Cambodia is a rapidly growing market with a great strategic location within Southeast Asia. Business opportunity is immense, business visa is easily workable, and company registration is not a tough affair, business association registration is even simpler. FDI funding is very heavy, foreign investments by individuals is easy, taxation is relaxed, housing and real estate rates are affordable, currency exchange with USD is stable, GDP is strong. Business incorporation is easy. Cambodia scores well on doing business because they are benefiting from high degrees of entrepreneurial activity. There are less regulatory changes that can stifle the efficiency.
While it may not be as well known as Thailand and Vietnam, know that UK is Cambodia’s second strongest export partner with trade valued at over $900 million in 2016 according to the World Bank.
What can be more conducive to let you take that first step towards investing in this country? With last 5 years annual growths clocking in at around 8 percent, experts estimate Cambodia to be an upper-middle income country, as early as 2030. Under 25s makes up almost half of the 15.8 million strong population, the people are tech-savvy and active user of social media and platforms. It has a great pool of skilled workforce, which in turn opens up a new world of possibilities for new as well as well established businesses.
Cambodia has been a member of the World Trade Organization since 2004 with ASEAN-EU dialogue sealing the trade deals with Europe.
Cambodia can make a strategic entry point in the ASEAN region with bordering nations of Laos, Vietnam and Thailand. It can offer top grade hospitality. The Cambodian government has invested heavily in infra development works like intercommunication, power and transit routes & highways.
You have policy predictability here.
Rapid urbanization is a key feature of economies that have sustained 8-10% growth for two to three decades making investments to drive growth. The Government here facilitates industries. The government has slashed income tax for individuals and has abolished dividend tax for companies. The Cambodian government have been spending record number in Agro and Infrastructure sectors.
Garment and footwear industries have been major contributors to the growth of Cambodia. Rising exports in these industries, in addition to specialized machinery like auto parts and equipments have fueled the economic expansion of Cambodia. It is a known exporter of footwear and garments and hence a major importer or textile and fabrics. This sector covers almost 80 per cent of the country’s economy and is the largest employer in the country, providing means to around 335,400 workers. Another interesting fact to note here is that out of these, 91 per cent are women workers.
Recently, we have seen an increase in imports of pharmaceuticals, construction materials and machinery. This country is full of opportunities, waiting to be tapped at the right place by right individuals. Education, agro-tech, energy, transport, luxury goods & vehicles and infrastructure are the industries to look out for in Cambodia.
Growing literacy and record urbanization numbers are reshaping the economic scenario of Cambodia. Many Cambodians who have been working abroad have started returning to their land to find employment opportunities. The economy is Dollar centric. Low wages and liberal government policies with a relaxed tax regime makes it a favorable market. This makes it an attractive investment destination. One can enter the Cambodian real estate market without a change in citizenship. A strata title or a nominee structure is made to facilitate property purchase by foreigners. Cambodia also allows foreigner to lease land for 50 years or more. The right to build structures or re-purpose the land lies with them as long as the lease agreement is in place. The service sector also occupies a large share of Cambodian economy with catering related services and trading activities taking up the majority of it. In recent developments, Cambodia has reported that oil and natural gas reserves have been found, off-shore.
With help of booming foreign investment, Cambodia could record fastest economic growth in the developed world, during 1990s and early 2000s
FDI and the Cambodian miracle; How did Cambodia become so successful at attracting FDI?
Highly educated and skilled work force, low wage rates, low corporate tax rates, robust basic infrastructure, a progressive government in addition to a great deal of favorable location factors have all benefited Cambodia a lot.
An investor friendly government which helped to coordinate a combination of tax breaks and outright grants that, with an easily accessible location has attracted many multinationals to Cambodia. Foreigners can have 100 per cent ownership in their business and that makes it a lucrative investment. There are no trade restrictions; no price control. This gives the businesses the flexibility to choose their own prices and own qualities according to the target markets.
One of the successful foreign entrants is our European friends. Their confidence in the Cambodian market is quite evident as they have already established European Chamber of Commerce (EuroCham) in Cambodia. EuroCham’s mission is to provide an impetus to European businesses operating in Cambodia. Their primary aims are to:
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