Bureau of Economic and Business Affairs
July 5, 2016

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Executive SummaryShare    

Cambodia has experienced rapid economic growth over the last decade. Cambodia’s gross domestic product (GDP) grew at an average annual rate of nearly eight percent during the past fifteen years. The tourism, garment, construction and real estate, and agriculture sectors accounted for the bulk of growth. The percentage of the population living in poverty also decreased to approximately 17.7 percent in 2012, the latest figures available. GDP per capita increased to an estimated USD 1,228 in 2015.

Cambodia has an open and liberal foreign investment regime with a relatively pro-investor legal and policy framework. Investment incentives available to foreign investors include 100 percent foreign ownership of companies, corporate tax holidays of up to eight years, a 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation.

Historically, these incentives have not been able to attract significant U.S. capital due to various factors including pervasive corruption, a limited supply of skilled labor, inadequate infrastructure (including high energy costs), and a lack of transparency in government approval processes. The political impasse and labor unrest that followed the 2013 national elections were additional deterrents to investment. Despite these challenges, the Phnom Penh Special Economic Zone has attracted more than USD 100 million in investments from several large American companies, including Coca Cola, Tiffany & Co., and American Licorice.

Following the 2013 national elections, the government announced a variety of economic and business reforms. In 2015, the government also issued an Industrial Development Plan identifying key challenges to economic growth in Cambodia.

According to International Monetary Fund (IMF) data, the total stock of foreign direct investment (FDI) in Cambodia in 2014, the most recent year available, jumped to USD 41 billion, largely due to a USD 38.7 billion investment from Thailand in 2014. Annual foreign direct investment inflow based on fixed assets decreased to USD 785 million in 2015.

Table 1



Index or Rank

Website Address

TI Corruption Perceptions index



World Bank’s Doing Business Report “Ease of Doing Business”


127 of 189

Global Innovation Index


91 of 141

U.S. FDI in partner country ($M USD, stock positions)



World Bank GNI per capita


1,020 USD

Millennium Challenge Corporation Country Scorecard

The Millennium Challenge Corporation, a U.S. Government entity charged with delivering development grants to countries that have demonstrated a commitment to reform, produced scorecards for countries with a per capita gross national income (GNI) of USD 4,125 or less. A list of countries/economies with MCC scorecards and links to those scorecards is available here: Details on each of the MCC’s indicators and a guide to reading the scorecards are available here:

1. Openness To, and Restrictions Upon, Foreign InvestmentShare    

Attitude toward Foreign Direct Investment

Cambodia began the transformation from a command to a free market economy in the late 1980s. It is now integrating into the regional and world trading framework. Cambodia joined ASEAN in 1999 and served as its chair in 2012. In 2001, the country joined the World Customs Organization, and in September 2004, it became one of the first Lesser Developed Countries to become a member of the World Trade Organization (WTO).

Cambodia’s 1994 Law on Investment established an open and liberal foreign investment regime. All sectors of the economy are open to foreign investment and the government permits 100 percent foreign ownership of companies in most sectors. In a few sectors, such as cigarette manufacturing, movie production, rice milling, gemstone mining and processing, publishing and printing, radio and television, wood and stone carving production, and silk weaving, foreign investment is subject to local equity participation or prior authorization from authorities. There is little or no discrimination against foreign investors either at the time of initial investment or after investment. Some foreign businesses, however, have reported that they are at a disadvantage vis-a-vis Cambodian or other foreign rivals that engage in acts of corruption or tax evasion or take advantage of Cambodia’s poor enforcement of laws and regulations. The Cambodian Bar Council has periodically taken actions to restrict or impede the work of foreign lawyers or foreign law firms. More information about investment and investment incentives in Cambodia may be found on the Council for the Development of Cambodia’s website via the following link:

Other Investment Policy Reviews

In compliance with WTO requirements, Cambodia conducted its first review of trade policies and practices in November 2011. The next review will be conducted in 2017. Cambodia’s full trade policy review report can be found at:

In response to the trade policy review recommendations, Cambodia has completed the following reforms:

  • Elimination of the Certificate of Origin requirement for exports to countries where a certificate is not required;
  • Implementation of online business registration;
  • Adoption of a competitive hiring process for Ministry of Commerce staff;
  • Implementation of risk evaluation measures for the Cambodia Import-Export Inspection and Fraud Repression Directorate General (CamControl) and creation of a CamControl risk management unit;
  • Enactment of the Law on Public Procurement;
  • Enactment of three judicial system laws: the Law on Court Structures, the Law on the Duties and Discipline of Judges and Prosecutors, and the Law on the Organization and Functioning of the Supreme Council of Magistracy;
  • Creation of the Commercial Court as a specialized Court of First Instance;
  • The creation of a credit bureau;
  • Establishment of a Telecom Regulator of Cambodia (TRC); in 2012, the Ministry of Posts and Telecommunication transferred its regulatory role to the TRC;
  • Enactment of the Law on Telecommunications in December 2015; and
  • Enactment of the Law on Animal Health and Production in February 2016.
  • Ongoing or planned reforms include the following:
  • Amendment to the Law on Standards;
  • Enacting a competition law;
  • Enacting a Law on Special Economic Zones;
  • Enacting a Law on Food Safety; and
  • Enacting a Law on E-Commerce.

Laws/Regulations on Foreign Direct Investment

Although the Cambodian Constitution calls for an independent judiciary, foreign investors are generally reluctant to use the Cambodian judicial system to resolve commercial disputes because the courts are perceived as unreliable and susceptible to political influence or bribery. Although the Cambodian government enacted the Law on Court Structure in July 2014 in an effort to increase the judiciary’s professionalism and discourage corruption and political influence, corruption remains endemic in the judicial system.

Cambodia’s 1994 Law on Investment created an investment licensing scheme to regulate the approval process for foreign direct investment and provide incentives to potential investors. In March 2003, the government simplified the licensing scheme and increased transparency and predictability by enacting the Law on the Amendment to the Law on Investment (Amended Law on Investment). The licensing scheme for investments of less than USD 2 million was clarified in February 2005 in a sub-decree on the Establishment of the Subcommittee on Investment in the Provinces-Municipalities of the Kingdom of Cambodia. Sub-decree No. 111 on the Implementation of the Law on the Amendment to the Law on Investment, issued in September 2005, lays out detailed procedures for registering a Qualified Investment Project (QIP), which is entitled to certain taxation incentives, with the Council for the Development of Cambodia and provincial/municipal investment subcommittees.

The website of the Council for the Development of Cambodia,, provides a list of laws, rules, procedures and regulations which could be useful for foreign investors.

Business Registration

A. All businesses are required to register with the Ministry of Commerce (MoC) and the General Department of Taxation (GDT). In January 2016, the Ministry of Commerce launched an online business registration portal that allows all existing and new businesses to register their companies at: Information about the online business registration process is available on the website of the MoC at The link also provides sources of information for various types of business registration documents. New business registration takes about two weeks. Depending on the types of business activities, new businesses are also required to register with other relevant ministries. For example, travel agencies must register at the Ministry of Tourism and private universities must register with the Ministry of Education, Youth and Sport, in addition to registering with the MoC and the GDT. Foreign companies may use the online registration system. However, difficulties in completing the registration, such as technical or language issues, have led some foreign and domestic companies to seek professional assistance to register or re-register.

B. The Council for the Development of Cambodia promotes and approves investments in Cambodia and provides investment incentives to companies with QIPs. Criteria used to evaluate the eligibility of QIPs include the amount of registered investment capital and activities of the business. Additional information about criteria to qualify for QIPs can be found at

C. The “SME Development Framework” developed by the SME Sub-Committee of the Private Sector Steering Committee classifies Small and Medium Enterprises (SMEs) according to the number of employees and the value of their assets. The calculation of employees is based on the equivalent of full-time employees. The classification levels of Micro, Small, and Medium Size Enterprises are listed in the below chart:


Government Definition




Fewer than 10 employees

Less than $50,000


11 – 50 employees

$50,000 - $250,000


51 – 100 employees

$250,000 - $500,000


Over 100 employees

Over $500,000

Industrial Promotion

The government has identified the agricultural sector and export-oriented investments as priority sectors. In an effort to promote and attract investment in these sectors, the government offers incentive programs including reductions or exemptions on import taxes for materials.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are few limitations on foreign control in Cambodia. Foreign investors may own 100 percent of their investment projects except in the sectors of cigarette manufacturing, rice milling, gemstone mining and processing, publishing and printing, radio and television, wood and stone carving production, and silk weaving. According to Cambodia’s Amended Law on Investment and related sub-decrees, there are no limitations based on shareholder nationality or discrimination against foreign investors except in relation to investments in real property or state-owned enterprises. The Law on Investment and the Amended Law on Investment state that the majority interest in land, however, must be held by one or more Cambodian citizens. Pursuant to the Law on Public Enterprise, the Cambodian government must directly or indirectly hold more than 51 percent of the capital or the right to vote in state-owned enterprises. The Cambodian Bar has periodically taken actions to restrict or impede the work of foreign lawyers or foreign law firms.

Privatization Program

There are no ongoing privatization programs.

Screening of FDI

Foreign direct investment must be registered at the Ministry of Commerce, and investors must obtain operating permits from the relevant line ministries. If a foreign investor seeks investment incentives as a Qualified Investment Project, he/she must register and receive approval from the Council for the Development of Cambodia or the Provincial-Municipal Investment Sub-Committee. The application to the Council for the Development of Cambodia may be made either before or after the registration at the Ministry of Commerce. More information about the QIP process may be found at

Competition Law

The government is in the process of drafting a competition law. The Ministry of Commerce has consulted an expert from the Australian Competition and Consumer Commission (ACCC) and plans to submit a draft Law on Competition to the Council of Ministers in 2016.

2. Conversion and Transfer PoliciesShare    

Foreign Exchange

Though Cambodia has its own currency, the riel, U.S. dollars are in wide circulation in Cambodia and remain the primary currency for most large transactions. There are no restrictions on the conversion of capital for investors. Cambodia’s 1997 Law on Foreign Exchange states that there shall be no restrictions on foreign exchange operations through authorized banks. Authorized banks are required, however, to report the amount of any transfer equaling or exceeding USD 100,000 to the National Bank of Cambodia on a regular basis.

Loans and borrowings, including trade credits, are freely contracted between residents and nonresidents, provided that loan disbursements and repayments are made through an authorized intermediary.

The Foreign Exchange Law allows the National Bank to implement exchange controls in the event of a foreign exchange crisis. In the event of such a crisis, the National Bank may impose certain temporary restrictions for a maximum period of three months on the activity or foreign exchange position of authorized intermediaries or on any loans in domestic currency extended to nonresidents. The U.S. Embassy is not aware of any cases in which investors have encountered obstacles in converting local currency to foreign currency or in sending capital out of the country.

Remittance Policies

Article 11 of the Law on the Amendment to the Law on Investment of 2003 states that Qualified Investment Projects can freely remit abroad foreign currencies purchased through authorized banks for the discharge of financial obligations incurred in connection with investments. These financial obligations include:

  • Payment for imports and repayment of principal and interest on international loans;
  • Payment of royalties and management fees;
  • Remittance of profits; and
  • Repatriation of invested capital in case of dissolution.

Financial Action Task Force (FATF) status

Cambodia has committed to work with the FATF and the Asia Pacific Group (APG) to address its strategic Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies. The FATF’s website states that Cambodia has made significant progress in improving its AML/CFT regime and notes that Cambodia has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in June 2011. Cambodia is therefore no longer subject to the FATF’s monitoring process under its ongoing global AML/CFT compliance process. Cambodia committed to working with the APG as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

3. Expropriation and CompensationShare    

Land rights are a contentious issue in Cambodia, complicated by the fact that most property holders do not have legal documentation of their ownership as a result of official policies and social upheaval during Khmer Rouge era. Numerous cases have been reported of influential individuals or groups acquiring land titles or concessions through political and/or financial connections, and then using force to displace communities to make way for commercial enterprises. In late 2009, the National Assembly approved the Law on Expropriation, which sets broad guidelines on land-taking procedures for public interest purposes. It defines public interest activities to include construction, rehabilitation, preservation, or expansion of infrastructure projects, and development of buildings for national defense and civil security. These provisions include construction of border crossing posts, facilities for research and exploitation of natural resources, and oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. Legal procedures regarding compensation and appeals are expected to be established in a forthcoming sub-decree, which is under internal discussion within the technical team of the Ministry of Economy and Finance. The U.S. Embassy is not aware of any cases in which Cambodia has expropriated a U.S. investment.

4. Dispute SettlementShare    

Legal System, Specialized Courts, Judicial Independence, Judgments of Foreign Courts

Most investors are generally reluctant to use the Cambodian judicial system to resolve commercial disputes because the courts are perceived as unreliable and susceptible to external political influence or bribery. Both local and foreign businesses report frequent problems with inconsistent judicial rulings, corruption, and difficulty enforcing judgments. For these reasons, most commercial disputes are currently resolved through negotiations facilitated by the Ministry of Commerce, the Council for the Development of Cambodia, the Cambodian Chamber of Commerce, or other institutions.

Cambodia adopted a Commercial Arbitration Law in 2006. In 2010, the government provided for the establishment of the National Commercial Arbitration Center (NCAC), Cambodia’s first alternative dispute resolution mechanism, to enable companies to resolve commercial disputes more quickly and inexpensively than through the court system. The NCAC was officially launched in March 2013, but has limited capacity and has received only one case to date. Three laws related to the judicial system were enacted in July 2014: the Law on Court Structures, the Law on the Duties and Discipline of Judges and Prosecutors, and the Law on the Organization and Functioning of the Supreme Council of Magistracy. Under the Law on Court Structure, the Commercial Court, established as one of the four specialized Courts of First Instance, will have jurisdiction over all commercial matters, including insolvency cases. The Commercial Chambers will hear all appeals arising out of the Commercial Court.


Cambodia’s 2007 Law on Insolvency was intended to provide collective, orderly, and fair satisfaction of creditor claims from debtor properties and, where appropriate, the rehabilitation of the debtor’s business. The Law on Insolvency applies to the assets of all business people and legal entities in Cambodia. The World Bank’s 2016 Doing Business Report ranks Cambodia 82 out of 189 in terms of the “ease of resolving insolvency,” a two-point decrease from 2015.

Investment Disputes

The Embassy has received no reports on investment disputes and the government does not publicize any relevant reports.

International Arbitration

International arbitration is available for Cambodian commercial disputes. In March 2014, the Supreme Court of Cambodia confirmed a decision of the Cambodian Court of Appeal, which had ruled in favor of the recognition and enforcement of an arbitral award issued by the Korean Commercial Arbitration Board (KCAB) of Seoul, South Korea. Cambodia became a member of the World Bank’s International Center for Settlement of Investment Disputes in January 2005. In 2009, the International Center approved a U.S. investor’s request for arbitration in a case against the Cambodian government, and in 2013 the tribunal rendered an award in favor of Cambodia.

Domestically, commercial disputes could also be resolved through the National Commercial Arbitration Center (NCAC), Cambodia’s first alternative dispute resolution mechanism, which was officially launched in March 2013.

ICSID Convention and New York Convention

Cambodia has been a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention - also known as the Washington Convention) since 2005. Cambodia is also a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) since 1960. In 2001, Cambodia passed the Law on Agreement and Implementation of the United National Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Duration of Dispute Resolution – Local Courts

Due to corruption and an overly bureaucratic system, investment/commercial disputes may take years to resolve.

5. Performance Requirements and Investment IncentivesShare    


To date, Cambodia has not notified the WTO of any measurements that were inconsistent with the Trade Related Investment Measure (TRIMs) requirements.

Investment Incentives

All investments need to be registered with the Ministry of Commerce. Cambodia’s Law on Investment and Amended Law on Investment also provide a mechanism for varying types of investment incentives that meet specified criteria. Investors seeking an incentive must submit an application to the Cambodian Investment Board within the Council for the Development of Cambodia. Investment activities excluded from incentives are detailed in the September 2005 Sub-Decree on the Implementation of the Amendment to the Law on Investment. These include the following sectors: retail, wholesale, and duty-free stores; entertainment establishments (including restaurants, bars, nightclubs, massage parlors, and casinos); tourism service providers; currency and financial services; press and media-related activities; professional services; and production and processing of tobacco and wood products. Incentives also may not be applied to investments in the production of certain products if the investment is less than USD 500,000. This includes food and beverages; textiles, garments, and footwear; and plastic, rubber, and paper products. Investors are not required to place a deposit guaranteeing their investment except in cases involving a concession contract or real estate development project. Investors who wish to apply are required to pay an application fee of seven million riel (approximately USD 1,750), which covers securing necessary approvals, authorizations, licenses, or registrations from all relevant ministries and entities, including stamp duties. Under a 2008 sub-decree, the Council for the Development of Cambodia is required to seek approval from the Council of Ministers for investment proposals that involve capital of USD 50 million or more, politically sensitive issues, the exploration and exploitation of mineral or natural resources, or infrastructure concessions. The Council for the Development of Cambodia is also required to seek approval from the Council of Ministers for investment proposals that will have a negative impact on the environment or the government’s long-term economic strategy.

Qualified Investment Projects are entitled to receive different incentives such as profit tax exemptions, special depreciation, and duty-free import of production equipment and construction materials. Investment projects located in designated special promotion zones or export processing zones are also entitled to the same incentives. Industry-specific investment incentives, such as a three-year profit tax exemption, may be available in the agriculture and agro-industry sectors. Agricultural materials used as inputs in export industries may be exempt from the value-added tax. More information about the criteria and investment areas eligible for incentives can be found at the following link:

Research and Development

The government does not have any restrictions on foreign firms participating in government financed and subsidized research and development programs. The government has public procurement procedures that companies can follow.

Performance Requirements

Under Cambodian law, most foreign investments and foreign investors are subject to the following taxes: corporate profits tax (20 percent), tax on individual salaries (zero to 20 percent), withholding taxes (four to 15 percent), value-added taxes (zero to ten percent), and import duties (zero to 35 percent).

The Law on Investment permits investors to hire foreign nationals for employment as managers, technicians, or skilled workers if the qualifications and/or expertise are not available in Cambodia. According to the Cambodian Labor Law, the number of foreign employees should not exceed ten percent of the total number of Cambodian employees. In practice, companies can request an increase in this ratio.

Data Storage

Cambodia does not have any forced localization policy that obligates foreign investors to use domestic contents in goods or technology. Cambodia also does not require foreign Information Technology providers to turn over source code.

The General Department of Information and Communications Technology (ICT) in the Ministry of Post and Telecommunications oversees ICT-related policy in Cambodia.

6. Protection of Property RightsShare    

Real Property

Mortgages exist and Cambodian banks often require certificates of property ownership as collateral before approving loans. The mortgages recording system, which is handled by private banks, is generally considered reliable.

The 2001 Land Law provides a framework for real property security and a system for recording titles and ownership. Land titles issued prior to the end of the Khmer Rouge regime in 1979 are not recognized due to the severe dislocations that occurred during the Khmer Rouge period. The government is making efforts to accelerate the issuance of land titles, but in practice the titling system is cumbersome, expensive, and subject to corruption. The majority of property owners lack documentation proving ownership. Even where title records exist, recognition of legal title to land has not been uniform, and there are reports of court cases in which judges have sought additional proof of ownership. Although foreigners are constitutionally forbidden to own land, the 2001 law allows long- or short-term leases to foreigners. As noted above, Cambodia also allows foreign ownership in multi-story buildings from the second floor up. Cambodia was ranked 121 out of 177 economies for ease of registering property in the 2016 World Bank Doing Business Report.

Intellectual Property Rights

Cambodia has adopted legislation concerning the protection of intellectual property rights, including the Law on Copyrights and the Law on Patent and Industrial Design. Cambodia is a member of the World Intellectual Property Organization and the Paris Convention for the Protection of Industrial Property, and is a party to the ASEAN Framework Agreement on Intellectual Property Cooperation. Cambodia has also concluded bilateral agreements on intellectual property protection and cooperation with the United States, China, Thailand, Japan, and South Korea.

Cambodia has enacted several laws pursuant to its WTO commitments on intellectual property. Copyrights are governed by the Law on Copyrights and Related Rights, which was enacted in January 2003. Trademarks are governed by the Law Concerning Marks, Trade Names and Acts of Unfair Competition, which was enacted in 2002. A patent law has been in place since 2003. Some gaps in intellectual property protection remain, however, and outstanding legislation includes a draft law for protecting trade secrets, a law on integrated circuit protection, and legislation on protecting encrypted satellite signals required by the World Intellectual Property Organization. In January 2014, Cambodia enacted the Law on Geographical Indications, recognizing geographical indications of local and foreign products. Infringement of IPR is pervasive, particularly related to software, compact discs and music, books, cigarettes, alcohol, and pharmaceuticals. In March 2015, the Cambodian government submitted its instrument of accession to the Madrid Protocol for International Registration of Marks at the World Intellectual Property Organization.

Although Cambodia is not a major center for the production and export of pirated compact discs, digital video discs (DVD), or other copyrighted materials, local businesses report Cambodia is growing as a source of pirated material due to weak enforcement. An inter-ministerial committee was established to combat piracy of compact discs and DVDs in the domestic market. Infringement complaints may be made to the Economic Police, Customs, the Cambodia Import-Export Inspection and Fraud Repression Directorate General, or the Ministry of Commerce. The division of responsibility among each agency, however, is not clearly defined. The National Intellectual Property Rights Committee is planning to create two new subcommittees: a subcommittee on IPR enforcement and a subcommittee on the education and dissemination of IPR rules and regulations. The sub-decree on the establishment of the two subcommittees is under review by the Council of Ministers.

Cambodia was not listed in the U.S. Trade Representative (USTR)’s Special 301 report or notorious markets report.

For additional information about treaty obligations and points of contact at local IP offices, please see the World Intellectual Property Organization’s country profiles at:

Resources for Rights Holders

Regional Contact:

  • Mr. Peter N. Fowler
  • Regional IP Attaché
  • Telephone number: (662) 205-5913
  • Email address:

Country resources:

List of local lawyers:

7. Transparency of the Regulatory SystemShare    

There is no pattern of systematic discrimination by the government against foreign investors in Cambodia. Numerous issues of transparency in the regulatory regime arise, however, from the lack of legislation and limited capacity of key institutions. Investors often complain that the decisions of Cambodian regulatory agencies are inconsistent, arbitrary, or corrupt. Cambodia has indicated a desire to discourage monopolistic trading arrangements in most sectors, but it has yet to pass the Law on Competition which was part of its WTO accession obligations. The Ministry of Commerce expects Cambodia to enact competition legislation in 2016. Under the most recent draft, a National Committee on Competition would be established.

8. Efficient Capital Markets and Portfolio InvestmentShare    

The Cambodian government does not use regulation of capital markets to restrict foreign investment. Banks have been free to set their own interest rates since 1995, and increased competition between local institutions has led to a gradual lowering of interest rates from year to year. Domestic financing, however, is still difficult to obtain at competitive interest rates. The average annual interest rate on loans in U.S. dollars stood at 11.61 percent in October 2015. A law addressing secured transactions, which includes a system for registering such secured interests, was promulgated in May 2007. Most loans are secured by real property mortgages or deposits of cash or other liquid assets, as provided for in existing contract and real property laws. Commercial and specialized bank deposits increased by 17 percent in 2015 over the previous year, equivalent to 62 percent of GDP. Loans also increased by 26 percent to 63 percent of GDP in 2015. The ratio of non-performing loans stood at two percent at the end of 2015, a decrease of 0.2 percentage points compared to 2014.

Cambodia has 36 commercial banks, 11 specialized banks (set up to finance specific turn-key projects such as real estate development), and 41 licensed microfinance institutions, of which seven were licensed microfinance deposit taking institutions. There were 38 registered rural credit operators as of end of 2014. The National Bank has also granted licenses to six financial leasing companies, six third-party processor companies (Wing Limited, Western Union Network Limited, Money Gram Payment System Inc, Pay Go SEA Ltd, Viettel PTE., Ltd, and IME (M) SDN BHD), and one Credit Bureau Company to improve transparency and credit risk management and encourage more lending to small-and medium-sized enterprise customers.

In a move designed to address the need for capital markets in Cambodia, the Cambodian Securities Exchange (CSX) was launched on July 11, 2011. In April 2012, the Phnom Penh Water Supply Authority, a state-owned enterprise, was the first domestically registered company on the CSX. In June 2014, Grand Twins International (Cambodia) Plc, a garment factory from Taiwan, became the second company to list on the CSX. Phnom Penh Autonomous Port listed its company in December 2015. The Phnom Penh Special Economic Zone launched its IPO on the CSX in April 2016. Two other state-owned enterprises, the Autonomous Port of Sihanoukville and Telecom Cambodia, and a private local company, Express Food Group Co., Ltd, are preparing for initial public offerings, but listing dates have yet to be announced. In November 2006, the National Assembly passed legislation to permit the government to issue bonds to address the country’s budget deficits. No bonds, however, have been issued since 2007, and Prime Minister Hun Sen said in 2008 that the government did not plan to issue bonds in the near future. In 2007, the government also passed the Law on the Issuance and Trading of Non-government Securities.

Money and Banking System, Hostile Takeovers

In August 2015, Moody’s Investors Service affirmed Cambodia’s government issuer rating at B2 based on its healthy growth path and modest debt burden. However, Moody’s report noted Cambodia could face sovereign credit challenges due to its low per capita income and weak institutional framework. The report noted China’s slower economic growth could negatively impact Cambodia’s economy because Cambodia benefits from Chinese trade, concessional loans, and investment.

In 2008, the National Bank of Cambodia (NBC) raised the minimum capital reserve requirements for banks from USD 13 million to USD 37.5 million. In March 2016, the NBC doubled the minimum requirement to USD 75 million for commercial bank and USD 15 million for specialized banks. Based on the new regulations, microfinance deposit taking institutions are required to increase capital reserves from USD 2.5 million to USD 30 million and other microfinance institutions need to increase to USD 1.5 million.

By the end of 2014 (the latest figure available), total assets in the banking system (commercial and specialized banks) had reached USD 16.2 billion, an increase of 29.6 percent compared with 2013 and equivalent to 95 percent of GDP. The infusion of capital from newly created banks and additional customer deposits were the primary drivers underlying the growth. Two large local banks, Acleda bank and Canadia bank, have the largest assets in the market with 19 percent and 14.4 percent respectively.

9. Competition from State-Owned EnterprisesShare    

Cambodia has four main state-owned enterprises: Electricité du Cambodge, which is in charge of producing and distributing power nationwide; the Phnom Penh Water Supply Authority, which is responsible for water treatment and supply; the Rural Development Bank, which services and refinances loans to licensed financial institutions, commercial banks, specialized banks, micro-finance institutions, associations, development communities, and small- and medium-sized enterprises that take part in rural development in Cambodia; and the Green Trade Company, which manages Cambodia’s national reserve of rice through purchases and sales made at market prices. In March 2015, the Cambodian government through the Ministry of Mines and Energy announced it is exploring the possibility of establishing a national oil company to invest in oil and gas sector.

OECD Guidelines on Corporate Governance of SOEs

Each state-owned enterprise is under the supervision of a line ministry or government institution and is overseen by a board of directors drawn from among senior government officials. Private enterprises are generally allowed to compete with state-owned enterprises under equal terms and conditions. These entities are also subject to the same taxes and value-added tax rebate policies as private-sector enterprises. State-owned enterprises are covered under the law on public procurement, which was promulgated in January 2012, and their financial reports are audited by the appropriate line ministry, the Ministry of Economy and Finance, and the National Audit Authority.

Sovereign Wealth Funds

Cambodia does not have a sovereign wealth fund.

10 Responsible Business ConductShare    

The Government does not have policies to promote responsible business conduct (RBC) or corporate social responsibility (CSR). However, there is increasing awareness of RBC among larger and multinational companies in the country. In 2015, a group of private sector and NGO representatives formed a National CSR Working Group to urge the government to adopt a national CSR framework. Initiated by the NGO Forum on Cambodia and Oxfam, the group meets quarterly to discuss CSR practices and seek solutions to problems caused by state and private investments. A number of economic land concessions in Cambodia have led to high profile land rights cases. The Cambodian government has recognized the problem, but in general, has not effectively and fairly resolved land rights claims. The Cambodian government does not have a national contact point for Organization for Economic Cooperation and Development (OECD) multinational enterprises guidelines and does not participate in the Extractive Industries Transparency Initiative.

11. Political ViolenceShare    

The risk of political violence directed at foreign companies operating in Cambodia is low. Foreign companies have been the targets of violent protests in the past, such as the 2003 anti-Thai riots against the Embassy of Thailand and Thai-owned commercial establishments. More recently, there were reports that Vietnamese-owned establishments were looted during a January 2014 labor protest. Authorities have also used force, including truncheons, electric cattle prods, fire hoses, and even gunfire, to disperse protestors. Incidents of violence directed at businesses, however, are rare. Post is unaware of any incidents of political violence directed at American or other non-regional interests.

Since mid-2015, the government’s pressure on the opposition party has intensified. Two opposition Cambodia National Rescue Party (CNRP) parliamentarians were beaten by plainclothes security personnel on grounds of the National Assembly October 2015, and the leader of the Party fled the country to avoid being imprisoned on politically motivated defamation charges. In April 2016, the CNRP deputy leader was threatened with multiple prosecutions from various government agencies, including the Anti-Corruption Unit, based on private phone conversations he had that were mysteriously leaked to the public. The decline in political freedom over the past year has not so far manifested itself in the economic realm.

12. CorruptionShare    

The Anti-Corruption Law was adopted in 2010 to combat corruption through education, prevention, and more effective enforcement. Under this law, all civil servants are obligated to declare their financial assets to the government every two years. The fourth round of asset and debt declaration took place during January 2015. The Anti-Corruption Unit (ACU), which was formed in 2010, has launched several high-profile prosecutions against public officials, including members of the police and judiciary. The ACU has also been accused of deliberately targeting the political opposition.

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Cambodia ratified the UN Convention against Corruption in 2007 and endorsed the Action Plan of the Asian Development Bank/ OECD Anti-Corruption Initiative for Asia and the Pacific in 2003. Cambodia is not a party to the OECD Convention on Combating Bribery.

Despite the passage of the Anti-Corruption Law and creation of the ACU, business people, both local and foreign (including U.S. companies), have identified corruption, particularly within the judiciary, customs service, and tax authorities, as the single greatest deterrent to investment in Cambodia. Corruption was cited by a plurality of respondents to the World Economic Forum survey as the most problematic factor for doing business in Cambodia. The minimum salary for administrative civil servants was raised from USD 138 to USD 175 per month in 2016, however, these wages still remain below the level required to maintain a suitable quality of life in Cambodia. As a result, public employees remain susceptible to corruption. Local and foreign businesses report that they must often pay facilitation fees to expedite business transactions. Even though the Cambodian government has published the official fees of public services since early 2013, the practice of paying additional fees remains common. Furthermore, the process for awarding government contracts is not transparent and is susceptible to corruption. The ACU has been criticized for initiating a series of politically motivated investigations in 2016 while being slow to investigate government corruption.

In 2015, the ACU, in collaboration with the private sector, established guidelines encouraging private companies to create internal codes of conduct prohibiting bribery and corrupt practices. The guidebook is publicly available on the website of the ACU at Private companies can sign a Memorandum of Understanding (MoU) with the ACU pledging to operate corruption-free and cooperate on anti-corruption efforts. There are currently more than 20 private companies that have signed an MoU with ACU.

Resources to Report Corruption

Government point of contact:

  • Om Yentieng
  • President
  • Anti-Corruption Unit
  • Building No. 54, Preah Norodom Blvd, Sangkat Phsar Thmey 3, Khan Daun Penh, Phnom Penh
  • Telephone number: +855-23-223954
  • Email address:

NGO point of contact:

  • Preap Kol
  • Executive Director
  • Transparency International Cambodia
  • Telephone number: +855-23-214430
  • Email address:

13. Bilateral Investment AgreementsShare    

Bilateral Taxation Treaties

Bilateral investment treaties provide reciprocal national treatment to investors, excluding benefits deriving from membership in future customs unions or free trade areas and agreements relating to taxation. These agreements preclude expropriations except those that are non-discriminatory, undertaken for a lawful or public purpose, and accompanied by prompt, adequate, and effective compensation at the fair market value of the property prior to expropriation. The agreements also guarantee repatriation of investments and provide for settlement of investment disputes via arbitration. Cambodia has signed bilateral investment agreements with Austria, Belarus, Burma (Myanmar), China, Croatia, Cuba, Czech Republic, Democratic People’s Republic of Korea, France, Germany, Hungary, Indonesia (later terminated), Japan, Kuwait, Laos, Malaysia, the Netherlands, Pakistan, the Philippines, the Republic of Korea, Russia, Singapore, Switzerland, Thailand, Vietnam, and the Organization of the Petroleum Exporting Countries. Future agreements are planned with Algeria, Bangladesh, the Belgium-Luxembourg Economic Union, Bulgaria, Egypt, Hungary, Israel, Iran, Libya, Macedonia, Malta, Qatar, Russia, Turkey, the United Kingdom, and Ukraine.

In July 2006, Cambodia signed a Trade and Investment Framework Agreement (TIFA) with the United States to promote greater trade and investment in both countries and provide a forum to address bilateral trade and investment issues. In February 2016, the third TIFA meeting was held in Phnom Penh. In August 2012, the United States and Cambodia agreed to begin exploratory discussions on a potential bilateral investment treaty (BIT). Additional exploratory talks on a BIT were held in February 2016.

Cambodia does not have a bilateral taxation treaty with the United States.

14. OPIC and Other Investment Insurance ProgramsShare    

Cambodia has an agreement with the Overseas Private Investment Corporation (OPIC) to encourage investment and is eligible for the Quick Cover Program under which OPIC offers financing and political risk insurance coverage for projects on an expedited basis. With most investment contracts written in U.S. dollars, there is little exchange rate risk. Even for riel-denominated transactions, the fact that Cambodia has adopted a managed floating exchange rate regime based on the U.S. dollar means that exchange rates are likely to remain stable. Cambodia is a member of the Multilateral Investment Guarantee Agency of the World Bank, which offers political-risk insurance to foreign investors. The Export-Import Bank of the United States (Ex-Im) provides financing for purchases of U.S. exports by private-sector buyers in Cambodia on repayment terms of up to seven years. Ex-Im support is typically limited to transactions with a commercial bank functioning as an obligor or guarantor. Ex-Im will, however, consider transactions without a bank on a case-by-case basis.

15. LaborShare    

Cambodia’s economy is primarily focused on four sectors: agriculture, garment production, tourism, and construction. The agricultural sector employees some 65 to 70 percent of the labor force. Around 700,000 people, the majority of whom are women, are employed in the garment and footwear sector; 500,000 are employed in the tourism sector; and a further 50,000 people in construction. According to the 2013 Inter-Censal Population Survey of Cambodia, the latest survey available, the country’s annual population growth rate was 1.46 percent from 2008 to 2013. Around 55 percent of the population is under the age of 25. The United Nations has estimated that around 300,000 new job seekers enter the labor market each year.

Given the severe disruption to the Cambodian education system and loss of skilled Cambodians during the 1975-79 Khmer Rouge period, workers with higher education or specialized skills are few and in high demand. The Cambodia Socio-Economic Survey conducted in 2013 found that about 27 percent of the labor force had completed an elementary education. Only 3.65 percent of the labor force had completed post-secondary education. The 2015-2016 Global Competitiveness Report of the World Economic Forum identified an inadequately educated workforce as one of the most serious problems to doing business in Cambodia.

Cambodia’s 1997 Labor Code protects the right of association and the right to organize and bargain collectively. Specifically, the law provides for the right of private-sector workers to form and join trade unions of their own choice without prior authorization, the right to strike, and the right to bargain collectively. While unions may affiliate freely, the law does not explicitly address their right to affiliate internationally. The Cambodian government does not prohibit hiring foreign nationals. According to the Ministry of Labor and Vocational Training (MOLVT), the number of foreign workers should not exceed ten percent of the total number of Cambodian workers. However, companies can request permission to increase the ratio of foreign workers.

Unresolved labor disputes may be brought to the Arbitration Council, an independent state body that interprets labor regulations in collective disputes, such as when multiple employees are dismissed. The parties may choose whether to consider the council’s decisions as binding. If neither party objects to the arbitral award within eight days of its issuance, it automatically becomes binding. Individual disputes may be brought before the courts, although the judicial system is neither impartial nor transparent.

The law requires trade unions to file their charters and lists of their officials with the MOLVT. The Bureau of Labor Relations is responsible for facilitating the process of union registration and certification of “most representative status” for unions, which entitles a union representing a majority of workers in a given enterprise to represent all the workers in that establishment.

Civil servants, including teachers, judges, and military personnel, as well as household workers, do not have the right to form or join a trade union. Teachers and other civil servants have regularly sought the right to organize. Personnel in the air and maritime transportation industries are free to form unions but are not entitled to social security and pension benefits and are exempt from the limitations on work hours prescribed by the labor law. The law stipulates that workers can strike only after several requirements have been met, including the failure of other methods of dispute resolution (such as negotiation, conciliation, or arbitration), a secret-ballot vote of the union membership, and seven days’ advance notice to the employer and the MOLVT. There is no law prohibiting strikes by civil servants, workers in public sectors, or workers in essential services. Legal protections are in place to guard strikers from reprisal.

The labor code prohibits forced or compulsory labor, establishes 15 as the minimum allowable age for paid work, and sets 18 as the minimum age for anyone engaged in work that is hazardous, unhealthy, or unsafe. The statute also guarantees an eight-hour workday and 48-hour work week, and provides for time-and-a-half pay for overtime or work on an employee’s day off. To increase competitiveness of garment manufacturers, the labor code was amended in 2007 to establish a night shift wage of 130 percent of daytime wages.

Cambodia maintains a minimum wage for workers in the garment and footwear sector. The minimum wage for garment workers was set at USD 140 per month in 2016 by the Labor Advisory Committee (LAC), a tripartite group comprised of representatives from the government, labor, and manufacturers. The LAC meets annually to set the wage for the coming year. Since 2010, the wage rate for workers in the sector has increased from USD 61 to USD 140. In theory, the LAC follows a formula, accounting for multiple factors in order to establish an adequate wage for workers in the sector. In practice, however, the determination of the ultimate rate appears to have an arbitrary element. The Prime Minister has decreed a USD five addition to the last two recommended raises.

The labor law stipulates that a worker is entitled to indemnity if laid off for reasons of health or if the contract is terminated by the employer alone, except in the case of a serious offense by the worker. Enforcement of many aspects of the labor code is poor, and many labor disputes involve workers simply demanding conditions to which they are legally entitled.

The U.S. government, the International Labor Organization (ILO), and others have been working closely with Cambodia to improve enforcement of the labor code and workers’ rights in general. The 1999 U.S.-Cambodia Bilateral Textile Agreement linked Cambodian compliance with internationally recognized core labor standards with the textile quota the United States granted to Cambodia. The U.S. government committed to increase the size of Cambodia’s textile export quota if Cambodia demonstrated improvements in labor standards. This was the first bilateral trade agreement to positively link market access with progress in compliance with labor obligations. The ILO, which works with the government to monitor adherence to international labor standards in the garment sector, succeeded in improving compliance with workplace standards, virtually eliminating the worst labor abuses, such as forced labor and child labor. While the quota regime ended on January 1, 2005, following Cambodia’s accession to the WTO, the ILO’s Better Factories Cambodia program continues to monitor and report on working conditions in garment factories. All export garment factories in Cambodia must agree to be monitored by the program in order to receive an export license. Monitoring reports summarizing compliance issues, tracking trends, and analyzing progress in Cambodia’s garment and footwear industries have been available online since March 2014.

In April of 2016, the Cambodian government passed a new law governing the operations of unions in the garment and footwear sector with the intent of decreasing labor activism and illegal strikes in the sector. Under the new law, unions will be more regulated and subject to stricter reporting and registration procedures. Independent unions opposed the law for adding barriers to strikes, giving the government greater authority to probe union finances, and prohibiting individuals with a criminal record from serving as union leaders. Since many union leaders have criminal records related to their labor activism, they viewed this provision as a cudgel to restrict unions’ ability to operate independently. The ILO has stated publically that the law could hinder Cambodia’s obligations to international labor conventions 87 and 98. The full effects of the law will depend upon its implementation.

16. Foreign Trade Zones/Free Ports/Trade FacilitationShare    

To facilitate the country’s development, the Cambodian government has shown great interest in increasing exports via geographically defined special economic zones (SEZs). In December 2005, the government adopted the Sub-Decree on Special Economic Zones to speed up the creation of the zones by detailing the procedures, conditions, and incentives for investors. Since then, the Cambodia Special Economic Zones Board has approved 36 SEZs, which are located in Phnom Penh, Koh Kong, Kandal, Kampot, Sihanoukville, and near the borders of Thailand and Vietnam. The main investment sectors in these zones include garments, shoes, bicycles, food processing, car and motorcycle assembly, and electrical equipment manufacturing.

17. Foreign Direct Investment and Foreign Portfolio Investment StatisticsShare    

According to IMF data, total FDI in Cambodia as reported by counterpart economies reached USD 41 billion in 2014, with Thailand responsible for a USD 38.7 billion that year. The IMF’s 2015 data is not yet available. According to the Council for the Development of Cambodia, the total stock of FDI for reported fixed assets in Cambodia was USD 30.2 billion in 2015. The Council for the Development of Cambodia numbers are based on projections and not actual investments. Foreign direct investment inflow based on fixed assets were projected to be USD 785 million in 2015.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy


Ministry of Economy and Finance

World Bank

USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other

Economic Data






Host Country Gross Domestic Product (GDP) ($M USD)





Foreign Direct Investment

Council for the Development of Cambodia

USG or international statistical source

USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other

U.S. FDI in partner country ($M USD, stock positions)





BEA data available at

Host country’s FDI in the United States ($M USD, stock positions)





BEA data available at

Total inbound stock of FDI as % host GDP





Total FDI Stock (2014 IMF data): $41 billion
2015 Cambodia GDP: $18.5 billion

By end of 2015, the Council for the Development of Cambodia had recorded approximately USD 85 million in U.S. registered capital investments since August 1994, equivalent to 0.5 percent of Cambodia’s GDP. Major U.S. business investments in Cambodia include: Caltex, which has a nationwide chain of service stations and a petroleum holding facility in Sihanoukville; GE; Crown Beverage Cans Cambodia Limited, which produces aluminum cans; CBREGroup, Inc.; Motorola Solutions Inc; Coca Cola; Tiffany’s, which has a diamond polishing factory; American Licorice; Otis Elevators; DuPont; and W2E Siang Phong Co., Ltd., a biogas power generation joint venture between U.S. and Dutch investors. U.S. franchises and brands with local distribution include: John Deere, Ford, Chevy, Gallo Wines, Swensen’s Ice Cream, Dairy Queen, Krispy Kreme doughnuts, Carl Jr’s, Cold Stone Creamery, Microsoft, Kohler, Domino’s Pizza, Burger King, Hard Rock Café; Coffee Bean and Tea Leaf, Starbucks Coffee, and Burger King. There are also U.S. investors in several Cambodian garment factories.

Major non-U.S. foreign investors in Cambodia include Asia Pacific Breweries (Singapore), Asia Insurance (Hong Kong), ANZ Bank (Australia), BHP Billiton (Australia), Oxiana (Australia), Infinity Financial Solutions (Malaysia), Total (France), PTT Cambodia (Thailand), Cambodia Airport Management Services (CAMS) (France), Forte Insurance (France), Manulife Cambodia PLC (Canada), Prudential (United Kingdom), Smart Axiata Co., Ltd (Malaysia), Thakral Cambodia Industries (Singapore), Petronas Cambodia (Malaysia), Charoeun Pokphand (Thailand), Siam Cement (Thailand), Bank of China (China), Cambrew (Malaysia), Aeon shopping mall (Japan), Parkson mall (Malaysia), and Metfone (Vietnam).

Some major local companies include: Sokimex Group (petroleum, hotel and tourism, and garments), Royal Group of Companies (telecommunications and information technology, banking and insurance, media and entertainment, hotel and resort properties and development, trading, and transportation), AZ Distribution (construction and telecommunications), Mong Reththy Group (construction, agro-industry, and rubber and palm oil plantations), KT Pacific Group (airport projects, construction, tobacco, food, and electronics distribution), Hero King (cigarettes, casinos, and power), Anco Brothers (cigarettes, casinos, and power), Canadia Bank (banking and real estate), Acleda Bank (banking), Men Sarun Import and Export (agro-industry and rice and rubber exports), SOMA Group (agriculture production and processing, education, energy, infrastructure, and trading), Vattanac Capital (banking, real estate, and golf resorts), and Worldbridge Group (logistics, real estate, industrial complex, construction, entertainment and media, e-commerce, and franchises). In 2009, Acleda Bank opened its first bank branch outside of Cambodia in Laos, and in 2013 it opened offices in Burma.

Table 3: Sources and Destination of FDI

According to IMF data, total FDI in Cambodia as reported by counterpart economies skyrocketed from USD 2.69 billion in 2013 to USD 41 billion in 2014, with Thailand responsible for the lion’s share, at 94.42 percent of total investment. The other top four foreign direct investment countries in Cambodia were Republic of Korea, Malaysia, France, and Denmark. The number of Cambodian investments outside the country was quite small compared to inward foreign direct investment. In 2014, outward foreign direct investment totaled USD 233 million (a 51 percent decrease compared to 2013), with around 62 percent of the total investment going to Singapore. Outward investment to the Philippines (USD 7.34 million) decreased by 72 percent compared to 2013. The IMF’s 2015 data is not yet available.

Direct Investment from/in Counterpart Economy Data

From Top Five Sources/To Top Five Destinations (US Dollars, Millions)

Inward Direct Investment

Outward Direct Investment

Total Inward



Total Outward









Republic of Korea



China, P.R. Mainland












Czech Republic






Republic of Korea



"0" reflects amounts rounded to +/- USD 500,000.

Source: IMF’s Coordinated Direct Investment Survey (

Table 4: Sources of Portfolio Investment

All the figures in the above tables are provided by the country of origin of the investments. Cambodian-supplied data is not available.

The total value of portfolio investment assets was USD 40.4 billion in 2014, the latest figures available. Among the top five partners, Thailand holds the largest equity securities (96 percent share). Korea ranked first in term of debt securities investment in Cambodia with 74.8 percent of total debt securities.

Data on Cambodia from the IMF’s Coordinated Portfolio Investment Survey (CPIS) site is not available.

Investment Assets

Top Five Partners (Millions, US Dollars)



Total Debt

All Countries



All Countries



All Countries









Korea, Republic of






Korea, Republic of
























China, P.R.: Mainland



China, P.R.: Mainland






Source: the IMF’s Coordinated Investment Survey (CDIS)

18. Contact for More InformationShare    

Margaret Hsiang
Economic Officer
No. 1, Street 96, Sangkat Wat Phnom, Phnom Penh, Cambodia
Phone: (855) 23-728-401