Cambodia Investment Review
The 7th Ecosystem Builder Network Meeting (EBN7), held on the 29th of March 2024 at the Khmer Enterprise Office, concluded with significant progress toward establishing a long-term roadmap for the development of Cambodia’s entrepreneurial ecosystem. The meeting marked a pivotal moment as representatives from government, development partners, and various institutions came together to refine and advance the strategic plan aimed at nurturing start-ups and small and medium-sized enterprises (SMEs) in the nation.
Cecile Dahome, Executive Director of Sevea Consulting, presented the current draft of the roadmap, which has been formulated with contributions from an inter-agency working group that includes Khmer Enterprise, Swiss Agency for Development and Cooperation, Oxfam, UNIDO, ILO, Netherlands Development Organization, two representatives from GIZ, and Swisscontact. The roadmap is constructed upon six pillars of entrepreneurship ecosystem development and is designed to foster the growth of businesses through each stage of an entrepreneur’s journey.
Ongoing Progress Made Through Flagship Initiatives
Participants reviewed the roadmap’s framework, which addresses key areas such as policy development, financial accessibility, market expansion, and the digital transformation of business processes. One significant highlight from the meeting was the emphasis on formalizing the Cambodian business landscape, with the online registration portal reporting over 34,000 businesses and $10 billion in registered capital.
The roadmap acknowledges the progress made through initiatives like the establishment of a SME Bank and the Entrepreneurship Development Fund, which have catalyzed the support structure for Cambodian enterprises. Digital platforms such as KhmerSME and Startup Cambodia, both launched in 2021, were recognized as crucial infrastructures that have simplified the shift from informal to formal business operations.
EBN7 also addressed the remaining challenges that the roadmap must contend with. There is an evident need for more consolidated and accessible startup data, as well as a clearer regulatory distinction between startups and SMEs. Additionally, the roadmap calls for the development of standalone policies geared specifically toward entrepreneurial development.
Actionable Course For Cambodia’s Entrepreneurial Development
As Cambodia prepares for its transition from an LDC, the roadmap outlines a strategy to mitigate the anticipated impacts on trade, particularly concerning access to the EU market and the shift from grant-based to loan-based financing from international partners. The meeting discussed the high interest rates on concessional loans from countries such as Japan and South Korea and the gradual transition from grants to loans, particularly from Germany.
With the recent implementation of a global minimum tax rate of 15% on corporate profits, the roadmap also details the need for Cambodia to review its corporate tax strategy to ensure that businesses remain competitive.
The EBN7 discussions highlighted various key policy documents that will shape the Cambodian entrepreneurial ecosystem. These include the Pentagonal Strategy – Phase I for realizing Cambodia Vision 2050, the Cambodia Digital Economy and Society Policy Framework, the Financial Technology Development Policy, and the E-Commerce Strategy.
EBN7 has set a clear and actionable course for Cambodia’s entrepreneurial development. The roadmap, once finalized, will provide a structured approach to strengthen the ecosystem, encouraging innovation, facilitating market access, and ensuring sustainable economic growth. The collective efforts of the EBN underscore a commitment to supporting Cambodia’s transition to a robust and dynamic business environment in the coming years.
