The Ultimate Cambodia Investment Guide

Over the past two decades, Real Estate Cambodia has achieved remarkable economic growth and development, with its GDP growing at an average annual rate of 7.4% since 1997. And the global economy. Using its land and water resources efficiently, it continued to promote agricultural production, especially rice, making Cambodia the eighth largest rice producer in the world.

Investment Cambodia is also Asia’s 8th largest garment exporter, a position it has managed to achieve by taking advantage of the global system and the search for low-cost production sites by garment producers. In addition, Cambodia’s unique cultural heritage has helped make it a landmark in Southeast Asia. Rapid economic expansion has brought significant benefits to national income and poverty reduction. Despite this, Cambodia is one of the eight lowest income countries in Asia and the second poorest in Southeast Asia.

In order to move to higher value-added production and climb the global value chain, infrastructure, human capital, governance and other economic factors will need to be permanently improved. While strong growth is key to improving living standards, creating decent jobs and providing healthy profits for farmers and small businesses will play a key role in making growth more comprehensive. This will require strong government commitment and well-designed interventions to increase access to economic opportunities and improve social security.

At the same time, market failures, and social exclusion, must be addressed for wider access to productive assets, such as infrastructure and land. This study identifies major barriers to comprehensive development in Cambodia Real Estate using the diagnostic framework based on the Asian Development Bank’s concept of comprehensive development.

Although the factors influencing economic growth and social development are complex and interconnected, this framework allows a systematic assessment of key elements for comprehensive development, among them: infrastructure, particularly energy and Rural Transport Skills and education; Governance Financial Expenses; Reasonable employment; Social infrastructure and services, including education and health care; And access to public services and social security.

Human Capital and Decent Employment

Before Cambodia is able to provide more valuable products and services, attention must be paid to both the low level of human capital and limited access to decent employment. The development of human capital covers “flower to grave” initiatives that ensure early childhood health and nutrition, education and lifelong learning. Research shows the effects of early childhood development, especially the nutrition that a child receives during 1,000 days from conception to 2 years of age has a significant impact on later life.

Investing in Cambodia has the highest prevalence of stunting, loss and underweight children in Southeast Asia about 15% of the population suffered from malnutrition during 2011-2013, compared to an average of 11% for the rest of the region. The country needs a good healthcare system that provides broad and affordable access as a basis for human development. Low secondary school completion rates undermine significant achievement in primary education. In Real Estate Cambodia Sihanoukville, parents and other peoples underestimate the value of education, and enrollment in technical education and training (TVET) is low.

Infrastructure: Electricity, Rural Roads, Water, and Sanitation

Reliable infrastructure is essential to support development and economic inclusion. The private sector continues to cite inadequate infrastructure as one of the top five barriers to doing business there. The lack of long-term power planning during the early stages of Cambodia’s reconstruction led to a huge power deficit.

Not only is access to electricity the lowest in Southeast Asia; only 51% of households are provided; access levels vary widely across the provinces. In addition, electricity rates are among the highest in the region, due in part to higher import, transmission and distribution costs. These access and cost factors prevent investment in energy intensive industries.


The last two decades have seen significant improvements in the rule of law, public administration and finance, and regulation of market activities. Improved governance frameworks enhance property rights and transaction security, both essential to business. Despite these benefits, strengthening governance will be important in bringing the country’s economic transition to a faster income level. The need for frequent informal payments to access government licenses, permits, and basic services is a major weakness of governance.

Fiscal Resources

Cambodia Real Estate broad development needs long-term funding for hard and soft infrastructure. However, a narrow tax base and weak tax administration hinder the government’s ability to generate revenue to advance its development agenda. The government relies heavily on concessional loans and grants from development partners to meet its spending program. Over time, it should reduce this dependence and mobilize domestic resources through better tax management, taxation and other types of revenue.

Access to Public Services and Social Protection

As mentioned earlier, significant regional disparities and income inequalities limit the delivery of social services. Access to social security is also very limited due to the early development of the country’s social security schemes. The government has increased spending on social security and tried to expand coverage, but progress has been slow.

Although it offers some diversity in economic sectors, the mix is nonetheless limited and exposes the economy to barriers and price shocks. The global financial crisis has cut apparel production and exports, leaving the country’s weak industrial focus limited.

Policy Recommendations

The analysis of the constraints used in this report leads to a series of key recommendations for policy makers.

Human Development

Key Priorities

Expand healthcare and encourage better nutrition.

Improve the quality of secondary education and increase the completion rate.

Provide accreditation and certification framework for TVET.

Specific Recommendations

Increase the number of doctors and other healthcare professionals and expand healthcare coverage and access. Make sure the first 1,000 days of life are well supported by nutrition and health care. Strengthen prenatal and postnatal care provided by primary health centers and provide support and funding for reproductive, maternal, neonatal and child health services.

Strengthen public awareness of the importance of good nutrition. Provide adequate resources to expand school-based lunch programs in poor areas to improve nutrition and encourage parents to send their children to school.

Infrastructure Development

Key Priorities

Complete the expansion of power generation and reduce energy imports.

Strengthen rural power companies and offer incentives to increase coverage.

Expand the paved rural road network.

Improve water and sanitation in rural towns.

Specific Recommendations

Integrate regional grids into a national network, which will be important for the distribution of power supply and production capacity across the country over the next few years.

Prioritize power supply to all villages by 2020 through joint improvement in generation, transmission and distribution.

Provide necessary government support to ensure the targeted power generation capacity by 2020. This new capacity should reduce imported electricity from its current 64% share to less than 30% by 2020 and will help meet the expected increase in electricity demand.

Improved Governance

Key Priorities

Strengthen the Anti-Corruption Unit and enforce the 2010 Anti-Corruption Act.

Work with development partners to improve public sector management and financial management.

Improve legal capacity to resolve trade disputes.

Specific Recommendations

Continue to strengthen the Anti-Corruption Unit and ensure full implementation of the 2010 Anti-Corruption Act through anti-corruption education, anti-corruption measures and law enforcement. Violators should be prosecuted with appropriate penalties to prevent corruption.

Advertise fees for public permit and license processing in offices and on government websites to increase transparency. This should include fees published jointly by the Ministry of Economy and Finance and the Council for the Development of Cambodia in late 2012, and fees announced by the Ministry of Commerce in early 2013. Encourage other ministries to follow suit.

Fiscal Resource Management

Key Priorities

To mobilize revenue to meet the demand for public investment and social services.

Strengthen government tax collection and administration.

Increase the share of income from direct taxes and find other sources of income generation and savings.

Specific Recommendations

Prioritize measures to increase revenue generation from the current 15% of GDP to 17% by 2018. Target tax arrears reduction through a focused strategy and a dedicated team to collect arrears. Incentives to attract investment in non-traditional products and services Evaluate the effectiveness of profit tax exemptions to attract new investment in order to be less broad and more focused.

Expand the direct tax base by adding more individuals and smaller firms while continuing the important work of the Department of Large Taxpayers. Reduce rebates on electricity, financial services and petroleum.

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