Transcript INVESTMENT IN CAMBODIA

INVESTMENT IN CAMBODIA
Sector: Jewelry
Arranged by Mrs. Tui Pakarat-Rutten
Vice President of TBCC
H/P: +66 81 839 2452 /+855 16 912 832
E-mail: [email protected]
Key Indicators
 Land area : 181,035 sq.km.
 Population: 15 Million
 Labor force (young) : 7,053,398
(Female: 3,608,345)
 Population growth rate : 1.54%
 GDP Growth (2013e) : 7.3%
 GDP per capita (2013e) : $1,080
 Inflation (2013e) : 4%
 Exchange rate: USD 1= 4,000 Riels
Real GDP Growth
Economic Transformation
• 2012 marked 20 years of economic development in
Cambodia, since the formation of the Royal Government of
Cambodia in 1993; a transformation from planned to market
economy.
• GDP grew from 2.5 billion in 1993 to 12.9 billion in 2011 and is
expected to reach 14.3 billion in 2012. Per capita GDP grew
from $229 to $909 in 2011 and is expected to reach $987 in
2012. Population increased from 10.8 million to 14.5 million in
2012.
• Inflation dropped from 150% in 1993 to 7.4% during 1994-98;
to 0.7% during 1999-03, then to 8% during 2004-08.
• The share of industry increased from 12.6% to 23.1%.
• The share of agriculture decreased from 45.3% to 33.6%
• The share of services reduced from 39.4% to 37.7%.
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Economic Transformation
• Government revenue increased from 290 billion Riels ($123
million) or 7.6% of GDP to 7,604 billion Riels ($2 billion) 13.5%
of GDP.
• The number of people living under poverty lines fell from 50%
in mid-1990s to 25% at present.
• Stock of public debt and publicly guaranteed debt in nominal
terms is 28% of GDP end-2010, of which 49% is held by
multilateral agencies and 51% - by bilateral creditors (of which
24% is non-rescheduled debt with US and Russia).
• Debt stock in NPV is 20% (the benchmark of 40%)
• Now Cambodia is a small, albeit open economy with liberal
market policies.
• Cambodia is located among the highly growing economies of
South-East Asia.
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6
ONE STOP SERVICE
OPEN DOOR POLICY
Council for the Development of Cambodia
(CDC)
Samdech Akka Moha Sena Padei Techo HUN SEN
Prime Minister of the Kingdom of Cambodia
Chairman
H.E. Mr. Keat Chhon,
Permanent Deputy Prime Minister
1st Vice Chairman
Trouble
Shooting
Committee
H.E. Mr. Sun Chanthol ,
Senior Minister, Minister of Commerce
Vice Chairman
H.E. Mr. Sok Chenda Sophea
Minister attached to the Prime Minister
Secretary General
H.E. Mr. Sok Chenda Sophea
Minister attached to the Prime Minister
Secretary General CSEZB
H.E. Mr. Sok Chenda Sophea
Minister attached to the Prime Minister
Secretary General CIB
H.E. Mr. Chhieng Yanara
Minister attached to the Prime Minister
Secretary General CRDB
H.E. Mr. Chea Vuthy
H.E. Mr. Heng Soknang
H.E. Mr. Chea Vuthy
H.E. Mr. Rith Vuthy
LCT. Heng Sokun
Deputy Secretary General
Deputy Secretary General
Deputy Secretary General
Deputy Secretary General
Deputy Secretary General
SEZ
FDI
ODA
Information & Application
Approval
Customs Duty & Tax Exemption
Visa & Work Permit
Company Registration
A ONE STOP SERVICE
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Investment Approval
Investment application
CDC issues a Conditional Registration Certificate to the Applicant

Company Registration / Ministry of Commerce

Relevant licenses, as appropriate / Ministry of Industry 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
Private Sector Development Strategy
 Investment Climate:

Law on Investment – August 1994

Amendment of Law on Investment (2003) and its sub-decree 111 ANKr.BK
(27 September 2005)

Automatic approval - One Stop Service
 Bilateral Investment Treaty (BIT)
 Trade Facilitation :

Single administrative document,

Single Window, Risk Management (Sihanouvillle Port)

Trade Sectoral Wide Approach (Trade SWAp)
 Government-Private Sector Forum:

Participatory approach
 Special Economic Zones (SEZ)
Law on Investment
Investment Guarantee
Investment Incentives
 Equal treatment of all investors

20% Corporate Tax
 No requirement of local equity

Tax holidays:
participation
 No price controls on products or
services
 No restriction on forex convertibility
 Free remittance of foreign
currencies abroad
Trigger period +3years+n; 6y <TH<9y

Full Import Duty Exemption

Repatriation of profit (withholding tax)

Reinvestment of earning (special
depreciation)
Bilateral Investment Treaties (BITs)
Signed BITs
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Australia
Austria
China
Croatia
Cuba
Czech
France
Germany
Indonesia
Japan (14/06/ 2007)
Kuwait
Lao PDR
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
Under negotiation
Malaysia
Netherlands
N. Korea
OPEC
Pakistan
Philippine
ROK
Singapore
Switzerland
Thailand
USA (OPIC)
Vietnam
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Myanmar
Ukraine
Arab Rep of Egypt
Russia
Libya
Great Britain & Northern
Ireland
Algeria
Bulgaria
USA
Qatar
Hungary
Malta
Bangladesh
Iran
Turkey
Belgium-Luxembourg
Economic Union
Mechanism of the Government-Private
Sector Forum
Interaction with the Private Sector: through the Government Private
Sector Forum, and the Steering Committee on Private Sector
Development and its sub-Steering Committees, the RGC is in regular
dialogue with the private sector, and seeks to address their concerns.
G–PSF
Bi-annual
meetings
Agriculture
and AgroIndustries WG
Tourism
WG
Manufacturing
and SMEs
WG
Law, Tax, and
Governance
WG
Banking and
Fin. Services
WG
Energy and
Infrastructure
WG
Trade
Facilitation
and Export
Processing
WG
Industrial
Relations
WG
Rice Export
WG
Laws and Regulation
in addition to those laws required by its accession to WTO,
Cambodia has adopted laws covering topic such as :
•
•
•
•
•
•
Commercial enterprise
Insolvency
Secured transactions
Commercial Arbitration
Transportation
Civil Aviation
Law in progress:
•
•
•
•
•
•
•
•
Commercial Contracts
Competition
Law on the Establishment of the
Commercial Court
Law on Anti-dumping, Countervailing
Duty and Safeguard
Law on Business Association,
Cooperatives
Law on Competition (Final Draft)
Law on Union
Regulations on Sanitary and Phytosanitary Measures (SPS)
Bilateral agreement on the promotion and protection of investments between
the Kingdom of Cambodia and other countries
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Australia
Austria
China
Croatia
Cuba
Czech
France
Germany
Indonesia
Japan
Kuwait
Lao PDR
13. Malaysia
14. Netherlands
15. OPEC
16. Pakistan
17. Philippine
18. ROK
19. Singapore
20. Switzerland
21. Thailand
22. USA (OPIC)
23. Vietnam
Encouraged Investment Activities
Agriculture and agro-industry
Transport and telecommunications
Energy and electricity
Labor-intensive industries, processing and
manufacturing;
Tourism
Human resource development
Oil & Gas, Mining
Approved Investments by Country/Region
(1994-2013)
US$ Million
10,000
9,611
9,000
8,000
7,000
6,000
5,000
4,405
3,649
4,000
2,620
3,000
2,000
1,524
1,294
1,021
899
870
1,000
786
391
Japan
Singapore
HongKong
Thailand
Taiwan
USA
Vietnam
Malaysia
EU
Korea
China
-
Approved Investments by Sector
1994 –2013
Agriculture
10%
Industry
29%
Service
17%
Tourism
44%
Investments in Cambodia 2008-2013
2008
2009
2010
2011
2012
2013
$11,420,127183
$6,309,435,594
$3,029,497,634
$7,984,908,645
$2,965,537,652
$3,314,528,763
Rank
1
2
Country
%
China
39.45
Cambodia
3
Korea
4
USA
5
6
7
8
9
10
11
Israel
Russia
U.K
Austria
Vietnam
France
Others
36.73
10.89
5.59
2.63
0.92
0.59
0.54
0.51
0.50
Country
Cambodia
China
Vietnam
Singapore
Russia
Thailand
Korea
India
Malaysia
Japan
1.28 Others
%
Country
60.81
Korea
14.93
5.58
4.81
3.84
3.53
2.89
1.90
1.19
0.20
China
Cambodia
Malaysia
Vietnam
Portugal
Australia
Singapore
Denmark
Japan
0.32 Others
%
35.10
28.73
14.91
8.53
5.23
1.66
1.65
1.02
0.97
0.86
Country
U.K
Cambodia
China
Vietnam
Malaysia
Korea
U.S.A
Japan
Australia
Singapore
1.35 Others
%
Country
%
30.93
Cambodia
42.08 Cambodia
29.76
22.05
8.65
3.03
2.10
1.78
0.83
0.31
China
Korea
Japan
Malaysia
Thailand
Vietnam
Singapore
U.K
0.20 U.S.A
0.35 Others
Country
20.69 China
9.89
Vietnam
9.15 Thailand
6.04 Korea
4.53 Japan
2.89 Malaysia
2.59 Singapore
0.51 UK
0.42
France
1.21 Others
%
68.80
15.68
6.10
4.37
1.76
1.59
1.04
1.03
0.43
0.27
0.96
Infrastructure: A definite prospect
Priority for infrastructure
Infrastructure rehabilitation
Multilateral aid availability
Decentralization
Regional opportunities
ASEAN & GMS integration
Private Participation in
Infrastructure (PPI): BOT, BOO,
etc…
Investment in Development & Maintenance of Physical Infrastructure
(for vibrant, safe and efficient logistics system)
 Transport and Urban Infrastructure
(roads, ports, railways, airport services, etc.):
for domestic integration and regional connectivity
 Irrigation System
 Electrical Power
 Information and Communication Technology
Agro-business
1) Production, Processing and
Commercialization of:
 Rice, Corn, Cassava, Sugarcane,
Cashew nut, Pepper and others
2) Livestock Farming and Aquaculture
 Animal breeding
 Animal feed production
 Freshwater and marine-based natural fisheries
 Freshwater and marine aquaculture
 Processing and trading
Tourism
 World Heritage Monuments
 Open Sky Policy to Siem Reap
 Natural beauty - Beach - Islands
 Ability to attract “add-on” trips
 Novelty value
Dolphins in Mekong River-Cambodia
Visitors to Cambodia
4,210
4,500
4,000
3584
Thousand (000)
3,500
2882
3,000
2,500
2,000
1421
1055
1,500
1,000
2500
2015 2125
1700
289 368
177 220 260 219
701
466 604
2161
500
0
Vision 2020: Visitor arrival from 2010 – 2020
YEAR
Visitor Arrivals
2010
2012
2015
2020
2,508,289
3,584,307
5,100,000
7,000,000
Investment Opportunities
 Phnom Penh
o
International Convention Center
o
High-end hotel (Four Seasons, Hyatt, etc…) at the moment there are only Intercontinental
Hotel, Sofitel and Raffles with approximately 500 rooms.
 Siemreap
o
International Convention Center
o
High-end hotel (Four Seasons, Sheraton, and Marriott, etc…) at the moment there are only
Raffles, Hyatt, Le Meridien, Sofitel, Aman resorts and Orient Express, with approximately 800
rooms.
o
Amusement park / recreational activities
o
Golf course (there are three existing golf courses)
 Sihanoukville
o
High-end hotel (Four Seasons, Hyatt, etc…)
o
Golf Course
Manufacturing & Export
 Competitive labor cost
 Tax incentives
 Market access
 Asean Economic Community 2015
MFN/GSP Market Access










Australia
Austria
Belarus
Belgium
Bulgaria
Canada
China
Czech Republic
Denmark
Finland










France
Germany
Hungary
Ireland
Italy
Luxemburg
Japan
Netherlands
New Zealand
Norway
… and the ASEAN integration System
Of Preferences (AISP) from the ASEAN 6











Poland
Portugal
ROK
Russian
Federation
Slovakia
Spain
Sweden
Switzerland
UK
USA
EBA (everything
but arms initiative
for LDCs)
Cambodia has embraced the globalization process as part of its
outward looking economic development strategy….
JOINING
ASEAN
Everything But
Arms (EBA)
JOINING
WTO
ASEAN
Economic
Community
Reasons to invest in Cambodia
Open economy
Sound Macroeconomic Environment
Competitive Investment Incentives
One Stop Service – Fast-Track Investment Approval
Process (28 days)
Low Labor Cost
Strategic Location
Preferential Trading Status
Access to ASEAN and World Markets
Kunming
Myanmar
Southern China
Hanoi
Yangon
Laos
o Vientiane
Vietnam
Thailand
Manila
Bangkok
.
CAMBODIA
Phnom Penh
The Philippines
Brunei
Begawan
Kuala Lumpur
Malaysia
Singapore
Jakarta
Indonesia
Invest in Cambodia and
Invest in Cambodia and you
you
have
600
million
have
million consumers
Invest
in15Cambodia
and you
consumers
at
your
have 325 million consumers
doorstep
virtually at your doorstep
General Tariff Rates
Applicable Rate
Major Commodities
0%
Pharmaceutical products (HS Code 30), Printed books (HS Code 4901), Ores, slag
and ash (HS Code26), Petroleum gases and other gaseous hydrocarbons (HS Code
2711)
7%
Edible fruit and nuts (HS Code 8), Animal or vegetable fats and oil and their
cleavage products (HS code 15), Sugar and sugar confectionery (HS Code 17), Raw
hides and skins (other than fur skins) and leather (HS Code 41), Articles of jewelry
and parts thereof, of precious metal or of metal clad with precious metal (HS
Code 7113), Bicycles and other cycles (including delivery tricycles), not motorized
(HS Code 8712), Musical instruments (HS Code 92)
15%
Alcohol (other than beer) (HS Code 22), Motorcycle (HS Code 78711), Clocks and
watches and parts of thereof (HS Code 91)
35%
Manufactures if straw, of esparto or of other planting materials (HS Code 46),
Electro-mechanical domestic appliances (HS Code 8509), Motor cars and other
motor vehicles principally designed for the transport of persons (HS Code 8703)
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Jewelry Import Duty
• Import Duty is 7% On CIF.
• Import VAT is 10% on CIF + Duty.
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Thailand Export to Cambodia
Goods
Jewelry
Goods
Jewelry
Goods
Jewelry
Value – Million Dollars
2011
2012
2013
2014 est.
2015 est.
19.4
111.0
282.3
52.1
296.0
Growth Rate - %
2011
2012
2013
2014 est.
2015 est.
1628.9
3462.65
154.33
-36.27
468.00
Proportion - %
2011
2012
2013
2014 est.
2015 est.
0.73
2.94
6.63
2.95
14.75
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