Cambodia's e-com sector seeks clear, regionally uniform regulations

The law on e-commerce and consumer protection was promulgated in 2019 with subsequent decrees and sub-decrees aiming to define e-commerce classifications as well as registration and tax requirements for both local and foreign companies.

But many current regulations lack clarity on the differences between a traditional and an e-commerce business, said Christopher McCarthy, chief executive officer of domestic marketing agency Mango Tango.

“The business community hates uncertainty and hence this is a hard position. What would make the business community more comfortable is an understanding of enforcement mechanisms for breaches of regulations imposed,” McCarthy was quoted as saying by a Cambodian news portal.

Nearirath Sreng, legal consultant and deputy head of DFDL Cambodia, said the regulations that Cambodia’s government is implementing are similar to previous legislation in neighboring countries like Indonesia and Singapore.

“The Cambodian government is on the right path with the ministry of posts and telecommunications now preparing new laws however any law takes a long time to draft and then implement, hence the language in these laws sometimes needs to be deliberately broad due to such a fast-changing industry,” she said.

McCarthy said Cambodian regulators should ensure, as best as possible, keep regulations in regional unison to make the most out of the recently ratified free trade agreement and across e-commerce platforms.

“About the newly implemented requirement for foreign firms to register for VAT [value-added tax] in Cambodia many of the larger firms such as Google and Meta (Facebook) already have however the smaller firms would most likely lack the resources to do so,” he said.

Nearirath Sreng added that some of these new laws and requirements now implemented are contradicting each other new e-commerce legislation should properly address this.

The main challenges of the sector still revolve around the lack of information technology experts, infrastructure and a large unbanked population. While COVID-19 has become a catalyst for several e-commerce businesses such as food delivery, it also hinders the growth of others such as ride-hailing.

Fibre2Fashion News Desk (DS)