Cambodia’s economy led by property inflation had orchestrated a domineering growth with a progressive inflation coupled by a substantial depository increase last year. In fact, the first half of 2018 had seen leading indicators of property growth to propel forward towards the end of the year and spill over to 2019. Furthermore, the rise of inflation aided by the growth in depositories will ensure substantiated financial development into 2019. However, cumbersome business procedures are obstacles that hinders such growth and streamlining them will lower the barriers of entry for investors.
Meanwhile, let’s look at the demographics of Cambodia, a population of 16 million with a replacement ratio of 1.6 and average life expectancy of 65 years old and a literacy penetration of 77%. Even though Cambodia is a labor intensive led economy yet Real Estate and Construction are the 2-leading industry as road infrastructures and amenities are critical for nation building. In fact, they are essential industries to provide job creation which leads to the stability of the country. We also foresee some of other areas of opportunity for the investors such as Financial & Insurance, Tourism and Hospitality, Agriculture, Education and Technology.
Moreover, specific stimuli had been taken to promote economic vibrancy predominantly led by the Royal Government taking a proactive approach to sourcing foreign direct investment (FDI)by offering various incentives to foreign investors via the Qualified Investment Project (QIP) scheme administered through the Council for the Development of Cambodia (CDC). Companies who successfully navigate through the QIP application process will gain some considerable benefits, including the choice between a profit-tax holiday and special depreciation allowances targeted at businesses that need to import significant volumes of equipment and materials for construction or manufacturing purposes. QIPs are also eligible for import-export exemptions. Cambodia has one of the most competitive tax regimes in Southeast Asia, with a comparatively low rate of tax on profits and minimal social security contribution requirements. Another initiative of the government to incentivize FDI is the creation of a number of ‘Special Economic Zones’ around the country, which have been designed to geographically concentrate investment projects and dedicate administrative resources so as to make registration processes and troubleshooting much easier for foreign investors. With such dedicated implementations, that exudes character and substance with an unyielding will to prosper both economically and spiritually benefiting both our investors and fellow Cambodians!