Cambodia - Foreign investment



There was little private foreign capital in pre-1975 Cambodia. French capital in rubber plantations represented more than half of the total investment. Foreign investment was prohibited under the Pol Pot regime and was not resumed under its successor, the People's Republic of Kampuchea (PRK). As part of Cambodia's economic reforms the July 1989 Foreign Investment Law and the regulations implementing the law contained in the May 1991 sub-decree on foreign investment created a favorable foreign investment climate in Cambodia. From 1989 to 1991 there were over 200 investment applications, 20 being granted and 70 given tentative approval. Foreign investors from Thailand, Singapore, Taiwan, Hong Kong, France, and the US accounted for over half these applications; overseas Khmers accounted for 30%, and 10% were from local investors. By 1993 it was reported that final contracts had been signed for 45 of these 200 applications. The value of these proposals is small, $1–5 million, and the proposals are concentrated in services, tourism, and textiles. The most visible projects are the 380-room Cambodiana Hotel in Phnom Penh, a satellite earth station project that provides international direct dial service, and a cellular telephone system in Phnom Penh. The primary hindrance to foreign investment is the lack of infrastructure—roads are in dismal condition, bandits roam, power outages are common, and phone service is inadequate.

The new foreign investment law was adopted by the National Assembly on 4 August 1994. It guarantees that investors shall be treated in a non-discriminatory manner, except for land ownership; that the government shall not undertake a nationalization policy which adversely affects private properties of investors; that the government shall not impose price controls on the products or services of an investor who has received prior approval from the government; and that the government shall permit investors to purchase foreign currencies through the banking system and to remit abroad those currencies as payments for imports, repayments on loans, payments of royalties and management fees, profit remittances, and repatriation of capital.

In October 1999, the government entered into a three-year IMF-monitored program that included as a priority goal making the country more attractive for foreign direct investment. In February 2000 this program was complemented by a World Bank program aimed at revising Cambodia's 1994 Law on Investment (LOI). Foreign investment commitments averaged over $800 million in the period 1996 to 1998, but fell to $482 in 1999. Actual foreign investment in 1999, the latest data available, was $160 million. In 2002, over 100 US companies and companies representing US products and services were active in Cambodia.

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User Contributions:

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Oct 27, 2010 @ 10:22 pm
I would like to know more about policy of foreign investment in Cambodia, because i have partner at oversea that they want to invest in our country but firstly they want to know clearly about policy for foreign investor before started, so how can i get the details of this policy?
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Feb 8, 2011 @ 4:04 am
i fond investor for Gust house in modulkiri province and gasolin. i have land for bulding and make up everything.

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