Council for the Development of Cambodia (CDC)

http://www.cambodiainvest.gov.kh

Investing in CAMBODIA

CDC Chairman

Secretary General

CIBSecretary General

H.E. Mr. SUON SITTHY

CRDBSecretary GeneralH.E. Mr. CHHIENG YANARA

• Investment Law/FDI• Investment Promotion• Licensing• Project Evaluation• Country Analysis and Strategy

• Aid Coordination• Multilateral Coordination• Bilateral Coordination• Public Investments• NGO Relation

2 Vice-Chairmen

1st Vice-ChairmanH.E. Mr. Keat Chhon, Senior Minister, Minister of Economy and Finance

H.E. Mr. CHAM PRASIDHSenior Minister & Minister of Commerce

H.E. Mr. KONG VIBOL1st Secretary of StateMinistry of Economy and Finance

H.E. Mr. SOK CHENDA

H.E. Samdech HUN SENPrime Minister

Flow chart of investment applicationsCDC Chairman

CDC Single-Stop-Servicechaired by H.E. Cham Prasidh

CIB Secretary General

H.E. Cham PrasidhCDC Vice-Chairman

CIB Departments

Routine investment applicationsfor garment factories, footwear

and their supporting industries, and hotels

Non-routine complexinvestmentapplications

< 7 Days < 25 days

Newly created 3rd arm of the CDC (December 2005):

The SEZ CommitteeCDC Chairman

CRDB CIB C-SEZ

C-SEZ One-Stop-Service Meetingpresided by

Prime Minister & CDC ChairmanH.E. Samdech Hun Sen

CRDB SG

Public Investments Private Investments outside SEZ Private Investments inside SEZ

CIB SG C-SEZ SG

SSS

Note: SEZ=Special Economic Zone

The Cambodian Investment Board (C I B)A One Stop Service

• Information & Application• Analysis & Evaluation• Approval• Customs Duty & Tax Exemption• Visa & Work Permit• Company Registration

Incentives according to the Law on Investments (2003)

20% Corporate Income Tax Trigger period +3 years + n (automatic)

Reinvestment of profit (special depreciation)Reinvestment of earning (withholding tax)5-year loss carry forwardFull Import Duty ExemptionNo Export TaxLicensing (Simple registration)

Investment by Sector6%

22%

35%

37%IndustryAgricultureInfrastructureTourism

1994 – 1st Half 2004

Investment by Sector

3%

27%

10%

60%

IndustryAgricultureInfrastructureTourism

2005

Investment by Sector

9.27%

79.10%

3.29%

8.33%

IndustryAgricultureInfrastructureTourism

2006

FDIs in Cambodia in 2004 (by country)

141.13

107.96

32.24

15.5711.37

7.33 6.88 5.05 3.9 3.16 2.16 1.96 1.91 0.71 0.52 0.29 0.010

20

40

60

80

100

120

140

160

Cam

bodi

a

Chi

naM

alay

sia

Sing

apor

eCh

ines

e Ta

ipei

Fran

ce

RO

K

Thai

land

USA

Cana

da

Japa

n

Rus

sia

Uni

ted

Kin

gdom

Dom

inic

an R

ep.

Hon

g K

ong

SAR

Swed

enA

ustr

alia

FDIs in Cambodia in 2005 (by Country)

280.96

241.58

68.1758.38 56.84 54.93

35.89

12.8 7.64 4.99 3.96 2 1.92 0.670

50

100

150

200

250

300

China

Cambo

diaChin

ese T

aipei

ROKThail

and

Singapore

Malays

iaUnit

ed K

ingdom

France

USACan

ada

Austra

liaIndone

siaArg

entin

a

1,961

4,341

831342

63145140160196554578

618

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Jan-Oct

2007

Total FDI

FDI in Cambodia(in USD million)

Source: CDC November 2007

In the center of In the center of gravity of gravity of

the most dynamic the most dynamic region in the region in the

worldworld

ChinaChina

Manufacture in Cambodia and

you’ll have 310 million consumers

in the Greater Mekong Sub-region

(GMS), virtually at your

doorstep…

Manufacture in Cambodia and Manufacture in Cambodia and

youyou’’ll have ll have 310310 millionmillion consumersconsumers

in the in the Greater Mekong SubGreater Mekong Sub--regionregion

(GMS), virtually at your (GMS), virtually at your

doorstepdoorstep……

GMS: Infrastructure Improvement 1992-2012

As of 1992As of 2004Projected by 2012

North-South Economic Corridor

East-West Economic Corridor

Southern Economic Corridor

GMS GMS Flagship Flagship ProjectsProjects

ASEAN Integration System of Preferences (AISP) for Cambodia (477 items)... and more

.

Phnom PenhThe Philippines

Singapore

Indonesia

MyanmarSouthern China

ManilaBangkok

Kunming

Yangon

Brunei

Jakarta

Begawan

Hanoi

Laoso Vientiane

Malaysia

Kuala Lumpur

ThailandVietnam

3hrs in average

Japan

CAMBODIA

Manufacture in Manufacture in Cambodia and youCambodia and you’’ll ll have have 560 560 million million consumers in consumers in ASEAN, virtually at ASEAN, virtually at your doorstepyour doorstep……

.

.

.

.

.

MORE REASONS TO INVEST

Open economy

Business friendly government

Sound macroeconomic environment

Foreigner friendly population

Reasonable cost (young

and energetic work force)

Favorable investment incentives and tax regime Strategic locationAbundant natural resourcesWorld class tourist site

Market access

Regional arrangements

Agro-business

Basic agrarian economyNatural endowments:

Abundant landRich fishery resourcesTimber resources

Organic cropsOrganic cropsValueValue--added emphasis/ added emphasis/ Food processingFood processingNew product developmentNew product development

Infrastructure: A definite prospect

Priority for infrastructureInfrastructure rehabilitationMultilateral aid availabilityDecentralizationRegional opportunitiesASEAN & GMS integrationPrivate Participation in Infrastructure (PPI): BOT, BOO, etc…

Physical Infrastructures: Work in progress

Asian Highway A1: Build and Rehabilitate Bangkok – Phnom Penh –Vung Tao Road

Rehabilitate RN7 from Southern Laos to Sihanoukville Deep Seaport

Upgrade and Expand Sihanoukville Port

Upgrade and Expand Phnom Penh, Siem Reap and Sihanoukville Airports

Tourism

Natural beauty

World Heritage Monuments

Open Sky Policy to Siem Reap

Ability to attract “add-on” trips

Novelty value

Manufacturing & Export

Competitive labor costTax incentives

• Market access• Regional

arrangement

Diversification of the economy

Promote industries and services currently not available in Cambodia to diversify the growth base

The Government adopted a Sub-decree on the Establishment and Management of Special Economic Zone (SEZ) in Dec 2005

SEZ will include export processing zones and free trade zones

Special Economic ZonesThe main rationale of establishing SEZs is to:– Provide investors with adequate infrastructure and supportive facilities– Effectively respond to the challenge of diversifying the Cambodian

economy and to promote demand-driven development, such as export promotion

– Enhance competitiveness of garment industry and other labor intensive activities

– Promote agro-industry, food processing– Promote assembling industry– Promote electronic and electric appliances industries

The following growth poles have been identified for industrial development:– Poipet and Koh Kong (at the Cambodian-Thai border)– Bavet and Phnom Den (at the Cambodian-Vietnamese border)– Phnom Penh– Sihanoukville

Sihanoukville Port has harbour facilities and “dry ports” which have been developed to enhance its competitive edge as an international commercial gateway

Current Licensed Special Economic Zones (SEZ)Current Licensed Special Economic Zones (SEZ)And other potential areasAnd other potential areas

O Neang Poipet SEZ

Pailin

Kompong Cham

Kep

Ho Chi Minh-City

O’Yadao

Phnom Penh SEZSuoy Chheng Koh Kong SEZ

Sihanoukville SEZS.N.C. SEZ

Kampot SEZ

N.L.C. SEZ

Eastern Seabordof Thailand

Neang Kok Koh Kong SEZ

Duong Chhiv Phnom Den SEZ

Manhattan Svay Rieng SEZ

Kaam Samnor

Stoeng Hav SEZ

Poipet O'Neang SEZ

Phnom Penh-Sihanoukville Growth CorridorStudy conducted by JICA

STUNG HAV SPECIAL ECONOMIC ZONE

RN 4

Sihanoukville Port

STUNG HAV SPECIAL ECONOMIC ZONE IN SIHANOUKVILLE

SihanoukvillePort

Oil Terminal

National Road # 4

Sihanoukville Port Rehabilitation Project by JBIC

New Container Terminal

FREE PORT

Phnom Penh Special Economic Zone (PPSEZ)

• PPSEZ is the Industrial and Residential Estate owned by Attwood Investment Group (Cambodia) joint venture with ZEPHYR Co., Ltd (Japan) with a 50-50 share

• The investment project has been approved by the first meeting of Cambodia Board of SEZ on 15 February 2006 which was presided over by Samdech Prime Minister Hun Sen

Private Sector Development Steering Committee (PSD-SC)

Private Sector Development Steering Committee

(PSD-SC)Chairman:

Sr. Minister KEAT ChhonVice Chairman:

Sr. Minister CHAM Prasidh

Sub-Steering CommitteeOn Investment Climate

And Private ParticipationIn Infrastructure

(PPI-SSC)Chairman:

Sr. Minister KEAT Chhon

Sub-Steering CommitteeOn Trade Development &Trade-related Investments

(TD&TRI-SSC)Chairman:

Sr. Minister CHAM Prasidh

Sub-Steering CommitteeOn Small and Medium

Enterprises(SME-SCC)Chairman:

Minister SUY Sem

Publicadministration

reform

Fighting Corruption

Legal and judicial reform

Armed forces reform and

demobilization

Peace, political stability and social

order

Integration of

Cambodia into the

region and the world

Partnershipin

development

Favorable macroeconomic and financial environment

Improving productivity and diversifying

agricultural sector

Land reform and mines clearance

Fisheries reform Forestry reform

Further construction of transport infrastructure

Management of water resources and

irrigation

Development ofenergy and power

grids

Development of Information and Communication

Technology

Strengthening private sector and attracting

investments

Creating jobs and ensuring improved

work conditions

Promoting SMEs Ensuring social safety nets

Enhancing quality of education

Improving health services

Fostering gender equity Implementing Population Policy

Good Governance• The core of the Rectangular Strategy of the third

term of the Royal government of Cambodia is good governance, focused at four reform areas:

• (1) anti-corruption, • (2) legal and judicial reform, • (3) public administration reform including

decentralization and deconcentration, and• (4) reform of the armed forces, especially

demobilization.

Zone Developer(Private Company)

- Administration- Finance- Operation - Promotion- >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>- >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Special Economic Zones Administration

(One-Stop Service)

- Representative of the CambodianSpecial Economic Zone Board

Chairman-Representative of the Custom

and Excise Department Member- Representative of CAMCONTROL Member- Representative of the Ministry of

Commerce Member- Representative of the Ministry of Labor and Vocational Training Member

Samdech Hun SenPrime Minister

Chairman of CDC

Cambodian Special Economic Zones Board

“CSEZ B”

Policy and Planning

Department

Operation and Management Department

Project Analysis and Registration

Department

Administration Department

Trouble Shooting Committee

-Chairmen of the CDC Chairman-Minister of the Council of Ministers Member -Minister of Economy and Finance Member -Minister of Commerce Member -Minister of Land Management, Urbanism and Construction

Member -Minister of Environment Member -Minister of Industry, Mines and Energy Member -Minister of Public Works and

Transportation Member -Minister of Labor and Vocational

Training Member -Secretary General of the CDC Member -Secretary General of the CSEZB Secretary

Secretary General

Deputy Secretary General

Structure at CDC and at each SEZ

Angkor Wat (Siemreap, Cambodia)

Be in Cambodia: the right place, the right time, for the right investment.