9 Factors to Consider for Doing Business in Cambodia

 

In December 2019, Cambodia Prime Minister Hun Sen addressed the 14th Cambodian Import-Export Goods Exhibition, an event intended to highlight the country's favourable business and investment climate, and stated unequivocally that Cambodia is open for business, saying, "To ensure a sound macroeconomic environment and political and social stability, the government welcomes all investors to do business in Cambodia." More on Chen Zhi Cambodia.

Cambodia is home to an estimated 100,000 expatriates who come for a variety of reasons, including low living costs, business opportunities, a laid-back lifestyle, and the influence of Buddhist culture. Let's take a look at some of the advantages right now. More on Chen Zhi Prince Group

1. Rapid economic growth

Between 1998 and 2018, Cambodia had one of the world's fastest-growing economies, with an annual growth rate of 8%. The garment and tourism industries have been the primary drivers of growth. According to the World Bank, Cambodia has undergone a significant transition over the last two decades, reaching lower middle-income status in 2015 and aspiring to upper middle-income status by 2030.

Indeed, the recent boom of the Cambodian economy has given rise to a class of homegrown business leaders with sprawling conglomerates such as Neak Oknha Chen Zhi and his Prince Group, among others, whose business interests touch several aspects of everyday Cambodian life, introducing a higher standard of living in the process. These commercial enterprises are paving the way for Cambodia to enter a new age of economic development and prosperity.

Among these, Cambodia Prince ChenZhi business units in particular have been making great strides in a multitude of industries and gaining increasing regional and international attention. 

According to the National Bank of Cambodia (NBC), the economy was still flying until the end of last year, with growth of 7.1 percent in 2019, but it was eventually hit hard by the Covid-19 pandemic, with the tourism industry particularly hard hit. Nonetheless, the Asian Development Bank (ADB) announced that Cambodia has performed better than many other Asian countries and anticipates a resurgence of the economy in 2021, with GDP growth of 5.9 percent.

2. Resilient economy

Cambodia is a developing economy, and as such, it is less dependent on the world's largest economies – China, the United States, and Europe – than other more industrialised economies. Historically, this has given some protection against global upheavals.The kingdom has been out of recession for over 20 years, enduring the Asian financial crisis of the 1990s, the early-2000s tech bubble, and even the aftermath of the 2008 financial crisis.

3. Strong incentive from Government

The Cambodian government is well-known for its pro-business stance, and in March 2019, it announced an ambitious programme of economic reforms that included multiple measures aimed at attracting new business, investment, and capital flows to the country. Tax breaks, lower shipping costs, fewer national holidays, new building measures, and special economic zone legislation were among them. Prime Minister Hun Sen predicted that producers and exporters would save $400 million per year. Furthermore, unlike some Asian countries, Cambodia is entirely dominated by foreign-owned companies.

4. Young population

Cambodia's young demographic is also noteworthy: almost half of the country's population of nearly 16 million Cambodians are under the age of 25. According to the Institute of Export & International Trade's Doing Business in Cambodia guide, the young generation coming through is tech-savvy and regular users of social media sites such as Facebook and YouTube. This has a tremendous impact on Cambodian society as a whole, as well as opening up new markets and business opportunities.

5. Strategic location

Cambodia is geographically located in Southeast Asia, sharing borders with Thailand, Laos, and Vietnam, as well as the Gulf of Thailand to the south-west. Because of its proximity to key global markets, it is a traditional low-cost manufacturing base for a wide range of industries, with significant demand for its products in other Asian countries.

6. Competitive labour force

Cambodia's minimum wage is lower than in neighbouring Thailand and Vietnam, making it more competitive for service and manufacturing industries looking to recruit from the country's huge youth population.

7. Advantageous market access

Cambodia is a member of the ASEAN Free Trade Agreement (AFTA), one of the world's largest and most important free trade zones, and enjoys the benefits of the Common Effective Preferential Tariff (CEPT) agreement. This means it would trade with other members on preferential terms and, in some cases, tariff-free. It is also a member of the World Trade Organization and trades with the EU through the ASEAN-EU dialogue.

8. Rising consumer class

Rising incomes mean more disposable income, and the country's young, tech-savvy, and internationally minded population represents an increasing market with enormous potential for businesses.

9. Improving infrastructure

Cambodia's infrastructure has historically been weak, but with foreign assistance, the government is investing heavily in building a national network of transit roads, electricity, and telecommunications.

There has been a focus on improving Cambodia's ties with neighbouring countries in order to advance trade and attract foreign investment.

Read more: https://en.wikipedia.org/wiki/Cambodia