The foreign direct investment in Cambodia (Cambodia FDI) registered a growth of 11.2 percent in 2021 compared to the previous year, according to a report from the National Bank of Cambodia yesterday.
The investment from China, South Korea, Vietnam, Singapore, Japan and Malaysia in the sectors of finance, manufacturing, real estate, hotel and restaurant, agriculture, and construction helped register an impressive growth last year.
Cambodia received a total FDI of $41 billion last year. The licensed FDIs mainly flowed into manufacturing, electricity, finance, real estate, hotel and restaurants, agriculture, and construction. Meanwhile, a significant share of FDI went to the financial sector with a $9.4 billion investment, representing 22.9 percent of the total investment.
China was the largest source of registered foreign investment, with $18 billion or 43.9 percent of the total registered investment capital. South Korea ranked second with a registered investment capital of $4.9 billion, followed by Vietnam and Singapore at US$2.5 billion and $2.7 billion, respectively.
Sok Chenda Sophea, Secretary-General of the CDC, explained how the government is working to rejuvenate Cambodia’s economy and continue its upward trajectory post Covid-19.
“On 22 December 2021, the government launched an important document called the strategic framework and programme for post-covid recovery 2021-2023, in which the three pillars are based on the 3Rs – Recovery, Reform, Resilience. The framework concerns a broad range of socio-economic matters, not least economic expansion. The second R stands for Reform – Economic diversification, trade facilitation, upcoming law on Special Economic Zones and implementation of the new investment laws.”
The government’s adoption of a more liberal foreign investment regime, which is already garnering a lot of attention both regionally and globally, aims to raise the bar further and create an even more conducive environment for investors.
The legislature around investment includes 100 percent foreign ownership of companies, corporate tax holidays of up to nine years,150 percent cost deduction on human resources and employee welfare purchases, duty-free import of capital goods, and no restrictions on capital repatriation.
Hong Vannak, an economic researcher at the Royal Academy of Cambodia, told Khmer Times that an 11.2 percent increase in FDI is a positive sign for Cambodia, even though the effect of Covid-19 is not over. “This growth is not accidental, it is a clear consideration of the Cambodian government, and it is a policy to attract foreign investors. Cambodia has been an island of peace for decades without war. There are no natural disasters that affect the investment infrastructure. Good diplomatic relations with a flexible and progressive approach for increasing investor confidence also helped.”
“Besides, the Cambodian government has drafted new investment laws to establish relations with Asean countries and other nations within the framework of the RCEP and WTO,” he added.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.
