Cambodia Investment Review
Foreign direct investment (FDI) into Cambodia strengthened further in 2025, with inflows rising to just over $5 billion, reflecting continued investor confidence in the Kingdom’s manufacturing base, regional supply-chain role, and improving infrastructure.
According to data released by the National Bank of Cambodia, total FDI inflows reached $5.2 billion in 2025, up 18.2% from the previous year. The increase extended Cambodia’s post-pandemic investment recovery and underscored its growing integration into regional and global production networks.
Manufacturing leads non-financial sector expansion
The NBC report shows that growth was largely driven by the non-financial sector, where investment rose by 24% year on year. Manufacturing was the standout performer, recording a sharp 50% increase in investment, reflecting ongoing expansion in export-oriented production, particularly garments, footwear, travel goods, and other light manufacturing activities.
Other non-financial sectors also posted gains, though at more moderate levels. Real estate investment increased by 23.2%, energy by 15.2%, agriculture by 4.7%, and a range of other sectors by nearly 30%. Construction investment edged up 7.7%, while the hotel and entertainment segment declined by 28.8%, suggesting a more cautious approach in tourism-linked developments after several years of rapid expansion.
In contrast, investment in the financial sector fell by 12.8%, highlighting a shift in capital allocation toward productive, export-linked industries rather than financial services.
China remains dominant source of capital
China continued to account for the bulk of foreign investment into Cambodia in 2025. The NBC data shows Chinese investors contributed 73% of total FDI inflows, reinforcing China’s position as Cambodia’s most significant economic partner.
Singapore ranked a distant second, accounting for 7% of inflows, followed by South Korea and Canada at 4% each, Malaysia at 3%, and other countries collectively representing 9%. The diversified but still China-heavy investment profile reflects Cambodia’s role within China-centric regional supply chains, while also indicating growing participation from other Asia-Pacific and Western investors.
The strength of investment flows was also reflected in project approvals. More than 600 investment projects were approved during the year by the Council for the Development of Cambodia, signaling sustained momentum in both new and expanding ventures.
Confidence underpinned by policy stability and market access
Economists point to several structural factors underpinning Cambodia’s FDI performance. These include political stability, relatively liberal investment regulations, a growing skilled workforce, and ongoing improvements in transport and logistics infrastructure. Cambodia’s participation in preferential trade schemes has also continued to support investor interest, particularly for manufacturers targeting export markets.
Read More: Opinion: Cambodia’s FDI Success Story Hides Dependence on China and Weak Institutions
At the same time, Cambodia’s manufacturing sector has increasingly aligned production with global consumer demand, helping to stabilise supply chains and improve predictability for investors operating in the Kingdom. Analysts note that demand-driven production has become an important factor in sustaining long-term manufacturing investment rather than short-term capacity expansion.
Strong international rankings reinforce momentum
Cambodia’s performance has also been recognised in international investment rankings. For the second consecutive year, the country was placed at the top of the FDI Stand Out Watch List among emerging markets, according to FDI Intelligence.
In 2025, Cambodia ranked first in the Asia-Pacific region and ninth globally in the Greenfield FDI Performance Index, which measures a country’s ability to attract greenfield investment relative to the size of its economy. The ranking highlights Cambodia’s effectiveness in converting its economic scale and policy framework into tangible investment outcomes.
Outlook: selective growth amid sectoral shifts
While headline FDI growth remains strong, the sectoral breakdown suggests a more selective investment environment. Manufacturing, energy, and export-linked industries continue to attract capital, while hospitality and financial services face more subdued inflows. This shift aligns with Cambodia’s broader development objectives, which prioritise industrial upgrading, job creation, and deeper participation in global value chains.
As Cambodia moves toward its planned graduation from least developed country status later this decade, maintaining policy consistency, improving skills development, and upgrading infrastructure will remain central to sustaining investor confidence. For now, the 2025 figures indicate that foreign investors continue to view the Kingdom as a competitive and resilient destination for long-term investment in Southeast Asia.
