It defines public interest activities to include construction, rehabilitation, preservation, or expansion of infrastructure projects, and development of buildings for national defense and civil security. This site uses cookies to optimize functionality and give you the best possible experience. In late 2009, the National Assembly approved the Law on Expropriation, which sets broad guidelines on land-taking procedures for public interest purposes. Cambodia has been a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) since 2005. If you use our chart images on your site or blog, we ask that you provide attribution via a link back to this page. Registration with MOC is possible throughan online business registration portal( link)that allows all existing and new businesses to register. A total of 22,277 teachers and 605 school leaders have enrolled and graduated from skills upgrading programs supported by the project. A list of Cambodian legal updates in compliance with the WTO is described in the above section regarding Investment Policy Reviews. Foreigners are constitutionally forbidden to own land in Cambodia; however, the 2001 Land Law allows long and short-term leases to foreigners. In late 2020, the government announced that businesses in the garment and footwear, tourism, and aviation sectors would continue to receive tax incentives in 2021. Foreign investment in Cambodia has been led by investors from the Peoples Republic of China, Japan, the Republic of Korea, Malaysia, Thailand, Singapore, and Vietnam. Foreign investors often build into their contracts clauses that dictate that investment disputes must be resolved in a third country, such as Singapore. The OECD conducted an Investment Policy Review of Cambodia in 2018. Poverty remains higher than pre-pandemic. Physical infrastructure projects, including commercial and residential real estate developments, continue to attract the bulk of FDI. Due to the global coronavirus pandemic (COVID-19), Cambodias economy contracted by 3.1 percent in 2020, but recovered gradually in 2021, and grew by 3.0 percent. This is the result ofthe lack of legislation and the limited capacity of key institutions, which isfurther exacerbated bya weakcourt system. Cambodiahas been a member ofWIPOsince1995 and has acceded to several international IPR protocols, including the Paris Convention (1998), the Madrid Protocol (2015), the WIPO Patent Cooperation Treaty (2016), The Hague Agreement Concerning the InternationalRegistration of Industrial Design (2017), and the Lisbon Agreement on Appellations of Origin and Geographical Indications (2018). In April 2017, the National Bank of Cambodia introducedaninterest rate cap on loans provided by the microfinance industry with no consultation withrelevant stakeholders. Under the law, all civil servants must also declare their financial assets to the government every two years. Prior to the pandemic, Cambodia had experiencedan extended period ofstrong economic growth, with average GDP growthof nearly 7 percent over the last two decades, driven by growing exports (particularly in garment and footwear products), increased investment,and domestic consumption. Infringement ofintellectual property rights (IPR)is prevalent in Cambodia. There are currently23special SEZs, which are located in Phnom Penh, Koh Kong,Kandal,Kampot, Sihanoukville, andthe borders of Thailand and Vietnam. If reconciliation fails, then the cases may be brought to the Arbitration Council, an independent state body that interprets labor regulations in collective disputes, such as when multiple employees are dismissed. Once enacted, it will be enforced by Cambodias Import-Export Inspection and Fraud Repression Directorate-General (CAMCONTROL). Ms. Phen Keomonyneath The World Bank forecasts that the economy will recover further and grow by 4.5 percent in 2022 and 5.8 percent in 2023. Examples of investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation. In March 2016, the NBC doubled the minimum capital reserve requirement for banks toUSD75 million for commercial banks andUSD15 million for specialized banks.

The government has shown willingness to use tax issues for political purposes. Series from World Development Indicators. In 2020, however, the crisis unleashed by COVID-19 negatively affected three main sectors of Cambodias economy, tourism, manufacturing exports, and construction, that contributed more than 70 percent of the countrys economic growth and provided 39 percent of its total paid employment in 2019. Phone: (855) 23-728-401 The knowledge agenda is a significant part of the World Banks engagement in Cambodia. International Commercial Arbitration and Foreign Courts. Relevant laws and regulations are notified to the WTO legal committeeonlyafter their adoption. The ACU, in collaboration with the private sector, has also established guidelines encouraging companies to create internal codes of conduct prohibiting bribery and corrupt practices. Critical cross-cutting themes are governance, institutions, and citizen engagement, which are embedded in all World Bank Group-financedactivities. SOEsare also subject to the same taxes and value-added tax rebate policies as private-sector enterprises. In Cambodia, most domestic wastewater is left untreated with only 11% of households connected to a sewer network. The NBC regulates the operations of banking systems in Cambodia. A draft antitrust and competition law is reportedly near completion. As of now, the project has benefitted 35,819 students, faculty members and educational staff. Authorized banks are required, however, to report the amount of any transfer equaling or exceedingUSD100,000 to the NBC on a regular basis. The United Nations estimates that around 300,000 new job seekers enter the labor market each year. Enhancing the quality of education and alignment with labor demands; and. Fax: (855)-23-728-800 03 / Select Countries You can add more than one country or area. As of 2020, 15 percent of Cambodias population (2.5 million people) didnot have access to improved water, and 23 percent (3.8million people) did not have access to improvedsanitation. Legislative power is vested in a bicameral parliament, while the judiciary makes up the third branch of government. Backlinks from other websites and blogs are the lifeblood of our site and are our primary source of new traffic. 73 percent of citizen targeted are able to cite correctly at least 2 out of 6 standards for schools and health centers and 2 out of 7 standards for communes. External links to other Internet sites should not be construed as an endorsement of the views or privacy policies contained therein. If you continue to navigate this website beyond this page, cookies will be placed on your browser. Tourism has been another large contributor to growth, with tourist arrivals reaching 6.61million in2019. We have provided a few examples below that you can copy and paste to your site: Your image export is now complete. Based on the success of the implementation of theImplementation of Social Accountability Framework(ISAF) phase I, whichwas initiated in 2015, the phase II (ISAF II) has been rolled out. For these reasons, many commercial disputes are resolved through negotiations facilitated by the Ministry of Commerce, the Council for the Development of Cambodia, the Cambodian Chamber of Commerce, and other institutions. The CSX currently has seven listed companies: the Phnom Penh Water Supply Authority;Taiwanese garment manufacturer Grand Twins International; the Phnom Penh Autonomous Port; the Sihanoukville Autonomous Port; Phnom Penh SEZ Plc; ACLEDA Bank; and Pestech Plc. To learn more about cookies, click here. In 2020, Cambodia signed a Free Trade Agreement (FTA) with China and joined the Regional Comprehensive Economic Partnership (RCEP) agreement, though neither agreement has been implemented yet. The economy in 2020 registered its worst performance since 1994, contracting by 3.1 percent. Email: CamInvestment@state.gov. There are no restrictions on the establishment of foreign currency bank accounts in Cambodia for residents. A resurgence of new variants could disrupt economic recovery, despite continued strong external demand conditions. Cambodias bond market is at the beginning stages of development. However, the COVID-19 pandemic caused more rising unemployment and increased poverty and inequality. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Cambodia offers incentives to projects within the SEZs such as tax holidays,zero rateVAT,and import dutyexemptionsfor raw materials, machinery, and equipment. The World Bank predicts that Cambodias economy will begin recovering and grow by 4 percent in 2021, though a COVID outbreak that started in February 2021 has already cost the economy an estimated USD250 million and could prolong the countrys recession. Data retrieved from IMFs Coordinated Direct Investment Survey database presents a much different picture of FDI into Cambodia as compared to that provided by the Cambodian government. COVID-19 infections, which receded in the fourth quarter of 2021, have resurged since February 2022, caused primarily by the rapid spread of the Omicron variant. Nevertheless, political tensions remain. In February 2019, the Financial Action Task Force (FATF), an international intergovernmental organization whose purpose is to develop policies to combat money laundering, cited Cambodia for being deficient with regard to its anti-money laundering and countering financing of terrorism (AML/CFT) controls and policiesand included Cambodia on its grey list. The government committed to working with FATF to address these deficiencies through a jointly developed action plan, although progress to date has not been sufficient and Cambodia remains on the grey list in 2021. All businesses are required to register with the Ministry of Commerce (MOC) and the General Department of Taxation (GDT). Counterfeitapparel, footwear, cigarettes, alcohol, pharmaceuticals,andconsumer goods, and piratedsoftware, music, and booksare some of the examples of IPR-infringing goods found in the country. QIPs are entitled to receive different incentives such as corporate taxholidays; special depreciationallowances; and importtax exemptionson production equipment, construction materials, and production inputs used to produce exports. Cambodia offers potential investment opportunities in various sectors including tourism; education; construction; agriculture/ agribusiness; automotive; energy; and health care. Themortgage recordationsystem, which is handled by private banks, is generally considered reliable. km. Cambodian ministries and regulatory agencies are not legally obligated to publish the text of proposed regulations before their enactment. Cambodias GDP per capita was recorded at $1,686 in 2021. In addition, the project has created IGAs under the basic services & community infrastructure component to provide economic opportunity for community members. It is believed that, while the company may have had some tax liability, the action taken by the General Department of Taxation, notably an inflated tax assessment, was politically motivated and intended to halt operations. There are few limitations on foreign control and ownershipof business enterprisesin Cambodia.

To date, Cambodia has not been listed by the Office of the U.S. Trade Representative (USTR) in its annual Special 301 Report, which identifiestrade barriers to U.S. companies due to the IPR environment. At the end of 2020, market capitalization stood at USD2.5 billion and the average daily trading value averages USD150,000. Email:TryS@state.gov, Commercial Counselor, U.S. Commercial Services, Charles Phillips Enhancing financial sector development and fostering private enterprises; Strengthening public sector accountability and public financial management; and. Business and economic data for 200 countries, * indicates monthly or quarterly data series. In 2020, a child born in Cambodia would be expected to be only 49 percent as productive when grown as she or he could be if she or he enjoyed full quality education, good health, and proper nutrition during childhood. 0 reflects amounts rounded to +/- USD 500,000. Since 2013, Cambodia has published the official fees for public services, but the practice of paying additional fees remains common. Mortgages exist in Cambodiaand Cambodian banks often require certificates of property ownership as collateral before approving loans. See: www.cambodiainvestment.gov.kh/why-invest-in-cambodia/investment-enviroment/investment-trend.html. Find out what the Bank Group's branches are doing in the region. CambodiasLaw on Investment andAmended Law on Investment offers varying types of investment incentives for projects that meet specified criteria. There is a small, but growing awareness ofresponsible business conduct (RBC)andcorporate social responsibility (CSR)amongbusinesses in Cambodia despite the fact that the government does not have explicit policies to promote them. Deputy Chief of Mission Benjamin V. Wohlauer, Ambassadors Fund for Cultural Preservation, U.S. Assistance for Cambodian Cultural Preservation, Statement by President Biden on the Killing of Former Japanese Prime Minister Abe Shinzo, Deputy Secretary Shermans Meeting with Cambodian Deputy Prime Minister/Foreign Minister Prak Sokhonn, United States, France, and Partners Celebrate World Press Freedom Day, 2022 Trafficking in Persons Report: Cambodia, Assistant Secretary Daniel J. Kritenbrinks Travel to Phnom Penh and Tokyo, United States Embassy in Phnom Penh celebrates 246thU.S. To learn more about cookies, click here. The quality of human capital will be of utmost importance to achieve Cambodias ambitious goal of reaching middle-income status by 2030. Cambodia continues to have a serious infrastructure gap and would benefit from greater connectivity and investments in rural and urban infrastructure. We face big challenges to help the worlds poorest people and ensure that everyone sees benefits from economic growth. U.S. franchises are very popular in Cambodia, the majority of which are in the food and beverage, retail, and hospitality sectors. There is currently no sovereign bond market, but the government has stated its intention of making government securities available to investors by 2022. ); about the size of Missouri. Data and research help us understand these challenges and set priorities, share knowledge of what works, and measure progress. The Asian Development Bank (ADB) is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. The poverty rate is the lowest in Phnom Penh (4.2 percent), other urban areas (12.6 percent), and the highest in rural areas (22.8 percent). Cambodia is conducting a feasibility study on a potential FTA with the Eurasian Economic Union. For example, the Higher Education Improvement project re-allocated $5 million to support activities on EdTech e-learning to help students learn from home (nearly 3 million beneficiaries), and the Cambodia Agriculture Sector Diversification project financed $10 million in activities to address food security for vulnerable populations. Total approved foreign direct investment (FDI) in Cambodia from 1994 to 2021 was valued at $46 billion in terms of fixed assets, and U.S. FDI amounted to approximately $1.4 billion. Property can also be expropriated for natural disasters and emergencies, as determined by the government. The latest available economic data for Cambodia compared to countries in Southeast Asia. Mothers in Cambodia have attended a parenting training program to learn how to improve their children's learning, hygiene, nutrition, protection and care. U.S. International Development Finance Corporation (DFC)and Other Investment Insurance Programs, 13. Access to land for the poor or landless families is an important aspect of poverty reduction in Cambodias rural areas. The NBC has also granted licenses to12financial leasing companies and one credit bureau company to improve transparency andcredit risk management and encourage lending to small- and medium-sized enterprise customers. Cambodia signed a free trade agreement (FTA) with China in 2020 and the Regional Comprehensive Economic Partnership (RCEP) free trade agreement in early 2021. Based on the new regulations, deposit-taking microfinance institutions now have aUSD30 million reserve requirement, while traditional microfinance institutions have aUSD1.5 million reserve requirement. You can add more than one country or area. The GDT alsohas an online portal fortax registrationand other services, whichcan belocated here. Cambodia enacted a Law on Consumer Protection in November 2019, but it has not been fully implemented as of April 2021. For example, in May 2016, in what was perceived as a populist move, the government set caps on retail fuel prices, with little consultation with petroleum companies. mi. Limits on Foreign Control and Right to Private Ownership and Establishment. As aWTOmember, Cambodia hasboth draftedandmodifiedlaws and regulations to comply with WTO rules.

Cambodia also benefits from a co-financing grant trust fund. Mr. Moses An The largest ofitsSEZs is in Sihanoukville and hosts primarily Chinese companies. In accordance with the Law on General Stature of Public Enterprises, there are two types of commercial SOEs in Cambodia: onethatis100 percent owned by thestate; and another thatis a joint-venture in which a majority of capital is owned by the state and a minorityis ownedby private investors.

Since Cambodia became the first least-developed country (LDC) to join the World Trade Organization (WTO) in 2004, trade has steadily increased. The Cambodia CPFs three focus areas are underpinned by specific objectives: Promoting state efficiency and boosting private sector development includes three objectives: Fostering human development includestwoobjectives: Improving agricultural productivity and strengthening the sustainable use of natural resources includes two objectives: The World Bank supports thesefocus areasthrough investment projects in education, health and nutrition, roads, improved livelihoods, agriculture diversification,land allocation for social and economic development, water supply and sanitation, sustainable landscape andwater resource management, disaster risk management, and community-level service delivery. Gross Domestic Product Per Capita for Cambodia [PCAGDPKHA646NWDB], ADBs country partnership strategy for Cambodia, 20192023 supports the countrys post-pandemic recovery by strengthening the health systems and addressing key constraints to growth, competitiveness, inclusion, and sustainability. Improving lower secondary education to meet minimum standards is the goal of a World Bank-supported project in Cambodia. In ahandful ofsectors, such as cigarette manufacturing, movie production, rice milling, and gemstone mining and processing,foreign investment is subject to local equity participation or prior authorization from authorities. The project has supported construction and renovation activities in 130 secondary schools. Corruption remains a significant issue in Cambodia. In 2012, the NBC launched retail payments for cheques and credit remittances. Learn more about quality higher-education opportunities in the U.S. that you will not find anywhere else in the world. Foreign direct investment (FDI) incentives available to investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, a 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation. Foreign investors may own 100 percent ofinvestment projects except in the sectors mentionedSection 1. Draft regulations are only selectively and inconsistently available for public consultation with relevant non-governmental organizations (NGOs), private sector, or other parties before their enactment. Theregulationsets additional requirements for banks and financial institutions that intend to issue securities to the public.

Cambodia does not have asovereign wealth fund. Telephone: +855-23-223-954 A small number of Vietnamese and Thai migrant workers are employed in Cambodia, and prior to the pandemic Chinese-run infrastructure and other businesses imported an increasing number of Chinese laborers, who typically earn more than their Cambodian counterparts. The national poverty line in Cambodia is now riel 10,951 or is equivalent to US$2.7 (market exchange rate) per person per day. LEAP established 975 self-help groups (SHGs) with 11,428 poor households/members, of which nearly 90 percent are women and all 975 SHG opened bank accounts and prepared their Micro Investment Plans (MIP). QIPs are then eligible for specific investment incentives. So far, the supply side has rolled out to 24 out of 25 capitals and provinces. A Fast and Secure Transfer (FAST) payment system was introduced in 2016 to facilitate instant fundtransfers. In the past, the GDT has lacked the capacity to collect taxes on a large scale. Local and foreign businesses report that they must often make informal payments to expedite business transactions. It assists its members and partners by providing loans, technical assistance, grants, and equity investments to promote social and economic development. Some Cambodiancompanies haveinvested in neighboring countries notably, Thailand,Laos, and Myanmar. The regulatory framework for corporate bonds was bolstered in 2017 through the publication of several regulations covering public offering of debt securities, the accreditation of bondholders representatives, and theaccreditation of credit rating agencies. 6 ADB Avenue, Mandaluyong City 1550, Metro Manila, Philippines. 59 percent of the service providers covered by the project (schools, health centers and commune administration) are now meeting key national standards. The government has also taken steps to limit free speech and stifle independent media, including forcing independent news outlets and radio stations to cease operations. The project has benefitted 140,263 students, teachers, school directors/deputy directors, educational staff, and community representatives, well beyond the original target for project beneficiaries of 20,500. Cambodia has recently redefined the poverty line, using the most recent Cambodia Socio-Economic Survey for 2019/20, based on cost-of-basic need, and a common basket approach. Available technologies include mobile payments, QR codes, and e-wallet accounts for domestic and cross-border payments and transfers. The Embassy is unaware of any incidents of political violence directed at U.S. or other non-regional interests. Cambodia hasaliberal foreign investment regime and actively courts FDI. The government also delayed the implementation of a capital gains tax, which was due to go into effect in 2021. Fax: (855)-23-728-800 Some 37 percentofthe non-agricultural workforce, or 2.2 million workers, are in the informal economy. Daily fluctuations of the exchange rate are low, typically under three percent. Meanwhile, the recovery of the service sector and, especially, tourism -- an important source of employment -- remains sluggish. In others,the GDT has been criticized for employing audits and assessing large tax obligations for political purposes. The ratio of non-performing loans was measured at 1.6 percent in 2019. There are no restrictions on the conversion of capital for investors.

Explore resources provided by the Research Division at the Federal Reserve Bank of St. Louis, Federal Reserve Bank of St. Louis, Performance-based contracting for road construction and maintenance is expanding to promote private sector participation and to optimize service quality. The Cambodian government offers a generous package of incentives to foreign investors and imposes few restrictions on imports from abroad. Land rights are a contentious issue in Cambodia, complicated by the fact that most property holders do not have legal documentation of their ownership because of the policies and social upheaval during Khmer Rouge era in the 1970s. This causes confusion to rights owners and muddles the overall IPR environment.

The results of a High Frequency Phone Survey of Households show that employment has yet to return to pre-pandemic levels. Despite the progress in health and education outcomes, human capital indicators lag other lower middle-income countries. 93/1 Wireless Rd., Bangkok 10330, Thailand * Source for Host Country Data: The Council for the Development of Cambodia (CDC) provides official government data on investment in Cambodia, but not all data is published online. The NBC also requested financial institutions to delay dividend payouts in order to preserve financial sector liquidity. A QIP allows employers to obtain visas and work permits for foreign citizens as skilled workers, but the employer may be required to prove to the Ministry of Labor and Vocational Training that the skillset is not available in Cambodia. The CDC is also required to seek approval for investment proposals that will have a negative impact on the environment or the governments long-term strategy. The total number of active Community Accountability Facilitators (CAFS) is 2,039 (1,351 females and 860 youth) which represent 4.4 CAFs per target commune/sangkats on average. The ongoingRoad Asset Management Project II (RAMPII)has been supporting the Ministry of Public Works and Transport (MPWT) to improve the condition, safety, and climate resilience of over 420 kilometers of the core national road network and to introduce a road management system. The CDC also serves as the secretariat to Cambodias Government-Private Sector Forum (G-PSF), a public-private consultation mechanism that facilitates dialogue within and among 10 government/private sector working groups.