On 26 January 2022, the Non-Banking Financial Service Authority issued a new prakas, Prakas No. 003 OSH/Prokor on Rules on the Management, Establishment and Functioning of Trust ("Prakas"). The Prakas aims to set out the rules, conditions, and procedures in controlling, organising, and operating a trust in Cambodia. It is applicable to the operation of all trusts and the conduct of all persons related thereto in Cambodia.
Under the Prakas, a trust is defined as "the management and disposal of Trust Fund provided for by a Trustor for the benefit of a beneficiary in accordance with the Trust Agreement or regulation in force".
The establishment of a trust requires approval for registration from the Director General of Trust Regulator in accordance with the Law on Trust, the provisions of the Prakas, and other relevant regulations in force.
The management, disposal and safekeeping of trust assets shall be done in accordance with the trust agreement and relevant applicable regulations. Assets under trust shall not be used or otherwise disposed of for the discharge of liabilities or debts of the trustee or any other persons notwithstanding for the purpose of rehabilitation, voluntary liquidation or dissolution, bankruptcy or any other similar purposes.
Not later than six months from the date of the Prakas, all trustees which have registered to operate prior to this Prakas shall apply for a license and/or approval with the Trust Regulator. Within the same period, all trustors which have established but have not registered trusts with the Trust Regulator shall apply for the registration of such trusts and comply with the relevant procedures as may be determined by the Trust Regulator under the Prakas.
For more information, click here to read our Legal Update.
