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5 Reasons Cambodia is Best in the Region for Foreign Investments

Cambodia is the 6th Fastest Growing Country in the World. It comes second to Myanmar in the Southeast Asian Countries.

IPS Cambodia
July 19, 2019
5 Reasons Cambodia is Best in the Region for Foreign Investments
Construction projects swathed in green in Phnom Penh

Cambodia’s strong economic growth is the result of Foreign Direct Investments. These investments were poured into the country in the last 20 years. Investment analysis shows that FDI had increased by more than 800% in the last 10 years. The highest reported GDP is $3B in 2018. It’s easy to understand how this small country in Asia attracts so many foreign investments.

1. NO VISA RESTRICTIONS

ASEAN member countries allow tourist visa access to fellow ASEAN members. With the exception of China and North Korea, traveling around Asia is easy if you are an Asian. However, obtaining a work visa is harder. You will need to submit proof of income or proof of employment. You also need to apply for so many government permits before you are allowed to stay long-term.

Getting a visa in Cambodia is very easy. Tourist Visa is free for 14-30 days depending on the nationality. A regular 30-day visa is available in airports and land borders. Jobseekers and tourists from non-ASEAN countries use this type of visa. No documentation required.

Work Visa (EB) for 3 months, 6 months and 12 months duration are available. Any travel agency in the major cities can process your visa. As long as you have proof of employment, you can get a work visa. Dependents of foreigners with a work visa is also eligible for EB Visa.

For retirees, an ER visa is available and processed by travel agencies. They can get a 6 months or 12 months visa duration. They only need proof of income from their originating country.

Similarly, students enrolled in Cambodian schools are eligible for the ES Visa. They only need to show proof of school registration. The visa is valid for a 6 months and 12 months duration. Any travel agency can process Visa applications and renewal.

2. NO CURRENCY DIFFERENTIATION

The US Dollar is accepted and used in Cambodia. It is used along with the local currency, Khmer Riel. Almost 80% of transactions in the country use USD. The USD is stable and reliable. It makes it easier for foreigners to conduct business transactions.

There is no freehold on foreign exchange. Foreigners easily earn money in USD and then send it back to their home countries. The same way that they can also withdraw USD from their home banks to use here in Cambodia. No foreign exchange rates to think about.

Cambodia is the only country in Asia that uses USD concurrently with its own currency. You can come in with a stack of USD and transact using it. No need to exchange your money with the local currency. Just be sure to carry around smaller bills with you. Cost of living in Cambodia is low, which is why prices for commodities is also low.

3. NO CHANGE OF CITIZENSHIP NEEDED

In most countries, you need to be a Citizen or hold Permanent Citizenship in order to get into the business of real estate. Some Asian countries like Malaysia allow you to buy property for a certain price range. The Philippines and Thailand only let you buy a condo unit. And foreigners are allowed to own only up to a certain percentage of a building.

That is not the case in Cambodia. You can enter the Cambodia real estate market without a change in citizenship. Foreigners can buy properties thru a Strata title or by way of nominee structure. In a nominee structure, 51% of the property is under the name of a Cambodian National and 49% is owned by the Foreigner. For security, they enter into a Mortgage Agreement. This does not allow nominees to sell, transfer, move or make any changes on the property.

Additionally, foreigners are allowed to lease land for 50 years or more. They can build structures or re-purpose the land as long as the lease agreement is in place. As long as it is not stipulated in the lease, the foreigner can do whatever they need to do on the land.

Foreigners can invest, and own companies in Cambodia. They can have 100% ownership and there are no trade restrictions. Investors can put up any type of business in the country. No price control is put in place, which means they can put any price they want on the items that they sell. Foreigners can also send their income back to their home country.

4. QUALIFIED INVESTMENT LAW

Foreign Companies registered as QIP enjoys tax exemption or special tax depreciation. The Special Tax Depreciation is 40% of the production materials.

In the tax exemption, foreign investors are eligible for a tax holiday of 3 years. The holiday starts at the time that they received the Final Registration Certificate. They also need to register with the Council for the Development of Cambodia. After the 3 years tax holiday, there is another 3 years priority period. This is another 3-year exemption. Duration depends on the type of project and invested capital.

Another benefit for QIPs is the Special Economic Zones. These zones are built around the country. SEZs have special privileges for industries that bring in FDI. These zones have privileges like an additional budget for infrastructure and public works. There are also stationed government officials that provide immediate help if needed.

5. YOUNG AND EAGER WORKFORCE

Although Cambodia was established as early as 802 AD, the country’s workforce is young. The Khmer Rouge era had basically wiped out their workforce. This left a young population that is slowly rebuilding its economy.

Many wealthy countries like Japan experience a slowdown in economic growth. This is because they have an aging workforce. These countries need to hire trained foreign workers from neighboring countries. The foreign workers populate their dying business sector.

In Cambodia, the workers are young and in huge numbers. Some lack basic skills like the English Language. However, foreigners in the education sector helped in developing them. They are eager to work in their chosen fields. There is no deficiency in terms of workers and laborers, in any industry.

WHY IS CAMBODIA THE BEST IN THE REGION FOR FOREIGN INVESTMENT?

The answer is simple, it’s easy and it’s practical. Cambodia’s welcoming attitude towards foreigners is the selling point. This is the reason why foreigners from many countries choose to invest in Cambodia. The expat population is now approximately 150,000 and it will continually grow in the next few years.

Housing properties are cheap, the cost of living is low. The ease with which to open and own a business is easy. The government encourages and supports foreign investment. Key laws are created to benefit foreigners bringing in capital to the country. These are the reasons why Cambodia is the best country in Asia for foreign investments.

The country rose from a poor country to a middle-income economy in just a few years. The government supports the developments and the country is ready for the changes. With an economic outlook such as this, it is no wonder that Cambodia’s economy continues to thrive.



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