T HE Council of Ministers has passed a draft investment law put forward by the
Cambodia Development Council and the bill will now be sent to the National
Assembly for approval.
Gen Tol Las, secretary general of the National
Assembly, said he had not yet received the law and the earliest it is likely to
be approved by lawmarkers is in the third week of July at an extraordinary
The adoption of the CDC draft ends months of government
political infighting over the law, with numerous competing version being
However, despite an investment law now finally nearing
approval, both Finance Minister Sam Rainsy and a well-connected expat
businessman cautioned that it was unlikely to spark a new economic dawn for
Rainsy told the Post: "The law is necessary but not in
itself sufficient to stimulate investment."
He said that problems of
security, poor infrastructure, high land prices and an inadequate legal frame
work must be tackled as well before Cambodia becomes a really attractive
There have been no new investment applications this
year, as businessmen have reserved judgement pending seeing the final shape of
the investment legilsation.
But the businessman, who declined to be
named, warned that investors will still be unlikely to come down off the fence.
He said: "The million dollar question is about whether the government is
perceived to be stable or not."
A copy of the draft approved by the
Council of Ministers was obtained by the Post. It has substantial incentives for
investors, including a profits tax of only 9 percent and large categories for
100 percent exemptions from import duties.
Investors are required to
register new projects with the CDC - described as a "one-stop shop" - and are
guaranteed a decision within 45 days. If no decision is forthcoming, after 45
days the project is considered approved.
While foreign ownership of land
is outlawed by the constitution, the CDC draft allows investors to rent land for
up to 70 year periods.
The businessman criticized the draft for not
specifying laying down criteria the CDC would judge whether to pass an
application or not. The lack of clarity on that point he said left a large
loophole which could be exploited by the corrupt.
But he added:
"Over-shadowing all criticism that could made of the draft is the fact a piece
of legislation has finally been adopted that is the main thing."
said that devious political maneuvres resulted in the draft drawn up by the
Finance Ministry never reaching the Council of Ministers for
However, publicly Rainsy was not critical, saying he had
been at the meeting when the draft was passed, adding: "It is a compromise which
takes in everybody's point of view."
Earlier an independent Western
analyst criticized the CDC draft as "almost duplicating all the worst provisions
of [Thailand's] Board of Investment law." CDC representatives were unavailable