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Business and Investment Opportunities in Cambodia

Business and Investment Opportunities in Cambodia. Bangkok, 28 May 2007. KONG VIBOL First Secretary of State of Ministry of Economy and Finance Vice Chairman of the Council for the Development of Cambodia. Presented by. Liberal foreign investment regime

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Business and Investment Opportunities in Cambodia

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  1. Business and Investment Opportunities in Cambodia Bangkok, 28 May 2007 KONG VIBOL First Secretary of State of Ministry of Economy and Finance Vice Chairman of the Council for the Development of Cambodia Presented by

  2. Liberal foreign investment regime 100% foreign ownership investments are allowed in all sectors and activities except the ownership of land No foreign exchange controls on current account transactions The Index of Economic Freedom ranks Cambodia 102nd among 170 countries in 2007. This is ahead of Indonesia (#110), Vietnam (#138) and Laos (#140) Factors considered in the Index include Cambodia’s Low income and corporate tax burden Investor friendly regulatory regimes Flexible labor markets Open international trade policy, reflected in accession to WTO membership in 2004 Cambodia is the most open economy of the least developed countries (LDCs). Open Economy: Committed to a Pro-business/Investor Model

  3. A. Recent Economic Developments • Real growth remains robust • Inflation has eased • Banking system is expanding • Positive external developments B. Outlook for 2006-2007 Very good economic performance Growth is robust, inflation low Solid basis for the economy in 2007

  4. Very good economic performance • Real growth around 10.8% in 2006 • 9% growth projected for 2007 Real GDP Growth Rate

  5. Very good economic performance • 2007– continued growth in garment exports, tourism, +ve agriculture • Some easing in construction growth Real GDP Growth Rate

  6. Economic Performance Average growth for last 5 years is 9.8% Source: SNEC & MEF

  7. Council for the Development of Cambodia Samdech Hun Sen Prime Minister of the RGC Chairman H.E Mr. Keat Chhon, Senior Minister Minister of Economy and Finance 1st Vice Chairman Trouble Shooting Committee H.E Mr. Cham Prasidh, Senior Minister, Minister of Commerce Vice Chairman H.E Mr. Kong Vibol, First Secretary of State Ministry of Economy and Finance Vice Chairman H.E Mr. Sok Chenda Secretary General Secretary General CRDB H.E. Mr. Chhieng Yanara Secretary General CIB H.E. Mr. Suon Sitthy Secretary General CSEZB H.E Sok Chenda Public relations and Aid coordination Documentation and information Management of bilateral aid Asia Management of bilateral aid EU& US Management of multilateral aid Management of aid from the UN NGO coordination and relations Project evaluation Administration Public relations and investment promotion Investment project evaluation and incentives Environmental impact assessment Inter-ministerial coordination Private investments strategies analysis Legal affairs and investment law Investment projects monitoring Administration Policy and planning Operation and management Project analysis and registration Administration

  8. A One Stop Service Open Door Policy • Information & Application • Approval • Customs Duty & Tax Exemption • Visa & Work Permit • Company Registration

  9. Investment Approval Investment application CDC issues a Conditional Registration Certificate to the Applicant 3 working days • Company Registration / Ministry of Commerce • Relevant licenses, as appropriate / Ministry of Industry and Energy • Review and approval of construction plan / local authorities- • Ministry of Land Management, Urban Planning and Construction. • Initial environmental impact assessment / Ministry of Environment • Tax Department Registration / Ministry of Economy and Finance 28 working days CDC issues a Final Registration Certificate to the Applicant

  10. Investments by Country1994 –2006 In Million USD Total USD 12,168 million

  11. SELECTED THAI COMPANIES

  12. Encouraged Investment Activities • Agriculture and agro-industry • Transport and telecommunications infrastructures • Energy and electricity sectors • Labor-intensive industries and export-oriented processing and manufacturing; • Tourism-related industries • Human resource development • Mining

  13. 20% Corporate Tax Trigger period +3years+n (automatic) Repatriation of profit (withholding tax) Reinvestment of earning (special depreciation) Full Import Duty Exemption No Export Tax Licensing (Simple registration) Investment Incentives

  14. n in tax holiday formula BACK

  15. Investment Protection The Investment Law and Sub-decree contains a number of important guarantees for the investors: • Equal treatment of all investors • No nationalization adversely affecting the property of investors • No price controls on products or services • No restriction on foreign equity participation • No restriction on forex convertibility • Remittance of foreign currencies abroad.

  16. Private Sector Development Strategy • Trade Facilitation (by2005) : Single inspection, Single document • Investment Climate: Amendment of LOI Automatic approval - One Stop Service • Government-Private Sector Forum: Participatory approach

  17. The Government pro-actively seeks to increase the participation and engage the private sector in the development of Cambodia. The Private Sector Forum (“PSF”) is one of the Cambodian Government’s initiatives in recognition of the importance of transparency • A framework for ongoing, structured dialogue between business and the Government with the view to improve the business environment. • A platform for businesses to offer expertise on a range of policy and regulatory reforms • Examples of the PSF’s success: high level consultations on investment and tax laws, the introduction of private sector monitors within the Ministry of Commerce, improved labor standards, and negotiations on cost reductions for major road concessions • Core work is undertaken during the year by 8 sector specific public-private working groups, consisting of government and business counterparts and co-chaired by one minister and one business representative • The Minister of Economy & Finance is the coordinator of the Working Group process • The CDC serves as the PSF’s secretariat, while the IFC acts as its coordinating bureau • The commitment of the Government to the PSF is underlined by the personal participation of the Prime Minister as the Chair in the bi-annual PSF • The PSF has demonstrated its ability to serve as a catalyst for public-private dialogue

  18. Diversification of the economy : Special Economic Zones Promote industries and services currently not available in Cambodia to diversify the growth base. The Government adopted a Sub-decree on the Establishment and Management of Special Economic Zone (SEZ) in Dec 2005. SEZ will include export processing zones and free trade zones • The main rationale of establishing SEZs is to: • Provide investors with adequate infrastructure and supportive facilities • Effectively respond to the challenge of diversifying the Cambodian economy and to promote demand-driven development, such as export promotion • Enhance competitiveness of garment industry and other labor intensive activities • Promote agro-industry, food processing • Promote assembling industry; and • Promote electronic and electric appliances industries • The following growth poles have been identified for industrial development: • Poipet and Koh Kong (at the Cambodian-Thai border) • Bavet and Phnom Den (at the Cambodian-Vietnamese border) • Phnom Penh; and • Sihanoukville • Sihanoukville Port has harbour facilities and “dry ports” which have been developed to enhance its competitive edge as an international commercial gateway

  19. Map of SEZ Chhay Chhay SEZ Koh Kong SEZ Sap N.L.C SEZ Phnom Penh SEZ Stoung Haov SEZ Manhattan SEZ Sihanoukville SEZ Duong Chhiv SEZ S.N.C SEZ Kampot SEZ

  20. Looking Forward to Welcome You inCambodia, The Land of ANGKOR and OPPORTUNITIES! TO GO TO SEE TO HEAR TO ENJOY TO ASSESS TO DECIDE T H A N K S

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