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Cambodia: A Thriving Investment Destination Across 19 Dynamic Sectors

by Jas Sohl

The Kingdom of Cambodia has emerged as a hub for forward-thinking investment, underpinned by a progressive legal framework and attractive incentives. Article 24 of the Law on Investment of the Kingdom of Cambodia highlights 19 priority sectors poised for transformative growth, offering a gateway for businesses to thrive in regional and global markets.

Exploring Cambodia’s Priority Sectors

  1. High-Tech and Innovation Industries: Industries focused on cutting-edge technologies, research, and development are central to Cambodia’s growth strategy.
  2. New and Competitive Manufacturing: Innovative industries producing high-value goods with global market potential are strongly encouraged.
  3. Supply Chain Development: Businesses supporting regional and international supply chains enjoy a favorable investment ecosystem.
  4. Agricultural and Manufacturing Support: Investments enhancing agriculture, tourism, and manufacturing supply chains create synergistic opportunities.
  5. Electronics and Electrical Industries: Cambodia welcomes industries producing advanced electronic and electrical products.
  6. Mechanical and Machinery Manufacturing: Vital to global supply chains, these industries benefit from significant incentives.
  7. Agriculture and Food Processing: With rich agricultural resources, Cambodia is a prime location for agro-processing industries catering to domestic and export markets.
  8. Small and Medium Enterprises (SMEs): Priority sectors for SME clusters, industrial parks, and innovation hubs foster localized economic growth.
  9. Tourism and Hospitality: As one of the world’s premier cultural and historical destinations, Cambodia supports investments that expand its tourism potential.
  10. Special Economic Zones (SEZs): Strategically located SEZs provide unparalleled benefits and infrastructure for investors.
  11. Digital Technology: Investments in digital industries, including artificial intelligence and big data, are instrumental in modernizing the economy.
  12. Education and Training: Projects in education, vocational training, and skill development are key to Cambodia’s human capital enhancement.
  13. Healthcare Development: Investments in medical services and facilities contribute to Cambodia’s robust health sector growth.
  14. Infrastructure Projects: Investments in physical infrastructure enhance connectivity and drive sustainable development.
  15. Logistics and Supply Chains: Cambodia’s strategic location makes it an ideal hub for logistics investments.
  16. Environmental and Biodiversity Projects: Initiatives focused on environmental management, conservation, and circular economy models are prioritized.
  17. Renewable Energy and Green Technologies: The government encourages projects that align with climate adaptation and sustainable energy solutions.
  18. Research and Modernization: Incentives support innovation, adoption of advanced technologies, and modernization of production systems.
  19. Other Potential Sectors: Any activities identified by the government as having significant socio-economic impact are incentivized.

Unmatched Incentives for Qualified Investment Projects (QIPs)

Cambodia’s investment framework is one of the most competitive in the region, with incentives designed to enhance profitability and long-term growth:

Option 1: Tax Exemptions

  • Tax Holidays: Up to 9 years of income tax exemption based on the investment category.
  • Progressive Tax Rates: Gradual increases post-exemption ensure sustained benefits.
  • Export Tax Relief: Exemptions on export taxes bolster global competitiveness.

Option 2: Enhanced Deductions

  • Double Expense Deductions: Up to 200% for training, digital transformation, and research initiatives.
  • Accelerated Depreciation: Special depreciation for capital expenditures.

Additional Incentives

  • Customs Duty and VAT Exemptions: Covering construction materials, machinery, and production inputs.
  • Local Procurement Benefits: 0% VAT on locally sourced production materials.
  • Welfare and Sustainability Incentives: Deductible expenses for projects benefiting workers, such as accommodations and modernizing production facilities.

Support for Expansion Projects

Expanded Qualified Investment Projects (EQIPs) benefit from continued tax exemptions, ensuring sustained growth through diversification, scaling production, or adopting advanced technologies.

Special Incentives for High-Potential Sectors

For activities deemed vital to Cambodia’s national development, special incentives are offered under the Law on Financial Management.

A Thriving Investment Landscape

Cambodia’s strategic location, pro-business policies, and diversified economy make it an ideal destination for investors seeking sustainable growth. With 19 priority sectors and unparalleled incentives, the Kingdom offers vast opportunities to businesses aiming to contribute to and benefit from its thriving economy.

Investors are invited to be part of Cambodia’s growth story—a nation that combines tradition, innovation, and opportunity to create a vibrant future. The time to invest in Cambodia is now.

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