Cambodia is located in traffic hinge position of southeastern Asia
Waterway: The Mekong River run through the Country from north to south; close to Gulf of Thailand in southwest, provided with the international deep-water terminal -the Sihanoukville international port.
Landway: neighbored with Vietnam at east, meet Laos at north and close to Thailand at northwest.
Aviation: There are three international airports in Cambodia which are Phnom Penh, Angkor, Sihanouk airports. In China, Beijing, Guangzhou, Shanghai, Hong Kong all have direct flights to Phnom Penh，the capital of Cambodia.
2.The safe political environment
(1)The political situation in Cambodia is stable: Cambodia is a constitutional monarchy. The Constitution set out that the power of the Legislative, Executive and Judicial branches shall be separated. The country has a bicameral legislature, which consists of the Congress and the Senate. The prime minister Hun Sen paying attention to the livelihood of the people and making a strong strategy on developing economy, making the domestic political situation remained stable and social security is good.
(2)The international political environment: pursuing a permanently neutral and nonaligned policy, and maintain friendly relations with most of the countries in the world. Cambodia is China's friendly neighbor, and the both countries enjoy a traditional friendship without any sovereignty disputes and ethnic conflicts in history, ever since a long time ago, Chinese leaders of several generations and Prince Sihanouk established a profound friendship. And it is also convenient to get a Cambodia visa.
3.The opened economic system
There is no exchange limitation in Cambodia, the foreign exchange funds can flow in and out freely, and also U.S. dollar floats freely . Most of profession is open for foreign investors, and Cambodia is one of the freest countries in the world. According to “2009 Index of Economic Freedom” by the Heritage Foundation in the US, Cambodia is ranked 21st out of 41 countries in the Asia-Pacific region. It has noticeably scores in fiscal freedom and government size, and as well as in monetary freedom. Low income tax and corporate tax contribute to a low overall tax burden.
The Cambodian government encourage the foreign investment. It has issued a series of regulations and set up the dialogue mechanism at fixed period with the investors. In 2011，the Cambodia Government approved 164 investment programmes, with a total amount of over 7.01 billion. Among these programmes, the total amount of foreign direct investment is over 5.08 billion.
In 1994, the government approved the Law of Investment. According to the law: in addition to the Constitution of the Kingdom of Cambodia provisions relating to land ownership, all investors, regardless of nationality and race, are equal in law; Cambodian government wouldn’t carry out the nationalization policy which is harmful to investor’s property; For the approved investment, the government doesn’t control the price on products and service.
4.Low labor cost
Cambodia is a traditional agricultural country, which has a population of 14 million, population age structure tend to be younger. Percentage of population by age group is as follows
- Children (0-14):33.7%
- Economically productive age group (15-64): 62%
- The elderly population (65+): 4.3%.
Though, most of the Cambodian is under low education, the labor source has great potential. Compare to other countries in ASEAN, the labor cost in Cambodia is the lowest. The legal salary is USD61 per month.
According to the law of Cambodia, the maximum time is eight hours per day, or 48 hours per week. If workers are required to work overtime, the overtime hours shall be paid at a rate of 150%-200%.
5.The favorable trade status
In 2004, Cambodia is approved accession to WTO. Since Cambodia is categorized as least developed country (LDC), it is entitled to additional preference, under which more of its products are subject to duty-free or tariff reductions. Cambodia have not encounter the dual anti-dumping and other trade barriers from developed countries yet.
In 1st January, 2011, the EU announced to start the new GSP, and would continue to offer the most preferential treatment to 49 LDC including Cambodia. The new GSP relax regulations to Cambodia, and one of the most important conditions is that the material sources no longer be restricted, the clothing products which produced in Cambodia and the fabric from different countries can enjoy tariff-free preferential to access to the EU market.
Till 2010, zero tariff trade can be realized among 10 members of ASAN, which means a huge ASEAN market with 600 million population has opened to Cambodia. In addition，the ASEAN will set up a FTA with South Korea, Japan, India, New Zealand and Australia, and the investor will also have the ASEAN 10+6 zero tariff of big market if invest in Cambodia.