Cambodia’s Law on Investment (LoI), promulgated on October 15, 2021, is a comprehensive piece of legislation that aims to attract and promote foreign investment in the Kingdom of Cambodia. The LoI offers a number of incentives to foreign investors, including tax exemptions, customs duty exemptions, and one-stop shop services. It also provides a number of investor protection measures, such as guarantees against expropriation and nationalization, and the right to free transfer of profits and capital.
Here are some of the key features of the LoI that foreign investors need to know before investing in Phnom Penh in 2023:
- Investment incentives: The LoI offers a variety of investment incentives to foreign investors, including:
- Tax exemptions and holidays for up to nine years, depending on the investment project’s location, sector, and size.
- Exemptions from customs duties on the import of machinery and equipment for investment projects.
- One-stop shop services to facilitate the investment process and reduce red tape.
- Investment protection: The LoI provides a number of investor protection measures, including:
- Guarantees against expropriation and nationalization.
- The right to free transfer of profits and capital.
- A clear and efficient dispute resolution mechanism for investment disputes.
- Investment sectors: The LoI applies to all investment projects, regardless of size or sector, except for those in the prohibited and restricted sectors. The prohibited sectors include activities that are harmful to national security, public order, morality, or the environment. The restricted sectors are those in which foreign investment is subject to certain conditions, such as joint ventures with Cambodian partners.
To invest in Phnom Penh, foreign investors must first register their investment project with the Council for the Development of Cambodia (CDC). The CDC is the Cambodian government agency responsible for promoting and regulating foreign investment.
The investment registration process is relatively straightforward and can be completed in a few weeks. Foreign investors must submit a number of documents to the CDC, including a business plan, financial projections, and a copy of their company’s registration certificate.
Once the CDC has approved the investment registration, foreign investors can begin the process of setting up their business in Phnom Penh. This process will involve obtaining the necessary business licenses and permits from the relevant government agencies.
Here are some of the most important references for foreign investors who are interested in learning more about Cambodia’s Law on Investment and the investment process in Phnom Penh in 2023:
- Law on Investment of the Kingdom of Cambodia (October 15, 2021)
- Investment Guide to Cambodia (Council for the Development of Cambodia)
- Doing Business in Cambodia (World Bank)
- Investing in Cambodia: A Guide for Foreign Investors (AmCham Cambodia)
- Cambodia Investment Review (Cambodia Chamber of Commerce)
- Cambodia’s Investment Climate: A Guide for Foreign Investors (U.S. Department of State)
Foreign investors who are considering investing in Phnom Penh in 2023 should consult with an experienced investment lawyer or consultant to ensure that they comply with all applicable laws and regulations.
Here are some additional tips for foreign investors who are considering investing in Phnom Penh in 2023:
- Do your research: Before investing in any new market, it is important to do your research and understand the local business environment. This includes understanding the legal and regulatory framework, the competitive landscape, and the potential risks and rewards of investing in the country.
- Partner with a local partner: Partnering with a local partner can be a helpful way to navigate the Cambodian business environment and reduce the risk of your investment. Local partners can provide valuable insights into the market and help you to build relationships with key stakeholders.
- Be patient: Investing in a new market takes time and effort. Be prepared to be patient and persistent as you work to build your business in Cambodia.
Cambodia is a country with a rapidly growing economy and a number of attractive investment opportunities. Foreign investors who are considering investing in Phnom Penh in 2023 should take the time to familiarize themselves with the country’s investment laws and regulations, and to partner with a local partner to increase their chances of success.
List of References:
- Law on Investment of the Kingdom of Cambodia (October 15, 2021)
- Investment Guide to Cambodia (Council for the Development of Cambodia)
- Doing Business in Cambodia (World Bank)
- Investing in Cambodia: A Guide for Foreign Investors (AmCham Cambodia)
- Cambodia Investment Review (Cambodia Chamber of Commerce)
- Cambodia’s Investment Climate: A Guide for Foreign Investors (U.S. Department of State)
