Cambodia Real Estate Market has experienced a long period of strong economic growth, with the average annual gross domestic product (GDP) growing at 7% over the past decade, driven by rising exports, rising investment and domestic consumption. Is. Tourism is another major partner in growth, with tourist arrivals reaching 6.61 million in 2019. You can argue against Cambodia Real Estate for technical reasons, but numbers are hard to avoid. Cambodia is one of the world’s youngest populations and is well positioned in a growing region with emerging tourism, resources and employment opportunities.
Despite the concessions, Cambodia has not attracted historically significant US investment. In addition to the country’s relatively market size, there are other factors that have disappointed American investors like corruption, limited supply of skilled labour, inadequate infrastructure, and lack of transparency in some government approval processes. Failure to consult the business community on new economic policies has also created difficulties for domestic and foreign investors.
1. Openness To, and Restrictions Upon, Foreign Investment
Cambodia has a foreign-invested government and actively pursues FDI. The basic law governing investment is the 1994 Investment Law. The government allows 100% foreign ownership of companies in most sectors. In a handful of sectors, such as cigarette manufacturing, movie production, rice milling, jewellery mining and processing, foreign investment is subject to participation in local equity or prior permission from the authorities. Although there is little or no legal discrimination against foreign investors, however, some foreign businesses report losses compared to Cambodia Property or other foreign competitors who are involved in corruption or tax evasion or poor Cambodian regulation. Benefit from implementation.
2. Bilateral Investment and Taxation Treaties
In July 2006, Cambodia signed the Trade and Investment Framework Agreement (TIFA) with the US to promote greater trade and investment between the two countries and to resolve investment issues. Provide a forum for In January 2019, the fifth TEFA meeting was held in Samraps, Cambodia.
By 2020, Cambodia has signed bilateral investment agreements with 27 countries which are; Austria, Bangladesh, Belarus, China, Croatia, Cuba, the Czech Republic, the Democratic People’s Republic of Korea, France, Germany, Hungary, India, and Indonesia, Japan, Kuwait, Laos, Malaysia, the Netherlands, Pakistan, the Philippines, the Republic of Korea, Russia, Singapore, Switzerland, Thailand, Turkey, the United Arab Emirates, and Vietnam.
3. Legal Regime
In general, Cambodia’s regulatory system, despite being improved, still lacks transparency. This lack of transparency is the result of a lack of legislation and the limited capacity of key institutions, and is exacerbated by a weak judicial system. Investors often complain that the decisions of Cambodian regulatory agencies are influenced by contradictions, arbitrariness or corruption.
For example, in May 2016, which was considered publicly popular, the government set retail fuel prices with little consultation with petroleum companies. In 2017, the National Bank of Cambodia introduced interest rate limits on loans provided by the microfinance industry. In recent years, investors have expressed concern over draft legislation that is not subject to stakeholder consultation.
4. Industrial Policies
Cambodia’s law on investment offers a variety of investment incentives for projects that meet certain criteria. Incentive-seeking investors. For example, must apply to the CDC for concessions as part of a Qualified Investment Project. Investors wishing to apply must pay an application fee of 7 million KHR, including obtaining the necessary approvals, permits, licenses or registrations from all relevant ministries and agencies, including stamp duty.
The CDC must seek approval from the Ministers for investment proposals that include capital of 50 million or more, politically sensitive issues, exploration and exploitation of minerals or natural resources, or infrastructure concessions.
5. Financial Sector
The Cambodia Securities Exchange (CSX) was founded in 2011 and launched in 2012 in a move to cater to the needs of capital markets in Cambodia. Attract a number of listed companies, including SMEs. It currently has four listed companies, including Phnom Penh Water Supply Authority, Sihanoukville Autonomous Port, Phnom Penh SEZ PLC, and Sihanoukville Autonomous Port.
6. Responsible Business Conduct
The Cambodia Property Market has a small but growing awareness of responsible business practices (RBCs) and corporate social responsibility (CSR), despite the fact that the government does not have clear policies to promote them. RBC and CSR programs are mostly found in large and multinational companies in the country. US companies, for example, have implemented a wide range of CSR activities to promote skills training, the environment, general health and well-being, and financial education. These programs have been warmly welcomed by both the general public and the government.
7. Labour Policies and Practices
The global COVID-19 epidemic has had a significant impact on Cambodia’s labour sector, the full extent of which is still unknown. Cambodia’s garments and manufacturing sector, which relies heavily on global supply chains for input and demand from the United States and Europe, is facing severe setbacks due to the COVID-19.
The government estimates that by June 2020, 190,000 of Cambodia’s approximately 1,000,000 factory workers have been laid off. In addition, about 80,000 of Cambodia’s 1.3 million migrant workers returned from abroad due to the loss of COVID-19. Cambodia’s labour force includes about 10 million people.
8. Foreign Direct Investment and Foreign Portfolio Investment
Cambodia Foreign Direct Investment (FDI) increased by 824.3 million $ in June 2021, compared to 806.8 million $ in the previous quarter.
The inflow of FDI into Cambodia has increased in recent years. Although FDI focuses primarily on infrastructure, including commercial and residential real estate projects, it has also recently supported investment in manufacturing and agricultural processing. Cambodia reports that its total FDI stock in 2019 reached $42 billion in terms of fixed assets, up from $38.5 billion in 2018.
The Private Sector in Cambodia
In Real Estate Cambodia, the private sector enjoys healthy policy discussions with the government through organizations such as the Bankers Association, the Garment Manufacturers Association of Cambodia, the International Business Club and the Phnom Penh Chamber of Commerce. With the cooperation and collaboration of foreign embassies and missions in Cambodia, many foreign investor associations have also been established.