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After reopening fully in late 2021, the Cambodian economy has continued to recover gradually, with a projected GDP growth of 5.2 percent in 2023, according to the World Bank. A rebound in tourism and Cambodia’s growing exports, led by the garment, footwear, and travel goods sector, are the drivers of the recovery. However, some external challenges remain, including global economic uncertainties and the impact of Russia’s invasion of Ukraine, which caused inflation to peak at 5.3 percent in 2022 from 2.9 percent in 2021. Inflation is projected to decrease to 2.5 percent in 2023, per the National Bank of Cambodia.

The Royal Government of Cambodia (RGC) has prioritized attracting investment from abroad, and in 2021 passed a new Law on Investment.  Foreign direct investment (FDI) incentives available to investors include 100 percent foreign ownership of companies, corporate tax holidays, reduced corporate tax rates, duty-free import of capital goods, and no restrictions on capital repatriation.  Despite these incentives, Cambodia has not attracted significant U.S. investment. Apart from the country’s relatively small market size, factors dissuading U.S. investors include: systemic corruption, a limited supply of skilled labor, inadequate infrastructure (including high energy costs), a lack of transparency in some government approval processes, and preferential treatment given to local or other foreign companies that engage in acts of corruption or tax evasion or take advantage of Cambodia’s weak regulatory environment. Foreign and local investors alike lament the government’s failure to adequately consult the business community on new economic policies and regulations.

In light of these concerns, on November 10, 2021, the U.S. Departments of State, Treasury, and Commerce issued a business advisory to caution U.S. businesses currently operating, or considering operating, in Cambodia to be mindful of interactions with entities involved in corrupt business practices, criminal activities, and human rights abuses. Despite these challenges, several large American companies maintain investments in the country, including Coca-Cola’s $100 million bottling plant and Ford’s $21 million vehicle assembly plant.  The Financial Action Task Force (FATF) removed Cambodia from its “grey list” of jurisdictions under increased monitoring in February 2023, after FATF assessed  that Cambodia had made progress in improving its anti-money laundering/countering the financing of terrorism (AML/CFT) regime. FATF called on Cambodia to continue to work to sustain its improvements in its AML/CFT system.

In recent years, Chinese FDI – largely from state-run or -associated firms – has surged and has become a significant driver of growth in Cambodia.  Chinese businesses, many of which are state-owned enterprises, are not subject to laws like the U.S. Foreign Corrupt Practices Act. In 2022, Cambodia recorded FDI inflows of $1.2 billion, with approximately 80 percent reportedly coming from the PRC, according to the Council for Development of Cambodia (CDC). Physical infrastructure projects continue to attract the bulk of FDI. The $2 billion Phnom Penh-Sihanoukville expressway, for example, was inaugurated for public use in October 2022. Planning for further similar infrastructure projects is underway. Additional sectors attracting foreign investment include manufacturing and agricultural processing.

In 2022, three bilateral and regional free trade agreements came into effect: the Cambodia-China Free Trade Agreement (CCFTA), the Cambodia-Korea Free Trade Agreement (CKFTA), and the Regional Comprehensive Economic Partnership (RCEP).

Climate change remains a critical issue in Cambodia due to its vulnerability to extreme weather occurrences, high rates of deforestation, and low environmental accountability.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perception Index 2022 150 of 180
Global Innovation Index 2022 97 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 1994-2022 $1,430

World Bank GNI per capita 2021 $1,580

Policies Towards Foreign Direct Investment

Cambodia has a liberal foreign investment regime and actively courts FDI. In 2021, the RGC enacted a new Law on Investment to attract more FDI in emerging sectors including agro-processing, electronics/machinery, health, industrial parts, infrastructure, and green energy. The government permits 100 percent foreign ownership of companies in most sectors. In a handful of sectors, such as cigarette manufacturing, movie production, rice milling, and gemstone mining and processing, foreign investment is subject to local equity participation or prior authorization from authorities.  While there is little or no official legal discrimination against foreign investors, some foreign businesses report disadvantages vis-a-vis Cambodian or other foreign rivals that engage in acts of corruption or tax evasion or take advantage of Cambodia’s weak regulatory environment.

The Council for the Development of Cambodia ( CDC ) is the principal government agency responsible for providing incentives to stimulate investment. Investors are required to submit an investment proposal to either the CDC or the Provincial-Municipal Investment Sub-committee to obtain a Qualified Investment Project (QIP) status depending on capital level and location of the investment in question.  QIPs are then eligible for specific investment incentives.

The CDC also serves as the secretariat to Cambodia’s Government-Private Sector Forum (G-PSF), a public-private consultation mechanism that facilitates dialogue within and among 10 government/private sector working groups.

Cambodia has created special economic zones (SEZs) to further facilitate foreign investment. As of 2022, there are 24 SEZs  in Cambodia.  These zones provide companies with access to land, infrastructure, and services to facilitate the set-up and operation of businesses. Services provided include utilities, tax services, customs clearance, and other administrative services designed to support import-export processes. Cambodia offers incentives to projects within the SEZs such as tax holidays, zero rate VAT, and import duty exemptions for raw materials, machinery, and equipment. The primary authority responsible for Cambodia’s SEZs is the Cambodia Special Economic Zone Board (CSEZB). The largest of its SEZs is in Sihanoukville and hosts primarily companies from the PRC.

Limits on Foreign Control and Right to Private Ownership and Establishment

There are few limitations on foreign control and ownership of business enterprises in Cambodia. Foreign investors may own 100 percent of investment projects except in the sectors mentioned above. According to Cambodia’s new Law on Investment and related sub-decrees, there are no limitations based on shareholder nationality nor discrimination against foreign investors, except for land ownership as stipulated in the Constitution of the Kingdom of Cambodia.

For property, land title must be held by one or more Cambodian citizens.  For state-owned enterprises, the Law on Public Enterprise provides that the Cambodian government must directly or indirectly hold more than 51 percent of the capital or veto rights.

For agriculture investments, foreign investors may request economic land concessions, if they meet certain criteria including provisions on land use, productivities, job creation, and environmental protection and natural resource management.

There are some limitations on the employment of foreigners in Cambodia. A QIP allows employers to obtain visas and work permits for foreign citizens as skilled workers, but the
employer may be required to prove to the Ministry of Labor and Vocational Training (MOLVT) that the skillset is not available among Cambodian workers. The Cambodian Bar has periodically taken actions to restrict or impede the work of foreign lawyers or foreign law firms in the country.

Other Investment Policy Reviews

The OECD Investment Policy Review of Cambodia in 2018 is available at the following link .

Business Facilitation

All businesses are required to register with the Ministry of Commerce (MOC), the General Department of Taxation (GDT), and the MOLVT.  To facilitate this registration process, the Ministry of Economy and Finance (MEF) in 2020 launched the “ Single Portal ” – available at  – where businesses can register online. There are six institutions integrated into the system: Ministry of Interior, MEF, MOC, MOLVT, General Department of Taxation (GDT), and CDC.

In addition, new businesses may also be required to register with other relevant ministries governing their sector and business activities. For example, travel agencies must also register with the Ministry of Tourism, and private universities must also register with the Ministry of Education, Youth, and Sport.

Outward Investment

There are no restrictions on Cambodian citizens investing abroad. Some Cambodian companies have invested in neighboring countries – notably, Thailand, Laos, and Myanmar.

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. The last TIFA meeting took place in Siem Reap, Cambodia, in January 2019.

As of 2022, Cambodia has signed bilateral investment treaties (BITs) with 27 countries. A full list of all countries with which Cambodia currently has bilateral investment treaties is available at Investment Policy Hub of UNCTAD . Cambodia does not have a BIT with the United States.

Cambodia implemented its first and second bilateral free trade agreement (FTA) with the PRC and the Republic of Korea in 2022; in the same year, Cambodia also joined the RCEP. Cambodia is currently conducting a feasibility study on a potential FTA with the Eurasian Economic Union .

As a member of ASEAN, Cambodia has signed many regional investment agreements including the ASEAN Comprehensive Investment Agreement, the ASEAN-Hong Kong Investment Agreement, the ASEAN-India Investment Agreement, the ASEAN-China Investment Agreement, and the ASEAN-Korea Investment Agreement.  A full list is available at .

Cambodia is also a party to several regional free trade agreements, including the ASEAN-Australia-New Zealand Free Trade Agreement, the ASEAN-Japan EPA, the ASEAN-Hong Kong, and ASEAN Framework Agreements with Korea, India, China, and the EU. A full list is available at .

Cambodia is party to double taxation agreements with Korea, Brunei, the PRC, Hong Kong, Indonesia, Malaysia, Singapore, Thailand, and Vietnam. Details of those agreements are available on the GDT website .

Cambodia is not a member of the OECD Inclusive Framework on Base erosion and profit shifting – OECD BEPS .

In the past, the GDT has lacked the capacity to collect taxes on a large scale. As a result, many companies evaded paying salary taxes, VAT, and real estate taxes, despite being required to do so under Cambodian laws. The GDT has taken steps, however, to increase tax revenue by building capacity of its officials, improving tax collection efficiency, and implementing existing tax laws better.

Application of Cambodia’s tax laws, while improving, remains inconsistent. In some cases, foreign investors face greater scrutiny to pay taxes than domestic counterparts. In others, the GDT has been criticized for employing audits and assessing large tax obligations for political purposes.

Transparency of the Regulatory System

Cambodia’s regulatory system, while improving, still lacks transparency. This is the result of a lack of legislation and the limited capacity of key institutions, further exacerbated by a weak court system. Investors often complain that decisions of Cambodian regulatory agencies are inconsistent, arbitrary, and influenced by corruption. For example, in May 2016, in what was perceived as a populist move, the government set caps on retail fuel prices, with little consultation with petroleum companies.  In April 2017, the National Bank of Cambodia introduced an interest rate cap on loans provided by the microfinance industry with no consultation with relevant stakeholders. More recently, investors have regularly expressed concerns over draft legislation that has not been subject to stakeholder consultations.

Cambodian ministries and regulatory agencies are not legally obligated to publish the text of proposed regulations before their enactment. Draft regulations are often selectively and inconsistently available for public consultation with relevant non-governmental organizations (NGOs), private sector, or other parties before their enactment. Approved or passed laws are available on websites of some ministries but are not always up to date. The majority are published only in Khmer. The Council of Jurists, the government body that reviews laws and regulations, publishes a list of updated laws and regulations in Khmer on its website.

Businesses are not required to have audited financial statements by independent audit firms or publish their financial reports unless they are financial institutions (banks/microfinance institutions) or publicly listed companies. The RGC does not mandate companies to make environmental, social, and governance (ESG) disclosures with respect to investments.

International Regulatory Considerations

As a member of ASEAN since 1999, Cambodia is required to comply with certain rules and regulations regarding free trade agreements with the 10 ASEAN member states. These include tariff-free importation of information and communication technology (ICT) equipment, harmonizing customs coding and the medical device market, as well as compliance with tax regulations on multi-activity businesses, among others.

As a member of the WTO since 2004, Cambodia has both drafted and modified laws and regulations to comply with WTO rules. Relevant laws and regulations are notified to the WTO legal committee only after their adoption. A list of Cambodian legal updates in compliance with the WTO is described in the above section regarding Other Investment Policy Reviews.

Legal System and Judicial Independence

The Cambodian legal system is primarily based on French civil law. Under the 1993 Constitution, the King is the head of state, and the elected Prime Minister is the head of government. Legislative power is vested in a bicameral parliament, while the judiciary makes up the third branch of government. Contractual enforcement is governed by Decree Number 38 D Referring to Contract and Other Liabilities. More information on this decree can be found at .

Although the Cambodian Constitution calls for an independent judiciary, both local and foreign businesses report problems with inconsistent judicial rulings, corruption, and difficulty enforcing judgments. For these reasons, many commercial disputes are resolved through negotiations facilitated by the Ministry of Commerce, the Council for the Development of Cambodia, the Cambodian Chamber of Commerce, and other institutions.

In late 2022, Cambodia unveiled its plan to establish a Commercial Court. The Commercial Court is expected to be functional in 2024 and be located in Phnom Penh.

Laws and Regulations on Foreign Direct Investment

Cambodia’s new Law on Investment, passed in October 2021, regulates the approval process for FDI and provides incentives to potential investors, both domestic and foreign. Sub-decree No. 111 (2005) lays out detailed procedures for registering a QIP with the CDC and provincial/municipal investment subcommittees.

The 2021 Law on Investment introduces an online registration process for QIP applications and shortens the timeline for the CDC’s issuance of a Registration Certificate to 20 working days. The portal for QIP registration with CDC can be found at .

Information about investment procedures and incentives in Cambodia may be found at .

Competition and Antitrust Laws

Cambodia’s Competition Law was signed in October 2021, following the enactment of a Law on Consumer Protection in 2019. Cambodia’s Consumer Protection Competition and Fraud Repression Directorate-General ( CCF ) is mandated to enforce these laws and investigate complaints. When disputes arise, individuals or businesses can file complaints with the CCF, with courts acting as the final arbitrator.

Expropriation and Compensation

Land rights are a contentious issue in Cambodia, complicated by the fact that most property holders do not have legal documentation of their ownership because of the policies and social upheaval during Khmer Rouge era in the 1970s. 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.

Cambodia’s Law on Expropriation, which sets broad guidelines on land-taking procedures , 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. Full details are available on the CDC website.

The government has shown willingness to use tax issues for political purposes. For instance, in 2017, a U.S.-owned independent newspaper had its bank account frozen purportedly for failure to pay taxes. It is believed that, while the company may have had some tax liability, the General Department of Taxation inflated the assessment to pressure the newspaper to halt operations. The action took place in the context of a widespread government crackdown on independent media in the country.

Dispute Settlement

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) since 2005. Cambodia has also been a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) since 1960.

Investor-State Dispute Settlement

International arbitration is available for Cambodian commercial disputes. Cambodia became a member of the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in January 2005.  In 2009, ICSID 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.  There is one pending ICSID arbitration case against the Cambodian government.

International Commercial Arbitration and Foreign Courts

Commercial disputes can also be resolved through the National Commercial Arbitration Center (NCAC), Cambodia’s first alternative dispute resolution mechanism, which was officially launched in March 2013. Arbitral awards issued by foreign arbitrations are admissible in the Cambodian court system. As an example, in March 2014, the Supreme Court of Cambodia upheld the 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 of Seoul, South Korea. In April 2022, the Singapore International Arbitration Center rendered a final arbitral award to a Cambodian company.

Bankruptcy Regulations

Cambodia’s 2007 Law on Insolvency is 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 applies to the assets of all businesspeople and legal entities in Cambodia.

In 2012, Credit Bureau Cambodia (CBC) was established to create a more transparent credit market in the country. CBC’s main role is to provide credit scores to banks and financial institutions and to improve access to credit information.

Investment Incentives

Cambodia’s 2021 Law on Investment offers varying types of investment incentives for projects that meet specified criteria. Investors seeking incentives as part of a QIP must submit an application to the CDC’s one stop service or register online at . Service fee information is available on the CDC’s website , under Investment Services/Service Fee.

The new Law on Investment provides investment incentives to QIPs classified into three types: basic incentives, additional incentives, and special incentives. Basic incentives include income tax exemptions, export tax exemptions, special depreciation rates, and eligibility for customs duty exemptions and VAT exemptions for the import of construction equipment and materials. Additional incentives include VAT exemptions for the purchase of locally produced production inputs, while special incentives may be granted to investment projects that have a high potential to contribute to national economic development.

Investment projects located in designated special promotion zones or export-processing zones are also entitled to the same incentives. More information about the criteria and investment areas eligible for incentives can be found at .

The CDC is required to seek approval from the Council of Ministers for investment proposals that involve capital of $50 million or more, politically sensitive issues, the exploration and exploitation of mineral or natural resources, or infrastructure concessions. The CDC is also required to seek approval for investment proposals that will have a negative impact on the environment or the government’s long-term strategy.

Foreign Trade Zones/Free Ports/Trade Facilitation

To facilitate the country’s development, the Cambodian government has shown great interest in increasing exports via geographically defined special economic zones (SEZs).  Cambodia is currently drafting a Law on Special Economic Zones, which is now undergoing technical review within the CDC. There are currently 24 special SEZs located in Phnom Penh, Koh Kong, Kandal, Kampot, Sihanoukville, and the borders of Thailand and Vietnam. The main investment sectors in these zones include garments, shoes, bicycles, food processing, auto parts, motorcycle assembly, and electrical equipment manufacturing.

Performance and Data Localization Requirements

Cambodia permits investors to hire foreign nationals for employment as managers, technicians, or skilled workers if the qualifications/expertise are not available in Cambodia. According to Cambodia’s Labor Law, the number of foreign employees should not exceed ten percent of the total number of Cambodian employees. In practice, a company can request an increase in this allotment from the MOLVT.

Cambodia does not have any forced localization policy that obligates foreign investors to use domestic contents in goods or technology. Cambodia also does not currently require foreign information technology providers to turn over source code. Cambodia issued a sub-decree on a national internet gateway in February 2021 which would require internet providers to route all online traffic through a single portal governed by the local government; to date, the sub-decree has not been implemented. In April 2022, the MOC and MEF issued notification number 837 requiring all companies operating in Cambodia to use a national second-level domain name ( as well as an email address with the national second-level domain name when filing annual declarations of commercial enterprises.

Real Property

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

Cambodia’s 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 (1975-79) are not recognized due to the severe record dislocations that occurred during that 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. Most property owners lack documentation proving ownership. Even where title records exist, recognition of legal titles to land has not been uniform, and there are reports of court cases in which judges have sought additional proof of ownership.

Foreigners are constitutionally forbidden to own land in Cambodia; however, the 2001 Land Law allows long and short-term leases to foreigners. Cambodia also allows foreign ownership in multi-story buildings, such as condominiums, from the second floor up. Cambodia adopted a Trust Law in 2018 (promulgated in 2019) to allow investors to own or transfer landed property via a regulated trust mechanism. The trust market is still developing and subject to regulatory updates. As of early 2023, there are 492 trusts worth approximately $735 million.

Intellectual Property Rights

To date, Cambodia has not been listed by the Office of the U.S. Trade Representative in its annual Special 301 Report, which identifies trade barriers to U.S. companies due to the IPR environment.

Infringement of intellectual property rights (IPR) is prevalent in Cambodia. Counterfeit apparel, footwear, cigarettes, alcohol, pharmaceuticals, consumer goods, and pirated software, music, and books are some of the examples of IPR-infringing goods found in the country.

Although Cambodia is not a major center for the production or export of counterfeit or pirated materials, IPR infringement issues remain due to limited enforcement.

To combat the trade in counterfeit goods, the Cambodian Counter Counterfeit Committee (CCCC) was established in 2014 under the Ministry of Interior to investigate claims, seize illegal goods, and prosecute counterfeiters. The Economic Crime Police, Customs, the Cambodia Import-Export Inspection and Fraud Repression Directorate General, Ministry of Industry, Science, Technology, and Innovation, as well as the Ministry of Commerce also have IPR enforcement responsibilities; however, the division of responsibility among each agency is not clearly defined. This causes confusion to rights owners and muddles the overall IPR environment.  Though there has been an increase in the number of seizures of counterfeit goods in recent years, in general such actions are not taken unless a formal complaint is made.

In 2020, the U.S. Patent and Trademark Office concluded a memorandum of understanding (MOU) with Cambodia on accelerated patent recognition, creating a simplified procedure for U.S. patents to be registered in Cambodia. The patent recognition application form can be found here . Official guidance for the patent validation application process is publicly available on MISTI’s website . Rights holders may download an application form  for patent validation in Cambodia from the website and submit a completed form via a patent agent.

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 this link .

Capital Markets and Portfolio Investment

To address the need for capital markets in Cambodia, the Cambodia Securities Exchange (CSX) was founded in 2011 and started trading in 2012. Though the CSX is one of the world’s smallest securities markets, with nine listed companies, it has taken steps to increase the number of listed companies, including attracting SMEs. At the end of Q4 2022, market capitalization stood at $1.9 billion, a four percent increase compared to the same period in 2021.

In September 2017, the National Bank of Cambodia (NBC) adopted a regulation on the Conditions for Banking and Financial Institutions to be listed on CSX. The regulation sets additional requirements for banks and financial institutions that intend to issue securities to the public. This includes prior approval from the NBC and minimum equity of KHR 60 billion (approximately $15 million).

Cambodia’s bond market is at the beginning stages of development. The regulatory framework for corporate bonds was bolstered in 2017 through the publication of several regulations covering public offering of debt securities, the accreditation of bondholders’ representatives, and the accreditation of credit rating agencies. The country’s first corporate bond was issued in 2018. There are currently nine corporate bonds listed on the CSX.  In September 2022, Cambodia issued the initial tranche of its first-ever sovereign bond offering, seeking to raise $300 million in proceeds. By the end of 2022, the government raised approximately $11 million via selling sovereign bonds.  The government also announced plans to issue another $200 million in sovereign bonds in 2023.

Money and Banking System

The NBC regulates the operations of Cambodia’s banks. Foreign banks and branches are freely allowed to register and operate in the country. There are 59 commercial banks, nine specialized banks (set up to finance specific turn-key projects such as real estate development), 82 licensed microfinance institutions (MFIs), and five licensed microfinance deposit taking institutions in Cambodia. The NBC has also granted licenses to 16 financial leasing companies and one credit bureau company to improve transparency and credit risk management and encourage lending to small- and medium-sized enterprises.

The banking sector’s assets, including those of MFIs, rose 14.5 percent year-on-year in 2022 to KHR 325.8 trillion ($79.7 billion) due to the addition of new seven financial institutions (four commercial banks and three MFIs). Credit increased by 20.2 percent year-on-year to KHR 229.5 trillion ($56.1 billion) due to an improved economic situation. At the same time, deposit amounts increased by 11.3 percent year-on-year to KHR 178.5 trillion ($44.6 billion).

The government does not use the 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. However, in April 2017, at the direction of Prime Minister Hun Sen, the NBC capped interest rates on loans offered by MFIs at 18 percent per annum. The move was designed to protect borrowers, many of whom are poor and uneducated, from excessive interest rates.

In March 2016, the NBC doubled the minimum capital reserve requirement for banks to $75 million for commercial banks and $15 million for specialized banks. Based on the new regulations, deposit-taking microfinance institutions now have a $30 million reserve requirement, while traditional microfinance institutions have a $1.5 million reserve requirement.

In response to the COVID-19 pandemic, the NBC adopted measures to maintain financial stability and ensure liquidity in the banking system. These measures included allowing banks to maintain their capital conservation buffer at 50 percent, reducing the reserve requirement rate, and allowing banks to restructure loans for clients impacted by COVID. Citing the economic recovery following the country’s official reopening in late 2021, the NBC announced it would gradually withdraw these measures starting in June 2022.

Financial technology (Fintech) in Cambodia is developing rapidly. Available technologies include mobile payments, QR codes, and e-wallet accounts for domestic and cross-border payments and transfers. In 2012, the NBC launched retail payments for checks and credit remittances. A “Fast and Secure Transfer” (FAST) payment system was introduced in 2016 to facilitate instant fund transfers. A Cambodian Shared Switch (CSS) system was launched in October 2017 to facilitate the access to network automated teller machines (ATMs) and point of sale (POS) machines. In October 2020, Cambodia launched its own payment system  called Bakong, a blockchain-based platform for commercial banks, MFIs, and payment service providers to use e-wallet and money transfer services without requiring consumers to create a bank account.

In February 2019, the Financial Action Task Force (FATF) cited Cambodia for being “deficient” with regard to its anti-money laundering and countering financing of terrorism (AML/CFT) controls and policies and included Cambodia on its “grey list” of jurisdictions for increased monitoring.  The RGC committed to working with FATF to address these deficiencies through a joint action plan. FATF removed Cambodia from its “grey list” on February 24, 2023, citing progress made by Cambodia in improving its AML/CFT regime.

Beyond the deficiencies in its AML/CFT regime, Cambodia has additional vulnerabilities as a largely cash-based, dollarized economy with porous borders. Both legal and illicit transactions, regardless of size, are frequently conducted outside of regulated financial institutions. Cash proceeds from crime are readily channeled into land, housing, luxury goods and vehicles, and other forms of property, without passing through the banking sector. Moreover, a lack of judicial independence and transparency constrains effective enforcement of laws against financial crimes. The judicial branch lacks efficiency and cannot assure impartiality. Judicial officials, up to and including the chief of the Supreme Court, have simultaneously held positions in the political ruling party. Refer to Section II: “Illicit Finance and Corrupt Activities in Cambodia” of the U.S. government’s Cambodia Business Advisory on High-Risk Investments and Interactions released on November 10, 2021, for more information.

Foreign Exchange and Remittances

Foreign Exchange

Though Cambodia has its own currency, the riel (denoted as KHR), 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 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 $100,000 to the NBC 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. There are no restrictions on the establishment of foreign currency bank accounts in Cambodia for residents.

The exchange rate between the riel and the U.S. dollar is governed by a managed float and has been stable at around one U.S. dollar to KHR 4,000 for the past several years.  Daily fluctuations of the exchange rate are low, typically under three percent.  The Cambodian government has taken steps to increase general usage of the riel, including phasing out in June 2020 the circulation of small-denominated U.S. dollar bills; however, the country’s economy remains largely dollarized.

Remittance Policies

QIPs 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.

Sovereign Wealth Funds

Cambodia does not have a sovereign wealth fund.

Cambodia currently has 15 state-owned enterprises (SOEs):  Electricité du Cambodge; Sihanoukville Autonomous Port; Telecom Cambodia; Cambodia Shipping Agency; Cambodia Postal Services; Rural Development Bank; Green Trade Company; Printing House; Siem Reap Water Supply Authority; Construction and Public Work Lab; Phnom Penh Water Supply Authority; Phnom Penh Autonomous Port; Kampuchea Ry Insurance; Cambodia Life Insurance; and the Cambodia Securities Exchange.

In accordance with the Law on General Stature of Public Enterprises, there are two types of commercial SOEs in Cambodia: those that are 100 percent owned by the state; and those that are joint ventures in which a majority of the capital is owned by the state.

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

Privatization Program

There are no ongoing privatization programs, nor has the government announced any plans to privatize existing SOEs.

There is a small but growing awareness of responsible business conduct (RBC) and corporate social responsibility (CSR) among businesses in Cambodia despite the fact that the government does not have explicit policies to promote them. RBC and CSR programs are most commonly found at larger and multinational companies in the country. U.S. companies, for example, have implemented a wide range of CSR activities to promote skills training, the environment, general health and well-being, and financial education. These programs have been warmly received by both the public and the government.

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.

Climate Issues

Cambodia ranks among the most vulnerable countries to climate change. Environmental problems such as deforestation and irresponsible natural resource exploitation are rampant. Despite a growing number of legal environmental frameworks, regulatory enforcement remains weak. The government estimates Cambodia could lose over $15 billion or 10 percent of its GDP by 2050 due to the impacts of climate change.

In the Global Green Growth Index 2022, Cambodia obtained a score of 53.75 points, well below the sustainability target of 100. The “green economic opportunities dimension” scores the lowest among all dimensions at 10.41, due to low green investment, green trade, green employment, and green innovation.

Cambodia has a complex and overlapping series of legislative and regulatory measures that govern environmental protection. A Royal Decree in 1993 defined the country’s first protected areas. The Law on Environmental Protection and Natural Resource Management was promulgated in 1996, followed by subsequent environment-related sub-decrees on water, air, noise, land, forests, and fisheries. The government has also released its National Strategic Plan on Green Growth 2013–2030, Cambodia Climate Change Strategic Plan 2014-2023, and the National Environment Strategy and Action Plan 2016–2023. In 2020, the government issued ministerial proclamation (Prakas) No. 021 on the Classification of Environmental Impact Assessment (EIA) for the Development Project 2020, an implementing measure of a Sub-Decree on the 1999 EIA Process, which requires all public and private companies to have environmental protection contracts and conduct environmental impact assessments. Cambodia unveiled its Long-term Strategy for Carbon Neutrality 2050 at the end of 2021. The Environmental and Natural Resources Code remains in draft and has not yet been finalized.

These laws and regulations do not have specific goals or targets for private companies to reach and most have yet to be widely and effectively implemented. Corruption, lack of transparency and accountability, and poor enforcement remain the major barriers to Cambodia’s transition to sustainable development.

The new Law on Investment redefines incentives for priority sectors: environmental management, biodiversity conservation, the circular economy, green energy, and technology contributing toward climate change adaptation and mitigation. Details on how the incentives are to be determined are to be spelled out in a forthcoming sub-decree.

Corruption in Cambodia is endemic and widespread. An increase in foreign investment from investors willing to engage in corrupt practices, combined with sometimes opaque official and unofficial investment processes, further drives the overall rise in corruption. In its Global Competitiveness Report 2019, the World Economic Forum ranked Cambodia 134th out of 141 countries for incidence of corruption. Transparency International’s 2022 Corruption Perception index ranked Cambodia 150 of 180 countries globally, the second lowest ranking among ASEAN member states.

Those engaged in business have identified corruption, particularly within the judiciary, customs services, and tax authorities as one of the greatest deterrents to investment in Cambodia. Foreign investors from countries that overlook or encourage bribery have significant advantages over foreign investors from countries that criminalize such activity.  In light of these concerns, on November 10, 2021, the U.S. Departments of State, Treasury, and Commerce issued a business advisory to caution U.S. businesses currently operating in, or considering operating, in Cambodia to be mindful of interactions with entities involved in corrupt business practices, criminal activities, and human rights abuses.

Cambodia adopted an Anti-Corruption Law in 2010 to combat corruption by criminalizing bribery, abuse of office, extortion, facilitation payments, and accepting bribes in the form of donations or promises. Under the law, all civil servants must also declare their financial assets to the government every two years. Cambodia’s Anti-Corruption Unit (ACU), established the same year, has investigative powers and a mandate to provide education and training to government institutions and the public on anti-corruption compliance. Since its formation, the ACU has launched a few high-profile prosecutions against public officials, including members of the police and judiciary, and has tackled the issue of ghost workers in the government, in which salaries are collected for non-existent employees.

The ACU, in collaboration with the private sector, has also established guidelines encouraging companies to create internal codes of conduct prohibiting bribery and corrupt practices. Companies can sign an MOU with the ACU pledging to operate corruption-free and to cooperate on anti-corruption efforts. Since the program started in 2015, more than 100 private companies have signed an MOU with the ACU. In 2018, the ACU completed a first draft of a code of conduct for public officials, which has not yet been finalized.

Despite the passage of the Anti-Corruption Law and creation of the ACU, enforcement remains weak. Local and foreign businesses report that they must often make informal payments to expedite business transactions. Since 2013, Cambodia has published the official fees for public services, but the practice of paying additional fees remains common.

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.

Resources to Report Corruption 

Om Yentieng President, Anti-Corruption Unit
No. 54, Preah Norodom Blvd, Sangkat Phsar Thmey 3,
Khan Daun Penh, Phnom Penh
Telephone: +855-23-223-954

Transparency International Cambodia
#13 Street 554,
Phnom Penh
Telephone: +855-23-214430

Incidents of violence directed at businesses are rare. The Embassy is unaware of any incidents of political violence directed at U.S. or other non-regional interests. In the past, authorities have used force to disperse protestors.

Nevertheless, political tensions remain. After relatively competitive communal elections in June 2017, where Cambodia’s opposition party won 43 percent of available seats, the government banned the opposition party and imprisoned its leader on charges of treason. With no meaningful opposition, the Cambodian People’s Party (CPP) swept the 2018 national elections, winning all 125 parliamentary seats. In the 2022 commune election, the ruling CPP won 74 percent of the popular vote and 1,648 commune chief positions (all but four), with the revamped opposition Candlelight Party coming in a distant second with 22 percent of the vote. The government has also taken steps to limit free speech and stifle independent media, including forcing independent news outlets and radio stations to cease operations. Cambodia will hold its seventh national elections in July 2023.

The COVID-19 pandemic had a significant impact on Cambodia’s labor sector. In particular, Cambodia’s GFT (garment, footwear, and travel goods) sector, heavily reliant on global supply chains for inputs and on demand from the United States and Europe, experienced severe disruptions due to COVID-19. Despite these disruptions, Cambodia’s exports, particularly in the GFT sector, grew significantly through the pandemic. In 2022, Cambodia’s total exports to the United States, its largest market by far, grew by 40 percent to $12.2 billion, up nearly $3.5 billion from 2021.

The labor force in Cambodia numbers eight million people according to the most recent national labor force survey (2019). A small number of Vietnamese, Thai, and Bangladeshi migrant workers are employed in Cambodia, and in recent years Chinese-run infrastructure projects and other businesses imported an increasing number of Chinese laborers, who typically earn more than their Cambodian counterparts.  Cambodia’s garment sector employs around 800,000 people according to official figures, but analysts estimate another 200,000 work in the informal sector through local subcontracting arrangements. Eighty-two percent of garment workers are female. Nearly all (97 percent) of Cambodia’s factories producing for export are foreign-owned, and top managers are also almost all foreign nationals.

Around 65 percent of the population is under age 30. The UN estimates that around 300,000 new job seekers enter the labor market each year. The agricultural sector employs 33 percent of the labor force. Of Cambodia’s eight million workers, 88 percent work in the informal sector. These workers are not covered by wage, hour, and occupational safety and health laws and inspections.

Cambodia’s 2016 Trade Union Law (TUL) erects barriers to freedom of association and the rights to organize and bargain freely. The International Labor Organization (ILO) has stated publicly that the law could hinder Cambodia’s obligations to international labor conventions 87 and 98. To address those concerns, Cambodia passed an amended TUL in early 2020, but the amended law does not fully address ILO, NGO, and union concerns about the law’s curbs on freedom of association. In addition, Cambodia has only implemented and enforced a minimum wage in the export GFT sector. All labor laws apply in Cambodia’s SEZs, but independent unions report that zone and SEZ factory management are often hostile to unions and that union formation and activity is particularly difficult in SEZs.

Unresolved labor disputes are mediated first on the shop floor, after which they are brought to the MOLVT. If reconciliation fails, then the cases 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. Since the 2016 Trade Union Law went into force, the number of Arbitration Council cases has decreased. MOLVT officials claimed the decline reflects the ministry’s improved ability to resolve labor conflicts, while some unions cited burdensome bureaucracy and legality in bringing their legal concerns to the council.

A strike and demonstration at Cambodia’s largest casino and hotel complex that began in December 2021 has drawn global attention from the ILO, international unions, and media. Rights groups and the ILO have expressed concerns about the criminalization of peaceful union activity. In February 2022, government authorities charged 11 union leaders and members with “incitement” and violations of the COVID-19 Prevention Law and put them in pre-trial detention for more than two months. The union leader was then rearrested in late 2022 for allegedly violating her bail conditions. Her trial, and that of the other ten union leaders, on incitement charges is ongoing. In response to this dispute and broader concerns over freedom of association, the ILO sent a fact-finding mission to Cambodia in March 2022.

A number of Cambodian companies have received financing from the Development Finance Corporation, including loans to financial institutions for the purposes of onward lending.

The Export-Import Bank of the United States (Ex-Im Bank) provides financing and insurance to local companies to help them purchase U.S.-made products and services; repayment terms are generally up to seven years. In 2018, Ex-Im Bank facilitated the sale of a U.S.-made grain silo through a loan guarantee, its first commercial transaction in Cambodia. Cambodia is also a member of the Multilateral Investment Guarantee Agency of the World Bank, which offers political risk insurance to foreign investors.

There has been a surge in FDI inflows to Cambodia in recent years. Though FDI goes primarily to infrastructure, including commercial and residential real estate projects, it has also funded investments in manufacturing and agro-processing. According to the CDC, Cambodia reported FDI inflows of $1.1 billion in 2022 in terms of fixed assets.

Investment into Cambodia is dominated by the PRC, and the level of Chinese investment has surged especially the last five years. Cambodia reports that its stock of FDI (in terms of fixed assets) from China reached $19.2 billion by the end of 2022. Other major sources of FDI in Cambodia (through 2022) include the Republic of Korea ($5 billion), the United Kingdom ($3.9 billion), and Malaysia ($2.8 billion). U.S. FDI stock in Cambodia reached $1.4 billion by the end of 2022.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2020 NA 2020 $25,400 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2022 $1,430 N/A N/A BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2021 $10 BEA data available at
Total inbound stock of FDI as % host GDP 2020 169% 2019 127.5% UNCTAD data available at   

* Source for Host Country Data: Council for the Development of Cambodia (CDC)

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data (through 2021)
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward $41,025 100% Total Outward $1,534 100%
China $12,068 29.4% Singapore $833 54.2%
Korea $4,895 11.9% China $546 35.5%
Hong Kong $3,383 8.2% Thailand $119 7.7%
Singapore $2,661 6.4% Korea $16 1%
Vietnam $2,486 6% United States $10 0.7%
“0” reflects amounts rounded to +/- USD 500,000.

Source: Data from the IMF’s Coordinated Direct Investment Survey database.  Data retrieved from IMF’s Coordinated Direct Investment Survey database presents a much different picture of FDI into Cambodia as compared to that provided by the Cambodian government. For example, the CDC reports USD 47.3 billion of FDI stock in terms of fixed assets through the end of 2021, while the IMF reports only USD 41 billion.

Moses An
Economic and Commercial Officer
U.S. Embassy Phnom Penh
No. 1, Street 96, Sangkat Wat Phnom, Phnom Penh, Cambodia
Phone: (855) 23-728-000

On This Page

  2. 1. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Towards Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
  10. Additional Resources
    1. Climate Issues
  11. 9. Corruption
    1. Resources to Report Corruption 
  12. 10. Political and Security Environment
  13. 11. Labor Policies and Practices
  14. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  15. 13. Foreign Direct Investment Statistics
  16. 14. Contact for More Information
2023 Investment Climate Statements: Cambodia
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