Cambodia: A Kingdom for Foreign Investment
Previous years have seen exponential growth in Cambodia’s foreign direct investment, or FDI. The 2021 World Investment Report, authored by the United Nations Conference on Trade and Development, revealed a steady inflow of USD 3.6 billion in FDI in 2020—a slight dip from the 2019 figure of USD 3.7 billion.
Due to the pandemic and a strongly tourism-driven economy, investors had postponed ventures in different sectors, especially the hospitality industry. Also affected were garments and textiles, due to the export orientation of the sector.
Nevertheless, major projects in construction, agriculture, and electrical and electronic components sustained inflows with the construction industry having the largest share of foreign investors. Among these, the primary investing countries are China, South Korea, Vietnam, Japan, and Singapore.
These impressive figures even in the middle of a global socioeconomic crisis underscore an indubitable openness in Cambodia towards foreign investment.
It is also reflected in economic policies and incentives, e.g.
- 100% foreign ownership of companies;
- Up to eight (8) years of corporate tax holidays;
- Duty-free import of capital goods;
- Restriction-free capital repatriation;
- A total of 23 special economic zones (SEZs) with ready land and infrastructure to propagate business operations.
Also notable is the lack of visa restrictions. A regular 30-day visa can be acquired at the airports or land borders with no documentation required, while work visas for up to 12-month durations are available and easily processed by travel agencies.
Cambodia is also the only Asian nation that uses USD concurrently with the local currency.
On a more social level, the workforce is brimming with energetic young people with keen interests in various fields, from business and marketing to tourism and the arts.
The attitude towards learning new skills from expats is overwhelmingly eager, and there is a pervading sense of empowering the local community through the different enterprises as a form of social responsibility.
An article published 10 years ago reported strong economic growth for the Kingdom following the 2008 global financial crisis, with foreign investment indicated as key to that growth.
To this day, Cambodia is generally known for a welcoming attitude towards foreign residents and international investment. The expat population is estimated at 150,000, with continual growth forecasted in coming years.
In fact, the World Bank reported in June that Cambodia’s economy is projected to grow at 4% this year (after a 3.1% contraction in 2020) due to revitalized global demand. Meanwhile, for 2022, the Asian Development Bank has projected the Kingdom’s gross domestic product (GDP) growth at 5.5%.
With a low cost of living and the ease of owning and opening a business in Cambodia, it’s clear that the government and general populace encourage and support foreign investment. This makes it among the best nations for foreign investment.