
  3. Approval letter from the Ministry of Commerce confirming the registration;
  4. Company bylaws, if any;
  5. Any contracts or understandings that limit the power of the company to enter into agreements, such as loan agreements;
  6. The most recent annual declaration to the General Department of Taxation; and
  7. Current VAT and Patent Tax certificates.

Because a litigation search is difficult to perform in Cambodia, it is common for the target company to provide a Certification Letter certifying the absence of pending or undisclosed lawsuits. As a practical matter, the courts will not, or cannot, provide this information. See Litigation Search.

For specific due diligence scoping, fees, and timelines, please contact us.