A snapshot of cambodia trade and investment climate final by chea socheat

A Snapshot of Cambodia’s Trade and Investment Climate

Presented by Mr. Chea Socheat

Department of Europe, Middle East, and AfricaCambodia Ministry of Commerce

[email protected]

Singapore, 09 October 2015

Outline

• Key Indicators of Cambodia’s Economy• Our selling points• Cambodia Investment Promotion and

Protection Infrastructure• Trade Facilitation• Ways forward

Key Indicators

Land area : 181,035 sq.km.

Population: 15.3 Million

Labor force (young) : 7,053,398 (Female: 3,608,345)

Population growth rate : 1.54%

GDP Growth (2014) : 7%

GDP per capita (2014) : $1090

Inflation (2014) : 3.9%

Exchange rate: USD 1= 4000 Riels

Our Selling Points Small and open economy, no tariff and non tariff

barriers Robust growth and political stability Market access to countries in ASEAN, EU, US, and

world markets due to various schemes including preferential treatment

Access to natural resources to cater for investments Open to all sectors for FDIs Competitive Investment Incentives One Stop Service – Fast-Track Investment

Approval Process

Our Selling Points Competitive labor cost Less stringent performance requirementFavorable labour and environmental protection laws and

regulations (foreign workers allowed) 100% foreign equity no limited license in banking sector and

telecommunication no requirement in technology transfer

Cambodia Investment Promotion and Protection Infrastructure

• Amendment to the law of investment (1994) and revised version (2003)

• IDP (2015-2025)• Bilateral Investment Promotion and Protection Agreements• One stop service-CDC for investment projects• Special Economic Zones including Sihanouk Ville • Simplification of administrative procedures• Trouble Shooting Committee- Government Private Sector

Forum (GPSF)• Investment incentives and prohibited investment projects• Investment after care service• International marketing through oversea representatives

Bilateral agreement on the promotion and protection of investments

1. Australia2. Austria3. China4. Croatia5. Cuba6. Czech 7. France 8. Germany9. Indonesia10. Japan11. Kuwait12. Lao PDR

13. Malaysia14. Netherlands15. N. Korea16. OPEC17. Pakistan18. Philippine19. ROK20. Singapore21. Switzerland22. Thailand23. USA (OPIC)24. Vietnam

Investment Protection

No expropriationEqual treatment of all investorsNo requirement of local equity participationNo price controls on products or servicesNo restriction on forex convertibilityFree remittance of foreign currencies abroad

The Investment Law and Sub-decree contains a number of important guarantees for the investors:

OPEN

DO

OR

POLIC

Y

ON

E STOP SERVIC

E

Organizational Structure

Information & ApplicationApprovalCustoms Duty & Tax

ExemptionVisa & Work PermitCompany Registration

A ONE STOP SERVICE

Licensing Authorities

Investment ApprovalInvestment application

CDC issues a Conditional Registration Certificate to the Applicant

Company Registration / Ministry of Commerce

Relevant licenses, as appropriate / Ministry of Mine and Energy

Review and approval of construction plan / local authorities-

Ministry of Land Management, Urban Planning and Construction.

Initial environmental impact assessment / Ministry of Environment

Tax Department Registration / Ministry of Economy and Finance

CDC issues a Final Registration Certificate to the Applicant

3 working days

28 working days

One Stop ServiceSpecial Economic Zone Administration

Company registration and investment license

Export/import permit Work permit and Labor books (both workers

and expatriate) SEZA will provide on site immediate legal

and administrative assistance

Cambodia’s Special Economic Zones

No Activities

Under Construction

Operational Kampot SEZSihanoukvillePort SEZ

Poipet O’Neang SEZ

Sihanoukville SEZ1

Sihanoukville SEZ2

Stung Hao SEZ

S.N.C SEZ

Kompong Som SEZ

Koh Kong SEZ

Souy Chheng SEZ

Oknha MongSEZ

Kiri Sakor Koh Kong SEZ

P (SEZ) I C

Thary Kompong Cham SEZ

GoldFame Pak Shun SEZ

Duong Chhiv SEZ

Phnom Penh SEZ

M D S Thmor DaSEZ

H K T SEZ

KandalSEZ

Dragon King SEZ

Government-Private Sector Forum

Government Private Sector Forum

18

1. World Bank Investment Climate Assessment lists the G-PSF as one of the key factors for the economic success of Cambodia

2. Royal Government of Cambodia uses the G-PSF to propose measures to respond to the crisis – several consultations on-going

3. 2009 Memo from World Bank to RGC recommends using the G-PSF for identification and monitoring of reforms

4. G-PSF is an integral apparatus of the RGC for private sector consultation and engagement of development partners in technical assistance.

5. Review of 31 PPDs worldwide shows G-PSF as among highest performers.

G-PSF a highly successful reform platform

Government-Private Sector Forum

Investment Incentives 20% Corporate Tax

Tax holidays up to 9 years

No tax on export

Full Import Duty Exemption

Reinvestment of earning (special depreciation)

Prohibited InvestmentsProhibited investment projects concern national security, social safety, and national economic necessity. Prohibited projects include:

- Production and processing of psychotropic substances or narcotic substances;

- Production of poisonous chemicals, agriculture pesticides and insecticides, and chemicals prohibited by international agreements and the WHO.

- Processing and production of electrical power from imported waste,

- Exploitation of forest prohibited by the Forestry Law, and- Any other investment activities prohibited by other laws

Encouraged Investment Activities

Agriculture and agro-industryTransport and telecommunications Energy and electricityLabor-intensive industries, processing and

manufacturing;TourismHuman resource developmentOil & Gas, Mining

Investment Opportunities

• Infrastructure: convention center, hotels, flyover, bridge

• Resorts• Logistics• Food processing• Power plant, energy sector• Electronic industry• Sewage plant/recycling plant

Cambodia Ministry of Commerce

Trade Facilitation• Reengineering • Single stop service for C/O application• Online business registration• Automation of Certificate of Origin registration• Self Certification• Online payment through banks• Digital signature and E-stamp• Hotline for trade support services

Ways Forward

• Trade repository with full features• National single window• Branding• Upgrade SMEs• Enhance skilled workforce pool and

productivity• Strengthen the law enforcement on IPR

THANK YOU