Cambodia is a Southeast Asian country with a population of about 16.7 million people and a GDP of about $27.2 billion in 2020. The country has experienced rapid economic growth in recent years, averaging 7.1% annually from 2010 to 2019, before being affected by the COVID-19 pandemic. Cambodia has also improved its business environment and ranked 144th out of 190 countries in the World Bank’s Ease of Doing Business 2020 report, up from 171st in 2014.
Cambodia offers many opportunities for foreign investors who are looking for a dynamic and emerging market with a strategic location, a young and productive workforce, a liberal investment regime, and a favorable tax system. Some of the best business opportunities in Cambodia for foreigners are:
Agriculture
Agriculture is one of the main pillars of Cambodia’s economy, accounting for more than 20% of its GDP and employing about 70% of its labor force. The country has abundant natural resources and favorable climatic conditions for growing a variety of crops, such as rice, cassava, rubber, corn, sugarcane, fruits, and vegetables. Cambodia also has a large potential for livestock and fisheries production.
Foreign investors can tap into the growing demand for agricultural products and services in Cambodia and abroad by providing modern farming equipment and machinery, such as tractors and harvesters (https://www.tetraconsultants.com/blog/best-business-opportunities-in-cambodia/), quality seeds and fertilizers, irrigation systems, post-harvest processing and storage facilities, cold chain logistics, and market access. Foreign investors can also benefit from the preferential tariff treatment that Cambodia enjoys under various trade agreements with major markets, such as the EU, China, Japan, South Korea, and ASEAN.
Tourism
Tourism is another key sector of Cambodia’s economy, contributing about 12% of its GDP and employing about 15% of its labor force in 2019. The country attracted more than 6.6 million international tourists in 2019 (https://www.tetraconsultants.com/blog/best-business-opportunities-in-cambodia/), mainly from China, Vietnam, Thailand, Laos, and South Korea. The main attractions of Cambodia are its rich cultural heritage and stunning natural beauty, such as the Angkor Wat temple complex, the Royal Palace, the Tonle Sap lake, the Mekong river, and the islands and beaches along the coast.
Foreign investors can seize the opportunities in the tourism sector by developing and operating hotels, resorts, restaurants, bars, casinos (https://www.aseanbriefing.com/news/2023-foreign-investment-opportunities-in-cambodia/), entertainment venues, tour operators, travel agencies, transport services, and souvenir shops. Foreign investors can also explore new segments of the tourism market, such as ecotourism (https://opendevelopmentmekong.net/stories/drivers-of-foreign-investment-in-cambodia/), adventure tourism (https://opendevelopmentmekong.net/stories/drivers-of-foreign-investment-in-cambodia/), cultural tourism (https://opendevelopmentmekong.net/stories/drivers-of-foreign-investment-in-cambodia/), wellness tourism (https://opendevelopmentmekong.net/stories/drivers-of-foreign-investment-in-cambodia/), and MICE (meetings, incentives, conferences, and exhibitions) tourism (https://opendevelopmentmekong.net/stories/drivers-of-foreign-investment-in-cambodia/).
Real Estate
Real Estate is one of the fastest-growing sectors in Cambodia, driven by the increasing demand for residential and commercial properties from both local and foreign buyers. The sector has also attracted significant investment from China (https://www.aseanbriefing.com/news/2023-foreign-investment-opportunities-in-cambodia/), which accounted for more than half of the total foreign investment in Cambodia in 2020 (https://www.aseanbriefing.com/news/2023-foreign-investment-opportunities-in-cambodia/). The main areas of development are Phnom Penh (the capital city), Siem Reap (the gateway to Angkor Wat), Sihanoukville (the port city and beach destination), Battambang (the agricultural hub), and Kampot (the scenic province).
Foreign investors can participate in the real estate sector by developing and selling or renting properties such as condominiums, apartments, villas, office buildings, shopping malls, industrial parks, and special economic zones. Foreign investors can also provide related services such as property management, brokerage, valuation, consultancy, and financing. Foreign investors should be aware of the legal framework and regulations governing land ownership and property transactions in Cambodia.
Textile
Textile is one of the largest export sectors in Cambodia, accounting for more than a third of its GDP and 57% of its total exports in 2020 (https://cicp.org.kh/wp-content/uploads/2021/02/CICP-Working-Paper-12-garment-in-Cambodia-by-Seng-Sovirak-and-Kum-Kim.pdf). The country is the ninth-largest exporter of garment, footwear and travel goods in the world, with a market share of 1.3% in 2019 (https://cicp.org.kh/wp-content/uploads/2021/02/CICP-Working-Paper-12-garment-in-Cambodia-by-Seng-Sovirak-and-Kum-Kim.pdf). The main markets for Cambodia’s textile products are the US, the EU, Japan, and ASEAN.
Foreign investors can benefit from the competitive advantages of Cambodia’s textile industry, such as low labor costs, preferential trade access, and abundant supply of raw materials. Foreign investors can also contribute to the development and transformation of the industry by investing in research and development, technology adoption, skills training, environmental and social standards, and value-added products. The government has launched a new road map for the textile and apparel industry 2023-2027, which aims to make the sector more resilient, sustainable, and high-value.
Food and Beverage
Food and beverage is one of the most promising sectors in Cambodia, as the country has a large and growing domestic market with a rising middle class and increasing disposable income. The demand for processed food and beverage products is also driven by the expanding tourism sector, urbanization, and changing consumer preferences. According to a report by Euromonitor International, the retail sales of packaged food in Cambodia reached $2.6 billion in 2019, growing by 10.4% annually since 2014.
Foreign investors can explore the opportunities in the food and beverage sector by producing and distributing high-quality, safe, and innovative products that cater to the local tastes and needs of Cambodian consumers. Foreign investors can also leverage Cambodia’s rich agricultural resources and low production costs to export food and beverage products to regional and global markets. Foreign investors should be aware of the regulatory requirements and standards for food safety and quality in Cambodia.
IT and Technology
IT and technology is one of the emerging sectors in Cambodia, as the country has a young and tech-savvy population with high internet penetration and mobile phone usage. According to a report by We Are Social, there were 16.8 million internet users (98% of the population) and 20.8 million mobile connections (121% of the population) in Cambodia as of January 2020. The demand for IT and technology products and services is also fueled by the digital transformation of various sectors, such as banking, education, health care, e-commerce, and entertainment.
Foreign investors can tap into the potential of the IT and technology sector by providing solutions that address the challenges and opportunities of Cambodia’s digital economy. Foreign investors can also support the development of local talent and innovation by investing in education, training, incubation, and collaboration platforms. Foreign investors should be aware of the legal framework and regulations governing data protection, cybersecurity, intellectual property rights, and e-commerce in Cambodia.
Healthcare
Healthcare is one of the essential sectors in Cambodia, as the country faces various health challenges such as communicable diseases, non-communicable diseases, maternal and child mortality, malnutrition, and environmental pollution. The Ministry of Health is responsible for governing and regulating the healthcare system, which consists of both public and private providers. The government has implemented several health reforms and programs with international assistance to improve the health status and access to health services for the population.
Foreign investors can find opportunities in the healthcare sector by providing quality and affordable healthcare products and services that meet the needs and expectations of Cambodian consumers. Foreign investors can also support the development and improvement of the healthcare infrastructure, human resources, technology, and innovation in Cambodia. Foreign investors should be aware of the legal framework and regulations governing healthcare products and services, such as registration, licensing, pricing, labeling, advertising, and quality control.
Education
Education is one of the vital sectors in Cambodia, as the country strives to develop its human capital and achieve its socio-economic goals. The Ministry of Education, Youth and Sport is responsible for governing and regulating the education system, which consists of pre-school, primary, secondary, higher and non-formal education. The government has implemented several education reforms and programs with international assistance to improve the access, quality and relevance of education for all.
Foreign investors can find opportunities in the education sector by providing quality and innovative education products and services that meet the needs and demands of Cambodian learners. Foreign investors can also support the development and improvement of the education infrastructure, human resources, technology and innovation in Cambodia. Foreign investors should be aware of the legal framework and regulations governing education products and services, such as registration, licensing, accreditation, curriculum, assessment and quality assurance.
Energy
Energy is one of the crucial sectors in Cambodia, as the country needs to meet its growing demand for electricity and fuel for its economic and social development. The Ministry of Mines and Energy is responsible for governing and regulating the energy sector, which consists of electricity generation, transmission, distribution and consumption, as well as petroleum exploration, production, import, export and consumption. The government has implemented several energy policies and plans with international assistance to improve the energy security, affordability and sustainability for all.
Foreign investors can find opportunities in the energy sector by providing reliable and cost-effective energy products and services that meet the needs and demands of Cambodian consumers. Foreign investors can also support the development and improvement of the energy infrastructure, human resources, technology and innovation in Cambodia. Foreign investors should be aware of the legal framework and regulations governing energy products and services, such as licensing, pricing, taxation, environmental and social impact assessment, and quality control.
Conclusion
Cambodia is a country with a lot of potential for foreign investors who are looking for a dynamic and emerging market with a strategic location, a young and productive workforce, a liberal investment regime, and a favorable tax system. Some of the best business opportunities in Cambodia for foreigners are in the sectors of agriculture, tourism, real estate, textile, food and beverage, IT and technology, healthcare and energy. Foreign investors should conduct a thorough market research and due diligence before entering the Cambodian market, as well as comply with the relevant laws and regulations governing their business activities. Foreign investors should also seek professional advice from local experts and partners to help them navigate the business environment and culture in Cambodia.