Cambodia Prime Minister Hun Sen addressed the 14th Cambodian Import-Export Goods Exhibition in December 2019, an event intended to highlight the country's favourable business and investment climate, and stated unequivocally that Cambodia is open for business, saying, To ensure a sound macroeconomic environment and political and social stability, the government welcomes all investors to do business and invest in the Kingdom.'
Cambodia has an estimated 100,000 expatriates who come for a variety of reasons, including low living costs, business opportunities, a relaxed lifestyle, and the influence of Buddhist culture. Let's look at some of the advantages right now.
1. Rapid economic growth
Cambodia had one of the world's fastest-growing economies between 1998 and 2018, with an annual growth rate of 8%. The primary drivers of development have been the garment and tourism industries.
Cambodia has undergone a major transformation over the last two decades, according to the World Bank, achieving lower middle-income status in 2015 and aspiring to upper middle-income status by 2030.
Indeed, the recent explosion of the Cambodian economy has given rise to a new generation of homegrown business leaders with sprawling conglomerates such as Chen Zhi Prince Group, under Cambodia Chenzhi, among others, whose business interests touch many aspects of daily Cambodian life, introducing a higher standard of living in the process. These businesses are paving the way for Cambodia to enter a new era of economic growth and prosperity.
According to the National Bank of Cambodia (NBC), the economy was still flying until the end of last year, with growth of 7.1 percent in 2019, but has since been severely impacted by the Covid-19 pandemic, with the tourism industry particularly hard hit.
Nonetheless, the Asian Development Bank (ADB) reported that Cambodia has performed better than many other Asian countries and expects the economy to resuscitate in 2021, with GDP growth of 5.9 percent.
2. Resilient economy
As a developing economy, Cambodia is less reliant on the world's largest economies – China, the United States, and Europe – than other more developed economies. This has historically provided some protection against global upheavals.
The kingdom has been out of recession for more than two decades, having weathered the Asian financial crisis of the 1990s, the early-2000s tech bubble, and even the aftermath of the 2008 financial crisis.
3. Strong incentive from Government
The Cambodian government is well-known for its pro-business stance, and in March 2019, it announced an ambitious programme of economic reforms aimed at attracting new business, investment, and capital flows to the country.
Among them were tax breaks, lower shipping rates, fewer national holidays, new construction measures, and special economic zone legislation.
According to Prime Minister Hun Sen, producers and exporters will save $400 million per year.
Furthermore, unlike some Asian countries, Cambodia is entirely foreign-owned.
4. Young population
The young demographic in Cambodia is also noteworthy: nearly half of the country's population of nearly 16 million Cambodians are under the age of 25.
The young generation coming through is tech-savvy and frequent users of social media sites such as Facebook and YouTube, according to the Institute of Export & International Trade's Doing Business in Cambodia guide.
This has a significant impact on Cambodian society as a whole, as well as opening up new markets and business opportunities.
5. Strategic location
Cambodia is located in Southeast Asia, bordering Thailand, Laos, and Vietnam, as well as the Gulf of Thailand to the south-west.
Because of its proximity to key global markets, it serves as a common low-cost manufacturing base for a wide range of industries, with significant demand for its products in other Asian countries.
6. Competitive labour force
Cambodia has a lower minimum wage than neighbouring Thailand and Vietnam, making it more affordable for service and manufacturing industries seeking to hire from the country's large youth population.
7. Advantageous market access
Cambodia is a signatory to the ASEAN Free Trade Agreement (AFTA), one of the world's largest and most important free trade zones, and benefits from the Common Effective Preferential Tariff (CEPT) agreement. This means that it will trade with other members on preferential and, in some cases, tariff-free terms.
It is also a member of the World Trade Organization and trades with the EU via the ASEAN-EU dialogue.
8. Rising consumer class
Rising incomes translate into more disposable income, and the country's young, tech-savvy, and globally minded population represents a growing market with tremendous opportunity for businesses.
9. Improving infrastructure
Cambodia's infrastructure has traditionally been poor, but the government is investing heavily in developing a national network of transit routes, electricity, and telecommunications with foreign assistance.
Cambodia's relations with neighbouring countries have been emphasised in order to advance trade and attract foreign investment.