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Business and Investment Opportunities
in Cambodia
Bangkok, 28 May 2007
Presented by
KONG VIBOL
First Secretary of State of Ministry of Economy and Finance
Vice Chairman of the Council for the Development of Cambodia
Open Economy: Committed to a Pro-business/Investor Model
Cambodia is the most open economy of the least developed countries (LDCs).
Liberal foreign investment regime
– 100% foreign ownership investments are allowed in all sectors
and activities except the ownership of land
No foreign exchange controls on current account transactions
The Index of Economic Freedom ranks Cambodia 102nd among
170 countries in 2007. This is ahead of Indonesia (#110), Vietnam
(#138) and Laos (#140)
Factors considered in the Index include Cambodia’s
– Low income and corporate tax burden
– Investor friendly regulatory regimes
– Flexible labor markets
– Open international trade policy, reflected in accession to WTO
membership in 2004
A. Recent Economic Developments
Real growth remains robust
Inflation has eased
Banking system is expanding
Positive external developments
B. Outlook for 2006-2007
Very good economic performance
Growth is robust, inflation low
Solid basis for the economy in 2007
Very good economic performance
– Real growth around 10.8% in 2006
– 9% growth projected for 2007
Real GDP Growth Rate
13.4
14
12
10
10
8
6
8.4
8.6
7.7
10.8
9.5
6.2
4
2
0
2000 2001 2002 2003 2004 2005 2006 2007
proj
Very good economic performance
– 2007– continued growth in garment exports, tourism, +ve
agriculture
– Some easing in construction growth
Real GDP Growth Rate
13.4
14
12
10
10
8
6
8.4
8.6
7.7
10.8
9.5
6.2
4
2
0
2000 2001 2002 2003 2004 2005 2006 2007
proj
Economic Performance
45.00%
41%
40.00%
35.00%
30.00%
25.00%
Average growth for last 5 years is 9.8%
17.90%
20.00%
13.30%12.6%
15.00%
10%
9.2%
10.00%
6.5%
5.00% 4.1%
3.50%
5.3%
9.20%
5.7%
13.4%
9.2%
5.0%
8.6%
7.7%
10.8%
10.0%
6.2%
4.00%
5.80%
3.90%
3.30%
4.70%
1.20%
0.20%
0.00%
-0.80%
-5.00%
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
4.10% 9.20% 6.50% 5.30% 5.70% 5.00% 12.60% 9.20% 7.70% 6.20% 8.60% 10.0% 13.4% 10.8%
GDP
Inflation 41% 17.90% 3.50% 10% 9.20% 13.30% 4.00% -0.80% 0.20% 3.30% 1.20% 3.90% 5.80% 4.70%
GDP per capita
Source: SNEC & MEF
1999
2000
2001
2002
2003
2004
2005
2006
282
288
307
325
342
386
454
513
Council for the Development of Cambodia
Samdech Hun Sen
Prime Minister of the RGC
Chairman
Trouble
Shooting
Committee
H.E Mr. Keat Chhon, Senior Minister
Minister of Economy and Finance
1st Vice Chairman
H.E Mr. Cham Prasidh,
Senior Minister, Minister of Commerce
Vice Chairman
H.E Mr. Kong Vibol, First Secretary of State
Ministry of Economy and Finance
Vice Chairman
H.E Mr. Sok Chenda
Secretary General
Secretary General CSEZB
H.E Sok Chenda
Policy and planning
Operation and management
Project analysis and registration
Administration
Secretary General CIB
H.E. Mr. Suon Sitthy
Public relations and investment promotion
Investment project evaluation and incentives
Environmental impact assessment
Inter-ministerial coordination
Private investments strategies analysis
Legal affairs and investment law
Investment projects monitoring
Administration
Secretary General CRDB
H.E. Mr. Chhieng Yanara
Public relations and Aid coordination
Documentation and information
Management of bilateral aid Asia
Management of bilateral aid EU& US
Management of multilateral aid
Management of aid from the UN
NGO coordination and relations
Project evaluation
Administration
A One Stop Service
Open Door Policy
Information & Application
Approval
Customs Duty & Tax
Exemption
Visa & Work Permit
Company Registration
Investment Approval
Investment application
CDC issues a Conditional Registration Certificate to the Applicant
3 working
days
Company Registration / Ministry of Commerce
Relevant licenses, as appropriate / Ministry of Industry and Energy
Review and approval of construction plan / local authoritiesMinistry of Land Management, Urban Planning and Construction.
Initial environmental impact assessment / Ministry of Environment
Tax Department Registration / Ministry of Economy and Finance
CDC issues a Final Registration Certificate to the Applicant
28 working
days
Investments by Country
1994 – 2006
In Million USD
2,500
Total USD 12,168 million
2,361
1,984
2,000
1,581
1,500
1,000
574
500
672
621
248
431
279
22
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SELECTED THAI COMPANIES
No
COMPANY’S NAME
ACTIVITIES
1
CP. CAMBODIA COMPANY LIMITED
FEED MILL, HATCHERY, BROILER FARM
2
CRYSTAL AGRO CO., LTD
PLANTATION OF CASSAVA CROP, TREES
CROPS, SUGARCANE
3
REAL GREEN CO., LTD
PLANTATION OF SUGAR CANE
4
CPAC MONIER (CAMBODIA) CO., LTD
CONCRETE ROOF TILE PRODUCTION
5
(SIAM CEMENT) KAMPOT CEMENT CO., LTD
CEMENT FACTORY
6
KAMPOT POWER PLANT/ SIAM
ELECTRICITY SUPPLY
7
THE IMPERIAL ANGKOR PALACE HOTEL
CO., LTD (LE MERIDIAN ANGKOR HOTEL)
HOTEL OPERATION IN SIEM REAP
8
CAMBODIA DEVELOPMENT ENTERPRISE
(CDE) CO., LTD.
HOTEL 5 STARS IN SIEM REAP
9
PHOKEETHRA RESORT & SPA (CAMBODIA)
CO., LTD
HOTEL AND SPA
GOLF COURSE
10
ANGKOR PISITH CO., LTD
INTERNATIONAL STANDARD HOSPITAL 250
BEDS
11
SAMART CO., LTD
CELLULAR MOBILE TELEPHONE NETWORK
12
CAMBODIA AIR TRAFFIC SERVICES LIMITED AIR TRAFFIC CONTROL SYSTEM
Encouraged Investment Activities
Agriculture and agro-industry
Transport and telecommunications
infrastructures
Energy and electricity sectors
Labor-intensive industries and exportoriented processing and manufacturing;
Tourism-related industries
Human resource development
Mining
Investment Incentives
20% Corporate Tax
Trigger period +3years+n (automatic)
Repatriation of profit (withholding tax)
Reinvestment of earning
(special depreciation)
Full Import Duty Exemption
No Export Tax
Licensing (Simple registration)
n in tax holiday formula
Light Industry
n
K < 5 000 000 USD
0
5000 000 < K < 20 000 000 USD
1year
K > 20 000 000 USD
2year
Heavy Industry
K < 5 000 000 USD
2year
K > 5 000 000 USD
3year
Tourism Projects
K < 10 000 000 USD
0year
K > 10 000 000 USD
1year
Agriculture, Agro-Industry
- Short cycle agriculture
1year
- Long cycle agriculture, agro-industry
2year
Infrastructure
K < 10 000 000 USD
1year
10 000 000 < K < 30 000 000 USD
2year
K > 30 000 000 USD
3year
BACK
Investment Protection
The Investment Law and Sub-decree contains a
number of important guarantees for the investors:
Equal treatment of all investors
No nationalization adversely affecting the
property of investors
No price controls on products or services
No restriction on foreign equity participation
No restriction on forex convertibility
Remittance of foreign currencies abroad.
Private Sector Development
Strategy
Trade Facilitation (by2005) :
Single inspection, Single document
Investment Climate: Amendment of LOI
Automatic approval - One Stop Service
Government-Private Sector Forum:
Participatory approach
The Government pro-actively seeks to increase the participation and engage the
private sector in the development of Cambodia.
The Private Sector Forum (“PSF”) is one of the Cambodian Government’s initiatives in
recognition of the importance of transparency
 A framework for ongoing, structured dialogue between business and the Government
with the view to improve the business environment.
 A platform for businesses to offer expertise on a range of policy and regulatory reforms
– Examples of the PSF’s success: high level consultations on investment and tax laws,
the introduction of private sector monitors within the Ministry of Commerce, improved
labor standards, and negotiations on cost reductions for major road concessions
 Core work is undertaken during the year by 8 sector specific public-private working
groups, consisting of government and business counterparts and co-chaired by one
minister and one business representative
– The Minister of Economy & Finance is the coordinator of the Working Group process
– The CDC serves as the PSF’s secretariat, while the IFC acts as its coordinating
bureau
 The commitment of the Government to the PSF is underlined by the personal
participation of the Prime Minister as the Chair in the bi-annual PSF
 The PSF has demonstrated its ability to serve as a catalyst for public-private dialogue
Diversification of the economy : Special Economic Zones
Promote industries and services currently not available in Cambodia to diversify the
growth base. The Government adopted a Sub-decree on the Establishment and
Management of Special Economic Zone (SEZ) in Dec 2005. SEZ will include export
processing zones and free trade zones
The main rationale of establishing SEZs is to:
– Provide investors with adequate infrastructure and supportive facilities
– Effectively respond to the challenge of diversifying the Cambodian economy and to
promote demand-driven development, such as export promotion
– Enhance competitiveness of garment industry and other labor intensive activities
– Promote agro-industry, food processing
– Promote assembling industry; and
– Promote electronic and electric appliances industries
The following growth poles have been identified for industrial development:
– Poipet and Koh Kong (at the Cambodian-Thai border)
– Bavet and Phnom Den (at the Cambodian-Vietnamese border)
– Phnom Penh; and
– Sihanoukville
Sihanoukville Port has harbour facilities and “dry ports” which have been developed to enhance
its competitive edge as an international commercial gateway
Map of SEZ
Chhay Chhay
SEZ
Sap
Koh Kong
SEZ
N.L.C
SEZ
Phnom
Penh SEZ
Stoung Haov
SEZ
Sihanoukv
ille
SEZ
S.N.C
SEZ
Kampot
SEZ
Duong
Chhiv SEZ
Manhattan
SEZ
Looking Forward to Welcome
You in Cambodia,
The Land of ANGKOR and OPPORTUNITIES!
TO GO
TO SEE
TO HEAR
TO ENJOY
TO ASSESS
TO DECIDE
THANKS