Given peace, stability, Cambodia offers friendly market for investors
Given peace, stability, Cambodia offers friendly market for investors
Cambodia is situated in a strategic location and provides a favourable investment environment for all investors, thanks to the country’s peace, stability, progressive reforms, and planning with a clear and coherent strategy from the government, complemented by prudent and balanced financial management of the budget and treasury.
Addressing the Launch of Moores Rowland Cambodia on Tuesday, Anthony Galliano, CEO of Cambodian Investment Management Group and the Vice President of the American Chamber of Commerce in Cambodia (AmCham), described Cambodia as the Asian Tiger of the 21st Century.
Since 2000, Cambodia’s average GDP growth was 6.91 percent, much better than the ASEAN average of 5 percent and more than double the average global economy average of 3.1 percent, Anthony said. Out of 193 countries in the world, Cambodia ranks 10th as the fastest growing economy in the world.
Talking to Khmer Times, Anthony said that in terms of percentage growth in 2023, Cambodia is the third fastest in ASEAN, just slightly behind Vietnam and Philippines.
Financial activities, manufacturing and real estate are presently the most attractive sectors for foreign direct investment, Anthony said. “I expect this trend to continue given the supply chain shifts and tariff avoidance, for present and future tariffs, especially those levied on China. The Kingdom is already benefitting from this transformation, most recently in solar panels and tires that are manufactured or assembled here for export to the US.”
The growth in the financial industry has been robust over the last decade, particularly in the banking and insurance sectors, and has contributed substantially to diversifying the economy and developing the service sector, he said, adding that expectations are that the capital markets are the next sector to flourish and investment banks, asset managers, and wealth advisers should start entering the market.
“Cambodia’s rapid growth can be attributed to first and foremost peace, stability, progressive reforms and planning with a clear and coherent strategy from the government, complemented by prudent and balanced financial management of the budget and treasury,” Anthony said.
In addition to the four pillars of garments, real estate and construction, tourism, and agriculture, the transformational diversification in the economy in financial services, manufacturing and technology has underpinned the rebasing of a higher GDP and continued average 7 percent growth.
Infrastructure development has attracted confidence in the Kingdom, consequentially resulting in increasing foreign direct investment, and urbanization has deployed the young workforce who are consistently upscaling their skill base.
Cambodia has made incredible strides in economic diversification and while the four pillars of Garments, Tourism, Real Estate and Construction, and Agriculture are critical sectors to the economy, services and manufacturing are gaining traction as key components, Anthony said.
“Key infrastructure projects such as the airports, ports, and highways have positioned Cambodia strongly as a competitor as a regional hub. In order to play in the new economy, such as data centers, blockchain, and cloud, electricity costs need to be reduced and capacity increased,” he said.
“The big US investments from tech giants such as Google, Microsoft, and Nvidia, in the billions of dollars, are directed at countries with the cost-benefit and capacity.”
On the occasion, Baudouin Coomans, Partner of Moores Rowland Indonesia, talked about the Sustainability and Environmental, Social, and Governance (ESG) report which is critical to every company because it can show the activities of companies in terms of sustainability.
“We at Rowland, doing the sustainability report and talking about the sustainability assurance. This is when the company does the sustainability report, and we do the assurance part. So, the sustainability report is a report by a company or organization regarding the economic, environmental, and social impacts caused by everyday activities,” Coomans said.
The sustainability report can have organizations measure and understand a company’s economic, environmental, social, and governance performance, and then set goals and manage effectively, he added. So, investing in Cambodia, the Sustainability and ESG report is really important to ensure the sustainability of a company.
Thomas Lee, Practicing Director and Chartered Tax Adviser at TEP, said that companies will gain a lot of advantages when they come to invest in Cambodia as well as benefits such as tax incentives, favourable law of investment, and incentives from the government. “Setting up investment in Cambodia has strategic advantages such as cost benefits—establishing significant cost advantage and market access—export from Cambodia facilitate market access to US, ASEAN countries and others,” he said.
China invested a lot of money in One Belt One Road, and Cambodia is one of strategic partners in the project. If companies like Alibaba, BYD and other companies invest in Cambodia, they will enjoy a lot of local benefits, Lee added.
