What does Cambodia offer to investors? Simply put: big markets, low wages, a liberal economy and some of the world’s great tourist destinations. Large markets are a function of area, not the local market of Cambodia but the markets of the Association of Southeast Asian Nations (ASEAN). The 10 ASEAN member states have a total population of about 550 million and participate in a Free Trade Area (AFTA) that will be completed by 2010.
As far as the liberal economy is concerned, Cambodia Real Estate is one of the most open economies in Asia, with a ranking similar to that of Japan, and one of the 49 most open economies in the world. Its low-wage, trainable labour force is certainly an asset to the increasingly competitive global economy. When it comes to tourism, Angkor’s extraordinary monuments near Siem Reap already ensure that Cambodia attracts tourists with an annual growth rate of 30% and above.
Conflict and instability in Cambodia in the 1970s and 1980s have exacerbated local problems for countries in the early stages of economic development. The short and bloody rule of the Khmer Rouge caused particularly long-term damage. Professionalism is a rare thing; Road infrastructure is limited and in poor condition, especially in rural areas; And management capacity is limited. We are delighted to introduce the 2020 edition of our Investment Guide to Cambodia.
Our goal in this guide is to help investors around the world reap the vast benefits of doing business in Cambodia, and to make the most of the vast opportunities offered by the country, its welcome, entrepreneurial and highly encouraging.
Our goal is to maximize the potential opportunities awaiting potential investors in Cambodia, to help and empower you, while ensuring that you work with your local counterparts in both the private and public sectors. Establish cultural and trade relations.
Key Investment Phases and Considerations
Investing in Cambodia is, in most cases, a straightforward, direct, and open process. This can be as simple as setting up a company through the registration of corporate documents in the Ministry of Commerce “MOC”, which can now usually be done through an online platform. However, in most cases, an additional operating license will be required. The Council for the Development of Cambodia “CDC” and the Special Economic Zones Board of Cambodia. Registration with “CSEZB” or Provincial Municipal Investment Sub-Committee “PMIS” is also required.
Like many other countries in the region, Investment in Cambodia can be divided into five stages:
- Evaluation of Businesses Potential and Scope of Investment
During this phase, the potential investor will explore the business environment, meet and evaluate potential partners, review the micro and macroeconomic situation, calculate expenses, legal and employment Assess the environment, determine the presence of the necessary infrastructure, and perform other relevant analyses. Whether direct investment is required in Real Estate Cambodia.
In many cases, investor goals can be achieved through indirect investment vehicles, such as establishing an agency or establishing licensing or distribution relationships with existing businesses operating in Cambodia.
As part of this evaluation process, investors will review the relevant advantages and disadvantages of Investing in Cambodia, including:
Advantages
l The market is very open for foreign investment, 100% foreign-owned investment is allowed in almost every sector.
l A business friendly government
l A foreign friendly population
l A growing local middle class and growing expat community
l Extensive use and acceptance of US dollars
l Favourable investment incentives and tax system
l Abundant natural resources (land, water, minerals, and possibly oil and gas)
l World-class tourist destinations including Angkor Wat, as well as islands and beaches
l A low cost, young and energetic workforce
l Easy access to nearby major economies, including Thailand, Vietnam and China
Disadvantages
l A legal framework that is still being developed and lacks some important trade rules
l Unexpected legal enforcement and enforcement
l High value of business information
l Lack of investment financing
l A small domestic market
l Relatively low purchasing power of the population And
l Poor education and inexperience in manpower
- Registration for Investment Incentives
After making a major decision to Invest in Cambodia, the investor must determine whether the project is eligible for investment incentives, and whether obtaining such an investment license is beneficial to the business. Most investors will want to enjoy the benefits of the tax incentives and investment guarantees available under the investment license. The investment licensing system is governed primarily by the Investment Law which was enacted in August 1994, and by amending the Investment Law in 2003 to simplify the licensing process. Significant modifications were made to make it transparent, predictable, automatic, and non-discriminatory.
Subsequently, several sub-orders were issued which further improved the investment law. Investment License is obtained from CDC and CSEZB or PMIS. Only eligible projects have the right to obtain such a license. It does not include investment plans which Negative lists, as defined. By sub-order, or investment plans with capital levels below the limit specified in the negative list. Meets the privileges and guarantees available for QIP, the registration process and eligibility requirements.
- Incorporation or Commercial Registration
In order to join a business in Cambodia, trade registration with MOC is required. The institution will have legal personality after registration with MOC, which can be done before or after registration with CDC / CSEZB or PMIS. In January 2016, MOC launched an online platform for business registration. This is expected to reduce the time required to set up a business.
- Routine “Downstream” Licenses
“Downstream” is a large number of approvals and licenses that must be obtained in addition to registration with MOC, and in the case of QIPs, registration with CDC / CSEZB or PMIS. In addition, some businesses for example banking, construction and real estate, financial leasing, insurance, medical, mining, oil and gas, telecommunications, and investment activities other government entities before registering with MOC or special licenses are required from the agencies. These include normal flow licenses; Tax registration, labour registration, and local authority approval.
- Operation Licenses or “Upstream” Licences
In addition to the registrations and licenses listed above, there are general and sector-specific operating licenses and approvals that must be obtained for an enterprise’s business activities. Some examples of “upstream” licenses include factory licenses from the Ministry of Industry and Crafts (“MIH”). Mining License Ministry of Mines and Energy (“MME”); Agricultural License and Incentives from the Ministry of Agriculture, Forestry and Fisheries (“MAFF”); Environmental approval from the Ministry of Environment (“MOE”); Large construction permits and Ministry of Tourism (“MOT”) licenses from the Ministry of Land Management, Urban Planning and Construction (“MLMUPC”) for investment in the tourism sector
