The long wait for the new laws on Investment and Special Economic Zones (SEZs) is expected to soon be near, due to an order from Prime Minister Hun Sen to the Council for the Development of Cambodia (CDC).
Speaking at the 18th Government-Private Sector Forum on Friday, the prime minister said he had instructed CDC to amend the Law on Investment and to prepare the Law on SEZs, and to have them finalised by the end of the first half of the year.
“Incentives are a key policy tool for the government to attract and reorient private investment flows into the priority sectors necessary for overall socio-economic development,” Hun Sen said.
He added that as policy, the government employs different criteria in determining incentives for each sector – such as job creation, technology adoption and connectivity with small- and medium-sized enterprises and export-oriented industries.
“The government will provide more incentives to sectors we want to promote – sectors we believe provide more benefits in terms of national socio-economic development.”
Hun Sen said that in principle he approved the chapter on investment incentives being removed from the Law on Investment and the Law on SEZs and included in the Law on the National Budget, with a sub-decree prepared for its execution to provide greater flexibility, giving room for incentive policy changes for priority sectors to boost Cambodia’s socio-economic development.
‘Wait and see’
CDC will remain the relevant body overseeing the amendments to the Law on Investment and the Law on SEZs.
The Law on Investment was initially adopted by the National Assembly on August 4, 1994. It was revised in 2003 but remained unchanged until now.
Acleda Bank Plc president and group managing director In Channy on Monday said Cambodia’s current investment law is attractive for investors and has fostered a spike in foreign direct investment.
He added that the Kingdom’s investment laws were very open to foreign investment, allowing 100 per cent foreign ownership of any business and providing tax incentives for some priority sectors.
“We will wait and see the amendment to the law. We believe there will be more benefits provided to investors,” he said.
Supreme National Economic Council senior adviser Mey Kalyan said the private sector had waited a long time for the amendments to the Investment Law, believing it would be tailored to current trends.
Kalyan said he was currently unsure of the major changes to the law, but he believed they would be made with the needs of the investors in mind and reflect changes in the business climate.
He added that Cambodia’s investment law needed adjustment to suit the new economic environment and retain competitiveness.
“Having an attractive investment law is very important, but good implementation is also necessary,” he said, adding that the challenges facing the Kingdom generally related to a lack of good implementation.
“As a first step, we need to have a good law and a good policy. And then we will need good implementation. We need to have a good law and policy first, and then we will gradually adjust our work towards the good strategy.”