Investment in Cambodia

Investment in Cambodia


Over the past few years, Cambodia has attracted investors from many Asian countries, including China, Vietnam and South Korea.  With the government’s push to bring development to Cambodia, local investment and foreign direct investment are both on the rise.  

Economic analysts and investment experts agree that the increased appeal of Cambodia to local and foreign investors can be attributed to increased security and improved infrastructure.

According to Youn Heng, director of the Evaluation and Incentive Department at the Council for the Development of Cambodia, the government has employed a number of strategies to try to attract investment.  Along with improving power grids and paving roads, the government has implemented a package of favourable tax laws that acknowledge investors’ difficulties and try to help find solutions.

“It is a very good strategy to attract investors to run their businesses in Cambodia,”  Youn Heng said.

Youn Heng remarked that there was no racial discrimination in the approval process.  Although the government attempts to reduce their tax burden, foreign investors are still denied the right to own property afforded to local investors.         

With regard to attracting both local and international investments, independent analyst Kang Chandararot claims there are two important strategies: (1) building Cambodia’s infrastructure to assure a more stable investment climate; and (2) creating laws that make investment in Cambodia easier and more profitable.

As we have seen, both strategies are being implemented nationwide to help investments run smoothly.  

Kang Chandararot added that security is another important element to keep in mind.  If our country ceases to be peaceful and descends into chaos, investors will be dissuaded from running their businesses here.  We should therefore work actively to maintain peace and safety in our country in order to maintain investor confidence.  

Kang Chandararot remarked that China used to be interested in Cambodia’s garment sector but has since changed its focus to mining, power and agriculture.  Their areas of investment are dictated by the vision of their investors, that is, which sectors they believe to be most profitable.  

“The most important investors in Cambodia are the countries of China and Korea, as they have pumped the most money into our economy,” explained Kang Chandararot.  He also noted that, while not yet investing at the level of other Asian countries, Vietnam will become an increasingly important investor in the future.  Because of its many current and potential investment partners, the Cambodian economy is growing  every day.

Still, at present, many countries that feel deeply about protecting human rights and fighting corruption have resisted investing in Cambodia, choosing instead to donate and provide aid.

Cheam Yeap, chairman of the Commission on Economy, Finance, Banking and Audit of the National Assembly, said every investment, both local and international, needed to abide by the national investment law.  The Cambodian investment law in question has been amended six times since its creation in 1999.

“The government has cleared the way for investors to invest in Cambodia,” said Cheam Yeap.

However, some critics contend that more and more foreign investment increases the risks of Cambodians losing land and property.  

Cheam Yeap denies these claims, emphasising that Cambodia has proper laws.  “We have land authorities, courts and village and commune chiefs.  The rule of law allays any fears that we will lose land,” he claimed, adding: “We will not allow foreigners to own Cambodian land, and we will not allow them to invest without checking their balances.”  

He went on to explain that since modern Cambodia was more open to local and foreign investors, some people were simply afraid of losing out.  He provided China as an example of a country that is benefiting from its investments in Cambodia, especially in the hydro-electricity sector.    

By 2015, Cambodia is slated to reap 1500 megawatts of electricity from Chinese investments at a very competitive price.  300 megawatts will be used in Phnom Penh, with the rest sent to other provinces  throughout the country.  

Cheam Yeap said there were many foreign countries that had not yet invested in the Cambodian economy.  He reasoned that these countries had not invested because of the global economic downturn, as well as their weariness over economic protests in Cambodia.


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