Cambodia Investment Review
The Singapore Business Federation (SBF) is leading a weeklong delegation to Cambodia from July 31 to August 5, in a strategic move to explore and unlock the burgeoning business and investment opportunities within the emerging Cambodian market.
Representing a broad spectrum of businesses, ranging from startups to multinational corporations, the SBF’s mission is multifaceted and comprehensive. It aims to gain in-depth insights into Cambodia’s economic potential and emerging trends, aligning with Singapore’s vision of strengthening bilateral business relationships and expanding its footprint in Southeast Asia.
The delegation’s week-long itinerary is a blend of thoughtful engagements and pragmatic assessments. The visit was kickoff with an insightful business seminar titled “Business Seminar: Cambodia – an Overlooked Destination for Investment and Business,” where industry experts will shed light on diverse aspects of Cambodia’s economic landscape.
In addition to this, the delegation will be embarking on site visits to Special Economic Zones, significant hubs of industrial and commercial activities, reflecting Cambodia’s strategic emphasis on economic diversification and growth.
Delegation’s Visit Is More Than a Diplomatic Gesture
Furthermore, the trip involves targeted briefings on various sectors, such as banking, technology, agriculture, and manufacturing, to equip Singaporean businesses with firsthand knowledge of Cambodia’s rapidly evolving market dynamics.
These engagements are complemented by networking receptions that foster interaction and collaboration between Singaporean and Cambodian businesses, ensuring that relationships are not just formed but nurtured.
The delegation’s visit is more than a diplomatic gesture; it signifies increasing interest from Singaporean businesses and investors in Cambodia’s potential. It reflects a broader trend of Singapore aligning with emerging markets that resonate with its entrepreneurial spirit, technological innovation, and commitment to sustainable growth.
Through a carefully curated blend of seminars, site visits, briefings, and networking opportunities, the SBF’s delegation to Cambodia encapsulates a forward-thinking approach to international business collaboration and promises to set a precedent for future engagements within the region.
Emphasizing Growth and Collaboration
Mr. Michael Tan, the Founder Director of Aquarii SG Pte Ltd & CEO of Aquarii BD Cambodia, presented Cambodia’s emerging status as a hub for business and investment, drawing from his experience as Singapore’s Ambassador to Cambodia from 2016 – 2020.
Highlighting the nation’s remarkable annual growth rate of 7.7%, Mr. Tan expressed optimism about Cambodia’s trajectory to graduate from LDC status by 2027 and reach high middle-income status by 2030. He also emphasized the nation’s technological advancements, specifically in e-payment transactions, which reached more than 9 times Cambodia’s official GDP in 2022.
With an eye on fostering collaboration and trade between nations, Mr. Tan stated, “We leverage our diverse network of strategic partners and experts to provide multi-sectoral services, enhancing business relations not only in Cambodia but also in Thailand, Indonesia, and Vietnam.”
He concluded by inviting attendees to explore Cambodia’s borders, expressing confidence in its growth, innovation, and potential for collaboration.
Cambodia’s Global Trade and SME Support
H.E. Dr. Chhieng Vanmunin, the Chief Executive Officer of Khmer Enterprise, focused on Cambodia’s international trade and its initiatives to support startups and small-to-medium enterprises (SMEs). He drew attention to the €3.5 billion worth of goods imported by the EU from Cambodia, showcasing the country’s global outreach.
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Dr. Vanmunin further commented on the EU as a vital trade partner for Cambodia, emphasizing active efforts to expand industrial and agricultural exports. He also addressed the challenges faced by startups and SMEs, such as rankings like 144th out of 190 in Doing Business (DB), acknowledging the hurdles and outlining the government’s support measures.
These measures include SME tax incentives, the establishment of facilitation institutions like the SME Bank, Khmer Enterprise, and Techo Startup Center, and additional financial support amounting to $160 million in 2021 and $250 million in 2022. Dr. Vanmunin stressed the need for regulatory simplification, expressing determination and optimism in unlocking Cambodia’s immense potential.
Banking and Finance Landscape
Mr. Ong Teong Hoon, Director and Shareholder’s Representative of Phillip Bank Cambodia, provided an enlightening overview of Cambodia’s complex and evolving banking and finance industry. With about 60 banks, hundreds of microfinance institutions (MFIs), and other financial entities, he highlighted the nation’s gradual dedollarization and the absence of foreign exchange control.
Mr. Ong also discussed various aspects of Cambodia’s lending landscape, including soft titles, hard titles, “L-maps,” and credit guarantee schemes that offer up to 70% of the banking facility. He noted the availability of insurance coverage that meets commercial requirements and the growing trend of electronic payments, which have become more widely accepted than credit cards in Cambodia.
His insights emphasized the unique blend of traditional practices with regulatory frameworks and technological innovations, painting a vivid picture of a vibrant ecosystem for growth and investment.
Insights into Cambodia’s Legal and Tax Reforms
Mr. Sim Laysym, Partner of VDB Loi Cambodia, spoke extensively about Cambodia’s legal and tax reforms, detailing significant changes since its introduction in 1997. He highlighted the country’s commitment to enhancing financial governance and transparency, with substantial amendments made in 2003, 2020, and 2023.
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He also discussed the tax landscape, including various monthly and annual taxes, the multilayered audit structure, penalties for non-compliance, and the importance of maintaining accounting records. Additionally, he provided insights into tax rates applicable to different entities and the flexibility in financing options in Cambodia.
His comprehensive look into Cambodia’s legal and tax structure illuminated the complexities of a system that continues to evolve, concluding that recent reforms have fostered an environment conducive to investment and entrepreneurship.
The seminar served as an eye-opening exploration into Cambodia’s multifaceted investment climate. From its promising growth trajectory to intricate financial landscape, international trade relations, and supportive measures for small businesses, the insights provided by each speaker painted a rich tapestry of opportunities.
It was an event that not only highlighted Cambodia’s current achievements but also laid out a vision of its potential as a leading player in the global market. It’s a vision that, given Cambodia’s demonstrated commitment to growth, innovation, and collaboration, is rapidly becoming a reality.
