Following guidance from Cambodia’s Prime Minister, the Ministry of Commerce has introduced a temporary compliance measure for companies that failed to submit annual declarations in previous years. Under this measure, eligible companies are required to pay a penalty for only the most recent year, rather than for all missed years, provided they regularize their status within 60 working days and cooperate with basic background verification.
The policy is intended to reduce accumulated compliance burdens while maintaining the legal requirement for annual declarations.
The annual declaration is a yearly report that every registered company in Cambodia must submit to the Ministry of Commerce. It is used to confirm that the company is still operating and to update basic information. This includes tax details, number of employees, contact information, and in some cases, information about finances and shareholders.
This declaration helps the government keep company records correct and up to date. Accurate records make it easier for authorities to manage businesses, plan economic policies, and improve transparency. It also helps protect Cambodia’s business reputation and ensures that companies are operating legally within the formal system.
This policy responds to a common problem faced by many companies, especially small or inactive ones. Some businesses missed their annual declarations for several years and later faced very high penalties. For these companies, the total penalty became too expensive, so they did not return to legal compliance. By limiting the penalty to only one year, the policy makes it easier and cheaper for businesses to fix their legal status instead of staying inactive or informal.
However, the penalty has not been removed completely. This is because the annual declaration is a legal requirement. If there were no penalty at all, companies might ignore the rules and wait for future exemptions. The 60-working-day deadline helps prevent this problem by making the policy temporary and conditional.
Overall, the policy tries to balance flexibility and enforcement. It encourages companies to return to compliance while still respecting the law. At the same time, it allows the government to collect revenue without placing heavy financial pressure on businesses. The approach focuses on helping companies re-enter the formal economy rather than punishing them harshly, which may support better long-term compliance.