Enforcing contracts and exiting Cambodia

Short answer

Cambodia had still not launched a commercial court as at March 2026, so enforcement runs through arbitration or negotiation, with the Ministry of Commerce and the Cambodian Chamber of Commerce facilitating mediation. That changes how a contract has to be written: the remedy you can actually use is a feature of the agreement, not an afterthought.

There is no commercial court

The US State Department’s 2026 Investment Climate Statement records that the commercial court had still not launched as at March 2026, and that an out-of-court dispute resolution mechanism has been in place since March 2024, with complaints handled by the Complainants and General Affairs Department of the Royal Academy of Justice. The same statement notes that commercial disputes can also be resolved through the National Commercial Arbitration Centre, and that foreign arbitral awards are recognised and enforced by Cambodian courts under the Commercial Arbitration Law and the New York Convention.

For comparison, Thailand has a specialised intellectual property and international trade court, and Vietnam has specialised courts and the Vietnam International Arbitration Centre but still no general commercial court. Cambodia is the most exposed of the three to a weak enforcement route.

This is a US government assessment, not a gazette check. Have Cambodian counsel confirm the current position for your contract; the practical routes have not changed, but a status change is possible.

Draft the contract for the route you will actually use

Contractual enforcement in Cambodia is governed by Decree No. 38 on Contracts and Other Liabilities. If a dispute is going to be resolved by an arbitral tribunal or a mediated negotiation, the agreement has to anticipate that.

Language. A bilingual contract is standard practice and gives the Cambodian court or arbitrator a text it can apply. A Khmer-only or English-only draft slows everything down.
Governing law and forum. Name the governing law and the forum, and check that the forum you choose will recognise the award. An international arbitration clause is more useful than a Cambodian court clause if the counterparty is hard to enforce against.
Payment and security mechanics. The remedy that works in a mediated or arbitral outcome is a well-documented account of what is owed, with agreed evidence and a mechanism for producing it.
Termination and handover. Set out how stock, tooling, receivables and the customer relationship move on exit, and what happens to exclusivity. A distribution agreement without a termination schedule is the most common source of a dispute we see.
Escalation before proceedings. A staged escalation, with a named contact on each side and a defined timetable, is what converts a dispute into a negotiation rather than a confrontation.

The institutional routes

Three routes do most of the work, and they are not mutually exclusive.

Route	What it is good for	Watch out for
Negotiation with Ministry of Commerce or CDC facilitation	Trade disputes between a foreign supplier and a local partner, where the relationship is worth keeping	No precedent value, and no timeline you can enforce
Cambodian Chamber of Commerce facilitation	Chamber-mediated commercial disputes between members, with local context	Membership and standing requirements apply
National Commercial Arbitration Centre	Contractual disputes with a defined contract and a defined claim	Cost and time; the award still has to be enforced against the counterparty’s assets

Start with the first, keep the third in reserve, and write the agreement so that the third is usable.

Closing, and making a company dormant

Exit is where the compliance stack catches you, and it is worth planning at the start rather than the end.

The annual declaration is the first trip-wire. It is filed in the three months before the registration anniversary, with a 15-day grace period. Three consecutive missed filings move a company to inactive status and put its directors and shareholders on a watch list. That is a cheap failure with an expensive tail.
Dormancy is a filing, not an absence. A dormant company still has filings, still owes its patent tax, and still has to be accounted for. Set it up properly with the Ministry of Commerce and the tax authority rather than simply stopping trade.
Liquidation is a process. It involves the tax authority, the Ministry of Commerce and a set of published fees, and it takes time. The Ministry of Commerce fee schedule publishes the fee codes for the liquidation stages.
Price the exit before you enter. What a buyer can actually acquire, and at what tax cost, is affected by the capital gains tax regime for immovable property from 1 January 2026 and by the corporate tax treatment of a transfer.

Sources: the Ministry of Commerce fee schedule, the General Department of Taxation, and Deloitte on the 2025 capital gains tax instruments. We have not verified the current liquidation fee totals from a primary source, so we have not published them.

How to reduce the chance you need any of this

Do the counterparty checks before you commit. A registry, patent tax, land title and tax clearance check takes days and removes most of the avoidable risk. Our partner verification guide sets out the checks.
Keep the relationship documented. Signed agreements, countersigned orders, delivery notes and payment records build the evidence file you will need.
Set the compliance calendar from day one. The annual declaration, the patent tax, the monthly filings and the audit have fixed windows, and a shared calendar with your accountant prevents every one of them becoming a penalty.
Know your exit before you sign the lease. A registered lease with a fixed term and a defined handover is worth more than a cheap one with an unclear end.

Questions investors ask

Is there a commercial court in Cambodia?

No. As at March 2026 the commercial court had still not launched, according to the US State Department’s 2026 Investment Climate Statement. Disputes run through negotiation, Ministry of Commerce or Chamber of Commerce facilitation, or arbitration at the National Commercial Arbitration Centre, whose awards are recognised and enforced in Cambodia.

How do I enforce a contract with a Cambodian supplier?

Decree No. 38 on Contracts governs contractual enforcement. Practically, you document what is owed, use a staged escalation with a named contact and timetable, and keep the arbitration or mediation route available in the contract itself, with a bilingual text and a defined forum.

Should my contract be in Khmer and English?

Bilingual is the norm in practice, and it is what makes the agreement usable in a mediation or arbitration. An English-only contract can still be enforced, but it slows the process and can create argument about which text governs.

How do I close my Cambodian company?

Liquidation is a process involving the tax authority and the Ministry of Commerce, with published fees in the Ministry of Commerce schedule, and it takes time. If you only want to stop trading, dormancy is the route, but it is a filing with the Ministry of Commerce and the tax authority, not an absence of activity, and the annual declaration and patent tax still apply.

What happens if I miss the annual declaration?

The annual declaration is due in the three months before the registration anniversary, with a 15-day grace period. Three consecutive missed filings move the company to inactive status and place its directors and shareholders on a watch list, which can make any later transaction harder.

Is there tax on selling a Cambodian company?

There is a 20% capital gains tax on gains from immovable property, in force for immovable property from 1 January 2026, and the corporate tax treatment of a share transfer depends on the facts. Practitioner alerts also cover a 2026 prakas on tax liability in mergers. Model the exit with a tax adviser before you assume a value.

Can I make a company dormant instead of closing it?

Yes, but dormancy is a status you file for. The company keeps its filings, its patent tax and its accounting obligations. It is cheaper than liquidation and preserves the entity for a future restart, but it is not free and it is not automatic.

How do I reduce contract risk in the first place?

Verify the counterparty before you commit, put the agreement in place before the first order, keep the evidence file, and set the compliance calendar from day one. Most disputes we see are not caused by a bad market; they are caused by missing documents and a missed filing.

Official tools to use alongside this guide

Sources

General information only, not legal, tax or investment advice. Laws, rules and figures change. Confirm the current position with licensed Cambodian professionals before acting.

Enforcing contracts and exiting Cambodia: what to plan for