Investment Environment and Opportunities in

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 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. , Shooting Senior Minister, Minister of Commerce 2nd Vice Chairman Committee H.E. Mr. 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

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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

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