Cambodia Investment Review
Aquarii BD Cambodia has released its latest issue of “Connecting Dots,” providing a comprehensive overview of significant economic and trade developments in Cambodia for June 2024. The edition covers critical areas such as economic growth forecasts, infrastructure projects, trade relations, investment incentives, and new e-arrival requirements for travelers.
Bullish Growth Forecasts for Cambodia
International financial institutions have projected positive growth for Cambodia’s economy in 2024 and 2025. The World Bank and the Asian Development Bank estimate a growth rate of 5.8% for 2024, while the International Monetary Fund predicts 6.0%, and the ASEAN+3 Macroeconomic Research Office offers the most optimistic forecast at 6.2%.
These projections, although encouraging, are tempered by local economic challenges. A sluggish property market, subdued domestic demand, rising nonperforming loans (NPLs), and tight cash flows have raised questions about the realism of these growth estimates. Nonetheless, experts believe that with political stability, policy reforms, and a youthful population, Cambodia is on the right track towards sustainable growth.
Funan Techo Canal: A Transformative Project
The Funan Techo Canal (FTC), Cambodia’s first capital-coastal waterway, is set to enhance the country’s economic landscape. Spanning 180 kilometers, this project aims to connect Phnom Penh Autonomous Port with Kep province and the Gulf of Thailand, linking inland waterways to Cambodia’s two major seaports. The canal is expected to reduce delivery costs and time, spur the growth of industrial zones, and create jobs.
Kinkesa Kim, Managing Director at CBRE Cambodia, highlighted the project’s potential to modernize infrastructure and improve trade competitiveness. She emphasized that the canal would benefit various sectors, including industrial and logistics, real estate development, agribusiness, and tourism.
Read More: Opinion – Funan Techo Canal Helps Cambodia Escape Vietnamese Commercial Pressure
Strengthening Bilateral Ties with Singapore
Prime Minister Hun Manet’s official visit to Singapore marked a significant milestone in Cambodia-Singapore relations. During his visit, PM Hun Manet engaged in high-level discussions with Singaporean leaders, resulting in several key agreements, including the launch of the Financial Transparency Corridor (FTC) initiative between the National Bank of Cambodia and the Monetary Authority of Singapore. This initiative aims to enhance trade and financial services between SMEs in both countries.
Dr. Tan See Leng, Singapore’s Minister for Manpower and Second Minister for Trade and Industry, praised the forum’s turnout and the continued interest from Singaporean companies in exploring opportunities in Cambodia. He noted that the partnerships formed have significantly contributed to the growth in foreign direct investment in ASEAN.
Expansion of Qualified Investment Projects (QIP) Tax Incentives
Under Cambodia’s new Law on Investment, Qualified Investment Projects (QIP) can benefit from various tax incentives. These include income tax exemptions and special depreciation deductions. The Ministry of Economy and Finance has introduced new procedures to provide income tax incentives for Expanded Qualified Investment Projects (EQIP), aiming to boost commercial growth and support industries benefiting the nation.
The law categorizes QIPs into Export QIP, Supporting Industry QIP, and Domestically Oriented QIP, each eligible for different incentives. This initiative is designed to ensure the sustainability of QIPs beyond the duration of the tax incentives.
New E-Arrival Requirements for Travelers
Starting July 1, 2024, all travelers to Cambodia must complete the Cambodian e-Arrival Card before entering the country. This digital platform replaces the traditional paper-based immigration, health, and customs forms, streamlining the entry process and reducing waiting times at airports. Travelers can complete the e-Arrival Card online within seven days prior to arrival, providing essential details such as personal information, passport data, and travel itinerary.
This new requirement aims to enhance the efficiency and safety of the arrival process, ensuring a smoother experience for all visitors to Cambodia.
Aquarii BD’s Role and Mission
Aquarii BD emphasizes the importance of providing international businesses and investors with up-to-date information on Cambodia’s economy and market.
“At Aquarii BD, we believe that helping international businesses and investors, particularly those not yet familiar or socialized to Cambodia’s value proposition and opportunities, to formulate an up-to-date understanding of factual developments in Cambodia’s economy and market, remains an important first step to attracting more investments to the Kingdom.”
“‘Connecting Dots’, a monthly compilation of the more salient local developments from the preceding month, coupled with insights and comments from trusted industry experts into Cambodia’s evolving market dynamics, underscores our commitment to equip businesses and investors with the knowledge and information to navigate the local business landscape and to make better-informed decisions on investment opportunities emerging from Cambodia’s socio-economic developments.”
For those interested in a deeper dive into Cambodia’s economic updates and forecasts, the full June 2024 issue of “Connecting Dots” is available for download on Aquarii BD’s website, offering invaluable insights into Cambodia’s economic progress and investment potential.
