Investment Environment and Opportunities in Cambodia
presented by
SUON SOPHAL Deputy Director Department of Public Relations and Investment Promotion Council for the Development of Cambodia Key Indicators
Land area : 181,035 sq.km. Population: 14.1 Million Labor force (young) : 7,053,398 (Female: 3,608,345) Population growth rate : 1.54% GDP Growth (2011) : 7.1% GDP per capita in 2011 : $909 Inflation (2011) : 5.5% Exchange rate: USD 1= 4075 Riels Economic Performance
14% Average growth for last 5 years is 10.3% 25.00%
12% 20.00%
10% 15.00%
8%
10.00%
6% z 5.00% 4%
0.00% 2%
0% -5.00% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 GDP 9.20% 6.50% 5.30% 5.70% 5.00% 12.60% 9.20% 7.70% 6.20% 8.60% 10.0% 13.3% 10.8% 10.2% 6.70% 0.10% 5.90% 7.10% Infla on 17.90% 3.50% 10% 9.20% 13.30% 4.00% -0.80% 0.20% 3.30% 1.20% 3.90% 5.80% 4.70% 5.9% 19.70% -0.60% 4.00% 5.50%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 GDP per capita 331 356 402 468 534 623 738 731 830 909
Source: SNEC & MEF ONE STOP SERVICE
OPEN DOOR POLICY Council for the Development of Cambodia (CDC)
Samdech Akka Moha Sena Padei Techo HUN SEN Prime Minister of the Kingdom of Cambodia Chairman
H.E. Mr. Keat Chhon, Deputy Prime Minister Minister of Economy and Finance 1st Vice Chairman
Trouble H.E. Mr. Cham Prasidh, Shooting Senior Minister, Minister of Commerce 2nd Vice Chairman Committee H.E. Mr. Sun Chanthol H.E. Mr. Kong Vibol Senior Minister in charge of Special Missions Secretary of State of Economy & Finance Permanent Vice Chairman H.E. Mr. Sok Chenda Sophea Vice Chairman Minister attached to the Prime Minister Secretary General
H.E. Mr. Sok Chenda Sophea H.E. Mr. Chhieng Yanara H.E. Mr. Sok Chenda Sophea Minister attached to the Prime Minister Secretary General CRDB Secretary General CIB Secretary General CSEZB
H.E. Mr. Chea Vuthy H.E. Mr. Leap Vanden H.E. Mr. Rith Vuthy H.E. Mr. An Sophanara Deputy Secretary General CSEZB Deputy Secretary General CRDB Deputy Secretary General CRDB H.E. Mr. Chea Vuthy H.E. Mr. Heng Soknang Deputy Secretary General CIB
SEZ ODA GMS National Secretariat FDI Information & Application Approval Customs Duty & Tax Exemption Visa & Work Permit Company Registration
A ONE STOP SERVICE Licensing Authorities
Council of Ministers : CDC but needs approval from CoM for project with investment capital exceeding $ 50 million, BOT, BOOT, BOO or BLT, long- term strategy, sensitive projects: negative impact on the environment and natural resource exploitation
CDC : less than $ 50 million
Provincial Authorities : less than $ 2 million Investment Approval
Investment application
CDC issues a Conditional Registration Certificate to the Applicant 3 working days
Company Registration / Ministry of Commerce
Relevant licenses, as appropriate / Ministry of Industry and Energy
Review and approval of construction plan / local authorities- 28 working Ministry of Land Management, Urban Planning and Construction. days
Initial environmental impact assessment / Ministry of Environment
Tax Department Registration / Ministry of Economy and Finance
CDC issues a Final Registration Certificate to the Applicant Qualified Investment Project Approval
Investor
In Special Economic Zone Outside Special Economic Zone
Application for QIP Application for QIP No Application for QIP
Cambodia Special Economic Zone Board Cambodia Investment Board Ministry of Commerce (CSEZB) (CIB)
•Under US$2 million ; •Over US$50 million ,Natural Resources ; •to Sub-Committee on Investment •to Council of Minister via CDC •of the Provinces-municipalities Conditional Registration Certificate Conditional Registration Certificate (3 working days) (3 working days)
SEZ One Stop Service Office
Final Registration Certificate Company Registration (28 working days)
Construction of Factory
Start Production Investment Incentives
20% Corporate Tax
Tax holidays: Trigger period +3years+n; 6y
Full Import Duty Exemption
Repatriation of profit (withholding tax)
Reinvestment of earning (special depreciation)
Investment Protection
The Investment Law and Sub-decree contains a number of important guarantees for the investors:
Equal treatment of all investors No requirement of local equity participation No price controls on products or services No restriction on forex convertibility Free remittance of foreign currencies abroad Bilateral agreement on the promotion and protection of investments between the Kingdom of Cambodia and other countries
1. Australia 13. Malaysia 2. Austria 14. Netherlands 3. China 15. N. Korea 4. Croatia 16. OPEC 5. Cuba 17. Pakistan 6. Czech 18. Philippine 7. France 19. ROK 8. Germany 20. Singapore 9. Indonesia 21. Switzerland 10. Japan (14 June 2007) 22. Thailand 11. Kuwait 23. USA (OPIC) 12. Lao PDR 24. Vietnam
Investment Opportunity Agriculture and Agro – Industry Transportation and Telecommunication Sector Energy Sector Labor Intensive Industries and Export Oriented Industries Processing Industry Tourism Sector Human Resource Development Oil & Gas, Mining
Approved Investments by Country/Region (1994- 2011) US$ Million 8,849 9,000
8,000
7,000
6,000
5,000 4,040 3,641 4,000 2,614 3,000
2,000 1,282 839 1,200 641 649 746
1,000 154
0
a g n a a e n
d
A
U
i
m
r
n n a e n a
s
S
i
E a
r o
o a p
y
w
h
l
n
o p
U
i
i
t
a
K a
l a
C a
K a
J
e
i
T a g
g
h
V
n
n
T
i
M
o
S H Approved Investments by Sector 1994 – 2011
Korean FDI in Agriculture Service Cambodia 7% 19% -160 projects -4,118 Million $
Industry Tourism 24% 50% Infrastructure: A definite prospect
Priority for infrastructure Infrastructure rehabilitation and Logistic development Multilateral aid availability Decentralization Regional opportunities ASEAN & GMS integration Private Participation in Infrastructure (PPI): BOT, BOO, etc… Agro-business
Basic agrarian economy Natural endowments:
Rich fishery resources
Good weather
Organic crops Value-added emphasis Food processing New product development Tourism
World Heritage Monuments
Open Sky Policy to Siem Reap
Natural beauty - Beach - Islands
Ability to attract “add-on” trips
Novelty value 150 km Tourism Center Poipet Eco-Tourism
314km
Gulf of Thailand 230 km
Sihanoukville Bokor (hill resort)
Beach & Island Resorts Visitors to Cambodia
Thousand (000)
Vision 2020: Visitor arrival from 2010 – 2020 YEAR 2010 2011 2015 2020 Visitor Arrivals 2,508,289 2,882,000 3,700,000 6,000,000 Top ten markets arrival from January-May 2012
Vietnam U.S.A
Korea Japan
China France
Lao PDR U.K
Thailand Russia
Investment Opportunities
Phnom Penh o International Convention Center o High-end hotel (Four Seasons, Hyatt, etc…) at the moment there are only Intercontinental Hotel, Sofitel and Raffles with approximately 500 rooms. Siemreap o International Convention Center o High-end hotel (Four Seasons, Hyatt, Sheraton, and Marriott, etc…) at the moment there are only Raffles, Le Meridien, Sofitel, Aman resorts and Orient Express, with approximately 700 rooms. o Amusement park / recreational activities o Golf course (there are three existing golf courses) Sihanoukville o High-end hotel (Four Seasons, Hyatt, etc…) o Golf Course
Manufacturing & Export
Competitive labor cost Tax incentives
Market access Regional arrangement MFN/GSP Market Access
Poland Australia France Portugal Austria Germany ROK Belarus Hungary Russian Federation Ireland Belgium Slovakia Italy Spain Bulgaria N-Korea Sweden Canada Luxemburg Switzerland China UK Japan Czech Republic USA Netherlands EBA (everything but Denmark New Zealand arms initiative for LDCs) Finland Norway … and the ASEAN integration System Of Preferences (AISP) from the ASEAN 6 Cambodia’s Special Economic Zones
Poipet O’Neang SEZ
Thary Kompong Cham Koh Kong SEZ Phnom Penh SEZ SEZ Souy Chheng SEZ
Oknha Mong P (SEZ) I C SEZ
Kiri Sakor Koh Kong SEZ GoldFame Pak Sihanoukville SEZ1 Shun SEZ No Activities Sihanoukville SEZ2 Stung Hao SEZ Under Construction S.N.C SEZ Sihanoukville Port Kampot SEZ Duong Chhiv SEZ Operational Kompong Som SEZ SEZ One Stop Service Special Economic Zone Administration
Company registration and investment license Export/import permit Work permit and Labor books (both workers and expatriate) SEZA will provide on site immediate legal and administrative assistance
Percentage of Population by age group Census 2008
The elderly population 4.30% Children (0-14) 33.70%
Economically productive age group (15-64) 62%
Source: NIS
Cambodia has embraced the globalization process as part of its outward looking economic development strategy….
ACCESS TO THE EUROPEAN ACCESS TO MARKET THE U.S. MARKET
JOINING ASEAN
JOINING WTO Reasons to invest in Cambodia
Open economy Sound Macroeconomic Environment Competitive Investment Incentives One Stop Service – Fast-Track Investment Approval Process (28 days) Low Labor Cost Strategic Location Preferential Trading Status Access to ASEAN and World Markets Kunming Southern China Myanmar Hanoi Laos Yangon o Vientiane Vietnam Thailand Manila Bangkok . CAMBODIA The Philippines Phnom Penh 1h:30 in average
Brunei
Kuala Lumpur Begawan Malaysia Singapore
Jakarta
Indonesia
InvestInvestInvest inin in CambodiaCambodia Cambodia and and you you and youhavehave have325 14 millionmillion 600 consumers consumers million
consumersvirtually at your at doorstep your
doorstep Thank you
Tel : (855) 23 981 154 For more information please visit: Fax : (855) 23 428 426 Email : [email protected] www.cambodiainvestment.gov.kh