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In addition to our newly-updated Guide to Doing Business in Cambodia, we are also pleased to announce that we have recently published a newly-updated Doing Business in Myanmar guide. Along with our established practice in Cambodia, BNG Legal also has a growing Myanmar practice able to assist investors with their legal needs. The economies of both Cambodia and Myanmar promise to be continuing growth leaders within ASEAN and globally. If you would like further information regarding the topics discussed in our Myanmar Guide, please don’t hesitate to contact our legal professionals in Yangon at: BNG Legal Myanmar.
On June 16, Grand Twins International PLC, a Taiwan-based garment company, joined the Phnom Penh Water Supply Authority on the Cambodia Securities Exchange (CSX) to become only the second company—and first privately-owned company—to list since the CSX opened in 2011. Grand Twins originally expected to list on the CSX in May. Delays, however, pushed that date back to June 16.
Many had hoped that the Grand Twins listing would help stimulate the largely moribund securities market. However, on the first day of trading Grand Twins shares dropped about 5% from its opening price of $2.40 to $2.28 per share. This could be due to a lack of confidence rising from the recent unrest in the garment industry. However, Stephen Hsu, Chief Executive of Phnom Penh Securities was more optimistic according to a recent Wall Street Journal article: “This can be turned around . . . . Technical issues, such as a lack of liquidity and gaps in securities regulations, need time to be resolved.” Despite this optimism in the days since listing, Grand Twins stock price has continued to drop and is trading at around $2.17 as of today.
Despite the somewhat lackluster opening days for the Grand Twins listing and the thin trading in Phnom Penh Water Supply, another Taiwanese-owned garment company and additional state-owned companies are considering beginning the process of listing on the CSX. Further listings are sorely needed to build the CSX. Despite this slow start to the stock exchange, Cambodia remains an attractive investment destination. If your company is considering investing in Cambodia, our newly-updated Guide to Doing Business in Cambodia provides a good overview of the legal and regulatory environment here.
As the ASEAN integration deadline of 2015 approaches, Cambodia’s attractiveness as an investment destination is increasing apace. As your company assesses investment opportunities around the globe, our newly-updated Guide to Doing Business in Cambodia provides a valuable overview of the legal and regulatory climate in the Kingdom. If you would like further information regarding any of the topics presented in the Guide, please don’t hesitate to contact our legal professionals at: BNG Legal Cambodia.
According to yesterday’s Cambodia Daily (“Gov’t to Restart National Adoptions,” offline only), foreigners will once again be allowed to adopt Cambodian children beginning in January 2013. Though the Law on Adoption was issued in 2009 as a result of widespread international criticism of abuses occurring in the Cambodian adoption system, the implementing regulations needed to put this law into practice have not yet been issued by the Ministry of Social Affairs, the ministry responsible for carrying out the law.
While this development is a positive sign that international adoptions may soon be permitted again in the Kingdom of Cambodia, would-be parents should temper their enthusiasm with caution and patience. Since 2009, there have been several dates announced for the revival of the international adoption process in Cambodia. Further, it remains to be seen how the US and other nations that have implemented bans on adoptions from Cambodia will react to the new policies and procedures. Even if Cambodia permits international adoptions, if the adoptive parents’ home countries fail to recognize the validity of the Cambodian adoption process, those parents and their adopted children may face years in legal limbo. Cautious optimism is the best attitude toward the recent announcement until more concrete policies and procedures are unveiled here and abroad.
A recent Wall Street Journal article showcases the newly-built home of Belgian photographer John Vink and also demonstrates how complicated property ownership and building construction can be in the Kingdom of Cambodia. In general, foreigners are not allowed to own land in Cambodia, but may hold a minority (49 percent) stake, with a Cambodian national holding the remaining majority stake, in a company that holds ownership rights to the land. Cf. Article 20 of the New Land Law (2001). The article does not specifically mention whether Mr. Vink pursued this option to preserve some of his ownership rights, but it is a fairly common way for foreign landholders to do so.
Mr. Vink bought the land for his home near Kep from a local religious order that is moving to a new location. Usually, such as transfer would be prohibited by law, as monastery lands may not be sold and may only be rented for religious purposes according to Article 20 of the New Land Law (2001). Perhaps because the order is moving to a new location, the land has been reclassified and is therefore alienable. There are several categories of land and differing rights of ownership for each in Cambodia. Again, the article does not indicate why a variance was permitted in this case, but it’s always a good idea to check out which legal category the land you might be interested in falls under before beginning negotiations.
Also illustrated by this piece is the often confusing regulatory process for construction in the Kingdom, which can endanger projects at almost any stage of completion. From the article:
Building on a hilltop is unusual in Cambodia because of cultural customs and costs, says Mr. Vink, so he faced some challenges in ensuring that he had an experienced contractor and proper permits. At one point a month after construction began, he thought all the permits were in order, until an inspector from the local environmental protection office showed up and ordered a halt to the project. But $300 in “fees” later—a sizeable sum in Cambodia—the necessary permits were obtained and the project moved forward, Mr. Vink says.
Congratulations to Mr. Vink and his wife for their lovely new home, but let their experience be an illustration of the type of pitfalls that anyone can face navigating the legal and regulatory system here in the Kingdom of Wonder.
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