The European Union will spend €3 million ($3.9 million) on a program to encourage small and medium enterprises to invest in Cambodia.

Speaking at a conference yesterday in Phnom Penh, EU Ambassador to Cambodia Jean-Francois Cautain said the five-year grant – to be managed by EuroCham – would be used to market Cambodia as an investment destination for European businesses and to strengthen advocacy to create a favourable business environment in the Kingdom.

“I think that 24 per cent of total FDI in ASEAN countries are coming from European Union investors. If we look at Cambodia it is only 2 per cent coming from European Union investors,” Cautain said.

“So I think there is room for improvement when it comes to businesses here in Cambodia.”

Curtain added that a larger presence from European businesses would help create greater competition and a more sustainable business environment.

EuroCham chairman Emmanuel Menanteau said Europe’s proximity to Southeast Asia and lack of knowledge of Cambodia’s business climate meant European businesses had a much smaller presence here than countries like China, Japan and South Korea.

“Especially for small and medium enterprises, we usually see Cambodia as a very faraway country with a different way of doing business, and we are unable to approach the market because mostly they don’t know how to do it,” he said.

Menanteau said that the grant would allow EuroCham to boost Cambodia’s image in both in the EU and in ASEAN, where many European investors were already well established.

“They [European businesses] don’t know what kind of businesses opportunities are represented here,” he said.

The EuroCham chairman said that his organisation would focus on attracting European SMEs looking to invest in value-added manufacturing, as well as in sectors such as hospitality and tourism, where European firms already have some presence.

The grant would strengthen EuroChams ability guide firms on how to do business in Cambodia, Menanteau said.