With the Cambodian New Year celebrations coming up, there is a nationwide break from work and an opportunity to gather with friends and family, and for many businesses, to take a pause and reflect on the first quarter of 2024.
There is some economic momentum returning via increased tourism and investments, but more importantly, a mood upswing that Cambodia could be on the right track economically - and attracting investors is at the heart of that.
So what are the top 5 reasons investors are looking at Cambodia?
Investments Into Cambodia’s Future
The Council for the Development of Cambodia (CDC) approved 106 fixed assets investment and expansion projects worth USD $2.2 billion in Q1 2024, it will be a massive jump compared to 2023 but most data should be - however it reflects the continuation of investment into the development of the Kingdom.
The main beneficiaries thus far were the industrial sector (accounting for over 90 per cent) but agriculture and the agro-industry, infrastructure, and tourism all benefited.
Cambodia has experienced significant economic growth - with many sources pointing to the average annual GDP growth rate of around 7% for a decade which means it's been one of the fastest-growing economies in Southeast Asia (although it has to be acknowledged there was a lower base compared to other countries.)
Cambodian Prime Minister Hun Manet said at the start of April that Cambodia is expected to see a 6.6 per cent rise in its economy in 2024.
- On the back of another revived estimate for the country in 2024, the CB EIC (Economic Intelligence Center) unit of the Siam Commercial Bank Public Company Limited, predicts that there will be a 6 per cent growth in FDI this year.
- According to Seasia Stats for Southeast Asia’s 2024 GDP growth projection - Cambodia tops the list with an estimated 6.1 per cent.
- The same projections indicate Cambodia is third among the top 25 fastest-growing economies in 2024.
This growth has been driven by sectors such as tourism, garments and textiles, construction, and agriculture and investors continue to look for opportunities in these sectors and those that align with government strategies such as those detailed for the Special Investment Promotion Program For Sihanoukville and in the Pentagonal roadmap of the Cambodian government under Prime Minister Hun Manet.
Ease Of Doing Business In Cambodia
The Cambodian government has implemented various reforms to attract foreign investment. The special economic zones (SEZ), simplified procedures for business registration, and tax incentives for certain industries all offer opportunities for a range of businesses.
The Kingdom is rapidly diversifying, and improving its infrastructure, including transportation networks and energy supply, with private, public and partnerships all incentivised to support investment activities. These are large-scale and some are billion-dollar projects which promise to improve accessibility to the region.
More trade offices and agreements are also expanding the global opportunities to work with Cambodian authorities.
- On the DHL Global Connectedness 2024 Report - Cambodia ranked at 60th out of 181 countries included in the index.
- The Australia-Cambodia Business Forum was formed in 2024, as well as Cambodia and the United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) enforced in Q1 2024.
Visas And Passports For Cambodia
The range of investment from different nations shows there is unilateral interest in Cambodia,
For the year to date, aside from domestic investment, just over a third came from China, while the other foreign investors were from Singapore, Vietnam, South Korea, the US and Malaysia.
You can find out more about the visa options here but the strategic location means Cambodia is central within ASEAN and has easy access to regional markets and trade routes.
Diversification Of Cambodia’s Skills Market
Perhaps seen as one of the more contentious “plus points' but Cambodia has without a doubt a young and relatively low-cost labour force, which is attractive to businesses, particularly those in labour-intensive industries such as garments and textiles, construction and others.
But the biggest long-term reward will be the upskilling of the workforce which has already become better skilled and educated - this opens up more advanced and potentially lucrative opportunities for businesses that require higher-level expertise in technologies, manufacturing and even the growth of SMEs.
The government estimates that small and medium enterprises (SMEs) provide 70 per cent of jobs and contribute 58 per cent to the nation's GDP.
These are essential if Cambodia wants to achieve its targets for achieving middle and higher-income statuses over the coming decades.
Tourism and Property Sectors Remain Fundamental
Cambodia's location in the heart of Southeast Asia offers access to a growing regional market for tourism and also logistics which benefits the property and real estate sectors.
- In April the economic strategic plan for Sihanoukville was changed into the rather mouthful “Master Plan to Develop Preah Sihanouk Province into a Model Multi-Purpose SEZ and Develop Cambodia’s Coastal Provinces into a Multi-Purpose and Comprehensive Economic Corridor.”
The most prominent investment project in Q1 2024 was the establishment of five-star hotels and business centres in Preah Sihanouk province with a capital investment of $574 million.
Cambodia already benefits from regional trade agreements that facilitate market integration and business opportunities and is now actively opening up air, land and sea routes to welcome a more diverse and international market.
The beautiful coastal areas with an emphasis on the islands and Sihanoukville are hoped to add to national growth - and appeal to both leisure and business travellers.
This leads to investments in hotels, resorts, hospitality services, and related infrastructure that can benefit from the country's tourism potential as well as the construction and property markets.
The Angkor Archaeological Park, run by the state-owned Angkor Enterprise continues to put up positive numbers for Cambodia’s most popular tourist destination - with the return of more Chinese visitors in Q1 also boosting numbers. It is hoped that pre-pandemic levels of tourism will be matched over the coming year.
Realestate.com.kh is now also offering “Personalised Property Tours for Overseas Investors” which taps into the above-mentioned benefits of investing in Cambodia, while exploring the High-Return Potential from a diverse range of properties, including luxurious condos to income-generating rentals, with excellent potential returns.
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