INVESTMENT ENVIRONMENT AND OPPORTUNITIES

IN CAMBODIA

presented by SUON SOPHAL Deputy Director of Public Relations and Investment Promotion Cambodian Investment Board/Council for the Development of Cambodia

Key Indicators

Land area : 181,035 sq.km. Population: 14.1 Million Labor force (young) : 7,053,398

(Female: 3,608,345) Population growth rate : 1.54% GDP Growth (2012e) : 7% GDP per capita (2012e) : $990 Inflation (2012) : 3% Exchange rate: USD 1= 3990 Riels

Economic Performance

Source: SNEC & MEF

Average growth for last 5 years is 10.3%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012e

GDP per capita 356 402 468 534 623 738 731 830 909 990

OPEN

DO

OR

POLIC

Y

ON

E STOP SERVIC

E

H.E. Mr. Chhieng YanaraMinister attached to the Prime Minister

Secretary General CRDB

H.E. Mr. Keat Chhon, Deputy Prime MinisterMinister of Economy and Finance

1st Vice Chairman

H.E. Mr. Sok Chenda SopheaMinister attached to the Prime Minister

Secretary General CIB

Trouble Shooting

Committee

Samdech Akka Moha Sena Padei Techo HUN SENPrime Minister of the Kingdom of Cambodia

Chairman

Council for the Development of Cambodia (CDC)

H.E. Mr. Chea VuthyDeputy Secretary General CSEZB

H.E. Mr. Kong Vibol Vice Chairman

H.E. Mr. Sok Chenda SopheaMinister attached to the Prime Minister

Secretary General CSEZB

LCT. Heng SokunDeputy Secretary General CRDB

H.E. Mr. Sok Chenda SopheaMinister attached to the Prime Minister

Secretary General

H.E. Mr. Cham Prasidh, Senior Minister, Minister of Commerce

2nd Vice Chairman H.E. Mr. Sun Chanthol

Senior Minister in charge of Special Missions Permanent Vice Chairman

H.E. Mr. Rith VuthyDeputy Secretary General CRDB

H.E. Mr. Chea VuthyH.E. Mr. An SophanaraH.E. Mr. Heng Soknang

Deputy Secretary General CIB

SEZ ODA FDIGMS National Secretariat

Information & ApplicationApprovalCustoms Duty & Tax ExemptionVisa & Work PermitCompany Registration

A ONE STOP SERVICE

Licensing Authorities

Council of Ministers : CDC but needs approval from CoM for project with investment capital exceeding $ 50 million, BOT, BOOT, BOO or BLT, long-term strategy, sensitive projects: negative impact on the environment and natural resource exploitation

CDC : less than $ 50 million

Provincial Authorities : less than $ 2 million

Investment Approval

Investment application

CDC issues a Conditional Registration Certificate to the Applicant

Company Registration / Ministry of Commerce Relevant licenses, as appropriate / Ministry of Industry and Energy Review and approval of construction plan / local authorities- Ministry of Land Management, Urban Planning and Construction. Initial environmental impact assessment / Ministry of Environment Tax Department Registration / Ministry of Economy and Finance

CDC issues a Final Registration Certificate to the Applicant

3 working days

28 working days

Investment Incentives

20% Corporate Tax

Tax holidays: Trigger period +3years+n; 6y <TH<9y

Full Import Duty Exemption

Reinvestment of earning (special depreciation)

Investment Protection

Equal treatment of all investorsNo requirement of local equity participationNo price controls on products or servicesNo restriction on forex convertibilityFree remittance of foreign currencies abroad

The Investment Law and Sub-decree contains a number of important guarantees for the investors:

Bilateral agreement on the promotion and protection of investments between the Kingdom of Cambodia and other countries

1. Australia2. Austria3. China4. Croatia5. Cuba6. Czech 7. France 8. Germany9. Indonesia10. Japan11. Kuwait12. Lao PDR

13. Malaysia14. Netherlands15. N. Korea16. OPEC17. Pakistan18. Philippine19. ROK20. Singapore21. Switzerland22. Thailand23. USA (OPIC)24. Vietnam

Encouraged Investment Activities

Agriculture and agro-industryTransport and telecommunications Energy and electricityLabor-intensive industries, processing and

manufacturing;TourismHuman resource developmentOil & Gas, Mining

Approved Investments by Country/Region (Outside SEZ 1994- 2012)

US$ Million

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000 C

hina

Hon

g Ko

ng

Tai

wan

EU

Mal

aysi

a

USA

Kore

a

Sing

apor

e

Thai

land

Japa

n

Vie

tnam

16,270

758 936

3,6852,614

1,289

4,327

731 867 366 1,282

Approved Investments by Sector1994 – 2012

Sector Projects AmountAgriculture 1 2,338,172Industry 39 196,488,601Service 1 21,151,408Total 41 219,978,181

Q1 2013

1994-2012

Investments in Cambodia 2008-Q1 2013No.

2008 2009 2010 2011 2012 Q1 2013$11,420,127183 $6,309,435,594 $3,029,497,634 $7,984,908,645 $2,965,537,652 219,978,181

Country % Country % Country % Country % Country % Country %

1 China 39.45 Cambodia 60.81 Korea 35.10 U.K 30.93 Cambodia 42.08 China 30.65

2 Cambodia 36.73 China 14.93 China 28.73 Cambodia 29.76 China 20.69 UK 14.1

3 Korea 10.89 Vietnam 5.58 Cambodia 14.91 China 22.05 Korea 9.89 Cambodia 13.3

4 USA 5.59 Singapore 4.81 Malaysia 8.53 Vietnam 8.65 Japan 9.15 Korea 12.63

5 Israel 2.63 Russia 3.84 Vietnam 5.23 Malaysia 3.03 Malaysia 6.04 Japan 9.24

6 Russia 0.92 Thailand 3.53 Portugal 1.66 Korea 2.10 Thailand 4.53 Hong Kong 7.30

7 U.K 0.59 Korea 2.89 Australia 1.65 U.S.A 1.78 Vietnam 2.89 Taiwan 6.22

8 Austria 0.54 India 1.90 Singapore 1.02 Japan 0.83 Singapore 2.59 U.S.A 1.76

9 Vietnam 0.51 Malaysia 1.19 Denmark 0.97 Australia 0.31 U.K 0.51 Israel 1.50

10 France 0.50 Japan 0.20 Japan 0.86 Singapore 0.20 U.S.A 0.42 France 1.23

Infrastructure: A definite prospect

Priority for infrastructure Infrastructure rehabilitationMultilateral aid availabilityDecentralizationRegional opportunitiesASEAN & GMS integrationPrivate Participation in

Infrastructure (PPI): BOT, BOO, etc…

Agro-business

Basic agrarian economyNatural endowments:

Rich fishery resources Good weather

Organic cropsValue-added emphasisFood processingNew product development

Tourism

World Heritage Monuments

Open Sky Policy to Siem Reap

Natural beauty - Beach - Islands

Ability to attract “add-on” trips

Novelty value

Eco-Tourism

Tourism CenterPoipet

Sihanoukville

Gulf of Thailand

314km

230 km

150 km

Beach & Island Resorts

Bokor (hill resort)

Visitors to Cambodia

Thousand (000)

Vision 2020: Visitor arrival from 2010 – 2020

YEAR 2010 2012 2015 2020Visitor Arrivals 2,508,289 3,201,981 3,700,000 6,000,000

Top ten markets in 2012

Vietnam

Korea

China

Lao PDR

Thailand

Japan

U.S.A

France

Australia

Malaysia

Investment Opportunities

Phnom Penh o International Convention Centero High-end hotel (Four Seasons, Hyatt, etc…) at the moment there are only

Intercontinental Hotel, Sofitel and Raffles with approximately 500 rooms. Siemreap

o International Convention Centero High-end hotel (Four Seasons, Hyatt, Sheraton, and Marriott, etc…) at the moment

there are only Raffles, Le Meridien, Sofitel, Aman resorts and Orient Express, with approximately 700 rooms.

o Amusement park / recreational activitieso Golf course (there are three existing golf courses)

Sihanoukvilleo High-end hotel (Four Seasons, Hyatt, etc…)o Golf Course

Manufacturing & Export

Competitive labor costTax incentives

Market accessRegional arrangement

MFN/GSP Market Access Australia Austria Belarus Belgium Bulgaria Canada China Czech Republic Denmark Finland

Poland Portugal ROK Russian

Federation Slovakia Spain Sweden Switzerland UK USA EBA (everything

but arms initiative for LDCs)

France Germany Hungary Ireland Italy N-Korea Luxemburg Japan Netherlands New Zealand Norway

… and the ASEAN integration SystemOf Preferences (AISP) from the ASEAN 6

Cambodia’s Special Economic Zones

No Activities

Under Construction

Operational Kampot SEZSihanoukville Port SEZ

Poipet O’Neang SEZ

Sihanoukville SEZ1

Sihanoukville SEZ2

Stung Hao SEZ

S.N.C SEZ

Kompong Som SEZ

Koh Kong SEZ

Souy Chheng SEZ

Oknha Mong SEZ

Kiri Sakor Koh Kong SEZ

P (SEZ) I C

Thary Kompong Cham SEZ

GoldFame Pak Shun SEZ

Duong Chhiv SEZ

Phnom Penh SEZ

M D S Thmor Da SEZ

H K T SEZ

Kandal SEZ

Dragon King SEZ

One Stop Service Special Economic Zone Administration

Company registration and investment license Export/import permit Work permit and Labor books (both workers and

expatriate) SEZA will provide on site immediate legal and

administrative assistance

JOININGWTO

JOININGASEAN

ACCESS TOTHE U.S.MARKET

ACCESS TO THEEUROPEANMARKET

Cambodia has embraced the globalization process as part of its outward looking economic development strategy….

Reasons to invest in Cambodia

Open economySound Macroeconomic EnvironmentCompetitive Investment IncentivesOne Stop Service – Fast-Track Investment Approval

Process (28 days)Low Labor CostStrategic LocationPreferential Trading StatusAccess to ASEAN and World Markets

.

Phnom PenhThe Philippines

Singapore

Indonesia

MyanmarSouthern China

ManilaBangkok

Kunming

Yangon

Brunei

Jakarta

Begawan

Hanoi

Laoso Vientiane

CAMBODIA

Malaysia

Kuala Lumpur

ThailandVietnam

1h:30 in average

Invest in Cambodia and you have 14 million

consumers

Invest in Cambodia and you have 325 million consumers virtually at your doorstep

Invest in Cambodia and you have 600 million

consumers at your doorstep

Thank you very much

More information, please contact: cdc.cib@online.com.kh or visit: www.cambodiainvestment .gov.kh