Cambodia is an open market economy and is among the fastest-growing economies in the world, averaging at 7% over the past decade prior to COVID-19 pandemic. Even at a time when many economies all over the world struggles to recover post-covid, the Cambodian economy (projected by the World Bank) is still expected to grow 5.2% in 2023.
Cambodia offers potential investment opportunities in various sectors including tourism; education; construction; agriculture/agribusiness; automotive; energy; manufacturing, and health care.
The Government of the Kingdom of Cambodia understands the value of foreign direct investment and markets and has concentrated efforts in improving business climate through offering of generous incentive packages to foreign investors. Foreign investors can benefit from the following active measures:
- Non-discrimination on the basis of foreign nationality: the Law on Commercial Enterprise permits 100% foreign ownership of a company. Foreign business can engage in unrestricted business activities, the same as Cambodian-owned companies, with the exception of land ownership.
- Investment incentive scheme: the Law on Investment (2021) brings a new legal framework conducive to foreign investment by modernizing local industries and protecting the rights of investors. The new law offers a variety of incentives, such as income tax exemption and custom duties incentives for investment projects under three categories: Qualified Investment Project (QIP), Expanded Qualified Investment Project (EQIP), and Guaranteed Investment Project (GIP). where notably establishing incentive scheme for 19 investment sectors and activities, including investment in digital infrastructure, environmental management and protection, energy efficiency, tourism, training and upskilling, logistics, research and development, infrastructure, and many others.
- Access to neighbouring markets: Cambodia is part of the ASEAN Economic Community, whose benefits include elimination of tariffs between the Association’s ten member countries, as well as the free flow of goods, services, and workers.
- Easy foreign currency remittances: there are no restrictions on foreign exchange through official banks.
Cambodia has rapidly established itself as a regional manufacturing hub-driven by its highly competitive labour force. Labour cost in Cambodia is cheaper than most regional competitors and given the success of the country’s labour-incentive, export-oriented industries.
REGISTERING YOUR COMPANY
All foreign direct investment in Cambodia must be registered with the Ministry of Commerce, the General Tax Department (both do online business registration) and Ministry of Labour and Vocational Training. Depending on specific business activities, companies may need to obtain operational licenses from other ministries involved.