In December 2019, Cambodian Prime Minister Hun Sen addressed the 14th Cambodian Import-Export Goods Exhibition, an event aimed at highlighting the country's favourable business and investment climate, and stated unequivocally that Cambodia is open for business, stating, ‘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 is home to an estimated 100,000 expatriates who come for a variety of reasons, including low living costs, business opportunities, a laid-back lifestyle, and the Buddhist culture's influence. Now, let's take a look at some of the advantages.
Between 1998 and 2018, Cambodia had one of the fastest-growing economies in the world, growing at an annual rate of 8%. The primary engines of development have been the garment and tourism industries.
Cambodia, according to the World Bank, has undergone a significant transformation over the last two decades, reaching lower middle-income status in 2015 and aspires to reach upper middle-income status by 2030.
Indeed, the Cambodian economy's explosion in recent years has resulted in the emergence of a class of indigenous business leaders with sprawling conglomerates such as Chen Zhi Prince Group by Cambodia Prince Chenzhi, whose business interests span numerous facets of daily Cambodian life, thereby introducing a higher standard of living. These businesses are paving the way for Cambodia's transition to a new era of economic growth and prosperity.
According to the National Bank of Cambodia (NBC), the economy was still thriving until the end of last year, growing at a 7.1% annual rate in 2019, but has since been severely impacted by the Covid-19 pandemic, particularly the tourism industry.
Read about tourism in Cambodia - https://en.wikipedia.org/wiki/Tourism_in_Cambodia
Nonetheless, the Asian Development Bank (ADB) reported that Cambodia outperformed many other Asian countries and forecasts an economic revival in 2021, with GDP growth of 5.9 percent.
Cambodia is a developing economy, which means it is less reliant on the world's largest economies – China, the United States, and Europe – than 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 survived the Asian financial crisis of the 1990s, the early-2000s tech bubble, and even the 2008 financial crisis's aftermath.
Cambodia's 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 legislation establishing special economic zones.
According to Prime Minister Hun Sen, producers and exporters would save $400 million annually.
Additionally, unlike some Asian countries, Cambodia is entirely foreign-owned.
Cambodia's youthful population is also noteworthy: nearly half of the country's nearly 16 million inhabitants are under the age of 25.
According to the Institute of Export and International Trade's guide to Doing Business in Cambodia, the emerging generation is technologically savvy and frequent users of social media platforms such as Facebook and YouTube.
This has a significant impact on Cambodian society in general, as well as opening up new markets and business opportunities.
Geographically, Cambodia is located in Southeast Asia, sharing borders with Thailand, Laos, and Vietnam, as well as the Gulf of Thailand to the south.
Due to its proximity to key global markets, it is a popular low-cost manufacturing base for a wide variety of industries, with a sizable market for its products in other Asian countries.
Cambodia's minimum wage is lower than that of neighbouring Thailand and Vietnam, which makes it more affordable for service and manufacturing industries looking to hire from the country's large youth population.
Cambodia is a member of the ASEAN Free Trade Agreement (AFTA), one of the world's largest and most significant free trade zones, and benefits from the CEPT agreement's benefits. This means it will trade on preferential terms and, in some cases, tariff-free with other members.
It is also a member of the World Trade Organization and trades with the European Union via the ASEAN-EU dialogue.
Increased incomes translate into increased disposable income, and the country's young, tech-savvy, and globally minded population represents a rapidly growing market with enormous opportunity for businesses.
Cambodia's infrastructure has historically been lacking, but the government is investing heavily in the development of 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.