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FDI Inflows into Cambodia Up 9.6 Percent in First Semester

Prathna​​   On November 29, 2021 - 3:15 pm​   In Investment  
FDI Inflows into Cambodia Up 9.6 Percent in First Semester New investment laws are hoped to attract more Foreign Direct Investment into Cambodia. KT / Pann Rachana

Cambodia attracted new foreign direct investment (FDI) of $39 billion at the end of the first semester of this year, a year-on-year increase of 9.6 percent, the National Bank of Cambodia’s statistics showed.

China was the largest source of registered FDI with $17.3 billion or 44.2 percent of the total registered investment capital among countries with newly licensed investment projects in Cambodia during the period.

South Korea and Vietnam were placed second and third with registered capital of $4.1 billion and $$2.5 billion, respectively.

The rankings in terms of value of investment’s approved and capital structure however remains a bit confusing as investments such as Naga 3, estimated at $3.5 billion and work on which has commenced in earnest since earlier this year has now been indicated under Malaysia’s FDI inflow.

Singapore, Japan, Malaysia, Thailand, the UK, Canada, and the U.S. were also among the top investment countries in Cambodia.

The licensed FDI covered mainly the areas of finance, manufacturing, real estate, hotel and restaurant, agriculture, electricity, and construction.

The government has made it a priority to attract investment from abroad. Foreign direct investment incentives available to investors include 100 percent foreign ownership of companies, corporate tax holidays, a 20 percent corporate tax rate after the incentive period ends, duty-free import of capital goods, and no restrictions on capital repatriation.

Cambodia’s openness to trade is another factor that is spurring recovery and inflow of FDI. According to the DHL Global Connectedness Index 2020, which measures the development of trade, capital, information, and people flows, the kingdom ranks as the 46th most globally connected country — a relatively high ranking for a lower-middle income country.

“Maintaining trade accessibility continues to be critical in encouraging foreign investment in the country. The free trade agreements on the horizon will likely unearth new growth opportunities for the country’s key sectors, which will be essential in getting the economy back on track this year,” Prayag Chitrakar, Country Manager, DHL Express Cambodia had said and as quoted by The Business Times earlier in the year.

Khmer Times