Cambodia is a country in Southeast Asia that has a large potential for agricultural development. According to Oxfam, agriculture remains a key driver of the Cambodian economy, contributing 23% of Cambodia’s GDP. Foreign direct investment (FDI) in agriculture has been a major source of development funding for Cambodia, as the Royal Government has successfully created an open investment environment that has resulted in substantial increases in FDI.
Some of the benefits that foreign investors can get from investing in the Cambodian agriculture sector are:
Access to abundant and fertile land: Cambodia has about 10.1 million hectares of agricultural land, of which only 3.6 million hectares are cultivated. Foreign investors can obtain land concessions from the government for up to 99 years, with a maximum size of 10,000 hectares per project. The land concession policy aims to promote large-scale agro-industrial development and create employment opportunities for rural communities.
Availability of low-cost labour: Cambodia has a young and growing population, with about 78% living in rural areas. The average monthly wage for agricultural workers is lower than neighbouring countries such as Vietnam and Thailand. Foreign investors can benefit from the cheap and abundant labour force in Cambodia, as well as the government’s incentives for skill development and vocational training.
Preferential market access: Cambodia enjoys preferential trade agreements with many countries and regions, such as the ASEAN Free Trade Area (AFTA), the ASEAN-China Free Trade Area (ACFTA), the Everything But Arms (EBA) scheme of the European Union, and the Generalised System of Preferences (GSP) of the United States. These agreements allow Cambodia to export its agricultural products with low or zero tariffs, which can increase the competitiveness and profitability of foreign investors.
Supportive legal framework: The Cambodian government has enacted various laws and regulations to facilitate and protect foreign investment in the country, such as the Law on Investment, the Law on Commercial Enterprises, the Law on Special Economic Zones, and the Law on Arbitration. The government also provides various incentives for foreign investors, such as tax exemptions, import duty exemptions, and investment guarantees.
Cambodia is an attractive destination for foreign investors who want to tap into the potential of its agriculture sector. The country offers many advantages, such as abundant and fertile land, low-cost labour, preferential market access, and a supportive legal framework. These benefits can help foreign investors achieve high returns and contribute to the development of Cambodia. As the Royal Government states, “Cambodia welcomes all investors who are interested in investing in agriculture and agro-industry”.
