Cambodia is a small but dynamic country in Southeast Asia that has been attracting more and more foreign investors in recent years. Cambodia offers many advantages and opportunities for investors who are looking for a fast-growing, stable, and business-friendly destination in the region.
Here are the top 5 reasons why you should consider investing in Cambodia.
- Consistent and strong economic growth
Cambodia has been one of the top-performing economies in Asia and the world for the past two decades. From 1994 to 2019, Cambodia’s gross domestic product (GDP) grew at an average annual rate of 7.7%, making it one of the fastest-growing economies in the world (https://kpmg.com/kh/en/home/insights/2022/02/investment-in-cambodia.html). Despite the impact of the Covid-19 pandemic, Cambodia’s GDP only contracted by 0.2% in 2020 and is expected to rebound by 3.6% in 2021 and 10.2% in 2022 (https://kpmg.com/kh/en/home/insights/2022/02/investment-in-cambodia.html). Cambodia’s economic growth has been driven by its openness to trade and investment, its strategic location, its young and dynamic workforce, and its diversification of sectors and markets.
- Favorable investment environment
Cambodia has a favorable investment environment that welcomes and supports foreign investors. Cambodia allows foreign investors to own 100% of their businesses in most sectors, with very few exceptions (https://www.realestate.com.kh/news/Why-Should-You-Invest-in-Cambodia/). Cambodia also offers various incentives and benefits for qualified investment projects (QIPs), such as tax holidays, duty exemptions, special depreciation allowances, and streamlined procedures (https://kpmg.com/kh/en/home/insights/2022/02/investment-in-cambodia.html). Cambodia has also established over 50 special economic zones (SEZs) that provide infrastructure, facilities, services, and incentives for investors who operate within them (https://kpmg.com/kh/en/home/insights/2022/02/investment-in-cambodia.html). Moreover, Cambodia has a low tax regime, with a corporate income tax rate of 20%, a value-added tax rate of 10%, and no capital gains tax (https://kpmg.com/kh/en/home/insights/2022/02/investment-in-cambodia.html).
- Strategic geographical location
Cambodia has a strategic geographical location that gives it access to a large and dynamic market. Cambodia is part of the Greater Mekong Subregion (GMS), which comprises six countries: Cambodia, China, Laos, Myanmar, Thailand, and Vietnam. The GMS has a combined population of over 340 million people and a combined GDP of over $1.5 trillion (https://italycambodia.com/blog/business-news/10-reasons-to-invest-in-cambodia/). Cambodia is also part of the Association of Southeast Asian Nations (ASEAN), which comprises 10 countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. ASEAN has a population of over 650 million people and a GDP of over $3 trillion (https://canopysands.com/investing-cambodia/). Cambodia benefits from the free trade agreements and economic integration initiatives that ASEAN has with other countries and regions, such as China, India, Japan, Korea, Australia, New Zealand, and the European Union.
- Fast rate of urbanization
Cambodia has a fast rate of urbanization that creates opportunities for investors in various sectors. According to the World Bank, Cambodia’s urban population increased from 19.5% of the total population in 2000 to 24.5% in 2019 (https://southeastasiaglobe.com/5-reasons-cambodia-is-best-in-the-region-for-foreign-investments/). This trend is expected to continue as more people migrate from rural areas to urban centers in search of better education, employment, and living standards. The urbanization process has increased the demand for housing, infrastructure, transportation, utilities, health care, education, and entertainment in Cambodia’s cities. This creates opportunities for investors who can provide these products and services to the growing urban population.
- Political stability and security
Cambodia has achieved political stability and security after decades of civil war and turmoil. Cambodia has been ruled by the Cambodian People’s Party (CPP) since 1979, and by Prime Minister Hun Sen since 1985. The CPP has maintained a strong grip on power and has won every national election since 1998. The CPP has also maintained good relations with its neighbors and major powers, such as China, the United States, and the European Union. Cambodia has also improved its security situation and has reduced its crime rate and violence. Cambodia has also participated in various regional and international peacekeeping and humanitarian missions.
Conclusion
Cambodia is a promising destination for foreign investors who are looking for a fast-growing, stable, and business-friendly country in Southeast Asia. Cambodia offers many advantages and opportunities for investors, such as consistent and strong economic growth, favorable investment environment, strategic geographical location, fast rate of urbanization, and political stability and security. By investing in Cambodia, investors can benefit from the country’s potential and contribute to its development.