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Cambodia – Investing in the Land of the Khmer

COUNTRY FACTSHEET CAMBODIA


1. COUNTRY INTRODUCTION:

Country Profiles - Cambodia Cambodia has experienced rapid economic growth recently. The Kingdom has been one of the world’s fastest-growing economies over the past fifteen years, with average annual gross domestic product (GDP) growth of nearly eight percent. A similar rate of economic development is expected in the coming years, based upon the four ‘core pillars’ of tourism, garment manufacturing, agriculture, and construction. While Cambodia remains a predominantly agrarian country, with approximately 80 percent of the population living in rural areas, there is a trend towards urbanisation with more and more working-age people moving to the cities to find jobs in the growing industrial and service sectors. The country has historically been dependent upon foreign aid but, having graduated to the UNDP’s ‘lower-middle income’ status in July 2016, is now enacting a serious reform agenda to increase tax revenue collection and increase the effectiveness of public spending. The Royal Government has also published an Industrial Development Policy identifying strategic objectives to ensure sustainable economic growth over the coming decade. International trade has been steadily increasing since Cambodia joined the World Trade Organisation (WTO) in 2004. Cambodia is also a member of the Association of Southeast Asian Nations (ASEAN) and the ASEAN Free Trade Agreement (AFTA).

 

2. KEY ECONOMIC DATA (World Bank 2015 unless otherwise stated):

Population: 15.58 million
GDP (Current US$): US$ 19.40 billion / EUR 18.3 billion1
GDP (Current US$, per capita): US$ 1,158.7 / EUR 1,094.5
GDP (PPP): US$ 54.37 billion / EUR 51.35 billion
GDP (PPP, per capita): US$ 3,490.00 / EUR 3,296.50
Real GDP Growth: 7.0% year-on-year
Consumer Price Index (CPI): 3.6% (Nov 2016, National Institute of Statistics)
Labour Force: 8.62 million
Unemployment Rate: N/A
Main Industries: Tourism, textiles and garments, beverages, food processing, rice milling, fishing, wood and wood products, rubber, cement, gem mining
Main Exports: Garments, footwear, rice, timber, light manufactured goods
Exports Partners: European Union 36.5% (including UK 8.8% in 2015), USA 23.1%, Japan 7.4%, Canada 6.7%, China 5.1%, Vietnam 5%, Thailand 4.9%, Netherlands 4.1% (2015)
Main Imports: Petroleum products, fabrics, vehicles, wholesale yarn, cigarettes, electrical communications equipment and medicine.
Imports Partners: Thailand 28.7%, China 22.2%, Vietnam 16.4%, Hong Kong 6.1%, Singapore 5.7% (2015)
Currency: Riel (KHR)
Ethnic groups: Khmer 90%; significant Chinese and Vietnamese populations, small numbers of ethnic minorities including Chams and upland indigenous peoples.
Religions: Theravada Buddhism 95% (official)
Languages: Khmer (official), spoken by more than 95%, some French still spoken, English increasingly popular as a second language
Literacy Rate: 77.2%

1 All exchange rates as of March 2017
 

3. BUSINESS & INVESTMENT ENVIRONMENT:

Cambodia offers investors a strategic geographical location, favourable demographics, a competitive labour force, and preferential access to key export markets. Cambodia has an open and liberal foreign investment regime with a relatively pro-investor legal and policy framework. Investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to nine years, a 20 percent standard corporate tax rate, after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation. Challenges of doing business in Cambodia include a limited supply of skilled labour, high electricity costs, some weak law enforcement practices, and unfair competition through tax evasion and parallel importing.

 

4. MARKET OPPORTUNITIES:

Cambodia offers potential investment opportunities in agribusiness and food processing; tourism infrastructure and resorts; education; architecture, construction, and engineering services; household goods and appliances; used cars and automotive parts; power generation equipment and power transmission infrastructure; fast food and beverage franchises; pharmaceuticals; and medical supplies and equipment.

 

5. SOURCES:

Country Introduction & Key Economic Data:

The World Factbook: https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html
Statistical information: http://unctadstat.unctad.org/CountryProfile/GeneralProfile/en-GB/116/index.html
Economist Intelligence Unit Country Reports: http://country.eiu.com/cambodia
Knoema “World Data Atlas”: https://knoema.com/atlas/Cambodia
EuroCham Cambodia Whitebook 2016: http://eurocham-cambodia.org/uploads/e3c65-white-book-2016-(english).pdf

Business Environment & Market Opportunities:

Cambodia Country Commercial Guide: https://www.export.gov/article?id=Cambodia-Market-Overview

International Rankings:

IFC/World Bank “Doing Business” Report 2017 – Ranked 131 / 191:
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/khm.pdf
Transparency International “Corruption Perception Index” – Ranked 156 / 176:
http://www.transparency.org/country/KHM
World Economic Form – Global Competitiveness Report (2016/2017) – Ranked 89 / 138: http://reports.weforum.org/global-competitiveness-index/country-profiles/#economy=KHM

 

Hanoi is an hour’s flight from the Cambodian capital Phnom Penh. From the Vietnamese capital, ASEAN Business Partners is coordinating its activities in Cambodia until the opening of a representative office. Through its extensive network of personal contacts and consultants, ASEAN Business Partners is ready to support you for your successful implementation of all your business plans in Cambodia.

 

Useful Links:

https://country.eiu.com/cambodia

https://www.cia.gov/library/publications/the-world-factbook/geos/cb.html

http://www.adb.org/publications/cambodia-fact-sheet

http://www.worldbank.org/en/country/cambodia

http://www.asidnet.org/web/

http://countrystudies.us/cambodia/

http://cpi.transparency.org/cpi2013/results/

http://www.weforum.org/reports/global-competitiveness-report-2013-2014

 

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