FDI inflows hit $48.4 billion in Cambodia in six years
FDI inflows hit $48.4 billion in Cambodia in six years
Foreign direct investment (FDI) in Cambodia reached 197.8 trillion riels, ($48.4 billion) between 2018-2023, said the National Bank of Cambodia (NBC) on Tuesday.
The NBC said, the main source of FDI inflows was China; which accounted for 45.6 percent of total FDI inflows to the region. The NBC said the sources for this data were its own database and data from the Council for the Development of Cambodia (CDC). And the NBC clarified that the FDI inflows from China included investments from Taiwan, Hong Kong and Macao.
This was followed by investment from South Korea (11.8 percent), Singapore (6.5 percent), Japan (6.2 percent), Vietnam (5.3 percent), Malaysia (4.4 percent), Thailand (4 percent), Canada (3.5 percent), and the United Kingdom (3.2 percent). FDI inflows from other countries were at 9.5 percent.
“The inflow of investment was invested into major sectors of the economy, including financial activities, manufacturing, real estate, accommodation, agriculture, energy, and construction,” said NBC.
More closely, manufacturing and the financial sector managed to attract the highest amount of foreign investment. Of the $48.4 billion FDI inflows in 2023, the financial activities space managed to corner 23.3 percent, while manufacturing saw 22.3 percent of total investment in the country. Following this, foreign investors chose to park their money in real estate (11.2 percent), accommodation (10.1 percent), agriculture (9.2 percent), energy (6.2 percent) and construction (5.8 percent).
The CDC in earlier statements has said Cambodia’s new investment law, Regional Comprehensive Economic Partnership (RCEP) trade pacts and the Cambodia-China Free Trade Agreement (CCFTA) are key factors when it came to attracting outside investment.
The new Law on Investment (LoI) was introduced in October 2021 to create a more transparent system; with a supportive legal environment to attract and promote domestic and foreign investment. The new law provides many benefits to investors, including income tax exemption and customs duties incentives.
In a media statement to Chinese news agency Xinhua, Ministry of Commerce’s Secretary of State and Spokesperson Penn Sovicheat said, “RCEP and other bilateral FTAs are magnets to attract foreign investors to Cambodia. FDI, especially from China, is crucial to help boost Cambodia’s economic and trade growth.”
Cambodia has bilateral FTAs with China, South Korea and the UAE. And the RCEP comprises 15 Asia-Pacific countries including 10 ASEAN member states, Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their five trading partners.
