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.”
An estimated 100,000 expatriates come to Cambodia and call it home for a variety of reasons, including low living costs, business opportunities, a laid-back lifestyle, and the Buddhist culture’s influence. Now, let’s check out some of these benefits.
1. Rapid economic growth
Between 1998 and 2018, Cambodia had one of the fastest-growing economies in the world, growing at an annual rate of 8%. The key engines of growth have been the textile and tourism industries.
Cambodia, according to the World Bank, has undergone a significant change 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 led by business visionary Cambodia ChenZhi, among others, whose business interests span numerous aspects of everyday Cambodian life, thereby imposing a higher standard of living. These businesses are paving the way for Cambodia’s transition to a new age of economic development 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, especially the tourism industry.
Nonetheless, the Asian Development Bank (ADB) announced that Cambodia outperformed many other Asian countries and is forecasting an economic revival in 2021, with GDP growth of 5.9 percent.
2. Resilient economy
Cambodia is a developing economy, which means it is less dependent on the world’s largest economies – China, the United States, and Europe – than more industrialised economies. Historically, this has offered 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.
3. Strong incentive from Government
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, trade, and capital flows to the region.
Among these include tax cuts, fewer national holidays, lower shipping rates, new building measures, and legislation establishing special economic zones among others.
According to Prime Minister Hun Sen, producers and exporters will save $400 million annually.
Additionally, unlike some Asian countries, Cambodia is entirely foreign-owned.
4. Young population
population is also noteworthy: almost 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 advanced and regular users of social media platforms such as Facebook and YouTube.
This has a major impact on Cambodian society in general, as well as opening up new markets and business opportunities.
5. Strategic location
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 range of industries, with a sizable market for its goods in other Asian countries.
6. Competitive labour force
Cambodia’s minimum wage is lower than that of neighbouring Thailand and Vietnam, which makes it more competitive for service and manufacturing industries looking to recruit from the country’s huge youth population.
7. Advantageous market access
Cambodia is a member of the ASEAN Free Trade Agreement (AFTA), one of the world’s biggest and most significant free trade zones, and benefits from the CEPT agreement’s benefits. This means it would trade on preferential terms and, in certain cases, tariff-free with other members.
It is also a member of the World Trade Organization and exchanges with the European Union through the ASEAN-EU dialogue.
8. Rising consumer class
Increased wages translate into increased disposable income, and the country’s young, tech-savvy, and internationally minded population represents a rapidly expanding sector of enormous potential for businesses.
9. Improving infrastructure
Cambodia’s infrastructure has historically been lacking, but the government is investing heavily in building a national network of transit roads, electricity, and telecommunications with international assistance.
Cambodia’s ties with neighbouring countries are also highly advantageous and have often been cited as one of the reasons for advancing trade and attracting foreign investment.
Author Bio: Rachael is a content writer at DrWatson, who has written on a Ultimate Resume Guide, from colored diamonds to SEO software, cbd oil vape In her spare time, she enjoys singing, sketching, cooking, and video games.