Preferential Market Access
Cambodia is an integrated participant in international markets, having jointed WTO in 2004. Due to its classification as a “Least-Develop Country” Cambodia receive preferential treatment from a number of key export markets. Both the US and the EU have program which give Cambodia duty-free and quota-free access to their markets on almost all export products-the EU allows for EBA (now EBA-20%) while the US scheme covers a list of 4,800 products categories. These benefits represent a considerable advantage over regional competition such as Thailand and Vietnam. Only Laos and Myanmar share similar levels of access to EU market.
Through its membership of ASEAN, Cambodia is part of ASEAN FTA (AFTA) and therefor benefit from the Common Effective Preferential Tariff (CEPT) agreement to reduce or eliminate tariffs on manufactured goods traded between the association’s ten members.
At the end 2015, the ASEAN Economic Community (AEC) had just come into effective, creating a single market that allows for free flow of goods, services and workers. At present, Cambodia exports relatively little to its near neighbours, through it is hoped that this will be change over the coming years. The Kingdom is located centrally within ASEAN, and there are major opportunities to capitalize on increasing levels of ASEAN connectivity in order to integrate into regional production chains or even to serve a regional logistics hub in future. ASEAN membership also entails participation in collective free trade agreement with China, Australia, India, Japan, South Korea and New Zealand, which may eventually be incorporated into a Regional Comprehensive Economic Partnership (RCEP), a free trade area that would include more than three billion people.
Strategic Geographic Location
Cambodia is located in the Centre of Southeast Asia, Sharing borders with Thailand, Laos and Vietnam. This provides easy access to a range of high-growth markets and facilitates intra-regional trade. For example, Cambodia’s booming garment industry imports most of its fabrics from China or other Asian countries via land and sea routes. Cambodia has strong air links to other ASEAN countries as well as to the rest of the East Asia. Phnom Penh International Airport has direct flight to Beijing, Shanghai, Guangzhou, Taipei, Seoul, Tokyo, plus the global aviation hub of Qata and Dubai. With the assistance of international donors and private sector partners, significant amount of money are being invested in infrastructure in order to enhance Cambodia’s link to its immediate and near neighbours.
Business- Friendly Government
The Royal Government of Cambodia understands the value of foreign direct investment and markets a concentrated effort to encourage foreign business to enter Cambodia. In a politically diverse region where regulatory frameworks can prove burdensome on foreign business, investors in Cambodia will benefit from the following active measures.
Cambodia is one of the most open economies in ASEAN with a business-friendly government and strong recent reform record.
- Non-discrimination: there are not legal constraints on the establishment a company in Cambodia that is 100% foreign-owned. With the exception of owing land, foreign business can engage unrestricted in exactly the same business activities in Cambodian-owned companies.
- Low taxes: Cambodia has one of the most competitive tax regimes in Southeast Asia. The tax-on-profits rate of 20% is the lowest in the region. Furthermore, almost all goods exported from Cambodia are exempt from customs duty.
- Investment incentive scheme: the government has created a dedicated board for administrating incentive scheme for foreign investors.
- Concentrated investment zones: recognizing the time and cost saving in concentrating infrastructural and administrative resources in specific areas, the government has approved numbers of SEZ to be created across the country, mostly near border areas and around manufacturing hub on the outskirts of Phnom Penh. Each zone (SEZ) has on-site administrative teams with strong connection to government ministries to deal with imports/exports, official registrations and troubleshooting…and others matters.
- Easy to repatriate profits: Cambodia’s 1997 law on foreign exchange states that there shall be no restrictions on foreign exchange operations through authorized banks, making it easy to remit profits made in Cambodia to bank accounts back home.
Strong recent reform record: in the last couple years, the government has stepped up the pace of reform, addressing issues around the ease of doing business in the Kingdom. New initiative such as ongoing automation of C/O issuance (a document required by exporters) and online business registration system are designed to reduce the time and resources required to comply with Cambodia regulations while also reducing the opportunities for non-transparent practices by lower-level officials.
Competitive Labour Force
Cambodia has rapidly established itself as a regional manufacturing hub-driven by its highly competitive labour force. Labour cost in Cambodia is cheaper than most regional competitors and given the success of the country’s labour-incentive, export-oriented industries.
Quality of life
Investors/ business people who make the move to Cambodia benefits from an attractive lifestyle, with low living costs and the chance to explore a fascinating country that has a rich cultural heritage and stunning natural beauty. The main investment/business areas is in Phnom Penh, Siem Reap and Shihanoukville. Cambodia benefits from favourable demographics- a youthful population with improving education levels that will only enhance the country’s competitiveness over the coming years.
Major Industries & Opportunities
- Garment and Textile and Footwear, Travel bags
- Agricultural Sector and agro-business processing industries
- Food and Beverages
- Healthcare and Pharmaceutical
- Finance and insurance
- ICT and New Technologies
- Automobiles and Motorcycles
- Mineral Resource
- E-Commerce business
Registering your company
All foreign direct investment in Cambodia must be registered with the Ministry of Commerce, the General Tax Department (both do online business registration) and if hiring employees go to Ministry of Labour and Vocational Training. Depending on specific business activities, companies may need to obtain operational licenses from other ministries involved.
Detail information about business registration contact Ministry of Commerce:
- Department of Business Registration: Lot No. 19-61, Russian Federation Blvd, Phum Toek Thla, Sangkat Toek Thla, Khan Sen Sok, Phnom Penh, Cambodia.
- Contact Person: Mr. Oum Dararith, Director
- Tel: +855-23 866 050 / 012 993 188 / 012 910 505
- E-mail: [email protected]