As investment pours into Southeast Asia and the wider region is ramping up industrial capacity, opportunities for doing business in Cambodia are also growing. With a consistent GDP growth of around 6-7% over the past decade (notwithstanding the Covid dip) Cambodia ranks ever higher in statistics from the World Bank. Projected growth rates to 2025 are around 7%.
However when exploring new markets, international companies often won’t consider doing business in Cambodia, perceiving it to be a backwater – yet this is no longer the case! Cambodia’s recent growth is fueled by a robust construction sector and large infrastructure projects such as highways, three new airports, high speed rail and upgraded harbour facilities.
The manufacturing sector is geared towards mass production based on low labour costs. For example, Cambodia is the world’s largest exporter of bicycles. Further, the textile and garment industry remains Cambodia’s largest employment sector. Doing business in Cambodia offers considerable outsourcing opportunity.
Agriculture accounts for more than 20% of GDP, and while this has declined as a percentage due to the rise of other sectors, it remains a major factor in the Cambodian economy. Demand for modern farming equipment is growing, fueled by a need to improve practices and seek better efficiencies in food production and access to markets.
Opportunities further exist in food and beverage, where the demand for imported foods has swiftly grown, as well as in IT and technology where Cambodia is seeking international assistance in expanding national coverage. Cambodia is a relatively youthful country where around 40% of the population is under 25, leading to opportunities in education. At the other end of the lifecycle, as Cambodian people become wealthier they are enjoying longer lifespans, leading to increased demand for better healthcare including medial equipment, pharmaceuticals and related later-life services.
With considerable ongoing investment in infrastructure there is scope for further growth in logistical services. In addition, Cambodia is addressing long term energy needs, where 40% of present supply is hydro-generated and much of the off-grid supply comes from small scale solar installations. There is vast opportunity here for any company interested in doing business in Cambodia.
The consumer sector, especially in luxury goods is booming. The showrooms of luxury car brands such as Bentley, BMW, Mercedes, Porsche, Lexus, Rolls Royce and the Italian sports cars are evidence of this. New mega-malls are full of imported fashion and household goods.
Visiting Angkor Wat in Siem Reap, Cambodia’s second city should absolutely be on everyone’s bucket list. Cambodia, the home to the ancient Khmer Empire is attracting tourism again and soon plans to exceed the 2019 number of 6.6 million visitors.
Doing business in Cambodia is relatively easy with the government ensuring regulatory compliance and oversight in navigable. Foreign companies are allowed 100% ownership with no restrictions to trade and offers amongst the lowest tax rates in Southeast Asia. Further, with a FTA with China and open border trade agreements with Thailand and Vietnam along with easy access to other nearby markets, Cambodia may be considered a possible manufacturing and logistical hub.
Asian Insiders is on the ground and for companies considering doing business in Cambodia, we are available to offer insights and preliminary research in response to enquiries, leading to more comprehensive preparation.
For a no-obligation call please contact Managing Partner Jari Hietala, jari.hietala)at)asianinsiders.com