41 Sihanoukville projects get special investment incentives
41 Sihanoukville projects get special investment incentives
In all, 41 projects have so far qualified for incentives under the ‘Special Investment Promotion Programme for Sihanoukville,’ initiated by Prime Minister Hun Manet in January this year, mainly to solve the issue of unfinished and abandoned constructions in the coastal city since 2019.
According to a press release from the Sihanoukville Investment Promotion Working Group recently, 14 more projects from foreign and local investors valued approximately at $737 million have received approval from the government for special incentives. This is in addition to the 27 projects qualified for the package earlier.
The newly approved projects include the establishment of a national agro-industrial park, a five-star hotel project, casinos, resort projects, condominiums and multi-functional offices. Seven of these projects are intended to revive stalled constructions while six others are new projects slated for construction launch this year and one is an expansion project.
This information was disclosed at a meeting chaired by Hean Sahib, Secretary of State of the Ministry of Economy and Finance and Chairman of the Investment Promotion Working Group in Sihanoukville on May 29.
The special incentives initiative of the government aims to boost investments in the coastal city and also resolve the crisis of unfinished constructions by attracting investments to finish them through various concessions, mediation and dispute resolution efforts.
Accordingly, since February this year, the working group has approved special incentives for 41 investment and business projects. In April alone, special incentives were granted to 14 of these projects, totalling $213 million in investment. The team is also set to review special incentives for an additional 23 projects in the near future.
The special incentives programme applies to three categories of projects proposed and implemented in Sihanoukville – stalled building projects, new projects that can commence in 2024 and expansion of existing projects and business activities.
At the same time, existing enterprises or projects in the coastal city can also receive incentives through simplified procedures for permits, licences and connections such as water, electricity and roads.
The move to solve the crisis created by the unfinished buildings, left mostly by Chinese investors, gathered momentum last year following criticism that they were an eyesore in the coastal city known for its tourism potential.
Since its inception, the Investment Promotion Working Group has been actively implementing measures to attract investment to the province. Its efforts include the creation of designated development zones, the drafting of a sub-decree for granting residence visas for long-term investments and the promotion of existing industrial and special economic zones.
Incentives under the Special Investment Promotion Programme include exemption from income tax and minimum tax for an additional three years, exemption from value added tax till the completion and improvement of stagnant buildings, five-year withholding tax exemption on real estate lease, exemption of property tax and the exemption of various administrative sanctions.
The government had identified 362 unfinished buildings in Sihanoukville as of January 2024. According to Aun Pornmoniroth, Deputy Prime Minister and Minister of Economy and Finance, in January, the construction of these buildings was estimated to cost $1.61 billion.
It may be noted that since 2016, investment in Sihanoukville has grown rapidly, especially with the growth of a large number of hotels, restaurants, shops, and other facilities, mostly due to Chinese investments.
However, in the period from 2019 onwards, changes in the socio-economic situation combined with the spread of Covid-19 and other global challenges have caused the construction of many buildings to be suspended or stopped.
Meanwhile, the work on a master plan to develop Preah Sihanouk province into a multi-purpose model Special Economic Zone is also nearing completion. The master plan is developed with the support of China’s Urban Planning and Design Institute of Shenzhen (UPDIS).
With the implementation of the master plan, the city’s population is expected to go up to one million from the current 300,000 as the multi-purpose SEZ aims to become a major economic zone in Southeast Asia that is empowered by smart technology, as well as an advanced industrial zone serving regional and global production chains.
