INVESTMENT OPPORTUNITIESin Cambodia

presented by

Sok Chenda SopheaMinister attached to the Prime Minister

Secretary General Council for the Development of Cambodia

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Key IndicatorsKey Indicators

Land Area : 181,035 sq.km.Land Area : 181,035 sq.km.

Population: 14.1 Million Population: 14.1 Million

Labor Force (Young) : 7,053,398 (Female: Labor Force (Young) : 7,053,398 (Female: 3,608,345)3,608,345)

Population Growth Rate : 1.54%Population Growth Rate : 1.54%

GDP (2010) : 5.9%GDP (2010) : 5.9%

GDP Per Capita in 2010 : $830GDP Per Capita in 2010 : $830

Inflation (2010) : 4%Inflation (2010) : 4%

Exchange Rate: USD 1= Exchange Rate: USD 1= 4062 Riels4062 Riels

JPY 1= 49.67 RielsJPY 1= 49.67 Riels

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Economic PerformanceEconomic Performance

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

GDP 9.20% 6.50% 5.30% 5.70% 5.00% 12.60% 9.20% 7.70% 6.20% 8.60% 10.0% 13.3% 10.8% 10.2% 6.70% 0.10% 5.90%

Inf lation 17.90% 3.50% 10% 9.20% 13.30% 4.00% -0.80% 0.20% 3.30% 1.20% 3.90% 5.80% 4.70% 5.9% 19.70% -0.60% 4.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0%

2%

4%

6%

8%

10%

12%

14%

Source: SNEC & MEF

Average growth for last 5 years is 10.3%Average growth for last 5 years is 10.3%

20022002 20032003 20042004 20052005 20062006 20072007 20082008 20092009 20102010

GDP per capita GDP per capita 331331 356356 402402 468468 534534 623623 738738 731731 830830

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H.E. Mr. Chhieng YanaraSecretary General CRDB

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

1st Vice Chairman

H.E. Mr. Suon SitthySecretary 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 Secretary of State of Economy & Finance

Vice Chairman

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

Secretary General CSEZB

H.E. Mr. Duy ThouvDeputy Secretary General CIB

H.E. Mr. Leap VandenDeputy 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. An SophanaraDeputy Secretary General CIB

SEZ ODA FDIGMS National Secretariat

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Information & ApplicationInformation & Application ApprovalApproval Customs Duty & Tax ExemptionCustoms Duty & Tax Exemption Visa & Work PermitVisa & Work Permit Company RegistrationCompany Registration

A ONE-STOP SERVICE

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Licensing AuthoritiesLicensing Authorities

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

CDC : Less Than $ 50 MillionCDC : Less Than $ 50 Million

Provincial Authorities : Less Than $ 2 MillionProvincial Authorities : Less Than $ 2 Million

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Investment ApprovalInvestment Approval

Investment Application

CDC issues a Conditional Registration Certificate to the applicant.

Company Registration / Ministry of Commerce

Relevant Licenses, as Appropriate / Ministry of Industry, Mines 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

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Investment IncentivesInvestment Incentives

20% Corporate Tax 20% Corporate Tax

Tax Holidays (TH): Trigger Period +3 years+n; 6y <TH<9y Tax Holidays (TH): Trigger Period +3 years+n; 6y <TH<9y

Full Import Duty ExemptionFull Import Duty Exemption

Repatriation of Profit (Withholding Tax)Repatriation of Profit (Withholding Tax)

Reinvestment of Earning (Special Depreciation)Reinvestment of Earning (Special Depreciation)

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Investment ProtectionInvestment Protection

Equal Treatment of All InvestorsEqual Treatment of All Investors No Requirement of Local Equity ParticipationNo Requirement of Local Equity Participation No Price Controls on Products or ServicesNo Price Controls on Products or Services No Restriction on Forex ConvertibilityNo Restriction on Forex Convertibility Free Remittance of Foreign Currencies AbroadFree Remittance of Foreign Currencies Abroad

The Investment Law and the Sub-Decree contain a number The Investment Law and the Sub-Decree contain a number of important guarantees for the investorsof important guarantees for the investors:

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Bilateral Agreement on the Promotion and Protection of Investments Bilateral Agreement on the Promotion and Protection of Investments between the Kingdom of Cambodia and Other Countriesbetween the Kingdom of Cambodia and Other Countries

1.1. AustraliaAustralia2.2. AustriaAustria3.3. ChinaChina4.4. CroatiaCroatia5.5. CubaCuba6.6. Czech Czech 7.7. France France 8.8. GermanyGermany9.9. IndonesiaIndonesia10.10. JapanJapan11.11. KuwaitKuwait12.12. Lao PDRLao PDR

13. MalaysiaMalaysia14.14. NetherlandsNetherlands15.15. N. KoreaN. Korea16.16. OPECOPEC17.17. PakistanPakistan18.18. PhilippinePhilippine19.19. ROKROK20.20. SingaporeSingapore21.21. SwitzerlandSwitzerland22.22. ThailandThailand23.23. USA (OPIC)USA (OPIC)24.24. VietnamVietnam

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Encouraged Investment ActivitiesEncouraged Investment Activities

Agriculture and Agro-IndustryAgriculture and Agro-Industry Transport and Telecommunications Transport and Telecommunications Energy and ElectricityEnergy and Electricity Labor-Intensive Industries, PLabor-Intensive Industries, Processing and rocessing and

Manufacturing;Manufacturing; TourismTourism Human Resource DevelopmentHuman Resource Development Oil & Gas, MiningOil & Gas, Mining

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Approved Investments by Country/RegionApproved Investments by Country/Region (1994- 2010) (1994- 2010)

US$ Million

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Approved Investments by SectorApproved Investments by Sector1994 – 20101994 – 2010

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Infrastructure: A Definite Prospect

Priority for InfrastructurePriority for Infrastructure Infrastructure RehabilitationInfrastructure Rehabilitation Multilateral Aid AvailabilityMultilateral Aid Availability DecentralizationDecentralization Regional OpportunitiesRegional Opportunities ASEAN & GMS IntegrationASEAN & GMS Integration Private Participation in Private Participation in

Infrastructure (PPI): BOT, BOO, Infrastructure (PPI): BOT, BOO, etcetc……

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Agro-businessAgro-business

Basic Agrarian EconomyBasic Agrarian Economy Natural Endowments:Natural Endowments:

Abundant LandAbundant Land Rich Fishery Resources Rich Fishery Resources

Organic CropsOrganic CropsValue-Added EmphasisValue-Added EmphasisFood ProcessingFood ProcessingNew Product DevelopmentNew Product Development

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TourismTourism

World Heritage MonumentsWorld Heritage Monuments

Open Sky Policy to Siem ReapOpen Sky Policy to Siem Reap

Natural Beauty - Beach - IslandsNatural Beauty - Beach - Islands

Ability to Attract “Add-on” TripsAbility to Attract “Add-on” Trips

Novelty ValueNovelty Value

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Eco-Tourism

Tourism CenterPoipet

Sihanoukville

Gulf of Thailand

314km

230 km

150 km

Beach & Island Resorts

Bokor (hill resort)

Visitors to CambodiaVisitors to Cambodia

Thousand (000)Thousand (000)

Visitor Arrivals from 2006 - 2010Visitor Arrivals from 2006 - 2010

YEARYEAR 20062006 20072007 20082008 20092009 20102010

Visitor ArrivalsVisitor Arrivals 1,770,0411,770,041 2,015,1282,015,128 2,125,4652,125,465 2,161,5772,161,577 2,508,2892,508,289

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Top Ten MarketsTop Ten Markets

Vietnam Vietnam

KoreaKorea

ChinaChina

JapanJapan

USAUSA

FranceFrance

UKUK

ThailandThailand

AustraliaAustralia

TaiwanTaiwan

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Japanese ArrivalsJapanese Arrivals

YearNumber of

Japanese VisitorsTotal Visitors Share (%) Rank

2006 158,353 1,770,041 9.31 2nd

2007 161,973 2,015,128 8.04 2nd

2008 163,806 2,125,465 7.71 3rd

2009 146,286 2,161,577 6.77 4th

2010 151,795 2,508,289 6.05 4th

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Investment OpportunitiesInvestment Opportunities

Phnom Penh Phnom Penh o International Convention CenterInternational Convention Centero High-End Hotel (Four Seasons, Hyatt, etc…): at the moment there are only High-End Hotel (Four Seasons, Hyatt, etc…): at the moment there are only

Intercontinental Hotel and Raffles with approximately 500 rooms.Intercontinental Hotel and Raffles with approximately 500 rooms. Siem Reap Siem Reap

o International Convention CenterInternational Convention Centero High-End Hotel (Four Seasons, Hyatt, Sheraton, and Marriott, etc…) at the moment 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 there are only Raffles, Le Meridien, Sofitel, Aman resorts and Orient Express, with approximately 700 rooms. approximately 700 rooms.

o Amusement Park / Recreational ActivitiesAmusement Park / Recreational Activitieso Golf Course (there are three existing golf courses)Golf Course (there are three existing golf courses)

SihanoukvilleSihanoukvilleo High-End Hotel (Four Seasons, Hyatt, etc…)High-End Hotel (Four Seasons, Hyatt, etc…)o Golf CourseGolf Course

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Manufacturing & ExportManufacturing & Export

Competitive Labor CostCompetitive Labor CostTax IncentivesTax Incentives

Market AccessMarket AccessRegional ArrangementRegional Arrangement

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MFN/GSP Market Access

AustraliaAustralia AustriaAustria BelarusBelarus BelgiumBelgium BulgariaBulgaria CanadaCanada ChinaChina Czech RepublicCzech Republic DenmarkDenmark FinlandFinland

PolandPoland PortugalPortugal ROK Russian FederationRussian Federation SlovakiaSlovakia SpainSpain SwedenSweden SwitzerlandSwitzerland UKUK USAUSA EBA EBA (“Everything (“Everything

But Arms” Initiative But Arms” Initiative for LDCs)for LDCs)

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

… … and the ASEAN Integration Systemand the ASEAN Integration SystemOf Preferences (AISP) from the ASEAN 6Of Preferences (AISP) from the ASEAN 6

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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

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One Stop ServiceOne Stop Service Special Economic Zone Administration (SEZA) Special Economic Zone Administration (SEZA)

Company Registration and Investment License Company Registration and Investment License Export/Import Permit Export/Import Permit Work Permit and Labor Books (Both Workers Work Permit and Labor Books (Both Workers

and Expatriate)and Expatriate) SEZA will provide on-site immediate legal and SEZA will provide on-site immediate legal and

administrative assistance. administrative assistance.

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JOININGJOININGWTOWTO

JOININGJOININGASEANASEAN

ACCESS TOACCESS TOTHE U.S.THE U.S.MARKETMARKET

ACCESS TO THEACCESS TO THEEUROPEANEUROPEANMARKETMARKET

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

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Reasons to Invest in CambodiaReasons to Invest in Cambodia

Open EconomyOpen Economy Sound Macroeconomic EnvironmentSound Macroeconomic Environment Competitive Investment IncentivesCompetitive Investment Incentives One-Stop Service - Fast -Track Investment Approval One-Stop Service - Fast -Track Investment Approval

Process (28 Days)Process (28 Days) Low Labor CostLow Labor Cost Strategic LocationStrategic Location Preferential Trading StatusPreferential Trading Status Access to ASEAN and World MarketsAccess to ASEAN and World Markets

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Phnom PenhThe Philippines

Singapore

Indonesia

MyanmarSouthern China

ManilaBangkok

Kunming

Yangon

Brunei

Jakarta

Begawan

Hanoi

Laos Vientiane

Malaysia

Kuala Lumpur

Thailand

Vietnam

1h:30 in average

CAMBODIA

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Invest in Cambodia and Invest in Cambodia and

you have 14 million you have 14 million

consumersconsumers

Invest in Cambodia and Invest in Cambodia and

you have 14 million you have 14 million

consumersconsumers

Invest in Cambodia and you Invest in Cambodia and you

have have 325 million325 million consumers consumers

virtually at your doorstepvirtually at your doorstep

Invest in Cambodia and you Invest in Cambodia and you

have have 325 million325 million consumers consumers

virtually at your doorstepvirtually at your doorstep

Invest in Cambodia and Invest in Cambodia and you have you have 590 million590 million

consumers at your consumers at your doorstepdoorstep

Invest in Cambodia and Invest in Cambodia and you have you have 590 million590 million

consumers at your consumers at your doorstepdoorstep

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Thank you Thank you

www.cambodiainvestment.gov.kh

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