Cambodia Investment Review
Vichet Lor, Vice President of the Cambodia Chinese Commerce Association (CCCA-Cambodia Chapter), spoke to CIR Leader Talks on his opinion of Cambodia’s rising economic potential, the mission and vision for the CCCA and the ongoing betterment economic prosperity brings to Cambodia and the region.
Starting from a real estate background Vichet has been consulting investors and business partners since the early days of the booming real estate market in Cambodia assisted by his unique trilingual ability to speak Khmer, English and Chinese.
Read more: Cambodia can utilize post-COVID recovery for economic reform says ADB
As Vice-President of the CCCA, Vichet states the associations mission and purpose is to promote Cambodia to China and the world with most of the founders from Hong Kong, the team helps locals and foreigners in Cambodia together to build networks and expand their business.
Cambodia – an ideal investment destination
“Cambodia is the most politically stable country within the ASEAN region, which, coupled with its liberal and open trade policies, make it an ideal investment destination,” shares Vichet. With no fund inflow and outflow restriction and the use of USD as the functioning currency, Cambodia has a distinct advantage, attracting Foreign Direct Investments (FDIs) from around the world.
The Kingdom’s allowance of 100% foreign ownership of companies serves as a significant magnet for FDIs. “This, in addition to the consistent economic growth of 7.7% for two decades, proves that Cambodia is on par to become the next Asian Tiger,” asserts Vichet, showcasing an economic resilience that even the COVID-19 pandemic couldn’t thwart.
One of the key areas of growth Vichet identifies is the urbanization of Cambodia’s capital, Phnom Penh. The rising population and lower costs in real estate, compared to other ASEAN members, present immense opportunities. “However,” Vichet notes, “It’s critical for investors to focus on properties with unique locations, quality, and amenities. A reputable property management company can guarantee future value appreciation.”
Projects like Urban Village and FACTORY Phnom Penh, which focus on blending amenities with community living, are indicative of the kinds of properties that Vichet believes will thrive. “Cambodia has a young population with 65% below 35 years old and a rising middle class. These unique factors make it a highly promising investment hub for the next five years.”
Despite these prospects, Vichet stresses the importance of caution. “Investors should avoid properties where developers don’t own the land or don’t comply with international industry safety standards and international building inspection certifications.”
Towards upper-middle-income economy
Leading financial institutions like AMRO, Asian Development Bank, IMF, and the World Bank recognize Cambodia’s potential. Vichet highlights, “Cambodia is in the top 3 of high-performing economies in the ASEAN region.” Recently, the ADB forecasted Cambodia as the 2nd highest performing economy, after the Philippines, with 5.8% economic growth for 2023.
Vichet emphasizes, “The Asia Pacific region is the engine of growth for the next decade for the global economy, with the ASEAN region, led by the Philippines, Cambodia, and Vietnam, at its heart.”
He acknowledges the rise of India as a global powerhouse and notes the shift of global manufacturing companies like Intel and Apple Inc. towards India. “Cambodia is already capitalizing on this shift,” says Vichet, “The Ministry of Commerce of Cambodia has negotiated an FTA with India to increase trade volumes with this rising global economic powerhouse.”
Cambodia’s trade mechanisms such as FTAs with China and South Korea, and its membership of the Regional Comprehensive Economic Partnership (RCEP) agreement, further its potential for growth. Vichet expresses, “This full cylinder’s horsepower is set to propel Cambodia to become the next Asian Tiger.”
With an aspiration to become an upper medium-income country by 2030 and a high-income country by 2050, Cambodia is progressing steadily with members from the international community also lending its support to this ambitious goal.
Read more: Cambodia Real Estate Survey 2023 – What Is The Market Sentiment
“International financial institutions and development partners are working hand in hand with the Royal Government of Cambodia to facilitate existing trade mechanisms, reduce tariffs and customs barriers, and build human capacity to meet the demands of high technology driven FDIs,” explains Vichet.
These concentrated efforts reveal a comprehensive growth plan. The Cambodian government, in collaboration with international bodies and leaders of the international community, are working to continue improving an ecosystem conducive to foreign investment and economic prosperity.
Economic betterment for all Cambodian’s
Vichet is also optimistic about the country’s economic prospects moving out of the pandemic. He continues, “The Royal Cambodian Governments strong efforts post-COVID, paired with our young and dynamic workforce, make Cambodia an attractive destination for investors worldwide. We are on the brink of a major economic boom.”
However, the success of Cambodia as the next Asian Tiger is not just about the numbers for investors, but about the people who live and work in the country. “Our aim is not just economic growth, but also the betterment of the lives of the Cambodian people. Investments need to be sustainable and inclusive,” asserts Vichet.
As Cambodia charts its way towards becoming an upper medium-income country by 2030, the CCCA aims to play a crucial role in this journey, with the association committed to promoting Cambodia globally and helping local and foreign businesses expand.
“Cambodia’s future is bright, and we’re only just beginning to scratch the surface of what we can achieve,” says Vichet. He concludes with a message to potential investors: “With the right investment strategy, and an understanding of our local market, the opportunities here are immense. Cambodia is more than ready to rise as the next Asian Tiger.”