Law on Investment in the Kingdom of Cambodia

                                                                            CHAPTER ONE
                                                                     GENERAL PROVISIONS

Article 1:

This Law governs all investment projects made by investors who are Cambodian citizens and/or foreigners within the Kingdom of Cambodia.

Article 2: Investors, for the purpose of this Law, can be either a natural person or a legal entity.

                                                                          CHAPTER TWO
                                             THE COUNCIL FOR THE DEVELOPMENT OF CAMBODIA

Article 3:

The Council for the Development of Cambodia is the sole service organization responsible for the rehabilitation, development and oversight of investment activities. The Council for the Development of Cambodia is the Royal Government's major body responsible for the evaluation and the decision making on all rehabilitation, development and investment project activities.

Article 4:

The Council for the Development of Cambodia comprises the following two operational boards:
The Cambodian Rehabilitation and Development Board;
The Cambodian Investment Board.

Article 5:

The organization and functioning of the The Council for the Development of Cambodia shall be determined by sub-decree.

                                                                       CHAPTER THREE
                                                               INVESTMENT PROCEDURES

Article 6:

Investors have to submit investment applications to the Council for the Development of Cambodia for review and decision.

Article 7:

The Council for the Development of Cambodia shall provide a response as to its decision to all investor/applicants within a period not to exceed 45 days following the date of submission of the complete investment application.Any Government officials who refuse to review and respond to an investor's application past the above mentioned period of time, without proper justification, shall be punished by law.

                                                                       CHAPTER FOUR
                                                              INVESTMENT GUARANTEES

Article 8:

Investors shall be treated in a non-discriminatory manner as set by law, except for ownership of land as set forth in the Constitution of the Kingdom of Cambodia.

Article 9:

The Royal Government shall not undertake any nationalization policy that would adversely affect private properties of investors in the Kingdom of Cambodia.

Article 10:

The Royal Government shall not impose discriminatory price controls on the products or services of investors who have received prior approval from the Government.

Article 11:

In accordance with the relevant laws and regulations, issued and published for the public by the National Bank of Cambodia, the Royal Government shall permit investors with investments in Cambodia to purchase foreign currencies through the banking system and to send these currencies abroad to pay financial obligations incurred in connection with their investments. This concerns the following payments:

Repatriation of invested capital in compliance with Chapter Eight.

                                                                   CHAPTER FIVE
                                                            INVESTMENT INCENTIVES

Article 12:

The Royal Government shall make available incentives to encourage investments in such important fields as:
Pioneer and/or high technology industries; Job creation; Export-oriented businesses; Tourism industry; Agro-industry and Value-adding industries; Physical infrastructure and energy; Provincial and rural development; Environmental protection; and Investments in a Special Promotion Zone (SPZ) as shall be created by law.

Article 13:

Incentives shall include the exemption, in whole or in part, of duties and taxes.

Article 14:

Incentives shall consist of the following:
A corporate tax rate of 9% except the tax rate on the exploration and exploitation of natural resources, timber, oil, mines, gold, and precious stones, which shall be set in other laws. A corporate tax exemption of up to 8 years depending on the characteristics of the project and the priority of the government which shall be mentioned in a sub-decree. This corporate tax exemption shall take effect beginning the year the project derives its first profit. A five-year loss carried forward shall be allowed. In the event the profits are being reinvested in the country of Cambodia, such profits shall be exempted from all corporate tax. Non-taxation on the distribution of dividends or profits or proceeds of investments, whether they will be transferred abroad or distributed in the country.

A 100% import duties exemption on construction materials, means of production, equipment, intermediate goods, raw materials and spare parts used by: An export-oriented project with a minimum of 80% of the production set aside for export; Industries located in a designated Special Promotion Zone (SPZ), listed in a development priority list issued by the Council for the Development of Cambodia. Tourism industry; Labor-intensive industry, value-adding industry, and agro-industry; Physical infrastructure and energy industry.

These 100% exemptions of duties and taxes mentioned above shall be in effect according to the terms of the agreement or requirement book of those investment projects that export at least 80% of overall production as stipulated in point 4 (a) above; and for those investment projects located in a Special Promotion Zone (SPZ) as in 4 (b). 100% exemption of export tax, if any; The permission to bring into the Kingdom of Cambodia foreign nationals who are: Management personnel and experts; Technical personnel; Skilled workers; Spouses and dependents of the above persons as authorized by the Council for Development of Cambodia and in compliance with the immigration and labor law.

Article 15:

The approval and incentives granted by the Council for Development of Cambodia cannot be transferred or assigned to any third parties.

                                                                      CHAPTER SIX
                                                           LAND OWNERSHIP AND USE

Article 16:

In accordance with the Constitution and relevant laws and regulations pertaining to the ownership and use of land:Ownership of land for the purpose of establishing promoted investment activities shall be vested only in natural persons holding Cambodian citizenship or in legal entities in which more than 51% of the equity capital is directly owned by natural persons or legal entities holding Cambodian citizenship.

Use of land by investors shall be permitted, including long-term leases of up to a period of 70 years, renewable upon request. Such use may include the right of ownership of real and personal property situated on the land as may be permitted by law.

                                                                   CHAPTER SEVEN
                                                            EMPLOYMENT PRACTICES

Article 17:

Investors in the Kingdom of Cambodia shall be free to hire Cambodian nationals and foreign nationals of their choosing in compliance with the immigration and labor laws.

Article 18:

Investors shall be allowed to hire foreign employees listed in Article 14 (6) provided that:The qualification and expertise of these foreign employees are not available in the Kingdom of Cambodia among the Cambodian populace. In the event of such a hiring, appropriate documentation including the photocopies of the employee's passport, certificate and/or degree, and a curriculum vitae shall be submitted to the Council.

Investors shall have the obligation to provide adequate and consistent training to Cambodian employees;
Promotion of Cambodian staff to senior positions will be made over time.

Article 19:

Foreign employees shall be allowed to remit abroad their wages and salaries earned in the Kingdom of Cambodia, after payment of the appropriate tax, in foreign currencies obtained through the banking system.

                                                                        CHAPTER EIGHT
                                                                 DISPUTES AND DISSOLUTION

Article 20:

Any dispute relating to a promoted investment established in the Kingdom of Cambodia or a foreign national concerning its rights and obligations set forth in the Law shall be settled amicably as far as possible through consultation between the parties in dispute.

Should the parties fail to reach an amicable settlement within two months from the date of the first written request to enter such consultations, the dispute shall be brought to either party for:conciliation before the Council which shall provide its opinion; reference of the matter to the court of the Kingdom of Cambodia; reference to any international rules to settle the disputes as agreed by both parties.

Article 21:

In the event a promoted company intends to end its activity in the Kingdom of Cambodia, it will have to inform the Council through either a registered letter or a hand delivered letter stating the reasons of such a decision, either of which shall be signed by the investor or his attorney-in-fact.

Article 22:

In the event of a proposal for a dissolution of the company without judicial procedures, the investor shall provide proofs to the Council that the company has properly settled with its potential creditors, any complainants and claims from the Ministry of Economy and Finance before the investor is allowed to officially dissolve his company or enterprise according to the applicable commercial law.

Article 23:

Once the investor is allowed to officially dissolve his company or enterprise, either within the judicial procedures or not, the investor can transfer the remaining proceeds of assets overseas or use them in the Kingdom of Cambodia. However, in the event that the dissolving company has used for less than five years machinery and equipment imported duty free, the company will be obligated to pay the duties applicable to that machinery and equipment.

                                                                                CHAPTER NINE
                                                                              FINAL PROVISIONS

Article 24:

Investments authorized under the previous "Law on Investment" of the State of Cambodia and its sub-decrees shall be subject to the same benefits as stated under this Law. This Law is not retroactive.

Article 25:

In the case where the promoted company violates or fails to comply with the conditions stipulated by the Council, the Council shall have the power to withdraw the rights and benefits granted to that company, in whole or in part.

Article 26:

This Law shall be promulgated immediately. This law is adopted by the National Assembly of the Kingdom of Cambodia in Phnom Penh on August 4, 1994 during the extraordinary session of the first legislature.

Law on Demonstrations

Article 1:

Meetings and gatherings of groups and crowds for staging demonstrations are acceptable. However, meetings of groups or crowds in public places or on public roads, or demonstration marches that can be detrimental to public tranquility, order or security, are categorically prohibited.

Article 2:

Marching demonstrations on public roads to express views on any issue may be held under the following conditions:

• Violence cannot be used and arms or any other dangerous instruments cannot be carried;
• Public tranquility, order and security cannot be jeopardized;
• Authorities in each commune and ward through which a group of demonstrators will march shall be informed at least three days beforehand, in writing, the following: the surnames, names, addresses and signatures of three of the demonstration's organizers; objectives; locations; dates; streets; and number of people participating in the demonstration.
• If demonstrations are to be held in provincial towns or cities, they should be reported as required in Article 2 (3), in writing, to the authorities there.

Article 3:

Authorities, after receiving a notice, should a issue a receipt for it. However, if the authorities concerned believe that the specific demonstration has characteristics conducive to turmoil, they can ban the demonstration, issuing a decision to do so within 48 hours and communicating this decision to the demonstration's organizers.

A copy of the decision should be immediately forwarded to higher authorities within 24 hours. In case of disagreement as to the decision of the authorities, demonstration organizers may lodge a protest with higher authorities. These higher authorities shall make a decision on the grievance of the demonstrators of either approval or rejection, and shall then communicate the decision to the petitioning party (ies) within 24 hours.

Article 4:

If any demonstration takes place without local authorities being informed beforehand or without authorization from local authorities, the local authorities can take measures to stop the demonstration from occurring. If, after two notices of the ban by the local authorities, the demonstrators still refuse to discontinue their activities, the local authorities shall disperse the demonstrators with force that does not endanger the lives of the demonstrators.

Article 5:

If demonstrators are armed with dangerous weapons or equipment, security forces can remove the dangerous weapons and equipment from the demonstrators.If the demonstrators persistently refuse to hand over the dangerous weapons or equipment, the security forces can detain the demonstrators temporarily and remove their dangerous weapons and equipment.

After the demonstrators acknowledge their wrongdoing, they shall be released and the dangerous weapons and equipment shall be returned to the rightful owners, except in cases of other offenses related to the dangerous weapons and equipment.

Article 6:

If a peaceful demonstration turns into a violent demonstration or a riot, the appropriate authorities will take the most appropriate measures to stop the violent demonstration or riot. The measures mentioned in Article 4 should be applied on a temporary basis.

Article 7:

Any demonstrator resorting to violence so as to cause damage to private or public property or to inflict bodily harm or death on other people or officials on duty shall be punished according to the law in effect, depending on the degree of the committed offense. Disguised demonstrators and those who incite demonstrators to use violence shall be punished according to the law currently in effect.

Article 8:

If any official, carrying out his duty at a demonstration, commits an offense causing damage to private or public property, or commits an offense causing injury or death to other people, shall be punished according to the law currently in effect.

Article 9:

Anyone taking advantage of a demonstration to commit burglary, looting, robbery or other offenses shall be punished to the maximum degree according to the law currently in effect.

Article 10:

Reparation of all damages caused by a demonstration shall be the responsibility of the province or city where the demonstration occurred. If the damages are caused by the fault or negligence of the victims of the damages themselves, the reparation of the damages by the province or city shall be reduced or cancelled. If the provincial or municipal authorities find the offenders who caused the damage in the demonstration, they can sue these offenders to repay to the city or province the cost of reparations to the victims.

Article 11:

This law is declared urgent. Adopted by the National Assembly of the State of Cambodia on 27 December 1991, and reaffirmed by the Ministers of the Interior of the Kingdom of Cambodia.