Suon Sophal
Director
Public Relations and Promotion of Private Investment

GLOBAL INVESTMENT TRENDS
The COVID-19 crisis will cause adramatic fall in FDI. Global FDI
flows are forecast to decrease by
up to 40 per cent in 2020, fromtheir 2019 value of $1.54 trillion(figure 1). This would bring FDI
below $1 trillion for the first timesince 2005. FDI is projected todecrease by a further 5–10 per
cent in 2021 and to initiate arecovery in 2022. A rebound, with
FDI reverting to the pre-COVID
underlying trend in 2022, ispossible, but only at the upperbound of expectations.

INVESTMENT TRENDS

8,000

5,000
4,000

Tourism centre

Tourism

1,000

236.23Hotel

1,012.25

Health care

8,385.33

Energy2,000

442.06

Services

6,009.46

Industry283.25Agriculture

3,326.301%485.003,000

114.600%

22%

4,528.90

17%3,609.55

6,000

4,643.50

7,000

5,847.00

19%

6,332.00

25%

6,451.52

9,000

8,250.80

Million US$

5%8,014.57

11%

9,397.58

Investment Trend by Sector (2015-2020)

0
2015

2016

2017

Non-SEZ

2018

SEZ

2019

Total

2020

58 SEZs approved• Sanco Poi Pet SEZ• Poi Pet O'Neang SEZ• Poi Pet PPSEZ (work inprogress)

39 SEZs with subdecree

23 SEZs are operational
18 SEZs with Special
Admin Office547 projects approved•Neang Kok Koh Kong
SEZ

•Phnom Penh SEZ•Kerry Worldbridge SEZ•Sihanoukville SEZ•Sihanoukville Port SEZ•Sihanoukville SEZ 1•H.K.T SEZ•Kampot SEZ• Manhattan Svay Rieng SEZ• Tai Seng Bavet SEZ• Dragon King Bavet SEZ• Shandong Sunshell Svay Rieng SEZ• Hi-Park SEZ• Qi Lu Jian Pu Zhai SEZ• Giga Resource Svay Rieng SEZ• Intervia Automobile SEZ

Total investment(4.31 billion USD)
Suspension of VAT on Duty
Free Import (letter No. 3841
MEF dated July 2nd 2019 andletter No. 3725 MEF

5,0000680.64

Korea

20.00
15.05
12.00
8.14
7.01
6.12
5.63
5.62
4.57
4.00
2.52
2.40
2.34
2.02
0.83
0.54
0.39

FranceNetherland
Philippines
Brunei
Seychelles
Macau
Marshal Island
UAE
SwedenArgentina
Australia
Maurice
Italy
New ZealandPakistanIndonesia

176.88USA

India

310.64China Teipei

22.55

363.05

U.K

Canada419.19Thailand

48.18

502.83

Malaysia

Samoa

592.57Singapore

British V.… 641.12

771.01

Vietnam

1,652.37

Cayman… 1,722.42

2,173.71

10,000Hong Kong

15,000Japan

20,00010,284.31

4,147.45

2.02

2.52

5.63

8.23

33.48

37.48

46.47

57.30

73.01

98.54

105.24109.61143.83262.81Million US$

Million US$

Singapore

Macau

China Taipei

Thailand

5,000

China

10,000

1.89

2.14

7.60

37.46

53.85

83.34

436.66BY COUNTRY (FY 2020)

Hong Kong

Cambodia

New… 0.83

Italy

Argentina

Macau

Vietnam

U.S.A

BVI

Japan

ThailandSingapore

Malaysia

U.K

China Taipei

Hong Kong

Korea

Cayman… 1,722.42
1,393.93
China

0

China

Cambodia

5,000

18,223.58

10,000

Cambodia

INVESTMENT TRENDS BY COUNTRY
BY COUNTRY (as of 22nd March 2021)

0Million US$

BY COUNTRY (FY 2015 – 2020)

Japanese Investment in Cambodia
900

Japanese FDI in SEZ

1

PPSEZ

38

168.06600

2Manhattan Bavet

1

1.94

500

3

Tai Seng Bavet

12

59.42

4

Dragon King Bavet

2

9.36

5

Sihanoukville Port

3

22.17

6

Sanco Poi Pet

8

64.85

7

Neang Kok Koh Kong

2

14.01

66

339.82820.08

800

882.9

No.

700

400

Million $12

Project

16

9

7

6

46.47

14

63.4

21

58.88

19

67.08

19

78.87

271.33
5

66.15

15

25.99

0

147.66200
100

298.89

300

2

Total

No.
Capital
Proj. (Mil US$)The Pioneers

7

ENHANCED SERVICES
Reception Desk

(Screen and provide
technical inputs)

Permits

Project proposal(Receive project proposal
and fee)

Relevant Department andAgencies

Management(Decision and Seek
Endorsement from higher
authorities)
Conditional Registration
Certificate (CRC)(3 working days)
Final Registration
Certificate (FRC)

https://qip.cdc.gov.kh(28 working days)

Investor
Import Duty Exemption(15 working days)• One Stop Services, Country Desks (Japan, Korea, EU, China)• Online Platform (QIP Online, NSW Master List, FB Notification)• Aftercare Services (Complaint Desk, Investment Tracking System)

TAX HOLIDAY (9yr)orSPECIAL DEPRECIATIONIMPORT DUTY EXEMPTIONINVESTMENTINCENTIVES(Article 7, Financial
Management Law
2006 & 2009)
Tax Holiday =Trigger Period + 3+ n (priority
period)EXPORT TAX EMEMPTIONn = 2 [(Industry<50M,
Infrastructure <30M)]

CORPORATE INCOME TAX(20%)
VAT exemption for
projects inside SEZ

n = 1 [(Industry<20M, Tourism<20M or Infrastructure <10M)]
n = 3 [(Industry>50M,
Agriculture QIP,
Infrastructure>30M)]

MAJOR CORPORATE TAXESPatent Tax: Annualfee (S, M, L)

INCOME TAX (CIT):
20% generally

Customs Duty: 7%,
15%, 35% (MFN)

VAT: 10%

Stamp Tax
✓ 4% transfer of property✓ 0.1% transfer of Share

Withholding Tax✓ Rental: 10%✓ Payment to non-resident taxpayer(interest, royalty, dividend,management/consulting): 14%

COMPARISON OF FISCAL TAX INCENTIVES
Current Law••
Income Tax
Exemption

3-6 years fromprofit or 6-9 years
from initial income
Or special
depreciation

New Law•••

3-9 years from initial
incomeExpiration of 6-year
income tax exemption
Or special depreciation

Minimum tax exemption
with independent audit
ReportDepreciated tax exemption
during income tax
exemption

Exemptionfrom Export
Tax

Exemption from export duties, unless provided in thelaw or Other provisions

Import Duty
Exemption

Current Law

New Law

Have the right toimport with the
exemption ofcustoms duty:
1. Construction
material
2. Production
Equipment
3. Production
inputs (onlyfor exportoriented
QIPs)

Have the right to importwith the exemption of (1)customs duty, (2) special
tax and (3) value-addedtax:
1. Construction material
2. Production Equipment
3. Production inputs(only for exportoriented QIPs. QIPs
that serves domestic
market will determine
the price, otherwise)
4. Construction
Equipment

Tax incentives included in the new law but not in the previous law, includes (i) VAT exemption for the purchase of local production input, (ii) 150% priceoffset on research, training, transportation, accommodation, canteen, nursery, etc., (iii) Income tax exemption for QIP expansion, and (iv) Special
incentives for specific investment sectors and activities that have high potential to contribute to national economic development (defined in the Financial
Law for Management).
Disclaimer: without prejudice to the process of adopting new investment law, the information in this slide is provided in good faith, however we make no
implication regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on new incentives above.

POLICY LEVELINVESTMENT
FACILITATION& AFTERCARE•••GPSF (1999)
Supported by 13 WGs
18th GPSF adopted 17 Measures• Arrangement under the Agreement
between Cambodia and Japan for the
Liberalization, Promotion andProtection of Investment (entered into
force on 31st July 2008)• Cambodia-Japan Public-Private
Sector Meeting (bi-annual) hold 21
meetings as of 11th February 2021

Policy recommendation 2020-2021• Labor (Seniority indemnity, and Minimum wage)• Taxation (Applying accounting treatment of CMT
to whole manufacturing industries, and VAT refundof charge for meal)• Commerce (Problems for parallel import)• Environment (Environmental Endowment Fund)• Power (New price table for electricity• Logistics (Early opening of the Stung Bot bordergate, speed up the process in customs clearance atthe border (24/7 operation of customs office,Paperless operation of shipping documents, andprice reduction of application fee for certificate oforiginWHY INVESTING IN
CAMBODIA?

PROSPECTS FOR GROWTH•••STRATEGIC LOCATIONSPECIFIC ASSETS
PRO-BUSINESS APPROACHASEAN (heartof dynamic
region)

WTO
Membership(MFN)

Strategic
Location(Heart of Potentials)

GSP Market access to
32 Countries+

SPECIFIC ASSETS
Natural Endowment(Cultural Heritage, No Natural Calamity(no earthquake, no typhoon)

Competitive labor force(Young & Dynamic, median age 27 years old)
Population is predominantly concentrated in the prime
working age groups.

2019 census:
Cambodia’s
population reachedover 15.55 million, a
16.1% increase over
11 years since 2008.
Male 7.57 million(48.7%) and Female
7.98 million (51.3%)

OPEN ECONOMY• F&E Treatment (Non-discrimination)• No local equity requirement• Free Transfer of capital and profits

PRO-BUSINESSAPPROACHONE STOP SERVICES• Streamlining Procedures (Online)• Incentives & Support• Aftercare Services

FULL GUARRANTEE••••No Nationalisation
No local content requirement
No restriction on FOREX
No capital & price control

Checklist for investment application
1. Application Form
2. Company Statute
3. Feasibility Study
4. If shareholder is juridical person:• Power of Attorney• Statute of Parent Companies

5. Copy of Passport (foreigner) or ID Card (Cambodian)
6. Letter of Indemnification (foreign shareholders)
7. Photo of Shareholders

8. Documents showing location and right to use (title, rental contract …)
9. Certificate of Deposit of 25% of registered capital from commercial banks
18

Thank you
More Information, please contact:  : info@cdc.gov.kh