About Cambodia
 
Brief Introduction
Investment Environment
 
 
Investment Enviroment
 
·Geography Advantages
·The safe political environment
·The opened economic system
·Low labor cost
·The favorable trade status
·Geography Advantages
·The safe political environment
·The opened economic system
·Low labor cost
·The favorable trade status
 
 
 
 
Investment Environment
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1.Geography Advantages

Cambodia is located in traffic hinge of southeastern Asia. It only takes 1.5 hours at average to fly to other ASEAN countries.

Water Route: The Mekong River runs through the country from north to south; the southwest of Cambodia lays against the Gulf of Thailand with the international seaportthe Sihanoukville international Port.

Land Route: Cambodia borders Vietnam at east, Laos at north and Thailand at northwest.

Air Route: There are three international airports in Cambodia including Phnom Penh, Siem Reap and Sihanouk airport; People in China can fly to Phnom Penh directly from Beijing, Guangzhou, Shanghai, Nanning, Kunming, Hong Kong and so on, while fly to Sihanoukville directly from Chengdu , Wuhan, Macau, Guangzhou and Wuxi.

2.The safe political environment
(1)The domestic political situation: The political situation in Cambodia is stable, the government pays attention to the livelihood of the people and makes a strong strategy on developing economy, and social security condition is healthy.

(2)The international political environment: Cambodia has been pursuing the permanent neutrality and the nonaligned policy, maintaining friendly relationships with the majority of countries in the world. Cambodia is the friendly neighbor of China, and both countries enjoy a traditional friendship for a long time.

3.The opened economic system

There are no foreign exchange limitation policies in Cambodia. The foreign exchange fund can flow in and out of Cambodia freely and the USD could be used in Cambodian market unlimitedly. Cambodia is one of the countries which enjoy the higher economic freedom in the world with the most industries can be invested by foreign investors. According to theIndex of Economic Freedom in 2016 issued by Heritage Foundation, Cambodia is listed as 24th among the 43 countries of the Asian-Pacific Region. Furthermore, Cambodia ranks 89th out of 138 most competitive countries over the world according to The Global Competitiveness Report 2016–2017 published by the World Economic Forum.

The Cambodian government encourages the foreign investment. It has issued a series of regulations and set up a dialogue mechanism at fixed period with the investors. In 1994, the government approved the Law of Investment. According to this law: apart from the provision about the ownership of land in Constitution of the Kingdom of Cambodia, all investors are equal in law regardless of nationalities and races. Cambodian government wouldn’t carry out the nationalization policy which is harmful to investor’s property. For the approved investment projects, the government would not control the prices on products and services.

In March 2015, The Kingdom of Cambodia government has approved 2015-2025 Industrial Developing Strategy, determined 4 key priorities to be achieved by 2018 in order to promote and sustain the momentum of Industrial Development as following: First, improving electricity supply to key industrial areas and estates,reducing the electricity price and ensuring the stability of the electricity supply. Second, building multi-modal transport and logistic system to connect to 3 keys industrial corridors namely Phnom Penh-Sihanoukville, Phnom Penh-Pakistan Region and Phnom Penh-Poipet. Third, building modern institutions for vocational and technical training / human resources development needed by industries. Forth, developing Sihanoukville province as a comprehensive demonstration economic special zone.

4.Low labor cost

Cambodia is a traditional agricultural country and the age structure of it tends to be younger. The average age is 24 years old. The percentages of population categorized by age groups are as follows

- Children (0-14):31.4%

- Economically productive age group (15-64): 64.3%

- The elderly population (65+): 4.3%.

The literacy rate in Cambodia is 92.7% (15-24 years old),and the labor force in this country works really hard, so the human resource here is enjoying a great potential. Compared to other countries in ASEAN, the labor cost in Cambodia is the lowest. The legal minimum salary is USD 170 per month in 2018.

According to the regulation of Cambodia, the maximum working hours are 8 hours per day and 48 hours per week. If the extra working hours are needed, the subsidy should be provided with a rate of 50%-100% higher than normal working time. 

5.The favorable trade status

In 2004, Cambodia was approved to join the WTO, which has not yet encountered "double reverse" and other trading barriers by the developed countries. Cambodian enjoys GSP treatment by the USA, EU, Japan and other 25 countries / regions. For the textiles and garment imported from Cambodia, America provides loose quotas and import customs duty suspended, EU no limit, and Canada free import customs duty. Meanwhile, Cambodia has been allowed to export zero-tariff products to the United States, such as handbags, satchels, wallets and other travel products.

On 1st January, 2011, the EU announced to start the new GSP, and continued to offer the  preferential treatment to 49 least developed countries including Cambodia. In addition, the new GSP relaxed limitations to Cambodia once more, and the important condition was that the fabric material sources were not restricted any more. The clothing products produced in Cambodia could use fabrics from any countries and enjoyed tariff-free preferential to enter the EU market. 

As a member of ASEAN, Cambodia has entered a market with ten countries and a population of 600 million. On 1st January 2010, China-ACFTA was established totally, which provided Chinese enterprises with a strategic opportunity to enter ASEAN countries. In addition,the ASEAN has signed FTAs with South Korea, Japan, India, New Zealand and Australia. It means that the companies would have the ASEAN 10+6 big markets with zero tariffs when investing in Cambodia.

 
 
 
 

Cambodia Sihanoukville Special Economic Zone
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