Investment Environment and Opportunities in Cambodia presented by Mrs. Bun Chamnan Commercial Attache To the Royal Embassy of Cambodia, Based in Nanning, Guangxi, China

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 (2012) : 7.3% GDP per capita in 2012 : $990 Inflation (2011) : 5.5% Exchange rate: USD 1= 4075 Riels 2

COUNCIL FOR THE DEVELOPMENT OF CAMBODIA OPEN DOOR POLICY ONE STOP SERVICE Customer Servicing Business Friendly

Information & Application Approval Customs Duty & Tax Exemption Visa & Work Permit Company Registration A ONE STOP SERVICE

Investment Approval Investment application 3 working days CDC issues a Conditional Registration Certificate to the Applicant 3 working days 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 28 working days CDC issues a Final Registration Certificate to the Applicant

Investment Protection The Investment Law and Sub-decree contain a number of important guarantees for the investors: Equal treatment of all investors No requirement of local equity participation No price controls on products or services No restriction on forex convertibility Free remittance of foreign currencies abroad

Bilateral agreement on the promotion and protection of investments between the Kingdom of Cambodia and other countries Australia Austria China Croatia Cuba Czech France Germany Indonesia Japan (14 June 2007) Kuwait Lao PDR Malaysia Netherlands N. Korea OPEC Pakistan Philippine ROK Singapore Switzerland Thailand USA (OPIC) Vietnam

Approved Investments by Country (1994- July 2012)

Approved Investments by Sector 1994 – July 2012

Cambodia-China Economic Relation Cambodia receives Import duty exemption on 418 tariff lines from China Trade 2011 ($US.Billion) 2012 Import from China 1.31 2.7 Export to China 0.18 0.21 Total 1.49 2.91

Cambodia-China Economic Relation Investment 2009 ($US.Million) 2010 2011 Chinese FDI inflow 930 694 1,192 Investment Activities -Garment and Textile -Hydro power -Rice-processing facilities -Agro-Industry -Mining and Energy

Encouraged Investment Activities Agriculture and agro-industry Transport and telecommunications Energy and electricity Labor-intensive industries, processing and manufacturing; Tourism Human resource development Oil & Gas, Mining

Why invest in Cambodia Open economy Sound Macroeconomic Environment Competitive Investment Incentives One Stop Service – Fast-Track Investment Approval Process (28 days) Low Labor Cost Strategic Location Preferential Trading Status Access to ASEAN and World Markets

• Macro-economic Stability Prospects for Sustainable Growth in Cambodia: 4 key-factors to induce Foreign Direct Investments (FDI) • Political Stability • Macro-economic Stability • Sound, Transparent and Predictable Legal Framework • Access to Key World Markets through Trade Preferences in terms of MFN/GSP

• Kingdom of Cambodia (1953-1970) POLITICAL STABILITY Cambodia’s contemporary history at a glance: 6 successive political regimes since 1953 Independence from the French Protectorate • Kingdom of Cambodia (1953-1970) • Khmer Republic (1970-1975) • Democratic Kampuchea (1975-1979) • People’s Republic of Kampuchea (1979- 1989) • State of Cambodia (1989-1991) • Cambodia (1991-1993) [under UNTAC] • Kingdom of Cambodia (1993-today)

MACRO-ECONOMIC STABILITY 2011-2012 Surplus for export 4,748,648 Tons of Paddy or 3,039,135 tons of rice

Economic Performance Average growth for last 5 years is 10.3% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 GDP per capita 331 356 402 468 534 623 738 731 830 909 990 Source: SNEC & MEF

A SOUND, TRANSPARENT AND PREDICTABLE LEGAL FRAMEWORK A receptive Government • Once every 6 months, the Prime Minister, H.E. Samdech HUN SEN, will meet with foreign and local investors in a Government-Private Sector Forum, and will address issues of interest of the private sector. • This mechanism has been institutionalized since Year 2000. • In the interval of 2 Government-PS fora, 8 Government- PS Working Groups are meeting on a monthly basis to tackle urgent issues. Only cross-cutting issues are submitted to the Forum chaired by the Prime Minister himself.

ACCESS TO WORLD’S MAJOR MARKETS ON A DUTY-FREE AND QUOTA-FREE BASIS DDA Commitments towards the LDCs Several developed and transition economies — including some of the major markets for least-developed countries’ exports — granted duty-free and quota-free market access for all or almost all exports from least-developed countries. They include Canada, the EU, New Zealand, Norway and Switzerland. Among the major developing countries, Singapore and Hong Kong, China already offer duty-free and quota-free access on virtually all products, including products from least-developed countries. • Some other developing countries such as Mauritius, Egypt, and the Republic of Korea, have also given least- developed countries preferential duty-free access to their markets, albeit for more limited ranges of products.

Countries according MFN/GSP to Cambodia = 0% import duty or reduced import duty for Cambodian exports  Australia  Austria  Belarus  Belgium  Brazil  Bulgaria  Canada  China  Czech Republic  Denmark  Finland  Norway  Poland  Portugal  ROK  Russian Federation  Slovakia  Spain  Sweden  Switzerland  UK  USA  France  Germany  Hungary

Countries according MFN/GSP to Cambodia = 0% import duty or reduced import duty for Cambodian exports  India  Ireland  Italy  Japan  Korea  Luxemburg  Japan  Netherlands  New Zealand

Tourism World Heritage Monuments Open Sky Policy to Siem Reap Natural beauty - Beach - Islands Ability to attract “add-on” trips Novelty value Ability to attracts “add-on” trips With massive tourist arrivals from key regional centers, it would be easy to have side trips to Siem Reap, Phnom Penh, and Sihanoukville areas, without having to bring tourists all the way from countries of origin. Novelty value In the early years, Cambodia can still benefit from novelty quality, as few people have visited in the past.

Tourism Center Poipet Eco-Tourism Sihanoukville Bokor (hill resort) 150 km Poipet Eco-Tourism 314km Gulf of Thailand 230 km Sihanoukville Bokor (hill resort) Beach & Island Resorts

Visitors to Cambodia Thousand (000) Vision 2020: Visitor arrival from 2010 – 2020 YEAR 2010 2011 2015 2020 Visitor Arrivals 2,508,289 2,882,000 3,700,000 6,000,000

Top ten markets arrival January-July 2012 Vietnam Korea China Lao PDR Thailand U.S.A Japan France U.K Russia Chinese Tourist Arrivals 2010 2011 2012 (Jan-May) Number of Chinese tourists 177,636 247,197 131,969

July 19, 2013 marked the 55th anniversary of the establishment of diplomatic relations between Cambodia and China.

So maybe, your next trip should be to Cambodia, in Phnom Penh or Siemreap, somewhere near this 7th Wonder of the Ancient World Angkor Wat (Siemreap, Cambodia)

clo_cambodia@yahoo.com www.cambodiainvestment.gov.kh CDC k>G>k