American businesses in Cambodia all expected positive profit numbers for the rest of 2015 and in 2016, while a large majority said that they plan to expand their operations in the Kingdom, according to a US Chamber of Commerce business outlook survey.
The ASEAN Business Outlook Survey 2016, created in conjunction with the American Chamber of Commerce in Singapore, had 53 per cent respondents say that the ASEAN market was important for their worldwide revenue, a slight drop from the 59 per cent in 2014.
“As a result, expectations for profit growth, workforce expansion, and increased investment, though still positive, show a moderate downward trend in this year’s survey relative to those of the past several years,” the report read.
David Wigglesworth, general manager of Cambodia Beverage Company, said the report showed that US businesses were attracted to the ASEAN region because they can achieve strong growth here, unlike in other regions.
“If you go back to an American or European environment, you’re lucky to be growing at 4 or 5 per cent,” he said. “It is an exciting place to be.”
While a vast majority cited corrupt practices and law enforcement as a hindrance within ASEAN, Singapore and Brunei were the only exceptions.
Respondents from Cambodia overwhelmingly cited corruption as an obstacle to conducting business in the Kingdom – 94 per cent saying it was a hindrance, higher than any other country.
Eighty-nine per cent felt pressure to pay government officials for licences and permits, whereas 94 per cent had the same issue while dealing with routine government services.
“Infrastructure issues and corruption remain impediments to investment.
The combination of the US Foreign Corrupt Practices Act and the Cambodian Anti-Corruption Law make this a very challenging environment for US business,” said Bretton Sciaroni, senior partner at regional law firm Sciaroni & Associates.
Sciaroni added that while the strict laws made it difficult for American businesses to function here, the government was working on better enforcement of anti-corruption measures, along with the Anti-Corruption Unit.
Despite these efforts, a majority of respondents were dissatisfied with services provided by government agencies, with 56 and 50 per cent unhappy with the Tax and Revenue Department, and Customs respectively.