Investment in Cambodia is primed to spike post-Covid as the country reopens to a global business climate that has shifted due to the pandemic and the country welcomes new laws aimed at attracting more foreign direct investment.
The forum will be a major chance to present Cambodia as an investment destination will come on November 24, when Cambodia virtually hosts the First Asia Europe Economic Business Forum, an accompanying event to the ASEM 13 Summit.
The event will touch on a wide range of topics, from new opportunities arising in a post-pandemic world, the need to invest in green infrastructure, digitalization, and the increased role of start-ups and MSMEs in the “new normal”.
During a preview of the event, European Chamber of Commerce (EuroCham) staff, diplomats, business experts and government officials outlined a potential roadmap for Cambodia as it emerges from the worst effects of the pandemic.
Cambodia’s investment law should ease entry for foreign businesses
EU Ambassador to Cambodia Carmen Moreno said trade and investment will be main drivers to sustain Cambodia’s growth and create new jobs.
“The adoption of the new investment law will be an important tool to attract more and better quality investment, increase diversification and competitiveness of industries, and provide more and higher-value jobs for the country,” she said.
Moreno also said the EU would look to increase its presence in Cambodia and is focused on creating a transparent and predictable business environment for investors that adheres to international standards.
Nöe Schellinck, EuroCham’s advocacy manager, said the new investment law offered a wide range of incentives for potential investors in certain sectors, including the option to forego income tax for up to nine years.
These incentives were outlined in a new edition of EuroCham’s “Business Opportunities in Cambodia” publication that was released Monday.
Room for growth across multiple sectors post-Covid
A comprehensive “Sourcing from Cambodia” brochure was also released Monday in advance of the business forum. The brochure, produced with support from the Ministry of Commerce, EuroCham, and German development agency Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), highlights companies in six key export sectors: pepper, sustainable textiles, light manufacturing, palm sugar, handicrafts, and mangoes.
EuroCham Chairman Tassilo Brinzer said the chamber has positioned Cambodia as a “plus one” investment destination, meaning that companies may shift some, but not all, of their production to Cambodia.
Events like the recent coup in Myanmar and increased US-China tensions have caused companies to look at countries like Cambodia as potential production destinations, according to EuroCham Deputy Director Hekseth said one of the biggest problems in attracting investment to Cambodia is old-fashioned views.
“The biggest problem we have at EuroCham Cambodia is what we call the perception gap. Cambodia is more than just ancient temples… and it offers far more than just agricultural products. Agriculture makes up a decreasing portion of GDP each year,” he said
Likewise, he said Cambodia would need to shift away from reliance on garment exports to grow as wages continue to rise. This change has already started taking place in areas like bicycle exports, he said.
During the first half of 2020, the EU imported $241 million of bicycles from Cambodia, making Cambodia the top bicycle exporter to the EU.
EuroCham CSR awards to be held November 23
Corporate social responsibility (CSR) has also started to play a larger role in modern Cambodian businesses, and CSR expert and EuroCham consultant Lyze Bentoto said promoting CSR is important because it leads to innovation and growth in the business community.
Bentoto will host the EuroCham CSR award ceremony scheduled for November 23 at 6:30 pm.
“It is indeed very important to promote and share these best [CSR] practices as they can be the seeds needed to cultivate innovation, engagement and growth,” she said.
“There’s already a strong local, inspirational foundation of role models ready to establish a nationwide socially responsible community. This community is made up of ordinary individuals who are doing extraordinary work individually and collectively through their companies to become impactful, offer sustainable solutions and improve our life quality.”
The Asian Development Bank has forecast 5.5% growth in 2022 after downgrading this year’s forecast to 1.9% – down from 4.0% in its April outlook. Inflation was forecast to remain relatively stable this year at 2.9%.