investing in cambodia
TRANSCRIPT
INVESTING IN CAMBODIA
CHANTHOL SUN Senior Minister, Minister of Commerce Vice Chairman Council for the Development of Cambodia
108-Oct-2015
STRATEGIC LOCATION IN SOUTH-EAST ASIA
208-Oct-2015
CAMBODIA AT A GLANCE
181,035 square kilometer
LAND AREA
14.7 million (at 2013)
POPULATION
1.46%
POPULATION GROWTH RATE
at 2013
Stable macroeconomic environment GDP growth : average 7.6% per annum the last 10 years (2005–2014 periods)
GDP per capita
$1,220 (2015: Projection by MEF)
Exchange rate US$ 1 = Riel 4,049 (2015–H1, period average of )
Inflation rate 1.0% (2015–H1, period average)
DEBT RATING B2
308-Oct-2015
REASONS TO INVEST IN CAMBODIA
• Macroeconomic Stability
• Pro-business Government
• Competitive Investment Incentives
• One-Stop Service Investment Promotion Agency
• Preferential Access to Regional & World Markets
• Investment Protection
• Efficient Infrastructure and Strategic Location
• Sound Financial Sector
• Abundant Resources, Labor, Land
408-Oct-2015
• GDP growth averaged 7.6% per annum the last 10 years (2005 – 2014)
• Projected GDP growth for 2015 is 6.9% (World Bank)
• Stable exchange rate
• Low inflation (3.9% in 2014 and 1% in the first half of 2015)
• Debt to GDP ratio 32.8% (at the end of 2013)
• Low budget deficit
• International reserves increased to US$ 3.6 billion (2013) and rose to US$ 4.4 billion (2014) – nearly 4 months of prospective imports
• International reserves reached US$ 4.7 billion in first half of 2015
• It took 12 years to increase international reserves from US$ 100 million to US$ 1 billion (1994–2006) but it just took 2 years to increase from US$ 2 billion to US$ 3 billion (2006–2008)
MACROECONOMIC STABILITY
508-Oct-2015
8.8%8.1%
6.6%
8.5%
10.3%
13.3%
10.8%10.2%
6.7%
0.1%
6.0%
7.1% 7.3% 7.4% 7.1% 6.9%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Est.
2015Proj.
Growthslowieddownin2009becauseofimpactsfromglobalfinancialcrisisSource:MOP-NISand2015isprojectedfigureoftheWorldBank
RealGDPGrowthRate(%)
GROSS DOMESTIC PRODUCT (GDP)
608-Oct-2015
468534
623
739 731
830909
9711,043
1,123
1,220
-
200
400
600
800
1,000
1,200
1,400
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Est. 2015Proj.
GDPPerCapita(US$)
GDP PER CAPITA GROWTH
708-Oct-2015
4,097 4,107
4,060 4,058
4,143
4,189
4,062
4,033 4,0274,038
4,050
3,900
3,950
4,000
4,050
4,100
4,150
4,200
4,250
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Proj.
StableExchangeRate(periodaverage,Riels/US$)
CURRENCY
808-Oct-2015
0.7% 1.4% 1.0%
3.9%
6.3% 6.1%7.7%
25.0%
-0.7%
4.0%5.5%
2.9% 2.9%3.9% 3.5%
-5%
0%
5%
10%
15%
20%
25%
30%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Proj.
LowInflation
MEFProjectionfor2015
INFLATION (PERIOD AVERAGE)
908-Oct-2015
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Foreign Reserves (US$ Billion)
US$4.4billion by2014andUS$4.7billionbymid-2015.Proejcted toreachUS$5.1billion bytheendof2015(MEFProjection)
FOREIGN RESERVES
1008-Oct-2015
6,828
8,4649,521
8,8988,080
9,681
12,256
13,879
16,409
18,024
2,9103,693
4,089 3,503 3,1383,906
5,0355,633
6,5307,408
3,9184,771
5,432 5,395 4,9425,775
7,2218,246
9,87910,616
(1,008) (1,078) (1,343) (1,892) (1,804) (1,869)(2,186) (2,613)
(3,349) (3,208)(5,000)
-
5,000
10,000
15,000
20,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
TotalTrade ExportImport TradeBalance
TRADE VOLUME (US$ MILLION)
1108-Oct-2015
6.0%
7.2%
5.4%
3.8%
2.7%3.3%
2.8% 2.8%
8.4%
7.5% 7.5%
6.3% 6.2%
4.3% 4.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Est.
2015Proj.
LowBudgetDeficit(%ofGDP)
BUDGET
12
MEFProjec+on
08-Oct-2015
REMARKABLE ACHIEVEMENTS
Source: World Bank WDI 1308-Oct-2015
GovernmentandPrivateSectorWorkingGroups
GovernmentandPrivateSectorForum
Privatesectorisanengineofeconomicgrowth
Easyaccesstorelevantgovernmentofficials
PRO-BUSINESS GOVERNMENT
1408-Oct-2015
GOVERNMENT PRIVATE SECTOR FORUM
World Bank Group: Support of structured public - private dialogue for private and financial sector development, 4/2009
1508-Oct-2015
COMPETITIVE INVESTMENT INCENTIVES
• Corporate tax - 20% • Tax holiday up to 9 Years
• Full import and export duty exemption (QIP Projects) • No discrimination, no nationalization
• No local participation requirement
• No price control on any products or services • No foreign exchange control
• No restriction on capital repatriation: free repatriation of profits & free remittance of royalty, interest, loan repayment, dividend, investment capital, etc.
• No trade restrictions • Long-term land lease
1608-Oct-2015
ONE-STOP SERVICE – CDC/CIB
Information and application Evaluation and approval
Customs duty and tax exemption Visa and work permit Company registration
Investor after-care
1708-Oct-2015
ACCESS TO WORLD MARKETS
Access to the U.S. market - 1996
Access to the E.U. market - 1996
Member of the Association of South-East Asian Nations (ASEAN) - 1999
Member of the World Customs Organization (WCO) - 2001
Member of the World Trade Organization (WTO) - 2004
Member of various regional trade agreements
1808-Oct-2015
o Australia
o Austria
o Belarus
o Belgium
o Bulgaria
o Canada
o China
o Czech Republic
o Denmark
o Finland
o France
o Germany
o Hungary
o Ireland
o Italy
o Korea
o Luxemburg
o Japan
o Netherlands
o New Zealand
o Norway
o Poland
o Portugal
o ROK
o Russian Federation
o Slovakia
o Spain
o Sweden
o Switzerland
o UK
o USA
MFN: Most Favored Nation GSP: Generalized System of Preferences
MFN/GSP MARKET ACCESS
1908-Oct-2015
INVESTMENT PROTECTION AGREEMENTS
o Australia
o China P.R
o Croatia
o Cuba
o Czech Republic
o DPR of Korea
o Germany
o France
o Indonesia
o Japan
o Kuwait
o Lao PDR
o Malaysia
o Netherlands
o OPEC
o OPIC
o Pakistan
o Philippines
o ROK
o Singapore
o Switzerland
o Thailand
o Vietnam
In process : o Algeria
o Bulgaria
o Egypt
o Lybya
o Myanmar
o Qatar
o Russia
o Ukraine
o UK
o USA
o Hungary
o Malta 2008-Oct-2015
• Completed ASEAN highway linking Thailand, Cambodia, Vietnam
• Completed ASEAN highway linking Cambodia, Lao PDR, China
• Finished upgrading national road network
• Rehabilitating National Railways as part of Singapore – Kunming rail link
• Upgraded Sihanoukville Port (new general cargo terminal)
• Upgraded Phnom Penh Port / new container port
• Upgraded Phnom Penh, Siem Reap, and Sihanoukville Airports
• Finalized installing fiber optic cable across the country
• Construction of new power plants
INFRASTRUCTURE & LOCATION
2108-Oct-2015
To Vietnam • NR-2 • NR-33 • NR-72 • NR-74 • NR-78
* New Route No
To Thailand • NR-48 • NR-57 • NR-62 • NR-64 • NR-68
ACCESS TO BORDER CROSSINGS
2208-Oct-2015
2308-Oct-2015
264km Phnom Penh-Sihanouk Ville
105km Serei Saophoan-Siem Reap
Propose new link
239km Siem Reap-Skun
Propose new link
255km Bat Doeng-Loch Nich
(Vietnam Border).
Propose new link
338Km Phnom Penh-Sisophon
48Km Sisophon-Poipet
273km Snoul-Strung Treng to Laos Border.
Propose new link
CAMBODIAN RAILWAY MAP
2408-Oct-2015
SPECIAL ECONOMIC ZONES
• 34 SEZs have been approved
• 11 SEZs are in operation
• 23 SEZs are being built
• Single Window for Import/Export Procedures
• Good Infrastructure
[ Photos: Phnom Penh Special Economic Zone ]
2508-Oct-2015
Cambodia’s Special Economic Zones
2608-Oct-2015
Invest in Cambodia and you have
14.7 million customers
Invest in Cambodia
and you have
623 million customers at
your doorstep
2708-Oct-2015
• 36 commercial banks (by the end of 2014) a) 11 Foreign Branch Banks
b) 13 Locally Incorporated
c) 12 Subsidiary Banks
• 11 specialized banks (including the Rural Development Bank) • 40 licensed-micro-finance institutions
(7 deposit-taking micro finance institutions)
• 33 registered-micro finance operators • 6 Non-life insurance companies • 2 life insurance companies
• 1 re-insurance company • Capital market laws • Financial leasing law
• Low NPL rate: 2.2% (2014) – down from 2.7% in 2013
• Strong banking supervision - prudent reserve requirement level
SOUND FINANCIAL SECTOR
2808-Oct-2015
339 413 539 608 797 9091,316
2,3282,5213,320
4,313
5,193
6,736
7,560
9,749
-
2,000
4,000
6,000
8,000
10,000
12,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
BANK DEPOSITS (US$ MILLION)
2908-Oct-2015
228 238 269 336 451 582 8931,595
2,3882,5113,241
4,326
5,846
7,352
9,345
-1,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Non-performingloansdeclinedto2.2%in2014from2.7%in2013
CREDIT TO PRIVATE SECTOR (US$ MILLION)
3008-Oct-2015
Officially launched on July 11, 2011
First trading on April 18, 2012
Joint venture between Cambodian and Korean exchanges
7 Underwriters registered
2 Dealers
4 Brokers
2 Investment advisories
STOCK EXCHANGE IN CAMBODIA
3108-Oct-2015
• Oil and gas
• Minerals (bauxite, carbonate rocks, natural gas, gold, iron, manganese, petroleum, phosphate, rock, salt, silica…)
• Great lake (Tonle Sap)
• Beaches (more than 400km)
• Monuments / Heritage Sites
• Abundant land
• Low labor cost & dynamic, young workforce
ABUNDANT RESOURCES, LABOR, LAND
3208-Oct-2015
POPULATION
Children)(0,14))29.4%&
&
Economically)produc8ve)age)group)
(15,64))65.6%&
The)elderly)popula8on))5.0%&
Percentage of population by age group 2013
3308-Oct-2015
INVESTMENT TRENDS
1,052
4,440
2,656
10,888
5,859
2,690
7,012
2,277
4,483
1,610
3,128
-
2,000
4,000
6,000
8,000
10,000
12,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 June2015
US$ Millions
3408-Oct-2015
APPROVED INVESTMENT BY COUNTRY 1994 – June 2015
10,301
4,4713,772
2,6501,568 1,311 1,116 937 1,073 825 400
-
2,000
4,000
6,000
8,000
10,000
12,000
US$ Million
3508-Oct-2015
APPROVED INVESTMENT BY SECTOR 1994 – June 2015
Agriculture10%
Industries29%
Service21%
Tourism40%
Approved Investment by Sector
3608-Oct-2015
• Agriculture and agro–industry
• Labor intensive industries
• Processing industry
• Tourism sector
• Transportation and logistic
• ICT
• Energy
• Oil, gas and mining
• Human resource development & education
INVESTMENT OPPORTUNITIES
3708-Oct-2015
REASONS TO INVEST IN CAMBODIA
• Macroeconomic stability
• Pro-business government
• Competitive investment incentives
• One-stop service investment promotion agency
• Preferential access to regional & world markets
• Investment protection
• Efficient infrastructure and strategic location
• Sound financial sector
• Abundant resources, labor, land
3808-Oct-2015
COUNCIL FOR THE DEVELOPMENT OF CAMBODIA
www.cambodiainvestment.gov.kh
H.E Keat Chhon [email protected]
H.E Chanthol Sun [email protected]
H.E Sok Chenda [email protected]
H.E Chea Vuthy [email protected]
H.E Heng Soknang [email protected]
Cambodian Investment Board: [email protected] 3908-Oct-2015