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I. Investment Environment
Economic Trend
According to the Ministry of Economy and Finance, it is projecting for a stable growth of real GDP at 6.1% in 2020. GDP per capita has also steadily increased from US$1,043 in 2013 to more than US$1,561 in 2018 and continue to increase in medium term in which per capita GDP is projecting to reach US$1,679 in 2019.
Investment Trend
The amount of committed investments in Cambodia grew significantly since 2012, a 24% increasing from US $2.9 Billion in 2012 to US$3.6 Billion in 2016 and continue to increase 75 percent in 2017. In 2018 investment has slightly increased approximately 2%. As in 2019 investment increased remarkably by 45 percent compared to 2018. Over the five-year period, invested capital by local investors accounted for approximately 35% of total investment.
The majority of committed investments were in the industrial and infrastructure sectors which together accounted for 53% of total investments in the last five years follow by tourism sector 41% and agriculture sector 6%.
II. Investment Opportunities and Priority Sector

III. Investment Incentives
1. Investment Incentives Granted to a Qualified Investment Project (QIP)
QIPs are entitled to the following investment incentives (“Amended Law on Investment”):
QIPs may elect to receive a profit tax exemption or use special depreciation.
Profit tax exemption (Selective): A tax holiday period is composed of “Trigger period” + 3 years + Priority Period (Maximum total 9 years)
An annual Certificate of Obligation Satisfaction (or “Certificate of Compliance”) has to be obtained by the QIP to be entitled “Profit Tax Exemption”.
A QIP shall be subject to a profit tax rate after its tax exemption period as determined in the Law on Taxation
Special depreciation (Selective): 40% special depreciation allowance on the value of the new or used tangible properties used in the production or processing.
Duty free import of production equipment, construction materials, etc. as shown in the following table.
A QIP located in a designated SPZ or EPZ: To be entitled to the same incentives and privileges as other QIP stipulated in the Amendment to the LOI.
A QIP shall be entitled to 100% exemption of export tax, except for activities as stipulated in laws in effect.
The rights, privileges and entitlements of a QIP can be transferred or assigned to a person who has acquired or merged a QIP subject to the approval of the CDC or PMIS.
2. Projects not Eligible for the Incentives
Those investment projects include the following:
All kinds of commercial activity, import, export, wholesale, and retails, including duty free shops
Any transportation services by waterway, by road, by air except investment in the railway sector
Restaurants, karaoke parlors, bars, nightclubs, massage parlor, fitness, etc.
Tourism service
Casino and gambling business
Currency and financial business and services such as banks, financial institutions, and insurance companies
Activities related to newspaper and media, including radio, television, press, magazine, etc.
Professional services
Production and processing of wood products using wood from natural forest with a legal domestic supply source for raw materials
Complex resort, including hotel, theme park, sport facilities, zoo with less than 50 hectares
Hotel below 3-star grade
Real estate development, warehouses facilities
3. Incentives in the SEZ
Beneficiary Incentives
Zone developers
  • The exemption period for the Tax on Profit shall be provided for a maximum period of 9 years, in compliance with article 14.1 of the Law on the Amendment to the Law on Investment.
  • The import of equipment and construction materials to be used for infrastructure construction in the zone shall be allowed and exempted of import duties and other taxes.
  • The Zone Developer shall receive custom duty exemption on the import of machineries, equipment for the construction of the road connecting the town to the zone, and other public services infrastructures for the public interests as well as for the interests of the zone.
  • The Zone Developer may request, under the form of a temporary admission (AT), the import of means of transport and machineries used for the construction of the infrastructures in accordance with the laws and regulations in force.
  • The Zone Developer may obtain a land concession from the State for establishing the SEZ in areas along the border or isolated region in accordance with the Land Law, and may lease this land to the Zone Investors
Zone investors
  • The same incentives on customs duty and tax as other QIP shall be entitled.
  • The Zone Investor entitled to the incentive* on Value Added Tax (VAT) at the rate of 0% shall record the amount of tax exemption for its every import. The said record shall be disregarded if the Production Outputs are re-exported.  In case the Production Outputs are imported into the domestic market, the Zone Investor shall refund the amount of Value Added Tax as recorded in comparison with the quantity of export.
Note: The Zone Investor entitled to the incentive: Investors such as garment and footwear manufacturers, their supporting industries or contractor.
  • Zone developers, investors or foreign employees have the right to transfer all the income derived from the investment and salaries received in the zone to banks located in other countries after payment of tax.
  • The Zone Developer and the Zone Investor are entitled to obtain the investment guarantees as stated in Article 8, Article 9 and Article 10 of the Law on Investment in the Kingdom of Cambodia and other relevant regulations.
  • Non-discriminatory treatment as foreigners, non-nationalization and no-fixing price 

IV. Prohibited Fields of Investment
Those investment activities are as follows:
Production/processing of psychotropic substances and narcotic substances
Production of poisonous chemicals, agriculture pesticide/insecticide and other goods by using chemical substances prohibited by international regulations or the World Health Organization, that affect the public health and environment.
Processing and production of electrical power by using any waste imported from a foreign country
Forestry exploitation business prohibited by Forestry Law
Investment activities prohibited by law: Deleted by Sub-Decree # 34 (RGC) on Adjustment to Sub-Decree No. 111 of April 23, 2007
V. Infrastructure
Infrastructure construction and improvement was regarded as one of the important missions of Cambodia’s Rectangular Strategy. The traffic network, mainly road and inland water transport, made great progress. There is no limitation for foreign investor to invest infrastructure. The Ministry of Public Works and Transport, Ministry of Mines and Energy and Ministry of Posts and Telecommunications take charge of infrastructure construction.

Road transport is the major transportation in Cambodia. In recent years, Cambodian government gave priority to develop transportation infrastructure, especially road and bridge. Owing to the restriction of fund, Cambodian government considers to build road at first. The funds receive from development partners’ assistance and soft loan.
There are south railway line and north railway line in Cambodia. The northern railway line runs from Phnom Penh to Sisophon, a northwest city, and the south railway line runs from Phnom Penh to Sihanoukville. The government repaired the two railway lines since 2010 via low-interest loan offered by Asian Development Bank, free assistance from Australian government and domestic financial fund. The south railway line has resumed running for passengers on 30 April, 2016.
Air Transport
Air transportation in Cambodia is mainly for passenger. There are three international airports in Phnom Penh, Siem Reap and Preah Sihanouk. In recent years, since Cambodian government implemented opening air traffic policy, the number of airlines steadily increased. 
Cambodian Congress passed ASEAN-China Air Transport Agreement and approved the Fifth Freedom, aiming at attracting more international airlines to stop over, load or unload passengers and cargos. It’s significant for the development of Cambodian civil aviation to realize connectivity between Cambodia and other countries.
Waterway Transport
Cambodian waterway transport consists of sea transport and river transport.
Sihanoukville is the only deep-water port with two berths, by which raw materials, vehicles, medicines and daily necessities are imported and garment, agricultural products are exported. The waterway from Sihanoukville can reach United States, United Nations, China, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Thailand, Vietnam, etc. Most of routes need to be transferred in Singapore.
Cambodian inland waters include Mekong, Tonle Sap and Bassac River and the major river transport ports are Phnom Penh Port, Kampong Cham Wharf, Kratie Wharf, etc.
It is competitive of Cambodian telecom market. The previous top three mobile network providers were Smart Axiata (invested by Malaysia), Merfone (invested by Vietnam) and Cellcard (invested by Cambodia). Seatel, a new provider, boosted investment and attracted more users. Cambodia enjoys a favorable price of telecom service and the costs of network traffic and telephone plan are both under global average level. With the popular idea of “Mobile First”, Cambodian people get used to surfing online by mobile phone instead of computer, thus mobile phone penetration surpasses 100%. Under the framework of Greater Mekong Subregion telecom development plan and promotion of foreign investment, Cambodia speeds up to carry out the development plan of optical cable.
Internet was introduced to Cambodia in 1997. CamNet, managed by Ministry of Posts and Telecommunications, takes charge of internet access service.
The bandwidth of Cambodian major cities can support e-commerce activities. Many active Internet Service Providers are increasing the capacity of national bandwidth. 
With the unstable electricity supply in some urban areas and most rural areas, full-day electricity supply cannot be guaranteed.
Cambodian government drew up a medium-term plan of for electricity production, for example, through building large thermal power plant and natural gas plant to diversify power supply, reduce dependence on petroleum and cut the cost of electricity production. Also, the government planned to develop potential power plants.
Reference: 1. Chinese Ministry of Commerce Department of Outward Investment and Economic Cooperation
2. Council for the Development of Cambodia
2020-10-24 11:38:18