investment environment and opportunity in cambodia
TRANSCRIPT
Investment Environment and Opportunity in Cambodia
Presented by
Sok Chenda Sophea
Minister attached to the Prime Minister
Secretary General
Council for the Development of Cambodia
8th March 2017
Tokyo, Japan
1. Key Indicators
2. Investment Environment in Cambodia
2.1. Council for the Development of Cambodia
2.2. Investment Incentives and Guarantee
2.3. GMS Infrastructure Connectivity
3. Investments in Cambodia
4. Reasons to Invest in Cambodia
5. Cambodia Industrial Development Policy 2015-2025
6. Special Economic Zones in Cambodia
6.1. SEZs in Svay Rieng (Bavet)
6.2. SEZs in Banteay Meanchey (Poi Pet)
7. Way Forward
8. The Pioneers
TABLE OF CONTENTS
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TABLE OF CONTENTS
1. Key Indicators
3
Low & Manageable Inflation
Population & Labor Force
Population: 15 Million
Literacy: 92.7% (15-24 years old)
Young and dynamic labor force:
Median age 24 years old
Population growth rate : 1.54%
GDP Growth (2004-2016)
Stable Exchange Rate (USD-Riel)
GDP Per Capita (2004-2016)
Land area :
181,035 sq.km.
4
Lao PDR
1. Key Indicators
10.0%
13.3%
10.8%10.2%
6.7%
0.1%
5.9%7.1% 7.3% 7.4%
7.1% 7.0% 7.0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e
Agriculture Industry Service GDP Growth
402 468 534 623 738 731 830 909 990 1036 1138 1215 1300
0
500
1000
1500
2.9% 3.0%
3.9%
1.2%
3.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2012 2013 2014 2015 2016e
40344025
4039
40624050
4000
4020
4040
4060
4080
2012 2013 2014 2015 2016e
2. Investment Environment in Cambodia
OP
EN
DO
OR
PO
LIC
Y
ON
E S
TO
P S
ER
VIC
EAftercare Service
Liberal Investment RegimeCustomer Approach
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2.1. Council for the Development of Cambodia (CDC)
Investment Incentives
Corporate Tax: 20%
Tax holidays: 0% up to 9
years
or
Special Depreciation
Full Import Duty
Exemption
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Investment Guarantee
No discrimination
No nationalization
No requirements of local equity
participation
No price controls on products or
services
No restriction on foreign
exchanges
No capital control
2.2. Investment Incentives and Guarantee
• Roads
• Telecommunications
• Power Transmission Line
GMS Infrastructure
Connectivity in
2015-2020
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5. GMS Infrastructure Connectivity 2.3. GMS Infrastructure Connectivity
3. Investments in Cambodia
Year 2012 2013 2014 2015 2016
Total $2.9 Billion $4.9 Billion $3.9 Billion $4.6 Billion $3.6 Billion
Rank Country % Country % Country % Country % Country %
1 Cambodia 42.08 Cambodia 66.80 Cambodia 64.00 Cambodia 69.28 China 29.92
2 China 20.69 China 15.68 China 24.44 China 18.62 Cambodia 27.55
3 Korea 9.89 Vietnam 6.10 Malaysia 2.18 UK 3.0 Japan 22.78
4 Japan 9.15 Thailand 4.37 Japan 1.72 Singapore 2.18 Thailand 4.61
5 Malaysia 6.04 Korea 1.76 Korea 1.66 Vietnam 1.92 Korea 4.59
6 Thailand 4.53 Japan 1.59 Vietnam 1.26 Malaysia 1.61 US 3.38
7 Vietnam 2.89 Malaysia 1.04 UK 1.13 Japan 1.28 Singapore 3.38
8 Singapore 2.59 Singapore 1.03 Singapore 0.89 Thailand 1.18 Vietnam 2.45
9 U.K 0.51 UK 0.43 Thailand 0.88 Korea 0.21 UK 0.60
10 U.S.A 0.42 France 0.27 Australia 0.51 Canada 0.19 Others 1.09
11 Others 1.21 Others 0.94 Others 1.36 Others 0.52
3.1. Investments by Country
Agriculture1%
Industries4%
Infrastructure80%
Tourism15%
2008
3.2. Investments by Sector
Agriculture13%
Industries33%
Infrastruc-ture15%
Tourism39%
2016
Agriculture10%
Industries18%
Infrastructure29%
Tourism43%
1994-2016
3.3. Japanese QIPs in Cambodia
Projects No. of QIP Capital (Million USD) No. of Workers
Outside SEZs 26 1,043 13,749
Inside SEZs 78 384 22,655
Phnom Penh 49 201 11,272
Svay Rieng 16 81 6,553
Banteay Meanchey 8 65 1,284
Sihanoukville 3 23 532
Koh Kong 2 14 3,014
Total 104 1,427 36,404
Open economy Equal treatment of all investors No requirement of local equity participation No price controls on products or services No restriction on foreign currencies convertibility
Sound macroeconomic environment
6th fastest growing economy in the world during
the last two decades (average growth rate: 7.7%)
Low & manageable inflation rate (under 5%)
Stable exchange rate (USD 1 = 4000 5%)
Competitive labor force
Reasonable wage: (minimum wage in 2017: $153)
Young and dynamic labor force (median age 24
years old)
Competitive investment incentives Low corporate tax: 20% Tax holiday: 0% up to 9 years Full import duty exemption (production equipment
and machineries, contraction material, production inputs)
One stop service Information & Application Fast-Track Investment Approval Process: all
documents will be processed within only 28 working days.
Customs Duty & Tax Exemption Visa & Work Permit
Strategic location
Center of ASEAN: flight time average only 1:30
hour to other ASEAN countries
Market access and Preferential trading status
ASEAN Market (AEC): pop. 616 M, GDP $2.5 Tri.
ASEAN + China, Japan, Korea, India, Australia &
New Zealand (RCEP): pop. 3.3 B, GDP $17.1 Tri.
EU (EBA) Market Access
GSP: 32countries
MFN: WTO members
EU
(EBA)
13
4. Reasons to Invest in Cambodia
.
Phnom PenhThe Philippines
Singapore
Indonesia
MyanmarSouthern China
ManilaBangkok
Kunming
Yangon
Brunei
Jakarta
Begawan
Hanoi
Laoso Vientiane
CAMBODIA
Malaysia
Kuala Lumpur
ThailandVietnam
1h:30 on average
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Strategic Location
Council for the Development of Cambodia
5. Cambodia Industrial Development
Policy 2015-2025
15
16
New growth strategy
A transformation and modernization of
Cambodia’s industrial structure from a
labor-intensive industry to a skill-based
industry by 2025
Improving electricity supply to key industrial areas/estates (price, stability, coverage): reduce the
electricity tariff from 18.8 cents/kwh in 2014 to 12 cents/kwh
Preparing a master plan for the development of multi-modal transport and logistic system focusing on
connection of 3 keys industrial corridors (Phnom Penh- Sihanoukville, Phnom Penh- Bavet, and
Phnom Penh- Poi Pet).
Improving Industrial Relations and Building modern institutions for vocational and technical training /
human resources development needed by industries.
Developing and transforming Sihanoukville Province into a multi-purpose SEZ.
Connecting to regional and global valuechain
Integrating into regional productionnetworks and developing clusters
Strengthening competitiveness andimproving productivity of domesticindustries
Marching toward developing a moderntechnology and knowledge-basedindustry
VISION
4 KEY PRIORITIES TO BE ACHIEVED BY 2018
BY
5. Cambodia Industrial Development Policy 2015-2025
17
5. Cambodia Industrial Development Policy 2015-2025
PRIORITY INDUSTRIAL SECTORS
New industries with the capability of breaking into new markets, with high value-added products, creative and highly competitive such as machinery assembly, mechanic/electronic/electric equipment assembly, means of transport assembly and natural resource processing
SMEs in all sectors especially those involved in drugs and medical equipment production, construction materials, packaging equipment for export, furniture manufacturing and industrial equipment, etc.
Agro-industrial production for export and domestic markets
Various types of supporting industries for the agriculture, tourism and textile sectors as well as for industries serving regional production chains with either global markets or global value chains
Industries serving regional production lines and those of future strategic importance such in ICT, energy, heavy industries, cultural/historical/traditional handicraft, and green technology.
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3
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5
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តំបន់សេដ្ឋកិច្ចពិសេេសៅកម្ពុជា
•Poi Pet O'Neang SEZ
•Sanco Poi Pet SEZ(Toyota Tsusho’s Techno Park)•Poi Pet PPSEZ (work in progress)
•Sihanoukville SEZ•Sihanoukville Port SEZ•Sihanoukville SEZ 1
•H.K.T SEZ
Neang KokKoh Kong SEZ
Phnom Penh SEZ
•Manhattan Svay Rieng SEZ•Tai Seng Bavet SEZ•Dragon King Bavet SEZ
•Shandong Sunshell SvayRieng SEZ•Hi-Park SEZ
Kampot SEZ
Kerry Worldbridge SEZ
6. Special Economic Zones in Cambodia
6.1. Svay RiengPop: 616,232
M: 49% F: 51%
Adult: 56% (age 18-60)
SCHOOL Student
262 Primary 71,823
55 Secondary 12,513
19 High 20,833
University: 1
Student: 3,210
TVET: 1 Student: 479
Special Economic Zones
1. Manhattan Svay Rieng SEZ
2. Tai Seng Bavet SEZ
3. Dragon King Bavet SEZ
4. Shandong Sunshell SEZ
5. Hi-Park SEZ
Total Investment Projects: 70
Total Investment Capital: Approx. USD 317 Million
Total employment: 42,000
Investment Activities:
- Computer Services: 46
- Auto Mechanic: 5
- Auto Repair: 20 Electrical: 166
- IT: 65 English: 85
- Animal Science: 20 Others…
- Public Admin.: 760 Banking: 733
- Management: 597 Accounting: 532
- English: 217 Marketing: 108
- Computer Science: 176 Agriculture: 85
- Rural Development: 80 Math: 57
- Animal Science: 34
0.09%
0.43%
0.61%
1.21%
11.86%
23.68%
26.55%
35.57%
Hungary
Hong Kong
US
Vietnam
Singapore
China
Japan
Taiwan
Garment and Footwear
42%
Furniture 23%
Bicycle Assembly
9%
Watch5%
Packaging5%
Electronic and Electrical
6%Others
10%
6.1. Svay Rieng
Proximity with Vietnam’s major city and seaports
Bavet to Ho Chi Minh: 70 km
Bavet to Cai Mep Port: 75 km
Bavet to Cat Lai Port: 90 km
Key Projects in development
Completed Feasibility Study on Phnom Penh – Bavet Expressway
Drafting MOU on Promoting the Study and Construction of Phnom Penh-Bavet and
Ho Chi Minh-Moc Bai Expressway Projects
Completed Phnom Penh – Bavet Electricity Transmission Line (02/02/2017)
Building a 10MW Solar Power Plant in Bavet
Bavet
Ho Chi Minh Cai Mep
Port
Cat Lai Port
6.2. Banteay Meanchey
Special Economic Zones
1. Sanco Poi Pet SEZ
(Toyota Tsusho’s Techo Park)
2. Poi Pet O’Neang SEZ
3. Poi Pet PPSEZ (work in progress)
Total Investment Projects: 14
Total Investment Capital: Approx. USD 76 Million
Total employment: 2,408
Investment Activities:
Pop: 747,402
M: 49% F: 51%
Young: 31% (age 15-35)
SCHOOL Student
408 Primary 92,718
54 Secondary 12,364
26 High 21,414
University: 4
Student: 4,142
- Management: 762 IT: 45
- Banking: 661 English: 235
- Marketing: 185 Law: 273
- Accounting: 150 Others…
TVET: 1 Student: 266
- Computer Services: 35
- Water System Installation: 30
- Electrical: 89 IT: 5
- Civil Engineering: 4 Auto Repair:7
- Aircon. Repair: 16 Others…
Auto Parts Assembly
30%
Steel1%
Electronic Equipment
62%
Jewelry Processing &
Box2%
Garment6%
7.93%
92.07%
Thailand
Japan
6.2. Banteay Meanchey
Proximity with Thailand’s major city and seaport
Poi Pet to Bangkok: 260 km
Poi Pet to Laem Chabang Port: 250 km
Key Projects in development
New border crossing at Stung Bot (Poi Pet)-Ban Nong Ian (Aranyaprathet) to be constructed
through a signed Agreement between the Royal Government of Cambodia and the Government
of the Kingdom of Thailand on the Construction of the new Border Crossing at Stung Bot-Ban
Nong Ian.
Increased quota of trucks and non-scheduled buses from 40 to 150 vehicles entering Cambodia
and Thailand at the Aranyaprathet-Poi Pet International Point of Entry under the GMS-IICBTA.
(The MOU will enter into force by the end of March 2017.)
Widening National Road No. 5 to four lanes from the current two, projected to be completed by
2021.
Renovating the Northern Railway Line (Phnom Penh – Poi Pet) connecting with Thailand
(Railway Bridge in Poipet 80% completed).
Poi Pet
Bangkok
Laem Chabang
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7. Way Forward
Legal instruments in process:
Drafting new investment law (incentives for Pioneer, targeted SMEs, welfare benefit etc.)
Drafting special economic zone law (streamlined administrative procedures)
Formulating new supporting regulations
Further negotiation on regional and bilateral investment agreement with international
partners
Public services:
Enhanced One-Stop Services
Improved aftercare services
More country desks
Proactive approach for targeted promotion:
Targeted industries/investors (China+1, Thai+1,…)
Establishing industrial zones in targeted provinces with expectation to develop industrial
clusters and industrial parks for SMEs
26
. The Pioneers8. The Pioneers
27
Thank you
SOK Chenda Sophea
Minister attached to the Prime Minister/Secretary General
Council for the Development of Cambodia
Email: [email protected]
どうもありがとうございました