Optimism prevails in the private sector that the Investment Law widely anticipated to launch later in the year will spell new momentum in the Kingdom’s industrial diversification in parallel with the region and beyond.
The current edition of the law comprises 11 chapter and 39 articles, with key stakeholders, the private sector and government institutions holding regular meetings to thrash out its details before an official launch.
According to the draft law which was obtained by The Post, one of the primary goals of the document is to increase Cambodia’s competitiveness in the spirit of diversifying its economic structure and resilience to regional and global crises.
It aims to modernise and increase the productivity of local industries and develop greater connectivity in the regional and global supply chain.
It also seeks to establish an investment incentive regime that is transparent, predictable, non-discriminatory and competitive, that supports socio-economic policies and that safeguards the rights and legitimate interests of investors in the Kingdom.
Sok Chenda Sophea, secretary-general of the Council for the Development of Cambodia (CDC) – the government’s investment body that is drafting the law, led a consultative meeting on January 6.
It was presided over by Ministry of Economy and Finance secretary of state Hean Sahip and attended by representatives of ministries and other government institutions.
According to the minutes of the meeting: “The draft of the new investment law is designed following the roadmap outlined in the 2015-2025 Industrial Development Policy, which aims to ensure attractiveness and competitiveness in the law that is conducive to national socio-economic development.”
In Channy, president and group managing director of ACLEDA Bank Plc, welcomed the new law, saying that it is designed to reflect the current changes of the regional and global investment architecture.
He said: “We’ve held consultative meetings with the private sector concerning the new investment law as we view it to be more attractive and responsive to the latest developments in the regional and global context.”
Cambodia Chamber of Commerce vice-president Lim Heng also applauded the law and voiced appreciation to the government for engaging the private sector as a partner for national economic development.
“The new Investment Law will help to diversify Cambodia’s industrial sectors to lure more investments and encourage more investment from technology businesses as the government targets a digital economic transformation for the years to come.”
Cambodia introduced the Investment Law in 1994 and amended it in 2003.
In 1995, just one year after the law’s enactment, the total amount of investment approved by the CDC totalled some $2.3 billion.
By 2008, cumulative approved investment value had surged to $10.89 billion, of which the tourism sector accounted for $8.77 billion, services $1.29 billion and agriculture $106.73 million.
As of December 31, 2019, the cumulative value of approved investments had ballooned to $85.88 billion.
In 2019 alone, the CDC approved $9.40 billion worth of investment projects, of which mainland Chinese investors accounted for $2.75 billion. Hong Kong ranked second at $912.55 million, while Japan took third with $298.84 million.
Of the cumulative foreign direct investment (FDI) approved in 1994-2019, the largest share was from mainland China (21.81 per cent), which in the early years had been the source of extensive investment in the fields of infrastructure, resource development (such as natural rubber) and tourism.
South Korea took the second largest share at 6.16 per cent and the UK placed third at 5.01 per cent.
Other major sources were Malaysia (3.59 per cent), Japan (3.13 per cent), Hong Kong (3.05 per cent), Taiwan (1.77 per cent), Vietnam (2.31 per cent), Singapore (1.64 per cent) and Thailand (1.54 per cent) – whose investment comes mainly from the garment sector.